Quarterly Report for Quarter Ending June 30, 2026 (Form 10-Q)

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

The following discussion and analysis of our unaudited condensed consolidated financial condition and results of operations should be read together with our Annual Report on Form 10-K for the year ended December 31, 2025 (the "Form 10-K"), as filed with the Securities and Exchange Commission (the "SEC").

Unless the context otherwise requires, (i) "we", "us", and "our", and the "Company" and "PAVmed" refer to PAVmed Inc. and its subsidiaries, including its subsidiary Lucid Diagnostics Inc. ("Lucid Diagnostics" or "Lucid") and its majority-owned subsidiary Veris Health Inc. ("Veris Health" or "Veris"), (ii) "FDA" refers to the Food and Drug Administration, (iii) "510(k)" refers to a premarket notification, submitted to the FDA by a manufacturer pursuant to § 510(k) of the Food, Drug and Cosmetic Act and 21 CFR § 807 subpart E, (iv) "CLIA" refers to the Clinical Laboratory Improvement Amendments of 1988 and associated regulations set forth in 42 CFR § 493, and (v) "LDT" refers to a diagnostic test, defined by the FDA as "an IVD that is intended for clinical use and designed, manufactured and used within a single laboratory," which is generally subject only to self-certification of analytical validity under the CMS CLIA program.

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (this "Form 10-Q"), including the discussion and analysis of our unaudited condensed consolidated financial condition and results of operations, contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, contained in this Form 10-Q, including statements regarding our future results of operations and financial position, business strategy and plans and objectives of management for future operations, are forward-looking statements. The words "may," "will," "should," "expects," "plans," "anticipates," "could," "intends," "target," "projects," "contemplates," "believes," "estimates," "predicts," "potential" or "continue" or the negative of these terms or other similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Forward-looking statements are not guarantees of future events or performance and actual events 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;
	●	our ability to obtain regulatory approval for the commercialization of our products;
	●	the ability of our products to achieve market acceptance;
	●	our success in retaining or recruiting, or changes required in, our officers, key employees or directors;
	●	our potential ability to obtain additional financing when and if needed;
	●	our ability to protect our intellectual property;
	●	our ability to complete strategic acquisitions;
	●	our ability to manage growth and integrate acquired operations;
	●	the potential liquidity and trading of our securities;
	●	our regulatory and operational risks;
	●	cybersecurity risks;
	●	risks related to health-related emergencies; and
	●	our estimates regarding expenses, future revenue, capital requirements and needs for additional financing.

In addition, our forward-looking statements do not reflect the potential impact of any future financings, acquisitions, mergers, dispositions, joint ventures or investments we may make.

We may not actually achieve the results, plans, and/or objectives disclosed in our forward-looking statements, and the intended or expected results, developments and/or other events disclosed in our forward-looking statements may not actually occur, and accordingly you should not place undue reliance on our forward-looking statements. You should read this Quarterly Report on Form 10-Q and the documents we have filed as exhibits to this Form 10-Q and the Form 10-K completely and with the understanding our actual future results may be materially different from what we expect. We do not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

Overview

PAVmed is a diversified commercial-stage life sciences company operating in the medical device, diagnostics, and digital health sectors. It operates through multiple independently financed subsidiaries under a shared services model. The Company's strategy is to advance and commercialize innovative healthcare technologies through its subsidiaries while maintaining flexibility to structure financing at either the PAVmed level or within its subsidiaries.

The Company's subsidiaries include Lucid Diagnostics, which is a commercial-stage cancer prevention medical diagnostics company that markets the EsoGuard® Esophageal DNA Test and EsoCheck® Esophageal Cell Collection Device, and of which the Company is the largest voting stockholder at approximately 25%, and Veris Health, which is a majority-owned digital health company focused on improving personalized cancer care during treatment and throughout survivorship through digital health tools and the development of an implantable physiological monitor designed to interface with the Veris Cancer Care Platform.

PAVmed continues to support the commercial expansion of EsoGuard through Lucid Diagnostics and to pursue strategic partnerships to expand adoption of the Veris Cancer Care Platform. In addition, PAVmed is developing a medical device portfolio, including its PortIO implantable intraosseous vascular access device and recently licensed endoscopic imaging technology from Duke University. The Company continues to evaluate opportunities to expand its portfolio through internal development and external licensing.

Recent Developments

Business

Medicare Coverage (Lucid)

In November 2024, Lucid submitted to MolDx our complete clinical evidence package in support of a request for reconsideration of the non-coverage language in the local coverage determination ("LCD") to secure Medicare coverage for EsoGuard. The EsoGuard clinical evidence package included six new peer-reviewed publications: three clinical validation studies (two in the intended use population, one case control), two clinical utility studies, and one analytical validation study. The current LCD provides clear coverage criteria consistent with the American College of Gastroenterology ("ACG") guidelines for esophageal precancer testing. The package was submitted as part of a request for reconsideration of the non-coverage language in the LCD to secure Medicare coverage for EsoGuard.

As part of the LCD reconsideration process, MolDx-participating Medicare Administrative Contractors convened a Contractor Advisory Committee ("CAC") Meeting regarding the LCD on September 4, 2025. At the meeting, eleven experts, including physicians across multiple specialties (GI, primary care, pathology), major society guideline co-authors (ACG, American Gastroenterological Association)) and industry leaders (American Foregut Society, American Society for Gastrointestinal Endoscopy), participated in this extensive discussion of the unmet clinical need with respect to early detection of esophageal precancer and the strength of the EsoGuard clinical validity and clinical utility data.

Medical Device Developments

In March 2026, PAVmed hired industry-veteran Joseph Virgilio to serve as PAVmed's Chief Business Officer for Medical Devices. Prior to joining PAVmed, Mr. Virgilio held leadership roles at a diverse group of medical device companies over the course of his 25-year career.

In this capacity, Mr. Virgilio will oversee the development and commercialization of PAVmed's current and future medical device portfolio. Such portfolio includes at this time the Company's PortIO implantable intraosseous vascular access device, which 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 portfolio also includes technology licensed by PAVmed from Duke University that involves a multi-modality probe combining angle-resolved low coherence interferometry with optical coherence tomography ("OCT"), as more fully described below.

Endoscopic Imaging Technology

In February 2026, PAVmed entered into a definitive license agreement with Duke University, through a newly formed subsidiary, for the exclusive worldwide rights to technology involving a multi-modality probe combining angle-resolved low coherence interferometry with endoscopic imaging. This technology may be used to identify and facilitate treatment of advanced esophageal precancer ("dysplasia") during upper endoscopy. The platform is designed to integrate with standard endoscopic procedures and may enable real-time assessment of esophageal tissue to guide clinical decision-making during the procedure. Additionally, as the diagnosis of dysplasia currently relies on biopsy-based approaches, which require tissue sampling and subsequent pathological review, this technology may provide a complementary approach to streamline the evaluation and treatment process.

Recent Developments - continued

Business - continued

Department of Veteran Affairs (Lucid)

In January 2026, Lucid announced that it has been awarded a contract by the U.S. Department of Veterans Affairs for EsoGuard expanding access to esophageal precancer testing across the nation's largest integrated healthcare system, which serves more than nine million enrolled veterans annually.

Strategic Commercial Partnership (Veris)

In October 2025, we announced that Veris and The Ohio State University Comprehensive Cancer Center - The James Cancer Hospital and Solove Research Institute ("OSUCCC - The James"), a National Cancer Institute-Designated Comprehensive Cancer Center, launched the commercial phase of their long-term strategic partnership agreement. This transition to a commercial phase follows successful completion of a pilot program conducted at the OSUCCC -- The James.

Recent Developments - continued

Financing

Series D Offering and Recapitalization; Series D Conversion

On February 3, 2026, PAVmed entered into subscription agreements (the "Subscription Agreements") with certain accredited investors (the "Investors") and, pursuant to and concurrently with the execution of the Subscription Agreements, sold to the Investors, for an aggregate purchase price of $30 million, (i) 30,000 shares of the Company's newly designated Series D Convertible Preferred Stock, par value $0.001 per share (the "Series D Preferred Stock"), and (ii) warrants (the "Warrant") to purchase an additional 30,000 shares of Series D Preferred Stock, with each investor receiving 100 shares of Series D Preferred Stock and a warrant to purchase 100 shares of Series D Preferred Stock for each $100,000 of its investment (the "Offering"). The initial conversion price of the Series D Preferred Stock is $6.50 per share, subject to adjustment in the event of stock splits, stock dividends, and similar transactions.

Concurrently with the Offering, the Company redeemed all 16,962 shares of Series C Preferred Stock outstanding and refinanced all $8.4 million in principal and interest of its Senior Secured Convertible Note issued in September (the "2022 Note"), in consideration of a cash payment to the holder thereof (the "Holder") of approximately $22.3 million (which was made using proceeds from the sale of the Series D Preferred Stock), and the issuance to the Holder of an amended and restated 2022 Note (the "2026 Note") with a principal amount of $15.0 million.

The net proceeds of the Offering, taking into account the cash payments made in respect of the redemption of the Series C Preferred Stock and the 2022 Note, were approximately $7.6 million.

On March 27, 2026, PAVmed's shareholders approved the conversion of the Series D Preferred Stock into shares of our common stock. Promptly following such approval, 100% of the Series D Preferred Stock was converted in full into 4,615,393 shares of our common stock.

Recent Developments - continued

Financing - continued

Lucid Diagnostics - Registered Direct Offering

On April 24, 2026, Lucid closed on the sale of 18,000,000 shares of its common stock, pursuant to its previously announced offering of shares of common stock at a price of $1.00 per share (the "Lucid RDO"). The net proceeds of the Lucid RDO, after deducting the underwriting discount and other expenses of the Lucid RDO, were approximately $16.8 million.

PAVmed ATM Facility

On April 17, 2025, the Company entered into a Sales Agreement (the "Sales Agreement") with Maxim Group LLC, as sales agent ("Maxim"), pursuant to which the Company may offer and sell, from time to time through or to Maxim, shares of its common stock in an "at the market" facility. Under the Sales Agreement, the Company may not issue or sell through Maxim a dollar amount of shares that would exceed $2.88 million of shares. The Company will pay Maxim a commission of 3.0% of the aggregate gross sales prices of the shares. Subsequent to June 30, 2026, through August 13, 2026, the Company sold 675,679 shares through the ATM equity facility for net proceeds of approximately $2.8 million, after payment of 3% commissions, or approximately $0.1 million. Following these sales, the Company has fully utilized the capacity available under the ATM equity facility, and no additional shares remain available for issuance thereunder.

Lucid ATM Facility

On May 30, 2025, Lucid entered into an "at-the-market offering" ("Lucid ATM") for up to $25.0 million of its common stock that may be offered and sold under a Controlled Equity Offering Agreement between the Company and Maxim Group LLC. In the six months ended June 30, 2026, Lucid sold 4,161,747 shares through the Lucid ATM equity facility for net proceeds of approximately $5.3 million, after payment of 3% commissions, or approximately $0.2 million.

Results of Operations

Overview

Revenue

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

Cost of revenue

The Company's cost of revenue from subscription revenue was derived from its Veris Health Cancer Care Platform. We have incurred expenses associated with the platform in the period in which the activities occur.

We expect that our gross margin may fluctuate based on the commercialization efforts of our subsidiaries.

Sales and marketing expenses

Sales and marketing expenses consist primarily of salaries and related costs for employees engaged in sales, sales support and marketing activities, as well as advertising and promotion expenses.

General and administrative expenses

General and administrative expenses consist primarily of salaries and related costs for personnel, travel expenses, facility-related costs, professional fees for accounting, tax, audit and legal services, salaries and related costs and other expenses associated with obtaining and maintaining patents within our intellectual property portfolio.

General and administrative expenses include those expenses related to being a public company, including fees and expenses for audit, legal, regulatory, tax-related services, insurance premiums and investor relations costs associated with maintaining compliance as a public company.

Results of Operations - continued

Research and development expenses

Research and development expenses are recognized in the period they are incurred and consist principally of internal and external expenses incurred for the development of our products, including:

	●	consulting costs for engineering design and development;
	●	salary and benefit costs associated with our medical research personnel and engineering personnel;
	●	costs associated with submission of regulatory filings;
	●	cost of laboratory supplies and acquiring, developing, and manufacturing preclinical prototypes; and
	●	product design engineering studies.

The expenses of our research and development activities includes those associated with research and development activities related to the Veris Cancer Care Platform and other products in our pipeline as well as applicable new technologies, as resources permit.

Other Income and Expense, net

Other income and expense, net, consists principally of management fee income received from Lucid, changes in fair value of our convertible notes and losses on extinguishment of debt upon repayment of such convertible notes.

Presentation of Dollar Amounts

All dollar amounts in this Management's Discussion and Analysis of Financial Condition and Results of Operations are presented in millions, except for share and per share amounts.

The three months ended June 30, 2026 as compared to three months ended June 30, 2025

Revenue

In the three months ended June 30, 2026, revenue was relatively flat, at less than $0.1 million, as compared to the corresponding period in the prior year.

Cost of revenue

In the three months ended June 30, 2026, the cost of revenue was approximately $0.1 million, as compared to less than $0.1 million for the corresponding period in the prior year. The net increase of $0.1 million principally related to the compensation costs resulting from Veris' commercialization efforts.

Sales and marketing expenses

In the three months ended June 30, 2026, sales and marketing costs remained relatively flat, at approximately $0.2 million, as compared to the corresponding period in the prior year.

General and administrative expenses

In the three months ended June 30, 2026, general and administrative costs were approximately $4.7 million, as compared to $3.7 million for the corresponding period in the prior year. The net increase of $1.0 million principally related to:

	●	approximately $1.2 million increase related to cash and stock-based compensation costs; and
	●	approximately $0.2 million decrease related to third-party professional fees, primarily due to financing-related costs.

Research and development expenses

In the three months ended June 30, 2026, research and development costs were approximately $2.1 million, as compared to $0.8 million for the corresponding period in the prior year. The net increase of $1.3 million principally related to the research and development costs incurred at Veris for the implantable physiological monitor.

Results of Operations - continued

The three months ended June 30, 2026 as compared to the three months ended June 30, 2025 - continued

Other Income and Expense

Change in fair value of convertible debt

In the three months ended June 30, 2026 and 2025, the change in the fair value of our convertible notes was approximately $0.6 million and $0.2 million of expense, respectively, related to the September 2022 Senior Convertible Note and the 2026 Note (as defined in Note 9, Debt, to the Financial Statements). The September 2022 Senior Convertible Note and the 2026 Note were initially measured at their issue-date estimated fair value and subsequently remeasured at estimated fair value as of each reporting period date.

Change in management fee income

In the three months ended June 30, 2026, management fee income remained flat at $3.2 million, as compared to the corresponding period in the prior year.

Change in fair value of Equity Method Investment

At June 30, 2026, the fair value of the Company's investment in Lucid was $33.5 million, with the Company recognizing an unrealized loss on its investment in Lucid of $2.5 million in the accompanying unaudited condensed consolidated statements of operations for the three months ended June 30, 2026. The fair value of common shares of Lucid held by the Company was determined using the $1.07 closing price per share of Lucid's common stock as of June 30, 2026, as compared to Lucid's common stock price per share of $1.15 at March 31, 2026.

At June 30, 2025, the fair value of the Company's investment in Lucid was $36.0 million, with the Company recognizing an unrealized loss on its investment in Lucid of $10.6 million in the accompanying unaudited condensed consolidated statements of operations for the three months ended June 30, 2025. The fair value of common shares of Lucid held by the Company was determined using the $1.15 closing price per share of Lucid's common stock as of June 30, 2025, as compared to Lucid's common stock price per share of $1.49 at March 31, 2025.

The six months ended June 30, 2026 as compared to six months ended June 30, 2025

Revenue

In the six months ended June 30, 2026, revenue was relatively flat, at less than $0.1 million, as compared to the corresponding period in the prior year.

Cost of revenue

In the six months ended June 30, 2026, the cost of revenue was approximately $0.2 million, as compared to $0.1 million for the corresponding period in the prior year. The net increase of $0.1 million principally related to the compensation costs resulting from Veris' commercialization efforts.

Sales and marketing expenses

In the six months ended June 30, 2026, sales and marketing costs were approximately $0.4 million, as compared to $0.5 million for the corresponding period in the prior year. The net decrease of $0.1 million principally related to a decrease in third-party consulting costs.

General and administrative expenses

In the six months ended June 30, 2026, general and administrative costs were approximately $11.0 million, as compared to $8.1 million for the corresponding period in the prior year. The net increase of $2.9 million principally related to:

	●	approximately $2.1 million increase related to third-party professional fees, primarily due to financing-related costs;
	●	approximately $0.7 million increase related to cash and stock-based compensation costs; and
	●	approximately $0.1 million increase related to general corporate and third-party consulting costs.

Research and development expenses

In the six months ended June 30, 2026, research and development costs were approximately $3.5 million, as compared to $1.6 million for the corresponding period in the prior year. The net increase of $1.9 million principally related to:

	●	approximately $1.8 million increase related to research and development costs, primarily related to the Veris implantable physiological monitor; and
	●	approximately $0.1 million increase related to compensation related costs.

Results of Operations - continued

The six months ended June 30, 2026 as compared to the six months ended June 30, 2025 - continued

Other Income and Expense

Change in fair value of convertible debt

In the six months ended June 30, 2026 and 2025, the change in the fair value of our convertible notes was approximately $2.8 million of income and $0.2 million of expense, respectively, related to the April 2022 Senior Convertible Note, the September 2022 Senior Convertible Note, and the 2026 Note (as defined in Note 9, Debt, to the Financial Statements). The April 2022 Senior Convertible Note, the September 2022 Senior Convertible Note and 2026 Note were initially measured at their issue-date estimated fair value and subsequently remeasured at estimated fair value as of each reporting period date.

Change in management fee income

In the six months ended June 30, 2026, management fee income remained flat at $6.3 million, as compared to the corresponding period in the prior year.

Loss on Debt Extinguishment

In the six months ended June 30, 2026, a debt extinguishment loss in the aggregate of approximately $3.4 million was recognized in connection with the redemption of the September 2022 Senior Convertible Note, as discussed below.

●

In the six months ended June 30, 2026, approximately $7.8 million of principal repayments were settled through a cash redemption payment of approximately $11.1 million. The redemption resulted in a debt extinguishment loss of approximately $3.4 million in the six months ended June 30, 2026.

In the six months ended June 30, 2025, a debt extinguishment loss in the aggregate of approximately $0.1 million was recognized in connection with our April 2022 Senior Convertible Note and September 2022 Senior Convertible Note, as discussed below.

●

In the six months ended June 30, 2025, approximately $0.2 million of principal repayments, along with less than $0.1 million of interest expense thereon, were settled through the issuance of 13,377 shares of common stock of the Company, with such shares having a fair value of approximately $0.3 million (with such fair value measured as the respective conversion date quoted closing price of the common stock of the Company). The conversions resulted in a debt extinguishment loss of approximately $0.1 million in the six months ended June 30, 2025.

See Note 9, Debt, to the Financial Statements, for additional information with respect to the April 2022 Senior Convertible Note, the September 2022 Senior Convertible Note, and the 2026 Note.

Change in fair value of Equity Method Investment

At June 30, 2026, the fair value of the Company's investment in Lucid was $33.5 million, with the Company recognizing an unrealized loss on its investment in Lucid of $0.6 million in the accompanying unaudited condensed consolidated statements of operations for the six months ended June 30, 2026. The fair value of common shares of Lucid held by the Company was determined using the $1.07 closing price per share of Lucid's common stock as of June 30, 2026, as compared to Lucid's common stock price per share of $1.09 at December 31, 2025.

At June 30, 2025, the fair value of the Company's investment in Lucid was $36.0 million, with the Company recognizing an unrealized gain on its investment in Lucid of $10.4 million in the accompanying unaudited condensed consolidated statements of operations for the six months ended June 30, 2025. The fair value of common shares of Lucid held by the Company was determined using the $1.15 closing price per share of Lucid's common stock as of June 30, 2025, as compared to Lucid's common stock price per share of $0.819 at December 31, 2024.

Liquidity and Capital Resources

Our current financing strategy is to obtain capital directly into Lucid, Veris and other subsidiaries to fund any product development or other related activities, although we retain the flexibility to raise capital at the PAVmed level. There are no assurances, however, we will be able to obtain an adequate level of financial resources required for the short-term or long-term commercialization and development of our products and services.

We have financed our operations principally through the public and private issuances of our common stock, preferred stock, common stock purchase warrants, and debt, both at the PAVmed level and, in the case of Lucid and Veris, at the subsidiary level, as well as through management fees under our management service contract with Lucid. We are subject to all of the risks and uncertainties typically faced by medical device and diagnostic and medical device companies that devote substantially all of their efforts to the commercialization of their initial products and services and ongoing R&D and clinical trials. We experienced net loss before noncontrolling interests of approximately $7.7 million and used approximately $5.3 million of cash in operations for the six months ended June 30, 2026. Financing activities provided $7.6 million of cash during the six months ended June 30, 2026. We ended the quarter with cash on-hand of $3.8 million as of June 30, 2026. We expect to continue to experience recurring losses and negative cash flows from operations, and will continue to fund our operations with debt and/or equity financing transactions. The Company's ability to continue operations 12 months beyond the issuance of the financial statements, will depend upon its ability to control its operating costs within the limits of the amounts collected from its management service contracts with its non-consolidated subsidiaries, to substantially increase its revenues from the Veris Cancer Care platform, and to raise additional capital through various potential sources including equity or debt financings or refinancing or restructuring existing debt obligations. These factors raise substantial doubt about the Company's ability to continue as a going concern within one year after the date the accompanying unaudited condensed consolidated financial statements are issued.

Issue of Shares of Our Common Stock

During the six months ended June 30, 2026

	●	We issued 4,615,393 shares of our common stock as a result of conversions of $30.0 million of our Series D Preferred Stock.
	●	We issued 433,546 shares of our common stock as a result of conversions of $1.4 million of our Series C Preferred Stock.
	●	We issued 225,000 shares of our common stock to vendors in exchange for approximately $2.0 million of agreed upon services, which is included in general and administrative operating expenses on the Company's unaudited condensed consolidated statement of operations.

Senior Notes

On April 4, 2022, we sold to an investor a Senior Secured Convertible Note with a face value principal of $27.5 million (the "April 2022 Senior Convertible Note"). The April 2022 Senior Secured Convertible Note had an initial contractual maturity date of April 4, 2024, which maturity date the investor agreed to extend by one year, to April 4, 2025. The April 2022 Senior Convertible Note was satisfied in full in connection with the Exchange (as defined below).

On September 8, 2022, we sold to the same investor an additional Senior Secured Convertible Note with a face value principal of $11.25 million (the "September 2022 Senior Convertible Note"). The September 2022 Senior Secured Convertible Note had an initial contractual maturity date of September 6, 2024, which maturity date was extended to December 31, 2026. A portion of the September 2022 Senior Convertible Note was satisfied in connection with the Exchange, and subsequently was refinanced in connection with the February 2026 Financing (as defined below).

On February 3, 2026, we consummated a series of financing-related transactions (the "February 2026 Financing"), in connection with which we refinanced the September 2022 Senior Secured Convertible Note by issuing to the holder thereof an amended and restated September 2022 Senior Secured Convertible Note with a face value principal of $15.0 million (the "2026 Note"). The 2026 Note has an initial contractual maturity date of February 3, 2029. Effective as of June 30, 2026, the Company and the Holder agreed to amend the Minimum Cash Covenant (as defined above) under the 2026 Note to provide that the amount of the Company's available cash will equal or exceed $2.5 million as of each Measurement Date (as defined above) (or, for any Measurement Date on or after September 15, 2026, $8.0 million), provided that the amendment will be deemed null and void unless by August 25, 2026, the Company is able to deposit $5 million in a blocked account formed for the benefit of the Holder. Accordingly, the Company was in compliance with all covenants under the 2026 Note as of June 30, 2026.

See Note 9, Debt, to the Financial Statements for additional information about the September 2022 Senior Convertible Note and the 2026 Note.

Liquidity and Capital Resources - continued

PAVmed ATM Facility

On April 17, 2025, the Company entered into a Sales Agreement (the "Sales Agreement") with Maxim Group LLC, as sales agent ("Maxim"), pursuant to which the Company may offer and sell, from time to time through or to Maxim, shares of its common stock in an "at the market" facility. Under the Sales Agreement, the Company may not issue or sell through Maxim a dollar amount of shares that would exceed $2.88 million of shares. The Company will pay Maxim a commission of 3.0% of the aggregate gross sales prices of the shares. Subsequent to June 30, 2026, through August 13, 2026, the Company sold 675,679 shares through the ATM equity facility for net proceeds of approximately $2.8 million, after payment of 3% commissions, or approximately $0.1 million. Following these sales, the Company has fully utilized the capacity available under the ATM equity facility, and no additional shares remain available for issuance thereunder.

Convertible Preferred Stock

On November 15, 2024, the Company entered into an Exchange Agreement (the "Debt Exchange Agreement") with the holder (the "Holder") of the April 2022 Senior Convertible Note and the September 2022 Senior Convertible Note. The Debt Exchange Agreement provided for the exchange (the "Exchange") of $22.3 million in principal amount of the April 2022 Senior Convertible Note and the September 2022 Senior Convertible Note and interest thereon for 22,347 shares of Series C Preferred Stock. On January 17, 2025, after satisfaction of all conditions to closing, the parties consummated the Exchange.

On November 20, 2024, the Company entered into a Securities Purchase Agreement (the "Series C Securities Purchase Agreement") with the Holder. The Series C Securities Purchase Agreement provided for the purchase of 2,653 shares of Series C Preferred Stock at a price of $1,000 per share, with the purchase price to be satisfied through the cancellation of $2.6 million of certain unsecured debt obligations owed by the Company to the Holder (the "Purchase"). On January 24, 2025, after satisfaction of all conditions to closing, the parties consummated the Purchase.

On February 3, 2026, the Company consummated the February 2026 Financing, in connection with which we sold to certain accredited investors (i) 30,000 shares of Series D Preferred Stock, and (ii) warrants (the "Series D Warrants") to purchase an additional 30,000 shares of Series D Preferred Stock, with each investor receiving 100 shares of Series D Preferred Stock and a warrant to purchase 100 shares of Series D Preferred Stock for each $100,000 of its investment. Concurrently therewith, the Company redeemed all 16,962 shares of Series C Preferred Stock outstanding. The February 2026 Financing, including both the convertible note refinancing and the preferred stock sale, but net of the redemption of the Series C Preferred Stock, generated proceeds to the Company of approximately $7.6 million. On March 27, 2026, all outstanding shares of Series D Preferred Stock were converted in full into 4,615,393 shares of the Company's common stock at the applicable conversion price.

The Series D Warrants entitle the holders thereof to purchase an aggregate of 30,000 shares of Series D Preferred Stock at an exercise price of $1,000 per share. The Series D Warrants expire on February 3, 2031. Commencing on the publication by Molecular Diagnostic Services Program (MolDx) of a draft local coverage determination that EsoGuard will be covered by Medicare, the Series D Warrants will be callable by the Company at a price of $0.001 per warrant share. In lieu of issuing additional shares of Series D Preferred Stock upon exercise of the warrants, the Company may (and intends to) issue to the holders the number of shares of its common stock that would be issuable to the holders upon conversion of the Series D Preferred Stock underlying the warrants. The Company may send written notice to the holders after such condition has been satisfied and, after receipt of such notice, the holders will have 30 days to exercise the Series D Warrants. If such warrants are exercised in full, the Company will receive an additional $30 million in cash proceeds in consideration of the issuance of an additional 4,615,393 shares of our common stock.

See Note 11, Preferred Stock, to the Financial Statements for additional information about the Series C Preferred Stock and the Series D Preferred Stock.

Liquidity and Capital Resources - continued

Veris Financing (June 2025)

On June 23, 2025, Veris and certain accredited investors consummated an offering (the "June 2025 Offering") of 1,800,000 shares of common stock, par value $0.001 per share, of Veris ("Veris Common Stock") and warrants to purchase 1,800,000 shares of Veris Common Stock ("Veris Warrants"), at a purchase price of $1.40 per share of Veris Common Stock. The June 2025 Offering generated gross proceeds to Veris of approximately $2.5 million. The proceeds of the offering will be used to continue development activities related to Veris' implantable physiological monitor and for general working capital purposes.

The Veris Warrants become exercisable six months after issuance and expire on the earlier of (i) the five-year anniversary of the initial exercise date and (ii) the 60th day following receipt by Veris of FDA approval of its implantable physiological monitor. The Veris Warrants have an exercise price of $1.40 per share, subject to adjustment as described below. The Veris Warrants may be exercised only for cash. The exercise price and number and type of securities or other property issuable on exercise of the Veris Warrants may be adjusted in certain circumstances, including in the event of a stock split or combination, stock dividend, or a recapitalization, reorganization, merger or similar transaction. In addition, if Veris completes a subsequent equity raise at a lower valuation, the exercise price of the Veris Warrants will be reduced to such lower valuation and the number of shares issuable on exercise of the Veris Warrants will be increased so that the aggregate exercise price remains the same.

Critical Accounting Estimates

The discussion and analysis of our financial condition and results of operations is based on our unaudited condensed consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP"). The preparation of these unaudited condensed consolidated financial statements requires us to make estimates and assumptions that affect the amounts reporting in our unaudited condensed consolidated financial statements and accompanying notes. On an ongoing basis, we evaluate our estimates and judgments. In accordance with U.S. GAAP, we base our estimates on historical experience and on various other factors that are believed to be appropriate under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. Our critical accounting estimates are as disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2025 as filed with the SEC on March 27, 2026. There have been no material changes to our critical accounting estimates in the six months ended June 30, 2026.