PAVmed(PAVM) - 2025 Q2 - Quarterly Report

Part I - Financial Information Item 1. Financial Statements Presents the unaudited condensed consolidated financial statements and notes for the periods ended June 30, 2025 and 2024 Condensed Consolidated Balance Sheets The balance sheets show a significant increase in total assets and a shift from a stockholders' deficit to positive equity Condensed Consolidated Balance Sheets (in thousands) | Asset/Liability Category | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets: | | | | Cash | $4,004 | $1,185 | | Total current assets | $5,488 | $2,164 | | Equity method investment - at fair value | $35,998 | $25,637 | | Total assets | $43,893 | $30,660 | | Liabilities, Mezzanine Equity and Stockholders' Equity (Deficit): | | | | Senior Secured Convertible Notes - at fair value | $6,800 | $29,100 | | Total current liabilities | $10,506 | $35,446 | | Total liabilities | $12,474 | $37,693 | | Mezzanine Equity (Series C Convertible Preferred Stock) | $3,260 | — | | Total Stockholders' Equity (Deficit) | $28,159 | $(7,033) | | Total Liabilities, Mezzanine Equity and Stockholders' Equity (Deficit) | $43,893 | $30,660 | - Total assets increased by approximately $13.2 million from December 31, 2024, to June 30, 2025, primarily driven by a significant increase in the equity method investment and cash[8] - Total liabilities decreased substantially by approximately $25.2 million, mainly due to a reduction in Senior Secured Convertible Notes[8] - Stockholders' Equity (Deficit) shifted from a deficit of $7.0 million to a positive equity of $28.2 million, indicating a significant improvement in the company's financial position[8] Condensed Consolidated Statements of Operations The statements of operations reflect a significant revenue decrease but a shift to net income in H1 2025 due to deconsolidation effects Condensed Consolidated Statements of Operations (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $6 | $979 | $14 | $1,989 | | Total operating expenses | $4,721 | $14,663 | $10,174 | $29,711 | | Operating loss | $(4,715) | $(13,684) | $(10,160) | $(27,722) | | Management fee income | $3,150 | — | $6,300 | — | | Change in fair value - equity method investment | $(10,643) | — | $10,361 | — | | Net income (loss) attributable to PAVmed Inc | $(11,921) | $(10,827) | $7,047 | $(26,039) | | Net income (loss) attributable to PAVmed Inc common stockholders | $(13,308) | $(10,908) | $4,386 | $(33,696) | | Net income (loss) per share – basic | $(0.74) | $(1.19) | $0.27 | $(3.78) | | Net income (loss) per share – diluted | $(0.74) | $(1.19) | $0.13 | $(3.78) | - Revenue significantly decreased for both the three and six months ended June 30, 2025, compared to 2024, primarily due to the deconsolidation of Lucid Diagnostics' operating results[11][208][222] - Total operating expenses saw substantial reductions for both periods in 2025 compared to 2024, also largely attributable to the deconsolidation of Lucid Diagnostics[11][209][210][211][212][223][224][225][226] - The company reported a net income attributable to PAVmed Inc of $7.0 million for the six months ended June 30, 2025, a significant improvement from a $26.0 million loss in the prior year, driven by management fee income and a gain from the change in fair value of equity method investment[11][229][233] Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit) Stockholders' equity improved significantly, moving from a deficit to a positive balance due to net income and stock issuances - PAVmed Inc's total stockholders' equity (deficit) improved from a deficit of $(7,033) thousand as of December 31, 2024, to a positive $28,159 thousand as of June 30, 2025[17][18] - Key changes include the issuance of Series C Convertible Preferred Stock through debt exchange and unsecured debt cancellation, and an increase in additional paid-in capital[17][18] - The company recognized net income of $7,047 thousand for the six months ended June 30, 2025, contributing to the equity improvement[17][18] Condensed Consolidated Statements of Cash Flows Cash flows show significantly reduced cash use in operations and lower financing proceeds compared to the prior year Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net income (loss) - before noncontrolling interest ("NCI") | $6,300 | $(33,426) | | Net cash flows used in operating activities | $(2,759) | $(24,765) | | Net cash flows used in investing activities | $(14) | $(45) | | Net cash flows provided by financing activities | $5,592 | $30,670 | | Net increase in cash | $2,819 | $5,860 | | Cash, end of period | $4,004 | $25,499 | - Net cash used in operating activities significantly decreased from $(24.8) million in 2024 to $(2.8) million in 2025, indicating improved operational efficiency or reduced burn rate[27] - Cash provided by financing activities decreased from $30.7 million in 2024 to $5.6 million in 2025, reflecting different financing strategies or needs[27] - The company ended the six months with $4.0 million in cash, an increase from the beginning of the period, despite lower financing proceeds compared to the prior year[27] Notes to Unaudited Condensed Consolidated Financial Statements This section provides detailed explanations for the line items and policies presented in the financial statements Note 1 — The Company Outlines the company's multi-product life sciences business model and current strategic focus areas - PAVmed Inc is a multi-product life sciences company focused on innovating, developing, acquiring, and commercializing novel healthcare technologies[29] - The company's current strategy involves establishing distinct subsidiaries for each financed asset, allowing for tailored financing directly into each subsidiary[29] - Current focus areas include supporting EsoGuard's commercial expansion through Lucid Diagnostics, expanding access to the Veris Cancer Care Platform, developing an implantable physiological monitor through Veris Health, and advancing other assets via an incubator-type platform (PMX)[30] Note 2 — Liquidity and Going Concern Recurring losses and a working capital deficiency raise substantial doubt about the company's ability to continue as a going concern - The Company generated less than $0.1 million in revenue and experienced recurring losses and negative cash flows from operating activities for the three and six months ended June 30, 2025[32] - As of June 30, 2025, the Company had a working capital deficiency of approximately $5.0 million, including $6.8 million in Senior Secured Convertible Notes classified as current liabilities and $4.0 million in cash[33] - These factors raise substantial doubt about the Company's ability to continue as a going concern within one year, necessitating increased revenues, cost control, and additional capital raises[34] Note 3 — Summary of Significant Accounting Policies Details the basis of presentation, consolidation principles, revenue recognition, and adoption of new accounting standards - The financial statements are prepared in accordance with U.S. GAAP and SEC rules, with all intercompany transactions eliminated in consolidation[37] - PAVmed has a controlling financial interest in Veris Health Inc, but ceased to have a controlling interest in Lucid Diagnostics as of September 10, 2024, now accounting for it using the equity method with the fair value option[37] - Revenue recognition follows ASC 606, with current revenue primarily from the Veris Cancer Care Platform, and previously from Lucid's EsoGuard tests[44] - The company adopted ASU No 2023-09 (Income Taxes) effective January 1, 2025, and is evaluating other ASUs for future impact[59][60][61] Note 4 — Equity Method Investment Explains the accounting for the Lucid Diagnostics investment and presents its summarized financial information - PAVmed accounts for its investment in Lucid Diagnostics as an equity method investment with the fair value option since September 10, 2024, due to loss of controlling interest but retention of significant influence[62] Lucid Diagnostics Summarized Financial Information (in thousands) | Metric | June 30, 2025 | | :--- | :--- | | Cash | $31,123 | | Total assets | $38,670 | | Total liabilities | $30,808 | | Shareholders' equity | $7,862 | | Revenue (Three Months Ended June 30, 2025) | $1,163 | | Net income (loss) attributable to common stockholders (Three Months Ended June 30, 2025) | $(7,888) | | Revenue (Six Months Ended June 30, 2025) | $1,991 | | Net income (loss) attributable to common stockholders (Six Months Ended June 30, 2025) | $(43,906) | - The fair value of PAVmed's investment in Lucid was $36.0 million at June 30, 2025, up from $25.6 million at December 31, 2024, resulting in an unrealized gain of $10.4 million for the six months ended June 30, 2025[64] - PAVmed recognized $3.15 million and $6.3 million in management fee income from Lucid for the three and six months ended June 30, 2025, respectively, following Lucid's deconsolidation[65] Note 5 — Revenue from Contracts with Customers Revenue has decreased significantly following the deconsolidation of Lucid Diagnostics Revenue and Cost of Revenue (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenue | < $0.1 | $979 | < $0.1 | $1,989 | | Cost of Revenue | $41 | $1,666 | $78 | $3,411 | - Revenue for the three and six months ended June 30, 2025, was less than $0.1 million, primarily from Veris Health Cancer Care Platform subscription revenue, a significant decrease from 2024 due to Lucid's deconsolidation[67] - Cost of revenue for the three and six months ended June 30, 2025, was also less than $0.1 million, mainly from Veris subscription revenue, down from $1.7 million and $3.4 million in 2024, respectively, due to Lucid's deconsolidation[68][69] Note 6 — Prepaid Expenses, Deposits, and Other Current Assets Details the components of prepaid expenses, which increased primarily due to higher advance payments and insurance Prepaid Expenses, Deposits, and Other Current Assets (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Advanced payments to service providers and suppliers | $320 | $115 | | Prepaid insurance | $528 | $233 | | Deposits | $373 | $347 | | Veris Box supplies | $260 | $266 | | Total prepaid expenses, deposits and other current assets | $1,481 | $961 | - Total prepaid expenses, deposits, and other current assets increased by $520 thousand from December 31, 2024, to June 30, 2025, primarily due to higher advanced payments to service providers and prepaid insurance[70] Note 7 — Leases Summarizes the company's operating lease liabilities and future payment obligations Future Lease Payments (in thousands) | Year | Amount | | :--- | :--- | | 2025 (remainder of year) | $357 | | 2026 | $724 | | 2027 | $594 | | 2028 | $471 | | 2029 | $481 | | Thereafter | $367 | | Total lease payments | $2,994 | | Less: imputed interest | $(484) | | Present value of lease liabilities | $2,510 | - The present value of lease liabilities as of June 30, 2025, was $2.51 million, with a weighted-average remaining lease term of 4.61 years and a weighted-average discount rate of 7.875%[71] - Operating lease right-of-use assets decreased from $2.50 million at December 31, 2024, to $2.26 million at June 30, 2025[71] Note 8 — Commitment and Contingencies The company is not aware of any pending legal proceedings likely to have a material impact on its financials - The Company may be subject to legal actions and claims in the ordinary course of business, including product liability, consumer, commercial, tax, and governmental matters[72] - As of the reporting date, the Company is not aware of any pending legal or other proceedings reasonably likely to have a material impact on its business, financial position, results of operations, or cash flows[72] Note 9 — Financial Instruments Fair Value Measurements Presents the fair value hierarchy for assets and liabilities, including the Lucid investment and convertible notes Fair Value Measurement on a Recurring Basis (in thousands) | Category | June 30, 2025 (Total) | December 31, 2024 (Total) | | :--- | :--- | :--- | | Assets: | | | | Investment in Lucid Diagnostics, Inc common stock | $35,998 | $25,637 | | Liabilities: | | | | Senior Secured Convertible Note - September 2022 | $6,800 | $8,800 | | Senior Secured Convertible Note - April 2022 | — | $20,300 | | Total liabilities at fair value | $6,800 | $29,100 | - The investment in Lucid Diagnostics common stock is classified as Level 1 fair value, based on quoted market prices[73] - Senior Secured Convertible Notes are classified as Level 3 liabilities, with fair values determined using Monte Carlo simulations and other valuation models[76][78] - The April 2022 Senior Convertible Note was fully satisfied by June 30, 2025, while the September 2022 Senior Convertible Note's fair value decreased from $8.8 million to $6.8 million[73][74] Note 10 — Debt Details the terms, covenants, and recent modifications of the company's outstanding senior convertible notes Senior Convertible Notes Outstanding (in thousands) | Note | Maturity Date | Stated Interest Rate | Conversion Price per Share | Principal Outstanding (June 30, 2025) | Fair Value (June 30, 2025) | | :--- | :--- | :--- | :--- | :--- | :--- | | September 2022 Senior Convertible Note | Dec 31, 2025 | 7.875% | $1.068 | $6,579 | $6,800 | - The April 2022 Senior Convertible Note was fully satisfied in January 2025 through a debt exchange, and the September 2022 Senior Convertible Note's conversion price was reset to $1.068 and maturity extended to December 31, 2025[82][87][90] - The Company is subject to financial covenants, including minimum cash of $8.0 million, which were waived through December 31, 2025[84][90] - Debt extinguishment losses were less than $0.1 million for the six months ended June 30, 2025, significantly lower than $1.1 million in the prior year[92][231][235] Note 11 — Stock-Based Compensation Summarizes stock option activity and the significant decrease in stock-based compensation expense post-deconsolidation PAVmed Stock Options Summary | Metric | Number of Stock Options (June 30, 2025) | Weighted Average Exercise Price (June 30, 2025) | | :--- | :--- | :--- | | Outstanding stock options | 822,143 | $19.44 | | Vested and exercisable stock options | 596,926 | $25.96 | - PAVmed granted 255,000 stock options in the six months ended June 30, 2025, and accepted voluntary forfeiture of approximately 494,202 options with higher exercise prices in January 2025[97][99] Consolidated Stock-Based Compensation Expense (in thousands) | Expense Category | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :--- | :--- | :--- | | Cost of revenue | $0 | $0 | | Sales and marketing expenses | $1 | $46 | | General and administrative expenses | $148 | $944 | | Research and development expenses | $13 | $102 | | Total stock-based compensation expense | $162 | $1,092 | - Total consolidated stock-based compensation expense decreased significantly from $1,904 thousand (3 months) and $3,786 thousand (6 months) in 2024 to $162 thousand and $1,092 thousand in 2025, respectively, primarily due to Lucid's deconsolidation[104] Note 12 — Preferred Stock Outlines the terms of Series B and Series C Preferred Stock, including recent issuances, conversions, and dividend accruals - As of June 30, 2025, there were 1,469,969 shares of PAVmed Series B Convertible Preferred Stock outstanding, with dividends of $88 thousand and $175 thousand earned for the three and six months ended June 30, 2025, respectively[110][113] - PAVmed Series C Convertible Preferred Stock was issued through a $22.3 million debt exchange and a $2.6 million unsecured debt cancellation in January 2025, with a stated value of $1,000 per share and a 7.875% annual dividend rate[86][88][118] - The Series C Preferred Stock conversion price was temporarily reduced to $0.40 per share through September 30, 2025, and the company recognized deemed dividend charges totaling $818 thousand in Q2 2025[129][131][136] - A portion of Series C Preferred Stock ($1.26 million) was reclassified to mezzanine equity due to a substantive redemption feature[132] Note 13 — Common Stock and Common Stock Purchase Warrants Describes recent common stock issuances, warrant activity, and the company's status with Nasdaq listing requirements - PAVmed regained compliance with Nasdaq's $2.5 million stockholders' equity requirement in February 2025 but received a notice for non-compliance with the $1 bid price rule in January 2025, with an extension until January 19, 2026[142][143] - In the six months ended June 30, 2025, the company issued 401,303 common shares for debt repayments, 1,216,565 shares through its ATM facility for $0.8 million net proceeds, and 3,840,094 shares from Series C Preferred Stock conversions[139][144] - A February 2025 offering generated $2.37 million gross proceeds from selling 2,574,350 common shares and pre-funded warrants to purchase 756,734 shares[147][149] - All Series Z Warrants, representing the right to purchase 795,830 shares, expired on April 30, 2025[150] Note 14 — Noncontrolling Interest Explains the accounting for the noncontrolling interest in the consolidated subsidiary, Veris Health Noncontrolling Interest (NCI) Equity (in thousands) | Category | June 30, 2025 | | :--- | :--- | | NCI – equity - December 31, 2024 | $(4,538) | | Net loss attributable to NCI | $(747) | | Impact of subsidiary equity transactions | $(7,928) | | Veris Health issuance of common stock for settlement of vendor service agreement | $104 | | Veris Offerings | $3,438 | | Stock-based compensation expense - Veris Health 2021 Equity Plan | $300 | | NCI – equity – June 30, 2025 | $(9,371) | - PAVmed lost controlling financial interest in Lucid Diagnostics on September 10, 2024, reducing its voting interest to less than 50.0%, but retains significant influence[153] - Veris Health is a consolidated majority-owned subsidiary, with PAVmed holding a 59.49% majority-interest ownership (83.9% on an as-converted basis)[155] - Veris Health completed a June 2025 offering, selling 1,800,000 common shares and warrants for $2.5 million gross proceeds, to fund development of its implantable physiological monitor[156][157] Note 15 — Net Income (Loss) Per Share Provides the calculation of basic and diluted net income (loss) per share, showing a shift from loss to profit Net Income (Loss) Per Share Attributable to PAVmed Inc Common Stockholders | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income (loss) per share – basic | $(0.74) | $(1.19) | $0.27 | $(3.78) | | Net income (loss) per share – diluted | $(0.74) | $(1.19) | $0.13 | $(3.78) | | Weighted average common shares outstanding, basic | 18,084,653 | 9,152,819 | 15,992,034 | 8,923,862 | | Weighted average common shares outstanding, diluted | 18,084,653 | 9,152,819 | 54,272,962 | 8,923,862 | - Basic and diluted EPS for the six months ended June 30, 2025, were $0.27 and $0.13, respectively, a significant improvement from losses of $(3.78) in the prior year[160] - For periods with net losses (Q2 2025, Q2 2024, H1 2024), common stock equivalents were excluded from diluted EPS calculation as their inclusion would be anti-dilutive[162] Note 16 — Segment Information The company operates as a single reportable segment with revenues concentrated in the United States - PAVmed operates as a single operating segment, with its Chief Executive Officer serving as the Chief Operating Decision Maker (CODM)[164][165] - The company's business activities are managed on a consolidated basis, and revenues are concentrated in the United States[164][166] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Analyzes financial condition and results of operations, focusing on Lucid's deconsolidation, recent developments, and liquidity FORWARD-LOOKING STATEMENTS Warns that the report contains forward-looking statements subject to significant risks and uncertainties - The report contains forward-looking statements regarding future results, financial position, business strategy, and operational objectives, which involve substantial risks and uncertainties[171] - Key risk factors include limited operating history, ability to generate revenue, regulatory approval, market acceptance, and additional financing needs[174] Overview Reiterates the company's multi-product life sciences strategy and current areas of strategic focus - PAVmed is a multi-product life sciences company focused on innovative healthcare technologies, utilizing a corporate structure with distinct subsidiaries for each financed asset[175] - Current strategic focus includes supporting Lucid Diagnostics' EsoGuard, expanding Veris Health's Cancer Care Platform, and advancing other products through an incubator-type platform (PMX)[176] Recent Developments Summarizes recent business and financing activities across the company and its key subsidiaries Business Highlights recent clinical, regulatory, and commercial milestones for the Lucid Diagnostics' EsoGuard test - Lucid Diagnostics submitted a clinical evidence package to MolDx in November 2024 for Medicare coverage reconsideration of EsoGuard, with a CAC Meeting scheduled for September 4, 2025[177][178] - Lucid was added to the Russell 2000® and 3000® Indexes on June 27, 2025, and launched a comprehensive esophageal precancer testing program with Hoag using EsoGuard[179][181] - NCCN Clinical Practice Guidelines updated in March 2025 to reference non-endoscopic biomarker testing, such as EsoGuard, as an acceptable alternative for BE screening[182] - Lucid published its fifth peer-reviewed clinical utility manuscript showing a 2.4-fold increase in BE detection with EsoGuard triage, and Highmark Blue Cross Blue Shield issued a positive coverage policy for EsoGuard in New York[183][185] - Lucid announced an $8 million NIH R01 grant in February 2025 for a five-year clinical study evaluating EsoCheck and EsoGuard[186] Financing Summarizes recent capital raising activities at the PAVmed, Veris Health, and Lucid Diagnostics levels - Veris Health completed a June 2025 offering, raising approximately $2.5 million in gross proceeds to fund development of its implantable physiological monitor[188] - PAVmed and Veris completed a February 2025 offering, generating $2.37 million in gross proceeds from the sale of PAVmed common stock and pre-funded warrants, and Veris common stock[190] - PAVmed entered into a new At-The-Market (ATM) Sales Agreement with Maxim Group LLC in April 2025, allowing for sales of up to $2.88 million in common stock[192][193] - Lucid Diagnostics completed a CMPO in April 2025, raising approximately $16.2 million net, and an RDO in March 2025, raising approximately $14.9 million net[195][196] Results of Operations Provides a comparative analysis of operating results, detailing the impact of Lucid Diagnostics' deconsolidation Overview Explains the expected impact of Lucid's deconsolidation on revenue and operating expense line items - Revenue is now primarily from the Veris Health Cancer Care Platform, shifting from Lucid's EsoGuard tests after its deconsolidation on September 10, 2024[198] - Operating expenses are expected to decrease due to Lucid's deconsolidation, as its expenses are no longer consolidated[199][201][203][204] - Other income and expense, net, primarily includes management fee income from Lucid and changes in fair value of convertible notes[205] The three months ended June 30, 2025 as compared to three months ended June 30, 2024 Compares Q2 2025 results to Q2 2024, showing decreased revenue and expenses due to Lucid's deconsolidation Key Financial Changes (Three Months Ended June 30, 2025 vs 2024) (in millions) | Metric | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | < $0.1 | $1.0 | $(0.9) | | Cost of revenue | < $0.1 | $1.7 | $(1.6) | | Sales and marketing expenses | $0.2 | $4.2 | $(4.0) | | General and administrative expenses | $3.7 | $7.0 | $(3.3) | | Research and development expenses | $0.8 | $1.6 | $(0.8) | | Amortization of acquired intangible assets | $0 | $0.1 | $(0.1) | | Management fee income | $3.2 | $0 | $3.2 | | Change in fair value of convertible debt | $0.2 (expense) | $0.6 (expense) | $(0.4) | | Change in fair value of Equity Method Investment | $(10.6) (loss) | $0 | $(10.6) | | Loss on Debt Extinguishment | $0 | $0.8 | $(0.8) | - Significant decreases in revenue and operating expenses are primarily due to Lucid's deconsolidation from PAVmed's operating results[208][209][210][211][212] - Management fee income increased by $3.2 million due to Lucid's deconsolidation, while a $10.6 million unrealized loss was recognized on the equity method investment in Lucid[215][220] The six months ended June 30, 2025 as compared to six months ended June 30, 2024 Compares H1 2025 results to H1 2024, highlighting a shift to net income driven by deconsolidation effects Key Financial Changes (Six Months Ended June 30, 2025 vs 2024) (in millions) | Metric | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | < $0.1 | $2.0 | $(1.9) | | Cost of revenue | < $0.1 | $3.4 | $(3.3) | | Sales and marketing expenses | $0.5 | $8.6 | $(8.1) | | General and administrative expenses | $8.1 | $13.7 | $(5.6) | | Research and development expenses | $1.6 | $3.6 | $(2.0) | | Amortization of acquired intangible assets | $0 | $0.5 | $(0.5) | | Management fee income | $6.3 | $0 | $6.3 | | Change in fair value of convertible debt | $0.3 (expense) | $2.7 (expense) | $(2.4) | | Change in fair value of Equity Method Investment | $10.4 (gain) | $0 | $10.4 | | Loss on Debt Extinguishment | < $0.1 | $1.1 | $(1.0) | | Deemed Dividend on Lucid Series A and Series A-1 Convertible Preferred Stock Exchange Offer | $0 | $7.5 | $(7.5) | - Similar to the quarterly trend, the six-month period shows substantial decreases in revenue and operating expenses due to Lucid's deconsolidation[222][223][224][225][226] - Management fee income increased by $6.3 million, and an unrealized gain of $10.4 million was recognized on the equity method investment in Lucid[229][233] - Debt extinguishment losses decreased significantly from $1.1 million in 2024 to less than $0.1 million in 2025[231] Liquidity and Capital Resources Discusses the company's financing strategy, cash position, and the going concern uncertainty due to recurring losses - The company's financing strategy focuses on obtaining capital directly into subsidiaries (Lucid, Veris) but retains flexibility to raise capital at the PAVmed level[236] - PAVmed experienced net income of $6.3 million before noncontrolling interests and used $2.8 million cash in operations for the six months ended June 30, 2025, ending with $4.0 million cash on hand[237] - The company expects continued recurring losses and negative cash flows, necessitating additional capital, which raises substantial doubt about its going concern ability[237] - Key financing activities in H1 2025 included issuing shares via ATM for $0.8 million net proceeds and a February offering for $2.37 million gross proceeds[240] - The September 2022 Senior Convertible Note's maturity was extended to December 31, 2025, and its financial covenants were waived until that date[239][241] - Veris Health raised approximately $2.5 million in gross proceeds from a June 2025 offering of common stock and warrants to fund its implantable physiological monitor development[262] Critical Accounting Estimates Confirms no material changes to critical accounting estimates related to fair value, stock compensation, and taxes - The preparation of financial statements requires management to make estimates and assumptions, particularly regarding fair value of debt obligations and stock-based equity awards[43][265] - There have been no material changes to the critical accounting estimates in the three months ended June 30, 2025, as disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024[265] Item 4. Controls and Procedures Details the evaluation of disclosure controls and procedures and changes to internal controls over financial reporting Evaluation of Disclosure Controls and Procedures Management concluded that disclosure controls and procedures were effective as of the end of the reporting period - Management, including the principal executive and financial officers, concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[266] - These controls provide reasonable assurance that required information is recorded, processed, summarized, and reported within SEC specified time periods[266] Changes to Internal Controls Over Financial Reporting Reports no material changes to internal control over financial reporting during the most recent fiscal quarter - There have been no material changes to internal control over financial reporting during the fiscal quarter ended June 30, 2025[267] Part II - Other Information Item 1. Legal Proceedings Addresses potential legal actions and claims the company may face during the ordinary course of business - The Company may be subject to various legal actions and claims, including product liability, consumer, commercial, tax, and governmental matters[269] - As of the reporting date, the Company is not aware of any pending legal or other proceedings that are reasonably likely to have a material impact on its business, financial position, results of operations, or cash flows[269] Item 5. Other Information Confirms no directors or officers adopted or terminated Rule 10b5-1 trading arrangements during the quarter - No directors or officers adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement" during the fiscal quarter ended June 30, 2025[273] Item 6. Exhibits Lists all exhibits filed as part of the Quarterly Report on Form 10-Q - The Exhibit Index includes the Sales Agreement (ATM Facility), the Sixth Amended and Restated 2014 Long-Term Incentive Equity Plan, and various certifications (e g, Section 302 and 906 of Sarbanes-Oxley Act)[281]