UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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| Item 2.01. | Completion of Acquisition or Disposition of Assets. |
On September 10, 2024, PAVmed Inc. (the “Company”) determined that Lucid Diagnostics Inc. (“Lucid”) and its subsidiaries will be deconsolidated from the Company’s financial statements as of September 10, 2024, as a result of the changes in the composition of the Company’s board of directors described under Item 5.02 below, in combination with the Company ceasing to have control over a majority of the voting power of Lucid. As a result of these events, the Company is considered to cease to have control over Lucid for the purposes of U.S. generally accepted accounting principles (“U.S. GAAP”), even though it continues to own, and has not disposed any of its, 31,302,444 shares of common stock of Lucid.
The Company completed the deconsolidation as an initial step in its efforts to achieve compliance with the continued listing standard set forth in Listing Rule 5550(b)(1) of The Nasdaq Stock Market (“Nasdaq”), which requires, among other things, that a company listed on the Nasdaq Capital Market maintain a minimum stockholders’ equity of $2.5 million. As shown on the unaudited pro forma condensed consolidated financial statements attached as Exhibit 99.2 to this report, after giving effect to these transactions, the Company’s stockholders’ equity as of June 30, 2024 would have increased by $9.7 million from a deficit of $18.6 million to a deficit of approximately $9.0 million. The Company continues to explore all available alternatives for further increasing the Company’s stockholders’ equity, including, but not limited to, by restructuring the existing senior secured convertible debt.
The Company determined that the deconsolidation of Lucid does not meet the criteria requiring presentation as discontinued operations in accordance with U.S. GAAP because it does not represent a strategic shift that will have a major effect on the Company’s operations or financial results. The deconsolidation of Lucid is considered, for accounting purposes only, a disposition of a significant business under Item 2.01 of Form 8-K. As a result, the Company prepared the unaudited pro forma condensed consolidated financial statements attached as Exhibit 99.2 to this report, which were prepared in accordance with Article 11 of Regulation S-X and are based on the historical financial statements of the Company. The historical consolidated financial statements have been adjusted in the accompanying unaudited pro forma condensed consolidated financial statements to give effect to the deconsolidation of Lucid. Certain information and disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted from this report, as is permitted by Securities and Exchange Commission rules and regulations.
Through September 9, 2024, Lucid’s results will continue to be consolidated into the Company’s financial statements and the Company will continue to recognize Lucid’s losses in its earnings. Effective as of September 10, 2024, the Company will no longer consolidate Lucid’s results in its financial statements. Following the deconsolidation of Lucid, the Company will account for its interest in Lucid in accordance with the measurement alternative under ASC 321, “Investments - Equity Securities,” and initially record its interest in Lucid as an asset on its balance sheet at the estimated fair value on September 10, 2024.
In connection with the deconsolidation, the Company expects to recognize an estimated non-cash gain of approximately $70 million in the third quarter of 2024, representing the excess of the estimated preliminary fair value of its interest in, and receivables from, Lucid over the carrying value of Lucid as of September 10, 2024. The proforma information provided in Exhibit 99.2 reflects the gain as if the deconsolidation occurred on January 1, 2023.
| Item 3.01. | Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing. |
As previously disclosed, on March 7, 2024, the Company received a notice from the Nasdaq Listing Qualifications Department stating that, for the prior 30 consecutive business days (through March 6, 2024), the market value of the Company’s listed securities had been below the minimum of $35 million required for continued inclusion on the Nasdaq Capital Market under Nasdaq Listing Rule 5550(b)(2). The Company was provided 180 calendar days, or until September 3, 2024, to regain compliance with the rule. The Company did not regain compliance with the rule during the allotted time period.
Accordingly, on September 10, 2024, the Company received a staff determination letter from the Nasdaq Listing Qualifications Department, stating that unless the Company timely requests a hearing before a Nasdaq Hearings Panel (the “Panel”) to appeal the staff determination, the Company’s securities will be subject to suspension and delisting.
The Company intends to timely request a hearing before the Panel. This hearing request will automatically stay Nasdaq’s delisting of the Company’s common stock and Series Z warrants pending the Panel’s decision. The Company expects that Nasdaq will hold the hearing with the Panel within 45 days of the Company’s request for the hearing, pursuant to the Nasdaq Listing Rules. At or prior to the hearing, the Company intends to present to Nasdaq information demonstrating that it has regained compliance with the continued listing standards under the Nasdaq Listing Rules, or alternatively a plan to regain compliance and a request for an extension of time to effectuate the plan.
Through the deconsolidation of Lucid described above, the Company already has taken steps to regain compliance with the continued listing standard under Nasdaq Listing Rule 5550(b)(1) in lieu of the continued listing standard under Nasdaq Listing Rule 5550(b)(2), and the Company will continue to explore all available options to regain compliance with the continued listing standards under Nasdaq Listing Rules. Notwithstanding the foregoing, there can be no assurance that the Company ultimately will regain compliance with the continued listing standards under the Nasdaq Listing Rules, or that Panel will grant the Company an extension of time to regain compliance, in the event the Company requests such an extension.
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| Item 5.02. | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Effective as of September 10, 2024, James L. Cox, M.D., and Joan B. Harvey resigned from the Company’s board of directors. Neither Dr. Cox’s nor Ms. Harvey’s resignation was due to any disagreement with the Company on any matter relating to the registrant’s operations, policies or practices.
Also effective as of September 10, 2024, the Company’s board of directors appointed Sundeep Agrawal, M.D. as a Class B director. The Company has entered into its standard form of indemnification agreement with Dr. Agrawal. In addition, in accordance with the Company’s policy for non-employee director compensation, Dr. Agrawal will receive an initial grant of a stock option with a grant date fair value of $250,000.
Prior to being appointed to the Company’s board of directors, Dr. Agrawal had entered into a strategic advisory agreement with the Company to provide certain M&A advisory services. Such agreement will remain in effect upon Dr. Agrawal joining the board. Pursuant to the agreement, Dr. Agrawal will receive a monthly consulting fee of $3,333. The agreement is terminable by the Company on 10 days’ written notice. Except for the foregoing, Dr. Agrawal has not engaged in any transactions with the Company that are required to be reported pursuant to Item 404(a) of Regulation S-K.
| Item 7.01. | Regulation FD Disclosure. |
On September 16, 2024, the Company issued a press release announcing the deconsolidation of Lucid and the staff determination letter from Nasdaq. A copy of the press release is attached to this report as Exhibit 99.1 and is incorporated herein by reference.
The information furnished under this Item 7.01, including the exhibit related thereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any disclosure document of the Company, except as shall be expressly set forth by specific reference in such document.
| Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits:
| Exhibit No. | Description | |
| 99.1 | Press release. | |
| 99.2 | Pro forma financial information. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
Forward-Looking Statements
This report contains “forward-looking statements” that are subject to substantial risks and uncertainties. All statements, other than statements of historical fact, contained in this report are forward-looking statements. Forward-looking statements contained in this report may be identified by the use of words such as “anticipate,” “believe,” “contemplate,” “could,” “estimate,” “expect,” “intend,” “seek,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “target,” “aim,” “should,” “will”, “would,” or the negative of these words or other similar expressions, although not all forward-looking statements contain these words. Forward-looking statements are based on the Company’s current expectations and are subject to inherent uncertainties, risks and assumptions that are difficult to predict. Further, certain forward-looking statements are based on assumptions as to future events that may not prove to be accurate. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, which are, in some cases, beyond the Company’s control and which could materially affect results. Factors that may cause actual results to differ materially from current expectations include, among other things, those described more fully in the section titled “Risk Factors” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 and the Company’s other reports filed with the Securities and Exchange Commission. Forward-looking statements contained in this announcement are made as of this date, and the Company undertakes no duty to update such information except as required under applicable law.
| 3 |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Dated: September 16, 2024 | PAVMED INC. | |
| By: | /s/ Dennis McGrath | |
| Dennis McGrath | ||
| President and Chief Financial Officer | ||
| 4 |
Exhibit 99.1
PAVmed Announces Efforts to Regain Compliance with Nasdaq Listing Requirements
Efforts include appointment of seasoned biotech investor Sundeep Agrawal, M.D. to board to replace departing directors
NEW YORK, September 16, 2024 – PAVmed Inc. (Nasdaq: PAVM) (“PAVmed” or the “Company”) a diversified commercial-stage medical technology company, operating in the medical device, diagnostics, and digital health sectors, today announced that, as part of its efforts to regain compliance with Nasdaq’s listing requirements, Lucid Diagnostics (Nasdaq: LUCD) (“Lucid”) will be deconsolidated from PAVmed’s financial statements. As a result, PAVmed will no longer report consolidated financials reflecting Lucid’s operating losses. PAVmed’s holdings of Lucid common stock remain unchanged, and the value of these holdings will be reported going forward as an asset on its balance sheet, substantially increasing the Company’s stockholder’s equity. The deconsolidation was effectuated by changing the composition of PAVmed’s board of directors and as a result of it no longer controlling a majority of the voting interests in Lucid. The deconsolidation does not affect PAVmed’s holdings of Lucid common stock and PAVmed remains Lucid’s largest shareholder.
The deconsolidation is the first in a series of steps that the Company is seeking to take in order to regain compliance with the Nasdaq continued listing standards. On September 10, the Company received a determination letter from Nasdaq, stating that the Company had not met the continued listing standards for 180 consecutive calendar days and that, unless the Company timely requests a hearing before a Nasdaq Hearings Panel to appeal the determination, the Company’s securities will be subject to delisting. The Company will be requesting such a hearing, which it expects to be held in October.
“This deconsolidation is an important initial step in our ongoing efforts to strengthen PAVmed’s balance sheet in order to regain compliance with Nasdaq’s ongoing listing requirements while maintaining PAVmed’s share ownership in Lucid,” said Dennis McGrath, PAVmed’s President and Chief Financial Officer. “We look forward to continuing to explore all available alternatives for further increasing the Company’s stockholder’s equity so that PAVmed can maintain its Nasdaq listing.”
An important element of the deconsolidation included changes to the PAVmed board of directors to ensure that a majority of directors on the Lucid board are not also PAVmed directors. These changes involved the appointment of seasoned biotech investor Sundeep Agrawal, M.D., to the PAVmed board, in place of departing directors James L. Cox, M.D. and Joan B. Harvey. Dr. Cox will remain on Lucid’s board of directors.
“We are thrilled to have Dr. Agrawal join our board, bringing with him deep experience in biotech and life sciences investing,” said Lishan Aklog, M.D., PAVmed’s Chairman and Chief Executive Officer. “I have had the pleasure of working closely with Dr. Agrawal in his role as a strategic advisor to the company for over a year. His depth of experience across a broad spectrum of biotech assets will be invaluable as we continue to pursue strategic transactions involving novel and groundbreaking technologies. I would also like to express my deepest gratitude to Dr. Cox and Ms. Harvey for their significant contributions to PAVmed during their tenure as board members.”
Dr. Agrawal is a General Partner at Colt Ventures, a leading private investment firm, and has led investments totaling hundreds of millions of dollars into public and private biotech companies. He has served on numerous company boards, including current directorships at BlossomHill Therapeutics, a small molecule drug discovery and development company focused on unmet medical needs in oncology and autoimmune disease, and Alterome Therapeutics, a biopharmaceutical company leading the development of next generation, small molecule targeted therapies for the treatment of cancer. His previously served as a Vice President at Longitude Capital, a $2 billion healthcare investment firm, and prior to that, as an Executive Director in Healthcare Investment Banking at Oppenheimer & Co. Dr. Agrawal holds an M.D. from the George Washington School of Medicine and a B.A. in Biology from George Washington University. He completed his clinical training at Lenox Hill Hospital in New York, NY.
For additional details regarding the deconsolidation and related changes in the Company’s board of directors, please see the Current Report on Form 8-K filed by the Company today.
About PAVmed
PAVmed Inc. is a diversified commercial-stage medical technology company operating in the medical device, diagnostics, and digital health sectors. Its subsidiary, Lucid Diagnostics, is a commercial-stage cancer prevention medical diagnostics company that markets the EsoGuard® Esophageal DNA Test and EsoCheck® Esophageal Cell Collection Device—the first and only commercial tools for widespread early detection of esophageal precancer to mitigate the risks of esophageal cancer deaths. Its other subsidiary, Veris Health Inc., is a digital health company whose lead product is a digital cancer care platform with physiologic data collection, symptom reporting and telehealth functions, designed to improve personalized cancer care through remote patient monitoring. Veris has also been developing an implantable physiological monitor, designed to be implanted alongside a chemotherapy port, which will interface with the Veris cancer care platform.
For more and for more information about PAVmed, please visit pavmed.com.
For more information about Lucid Diagnostics, please visit luciddx.com.
For more information about Veris Health, please visit verishealth.com.
Forward-Looking Statements
This press release includes forward-looking statements that involve risk and uncertainties. Forward-looking statements are any statements that are not historical facts. Such forward-looking statements, which are based upon the current beliefs and expectations of PAVmed’s management, are subject to risks and uncertainties, which could cause actual results to differ from the forward-looking statements. Risks and uncertainties that may cause such differences include, among other things, volatility in the price of PAVmed’s common stock; general economic and market conditions; the uncertainties inherent in research and development, including the cost and time required to advance PAVmed’s products to regulatory submission; whether regulatory authorities will be satisfied with the design of and results from PAVmed’s clinical and preclinical studies; whether and when PAVmed’s products are cleared by regulatory authorities; market acceptance of PAVmed’s products once cleared and commercialized; PAVmed’s ability to raise additional funding as needed; and other competitive developments. In addition, PAVmed continues to monitor the COVID-19 pandemic and the pandemic’s impact on PAVmed’s businesses. These factors are difficult or impossible to predict accurately and many of them are beyond PAVmed’s control. In addition, new risks and uncertainties may arise from time to time and are difficult to predict. For a further list and description of these and other important risks and uncertainties that may affect PAVmed’s future operations, see Part I, Item 1A, “Risk Factors,” in PAVmed’s most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission, as the same may be updated in Part II, Item 1A, “Risk Factors” in any Quarterly Report on Form 10-Q filed by PAVmed after its most recent Annual Report. PAVmed disclaims any intention or obligation to publicly update or revise any forward-looking statement to reflect any change in its expectations or in events, conditions, or circumstances on which those expectations may be based, or that may affect the likelihood that actual results will differ from those contained in the forward-looking statements.
Investor and Media Contact
Matt
Riley
PAVmed
610.348.8926
mjr@pavmed.com
Exhibit 99.2
PAVMED INC.
and SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands except number of shares and per share data - unaudited)
| For the year ended December 31, 2023 | ||||||||||||||||||
| As Reported | Lucid Diagnostics Inc. Deconsolidation | Pro forma Adjustments | Footnotes | Pro forma Statements | ||||||||||||||
| Revenue | $ | 2,452 | $ | (2,428 | ) | $ | - | $ | 24 | |||||||||
| Operating Expenses: | ||||||||||||||||||
| Cost of revenue | 6,420 | (5,979 | ) | - | 441 | |||||||||||||
| Sales and marketing | 17,583 | (16,404 | ) | 437 | (4) | 1,616 | ||||||||||||
| General and administrative | 30,947 | (19,254 | ) | 6,349 | (4) | 18,042 | ||||||||||||
| Amortization of acquired intangible assets | 2,021 | (2,021 | ) | - | - | |||||||||||||
| Research and development | 14,276 | (7,252 | ) | 2,214 | (4) | 9,238 | ||||||||||||
| Total operating expenses | 71,247 | (50,910 | ) | 9,000 | 29,337 | |||||||||||||
| Operating loss | (68,795 | ) | 48,482 | (9,000 | ) | (29,313 | ) | |||||||||||
| Other income (expense): | ||||||||||||||||||
| Interest income | 505 | (424 | ) | - | 81 | |||||||||||||
| Interest expense | (589 | ) | 416 | - | (173 | ) | ||||||||||||
| Management fee revenue | - | - | 9,000 | (4) | 9,000 | |||||||||||||
| Change in fair value - Senior Secured Convertible Notes | (6,026 | ) | 2,980 | - | (3,046 | ) | ||||||||||||
| Loss on issue and offering costs - Senior Secured Convertible Note | (1,186 | ) | 1,186 | - | - | |||||||||||||
| Debt extinguishments loss - Senior Secured Convertible Notes | (3,782 | ) | 26 | - | (3,756 | ) | ||||||||||||
| Change in fair value - derivative liability | (390 | ) | - | - | (390 | ) | ||||||||||||
| Gain on sale of intellectual property | 1,000 | - | - | 1,000 | ||||||||||||||
| Gain on deconsolidation of subsidiary | - | - | 42,351 | (1) | 42,351 | |||||||||||||
| Change in fair value of equity method investment | - | - | 1,565 | (2) | 1,565 | |||||||||||||
| Other income (expense),net | (10,468 | ) | 4,184 | 52,916 | 46,632 | |||||||||||||
| Loss before provision for income tax | (79,263 | ) | 52,666 | 43,916 | 17,319 | |||||||||||||
| Provision for income taxes | - | - | - | - | ||||||||||||||
| Net loss before noncontrolling interest | (79,263 | ) | 52,666 | 43,916 | 17,319 | |||||||||||||
| Net loss attributable to the noncontrolling interests | 15,088 | (13,174 | ) | - | 1,914 | |||||||||||||
| Net loss attributable to PAVmed Inc. | (64,175 | ) | 39,492 | 43,916 | 19,233 | |||||||||||||
| Less: Deemed dividend on Series Z warrant modification | (1,791 | ) | - | - | (1,791 | ) | ||||||||||||
| Less: Series B Convertible Preferred Stock dividends earned | (304 | ) | - | - | (304 | ) | ||||||||||||
| Net loss attributable to PAVmed Inc. common stockholders | $ | (66,270 | ) | $ | 39,492 | $ | 43,916 | $ | 17,138 | |||||||||
| Per share information: | ||||||||||||||||||
| Net loss per share attributable to PAVmed Inc. common stockholders - basic | $ | (9.16 | ) | $ | 2.37 | |||||||||||||
| Net loss per share attributable to PAVmed Inc. common stockholders - diluted | $ | (9.16 | ) | $ | 2.35 | |||||||||||||
| Weighted average common shares outstanding - basic | 7,231,546 | 7,231,546 | ||||||||||||||||
| Weighted average common shares outstanding - diluted | 7,231,546 | 7,302,073 | ||||||||||||||||
PAVMED INC.
and SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands except number of shares and per share data - unaudited)
| For the three months ended June 30, 2024 | ||||||||||||||||||
| As Reported | Lucid Diagnostics Inc. Deconsolidation | Pro forma Adjustments | Footnotes | Pro forma Statements | ||||||||||||||
| Revenue | $ | 979 | $ | (966 | ) | $ | - | $ | 13 | |||||||||
| Operating Expenses: | ||||||||||||||||||
| Cost of revenue | 1,666 | (1,614 | ) | - | 52 | |||||||||||||
| Sales and marketing | 4,242 | (4,210 | ) | 127 | (4) | 159 | ||||||||||||
| General and administrative | 7,009 | (4,857 | ) | 1,804 | (4) | 3,956 | ||||||||||||
| Amortization of acquired intangible assets | 105 | (105 | ) | - | - | |||||||||||||
| Research and development | 1,641 | (1,372 | ) | 570 | (4) | 839 | ||||||||||||
| Total operating expenses | 14,663 | (12,158 | ) | 2,500 | 5,005 | |||||||||||||
| Operating loss | (13,684 | ) | 11,192 | (2,500 | ) | (4,992 | ) | |||||||||||
| Other income (expense): | ||||||||||||||||||
| Interest income | 110 | (107 | ) | - | 3 | |||||||||||||
| Interest expense | (11 | ) | 6 | - | (5 | ) | ||||||||||||
| Management fee revenue | - | - | 2,500 | (4) | 2,500 | |||||||||||||
| Change in fair value - Senior Secured Convertible Notes | (566 | ) | (599 | ) | - | (1,165 | ) | |||||||||||
| Debt extinguishments loss - Senior Secured Convertible Notes | (763 | ) | 513 | - | (250 | ) | ||||||||||||
| Change in fair value of equity method investment | - | - | 313 | (2) (3) | 313 | |||||||||||||
| Other income (expense),net | (1,230 | ) | (187 | ) | 2,813 | 1,396 | ||||||||||||
| Loss before provision for income tax | (14,914 | ) | 11,005 | 313 | (3,596 | ) | ||||||||||||
| Provision for income taxes | - | - | - | - | ||||||||||||||
| Net loss before noncontrolling interest | (14,914 | ) | 11,005 | 313 | (3,596 | ) | ||||||||||||
| Net loss attributable to the noncontrolling interests | 4,087 | (3,843 | ) | - | 244 | |||||||||||||
| Net loss attributable to PAVmed Inc. | (10,827 | ) | 7,162 | 313 | (3,351 | ) | ||||||||||||
| Less: Series B Convertible Preferred Stock dividend earned | (81 | ) | - | - | (81 | ) | ||||||||||||
| Net loss attributable to PAVmed Inc. common stockholders | $ | (10,908 | ) | $ | 7,162 | $ | 313 | $ | (3,432 | ) | ||||||||
| Per share information: | ||||||||||||||||||
| Net loss per share attributable to PAVmed Inc. common stockholders - basic and diluted | $ | (1.19 | ) | $ | (0.37 | ) | ||||||||||||
| Weighted average common shares outstanding - basic and diluted | 9,152,819 | 9,152,819 | ||||||||||||||||
PAVMED INC.
and SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands except number of shares and per share data - unaudited)
| For the six months ended June 30, 2024 | ||||||||||||||||||
| As Reported | Lucid Diagnostics Inc. Deconsolidation | Pro forma Adjustments | Footnotes | Pro forma Statements | ||||||||||||||
| Revenue | $ | 1,989 | $ | (1,967 | ) | $ | - | $ | 22 | |||||||||
| Operating Expenses: | ||||||||||||||||||
| Cost of revenue | 3,411 | (3,269 | ) | - | 142 | |||||||||||||
| Sales and marketing | 8,552 | (8,404 | ) | 253 | (4) | 401 | ||||||||||||
| General and administrative | 13,688 | (8,927 | ) | 3,607 | (4) | 8,368 | ||||||||||||
| Amortization of acquired intangible assets | 477 | (477 | ) | - | - | |||||||||||||
| Research and development | 3,583 | (2,873 | ) | 1,140 | (4) | 1,850 | ||||||||||||
| Total operating expenses | 29,711 | (23,950 | ) | 5,000 | 10,761 | |||||||||||||
| Operating loss | (27,722 | ) | 21,983 | (5,000 | ) | (10,739 | ) | |||||||||||
| Other income (expense): | ||||||||||||||||||
| Interest income | 182 | (175 | ) | - | 7 | |||||||||||||
| Interest expense | (26 | ) | 18 | - | (8 | ) | ||||||||||||
| Management fee revenue | - | - | 5,000 | (4) | 5,000 | |||||||||||||
| Change in fair value - Senior Secured Convertible Notes | (2,728 | ) | (890 | ) | - | (3,618 | ) | |||||||||||
| Debt extinguishments loss - Senior Convertible Notes | (1,132 | ) | 681 | - | (451 | ) | ||||||||||||
| Debt modification expense | (2,000 | ) | - | - | (2,000 | ) | ||||||||||||
| Change in fair value of equity method investment | - | - | (18,468 | ) | (2) (3) | (18,468 | ) | |||||||||||
| Other income (expense),net | (5,704 | ) | (366 | ) | (13,468 | ) | (19,538 | ) | ||||||||||
| Loss before provision for income tax | (33,426 | ) | 21,617 | (18,468 | ) | (30,277 | ) | |||||||||||
| Provision for income taxes | - | - | - | - | ||||||||||||||
| Net loss before noncontrolling interest | (33,426 | ) | 21,617 | (18,468 | ) | (30,277 | ) | |||||||||||
| Net loss attributable to the noncontrolling interests | 7,387 | (6,898 | ) | - | 489 | |||||||||||||
| Net loss attributable to PAVmed Inc. | (26,039 | ) | 14,719 | (18,468 | ) | (29,788 | ) | |||||||||||
| Less: Series B Convertible Preferred Stock dividend earned | (161 | ) | - | - | (161 | ) | ||||||||||||
| Less: Deemed dividend on Subsidiary Preferred Stock attributable to the noncontrolling interests | (7,496 | ) | - | - | (7,496 | ) | ||||||||||||
| Net loss attributable to PAVmed Inc. common stockholders | $ | (33,696 | ) | $ | 14,719 | $ | (18,468 | ) | $ | (37,445 | ) | |||||||
| Per share information: | ||||||||||||||||||
| Net loss per share attributable to PAVmed Inc. common stockholders - basic and diluted | $ | (3.78 | ) | $ | (4.20 | ) | ||||||||||||
| Weighted average common shares outstanding - basic and diluted | 8,923,862 | 8,923,862 | ||||||||||||||||
PAVMED INC.
and SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(in thousands except number of shares and per share data - unaudited)
| As of June 30, 2024 | ||||||||||||||||||
| As Reported | Lucid Diagnostics Inc. Deconsolidation | Pro forma Adjustments | Footnotes | Pro forma Statements | ||||||||||||||
| Assets: | ||||||||||||||||||
| Current Assets: | ||||||||||||||||||
| Cash | $ | 25,499 | $ | (24,920 | ) | $ | - | $ | 579 | |||||||||
| Accounts receivable | 219 | (160 | ) | - | 59 | |||||||||||||
| Inventory | 687 | (687 | ) | - | - | |||||||||||||
| Prepaid expenses, deposits, and other current assets | 3,802 | (1,892 | ) | - | 1,910 | |||||||||||||
| Total current assets | 30,207 | (27,659 | ) | - | 2,548 | |||||||||||||
| Fixed assets, net | 1,331 | (1,050 | ) | - | 281 | |||||||||||||
| Equity method investment | - | - | 25,668 | (5) | 25,668 | |||||||||||||
| Operating lease right-of-use assets | 5,771 | (3,037 | ) | - | 2,734 | |||||||||||||
| Intangible assets, net | 947 | (947 | ) | - | - | |||||||||||||
| Other assets | 1,157 | (1,157 | ) | - | - | |||||||||||||
| Total assets | $ | 39,413 | $ | (33,850 | ) | $ | 25,668 | $ | 31,231 | |||||||||
| Liabilities, Preferred Stock and Stockholders’ Equity | ||||||||||||||||||
| Current liabilities: | ||||||||||||||||||
| Accounts payable | $ | 1,232 | $ | (903 | ) | $ | - | $ | 329 | |||||||||
| Accrued expenses and other current liabilities | 6,789 | (2,727 | ) | - | 4,062 | |||||||||||||
| Operating lease liabilities, current portion | 1,369 | (884 | ) | - | 485 | |||||||||||||
| Senior Secured Convertible Notes - at fair value | 44,000 | (11,200 | ) | - | 32,800 | |||||||||||||
| Total current liabilities | 53,390 | (15,714 | ) | - | 37,676 | |||||||||||||
| Operating lease liabilities, less current portion | 4,665 | (2,154 | ) | - | 2,511 | |||||||||||||
| Total liabilities | 58,055 | (17,868 | ) | - | 40,187 | |||||||||||||
| Commitments and contingencies | ||||||||||||||||||
| Stockholders’ Equity: | ||||||||||||||||||
| Preferred stock | 3,151 | - | - | 3,151 | ||||||||||||||
| Common stock | 10 | - | - | 10 | ||||||||||||||
| Additional paid-in capital | 243,524 | - | - | 243,524 | ||||||||||||||
| Accumulated deficit | (320,630 | ) | 43,817 | 25,668 | (5) | (251,145 | ) | |||||||||||
| Total PAVmed Inc. Stockholders’ Equity (Deficit) | (73,945 | ) | 43,817 | 25,668 | (4,460 | ) | ||||||||||||
| Noncontrolling interests | 55,303 | (59,799 | ) | - | (4,496 | ) | ||||||||||||
| Total Stockholders’ Equity (Deficit) | (18,642 | ) | (15,982 | ) | 25,668 | (8,956 | ) | |||||||||||
| Total Liabilities and Stockholders Equity/(Deficit) | $ | 39,413 | $ | (33,850 | ) | $ | 25,668 | $ | 31,231 | |||||||||
(1) The gain upon deconsolidation of Lucid Diagnostics Inc. for purposes of the pro forma condensed consolidated statements of operations data was calculated by comparing PAVmed Inc.’s $220 basis as of January 1, 2023 (represented by the net assets of Lucid Diagnostics Inc. of $23,046, net of non-controlling interest of $22,826) as compared to the fair market value of PAVmed Inc.’s ownership of 31,302,420 of Lucid Diagnostics Inc. common stock at $1.36 price per share at January 1, 2023, or $42,571. The difference between the basis and the fair market values of $42,351 represents the proforma gain recognized.
(2) Calculation of the fair value option for the proforma period
(3) Subsequent to the June 30, 2024 pro forma information presented, a $0.01 change per share of Lucid Diagnostics Inc. common stock results in a change in PAVmed Inc.’s fair value of Lucid Diagnostics Inc. of a $0.3 million increase or decrease in the Company’s basis and stockholders equity.
(4) Operating expenses related to the Management Services Agreement revenue reflected in Other Income.
(5) The unaudited condensed consolidated pro forma balance sheet data as of June 30, 2024 is presented as if the deconsolidation of Lucid Diagnostics Inc. had occurred on June 30, 2024 and was calculated based on Lucid Diagnostics Inc.’s common stock price of $0.82 and the number of shares of Lucid Diagnostics Inc.’s common stock owned by PAVmed Inc. of 31,302,444 as of that date.