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What changed in Lucid Diagnostics Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Lucid Diagnostics Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+405 added−394 removedSource: 10-K (2025-03-24) vs 10-K (2024-03-25)

Top changes in Lucid Diagnostics Inc.'s 2024 10-K

405 paragraphs added · 394 removed · 258 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

63 edited+55 added−38 removed138 unchanged
Biggest changeAs such, FDA has structured the proposed phaseout policy to contain five key stages: ● Stage 1: End the general enforcement discretion approach with respect to Medical Device Regulation (MDR) requirements and correction and removal reporting requirements 1 year after FDA publishes a final phaseout policy, which FDA intends to issue in the preamble of the final rule. ● Stage 2: End the general enforcement discretion approach with respect to requirements other than MDR, correction and removal reporting, Quality System (QS), and premarket review requirements 2 years after FDA publishes a final phaseout policy. ● Stage 3: End the general enforcement discretion approach with respect to QS requirements 3 years after FDA publishes a final phaseout policy. ● Stage 4: End the general enforcement discretion approach with respect to premarket review requirements for high-risk IVDs 3.5 years after FDA publishes a final phaseout policy, but not before October 1, 2027. ● Stage 5: End the general enforcement discretion approach with respect to premarket review requirements for moderate risk and low risk IVDs (that require premarket submissions) 4 years after FDA publishes a final phaseout policy, but not before April 1, 2028.
Biggest changeThe phaseout policy contains the following five stages: ● Stage 1: Beginning on May 6, 2025, which is one year after the publication date of the final LDT rule, FDA will expect compliance with medical device reporting (MDR) requirements, correction and removal reporting requirements, and quality system (QS) requirements regarding complaint files. ● Stage 2: Beginning on May 6, 2026, which is 2 years after the publication date of the final LDT rule, FDA will expect compliance with requirements not covered during other stages of the phaseout policy, including registration and listing requirements, labeling requirements, and investigational use requirements. ● Stage 3: Beginning on May 6, 2027, which is 3 years after the publication date of the final LDT rule, FDA will expect compliance with QS requirements (other than requirements regarding complaint files which are already addressed in stage 1). ● Stage 4: Beginning on November 6, 2027, which is 3½ years after the publication date of the final LDT rule, FDA will expect compliance with premarket review requirements for high-risk IVDs offered as LDTs (IVDs that may be classified into class III or that are subject to licensure under section 351 of the Public Health Service Act), unless a premarket submission has been received by the beginning of this stage in which case FDA intends to continue to exercise enforcement discretion for the pendency of its review. ● Stage 5: Beginning on May 6, 2028, which is 4 years after the publication date of the final LDT rule, FDA will expect compliance with premarket review requirements for moderate-risk and low-risk IVDs offered as LDTs (that require premarket submissions), unless a premarket submission has been received by the beginning of this stage in which case FDA intends to continue to exercise enforcement discretion for the pendency of its review. 4 The FDA also intends to exercise enforcement discretion and generally not enforce some or all applicable requirements for certain categories of IVDs manufactured by a laboratory.
However, the absence of such marks is not intended to indicate, in any way, Lucid or its subsidiaries will not assert, to the fullest extent possible under applicable law, their respective rights to such trademarks and trade names.) Health Insurance Coverage and Reimbursement Our ability to successfully commercialize our products will depend in part on the extent to which governmental authorities, private health insurers and other third-party payors provide coverage for and establish adequate reimbursement levels for the procedures during which our products are used.
However, the absence of such marks is not intended to indicate, in any way, Lucid or its subsidiaries will not assert, to the fullest extent possible under applicable law, their respective rights to such trademarks and trade names.) 9 Health Insurance Coverage and Reimbursement Our ability to successfully commercialize our products will depend in part on the extent to which governmental authorities, private health insurers and other third-party payors provide coverage for and establish adequate reimbursement levels for the procedures during which our products are used.
Clinical validation analysis demonstrated improved sensitivity and specificity for the detection of esophageal precancer, having demonstrated enhanced assay performance and lower costs in extensive validation studies. 4 Competition The U.S. market for esophageal cancer (i.e., EAC) and pre-cancer (i.e., BE, with or without dysplasia) testing is large, consisting of more than 30 million at-risk individuals over the age of 50.
Clinical validation analysis demonstrated improved sensitivity and specificity for the detection of esophageal precancer, having demonstrated enhanced assay performance and lower costs in extensive validation studies. Competition The U.S. market for esophageal cancer (i.e., EAC) and pre-cancer (i.e., BE, with or without dysplasia) testing is large, consisting of more than 30 million at-risk individuals over the age of 50.
Two independent clinical validation case control studies funded by the National Institute of Health utilized were performed using upper endoscopy with biopsies as the diagnostic comparator and confirmed EsoGuard accurately identifies BE. A pooled analysis of both studies demonstrated 84% sensitivity (95% confidence interval [CI] 76-90%), for detection of BE, and 86% specificity (95% CI 81-91%).
Two independent clinical validation case control studies funded by the National Institute of Health utilized were performed using upper endoscopy with biopsies as the diagnostic comparator and confirmed EsoGuard accurately identifies BE. A pooled analysis of both studies demonstrated 84% sensitivity (95% confidence interval (“CI”) 76-90%), for detection of BE, and 86% specificity (95% CI 81-91%).
Manufacturing cGMP Requirements Manufacturers of medical devices are required to comply with FDA manufacturing requirements contained in FDA’s current Good Manufacturing Practices (cGMP) set forth in the quality system regulations promulgated under section 520 of the Food, Drug and Cosmetic Act. cGMP regulations require, among other things, quality control and quality assurance as well as the corresponding maintenance of records and documentation.
Manufacturing cGMP Requirements Manufacturers of medical devices are required to comply with FDA manufacturing requirements contained in FDA’s current Good Manufacturing Practices (“cGMP”) set forth in the quality system regulations promulgated under section 520 of the Food, Drug and Cosmetic Act. cGMP regulations require, among other things, quality control and quality assurance as well as the corresponding maintenance of records and documentation.
During the approval or clearance process, FDA typically inspects the records relating to the conduct of one or more investigational sites participating in the study supporting the application. Post-Approval Regulation of Medical Devices and Diagnostic Tests After a device is cleared or approved for marketing, numerous regulatory requirements continue to apply.
During the approval or clearance process, FDA typically inspects the records relating to the conduct of one or more investigational sites participating in the study supporting the application. 11 Post-Approval Regulation of Medical Devices and Diagnostic Tests After a device is cleared or approved for marketing, numerous regulatory requirements continue to apply.
In March 2023, we launched a Direct Contracting Strategic Initiative (“DCSI”) to engage directly with large Administrative Services Only (“ASO”) self-insured employers, unions and other entities, seeking to replicate the successes of other cancer screening diagnostic companies that have deployed similar strategies.
In March 2023, we launched a direct contracting strategic initiative to engage directly with large Administrative Services Only (“ASO”) self-insured employers, unions and other entities, seeking to replicate the successes of other cancer screening diagnostic companies that have deployed similar strategies.
Other companies have been prosecuted for causing false claims to be submitted because of the companies’ marketing of products for unapproved, and thus noncovered, uses. 10 The government may further prosecute, as a crime, conduct constituting a false claim under the False Claims Act.
Other companies have been prosecuted for causing false claims to be submitted because of the companies’ marketing of products for unapproved, and thus noncovered, uses. The government may further prosecute, as a crime, conduct constituting a false claim under the False Claims Act.
The quickest and least expensive pathway would be 510(k) clearance with a review of existing bench and animal data. A de novo classification pathway would have a similar cost to seeking 510(k) clearance, but with a slightly longer review timeline. Th e longest and most expensive path would be a PMA with extensive randomized human clinical trials.
The quickest and least expensive pathway would be 510(k) clearance with a review of existing bench and animal data. A de novo classification pathway would have a similar cost to seeking 510(k) clearance, but with a slightly longer review timeline. The longest and most expensive path would be a PMA with extensive randomized human clinical trials.
The content of our website is not incorporated by reference into this Annual Report on Form 10-K, nor in any other report or document we file or furnish with and /or submit to the SEC, and any reference to our website are intended to be inactive textual references only. 13
The content of our website is not incorporated by reference into this Annual Report on Form 10-K, nor in any other report or document we file or furnish with and /or submit to the SEC, and any reference to our website are intended to be inactive textual references only. 16
Regulation FDA Regulation For the purposes of FDA regulation a “medical device” is broadly defined in section 201(h) of the FDCA as “an instrument, apparatus, implement, machine, contrivance, implant, in-vitro reagent, or other similar or related article, which is intended for use in humans for the diagnosis of disease or other conditions, or in the cure, mitigation, treatment, or prevention of disease, or intended to affect the structure or any function of the body, and which does not achieve its primary intended purposes through chemical action and which is not dependent upon being metabolized for the achievement of its primary intended purposes.” Medical devices subject to FDA regulation include “in-vitro diagnostic medical devices” or IVD devices, defined in the same FDCA section as “reagents, instruments, and systems intended for use in the diagnosis of disease or other conditions, including a determination of the state of health, in order to cure, mitigate, treat, or prevent disease or its sequelae, which are intended for use in the collection, preparation, and examination of specimens taken from the human body”.
Regulation FDA Regulation For the purposes of FDA regulation a “medical device” is broadly defined in section 201(h) of the Food, Drug, and Cosmetic Act (“FDCA”) as “an instrument, apparatus, implement, machine, contrivance, implant, in-vitro reagent, or other similar or related article, which is intended for use in humans for the diagnosis of disease or other conditions, or in the cure, mitigation, treatment, or prevention of disease, or intended to affect the structure or any function of the body, and which does not achieve its primary intended purposes through chemical action and which is not dependent upon being metabolized for the achievement of its primary intended purposes.” Medical devices subject to FDA regulation include “in-vitro diagnostic medical devices” or IVD devices, defined in the same FDCA section as “reagents, instruments, and systems intended for use in the diagnosis of disease or other conditions, including a determination of the state of health, in order to cure, mitigate, treat, or prevent disease or its sequelae, which are intended for use in the collection, preparation, and examination of specimens taken from the human body”.
For example, EndoSign, commercialized by Cyted, and much like Cytosponge and our own EsophaCap before it, is a small mesh sponge within a soluble gelatin capsule that needs to reside in the stomach for some time until it fully dissolves and then is pulled thru the targeted region brushing the lining of the esophagus and then later retrieved, although, unlike EsoCheck, it is unprotected from sample contamination as the brush later passes regions of the upper esophagus and mouth.
For example, EndoSign, commercialized by Cyted, and much like Cytosponge, is a small mesh sponge within a soluble gelatin capsule that needs to reside in the stomach for some time until it fully dissolves and then is pulled thru the targeted region brushing the lining of the esophagus and then later retrieved, although, unlike EsoCheck, it is unprotected from sample contamination as the brush later passes regions of the upper esophagus and mouth.
EsoGuard and EsoCheck are based on patented technology licensed by Lucid from Case Western Reserve University (“CWRU”). EsoGuard and EsoCheck have been developed to provide accurate, non-invasive, patient-friendly testing for the early detection of EAC and Barrett’s Esophagus (“BE”), including dysplastic BE and related pre-cursors to EAC in patients with chronic GERD. Market Opportunity In 2023, approximately 20,000 U.S.
EsoGuard and EsoCheck are based on patented technology licensed by Lucid from Case Western Reserve University (“CWRU”). EsoGuard and EsoCheck have been developed to provide accurate, non-invasive, patient-friendly testing for the early detection of EAC and Barrett’s Esophagus (“BE”), including dysplastic BE and related pre-cursors to EAC in patients with chronic GERD. Market Opportunity In 2024, approximately 22,000 U.S.
These criteria include active GERD with at least two risk factors, as well as evidence of analytic validity, clinical validity, and clinical utility.
These criteria include active GERD with at least three risk factors, as well as evidence of analytic validity, clinical validity, and clinical utility.
Our EsoCheck device faces competition from other manufactures with devices designed to collect cell samples from targeted regions of the esophagus.
Our EsoCheck device faces competition from other manufacturers with devices designed to collect cell samples from targeted regions of the esophagus.
Item 1. Business Background and Overview Lucid Diagnostics Inc. (“Lucid”) is a commercial-stage medical diagnostics technology company focused on the millions of patients with gastroesophageal reflux disease (“GERD”), also known as chronic heartburn, acid reflux or simply reflux, who are at risk of developing esophageal precancer and cancer, specifically highly lethal esophageal adenocarcinoma (“EAC”).
Background and Overview Lucid Diagnostics is a commercial-stage medical diagnostics technology company focused on the millions of patients with gastroesophageal reflux disease (“GERD”), also known as chronic heartburn, acid reflux or simply reflux, who are at risk of developing esophageal precancer and cancer, specifically highly lethal esophageal adenocarcinoma (“EAC”).
For the first time, however, the clinical guideline also endorses nonendoscopic biomarker screening as an acceptable alternative to costly and invasive endoscopy stating that “a swallowable nonendoscopic capsule device combined with a biomarker is an acceptable alternative to endoscopy for BE.” The clinical guideline specifically mentions EsoCheck, along with our EsophaCap® device, as such swallowable, nonendoscopic esophageal cell collection devices, as well as methylated DNA biomarkers such as EsoGuard.
For the first time, however, the clinical guideline also endorses non-endoscopic biomarker screening as an acceptable alternative to costly and invasive endoscopy stating that “a swallowable non-endoscopic capsule device combined with a biomarker is an acceptable alternative to endoscopy for BE.” The clinical guideline specifically mentions EsoCheck as such a swallowable, non-endoscopic esophageal cell collection device, as well as methylated DNA biomarkers such as EsoGuard.
Presently, PAVmed controls more than 50% of the combined voting power of our common stock and our convertible securities. However, PAVmed’s percentage of the combined voting power may decrease when dividends are paid on our convertible securities and to the extent our convertible securities are converted into shares of our common stock.
Presently, PAVmed controls less than 50% of the combined voting power of our common stock and our convertible securities. In addition, PAVmed’s percentage of the combined voting power may decrease when dividends are paid on our convertible securities and to the extent our convertible securities are converted into shares of our common stock.
We are confident that the proposed policy will not have a commercial impact as the Company already has a robust QS management platform for medical devices and EsoGuard will be able to transition to the platform to fulfill the QS requirements, if and when required by the FDA.
We are confident that the proposed final rule will not have a commercial impact as the Company already has a robust QS management platform for medical devices and EsoGuard will be able to easily transition to the platform to fulfill the QS requirements, as required by the FDA.
The date the patents protecting certain of our owned and licensed technology will first begin to expire is as set forth in the table below (although currently pending patent applications, both foreign and domestic, are positioned to provide protection beyond such date in each instance).
Each of the technologies noted below is protected by multiple families. The date the patents protecting certain of our owned and licensed technology will first begin to expire is as set forth in the table below (although currently pending patent applications, both foreign and domestic, provide protection beyond such date in each instance).
Our current test center network currently includes locations in metropolitan areas in Arizona, California, Colorado, Florida, Idaho, Illinois, Nevada, Ohio, Oregon, Texas and Utah.
Our current test center network currently includes locations in metropolitan areas in Arizona, California, Colorado, Florida, Georgia, Idaho, Michigan, Nevada, Texas and Utah.
Additionally, the legislatures in a number of states have passed laws mandating coverage of comprehensive biomarker testing over the past several years. We believe that EsoGuard falls within the definition of a biomarker test and thus we are reviewing how to leverage legislation in those states to expand access to EsoGuard.
Additionally, the legislatures in a number of states have passed laws mandating coverage of comprehensive biomarker testing over the past several years. We are reviewing how to leverage legislation in those states to expand access to and reimbursement of EsoGuard.
The MSA does not have a termination date, but may be terminated by our board of directors at any time. The PBERA likewise does not have a termination date, but may be terminated by PAVmed or Lucid at any time.
The MSA does not have a termination date, but may be terminated by our board of directors at any time.
License Agreement Under the terms of our license agreement with CWRU (as amended to date, the “Amended CWRU License Agreement”), we acquired an exclusive worldwide right to use the intellectual property rights to the EsoGuard and EsoCheck technology for the detection of changes in the esophagus and on sample preservation.
Path-Tec also manages warehousing, logistics, fulfillment and customer support of our products. 3 License Agreement Under the terms of our license agreement with CWRU (as amended to date, the “Amended CWRU License Agreement”), we acquired an exclusive worldwide right to use the intellectual property rights to the EsoGuard and EsoCheck technology for the detection of changes in the esophagus and on sample preservation.
PAVmed owns approximately 70.1% as of December 31, 2023 and 64.9% as of March 21, 2024 of the combined voting power of our outstanding common stock (with such percentage inclusive of shares of our common stock underlying granted but unvested restricted stock awards), but excluding the voting power of any convertible securities.
PAVmed owns approximately 46% as of December 31, 2024 and 34% as of March 20, 2025 of the combined voting power of our outstanding common stock (with such percentage inclusive of shares of our common stock underlying granted but unvested restricted stock awards), but excluding the voting power of any convertible securities.
In October 2020, CMS granted EsoGuard final Medicare payment determination of $1,938.01, effective January 1, 2021. 2 A final Local Coverage Determination (“LCD”) L39256, entitled “ Molecular Testing for Detection of Upper Gastrointestinal Metaplasia, Dysplasia, and Neoplasia ” became effective in May 2023 on the Center for Medicare and Medicaid Services (“CMS”) website by MAC Palmetto GBA.
A final Local Coverage Determination (“LCD”) L39256, entitled “ Molecular Testing for Detection of Upper Gastrointestinal Metaplasia, Dysplasia, and Neoplasia ” became effective in May 2023 on the Center for Medicare and Medicaid Services (“CMS”) website by MAC Palmetto GBA.
It is our understanding that the data we are collecting for EsoGuard will be sufficient to support the analytical and clinical validity requirements for a premarket submission to the FDA as and when required by FDA’s final policy anticipated to be released by the FDA in April 2024. 8 Clinical Trials of Medical Devices and Diagnostic Tests One or more clinical trials may be necessary to support an FDA submission.
It is our understanding that the data we are collecting for EsoGuard will be sufficient to support the analytical and clinical validity requirements for a premarket submission to the FDA. Clinical Trials of Medical Devices and Diagnostic Tests One or more clinical trials may be necessary to support an FDA submission.
PAVmed may elect that our obligations under each of the MSA and the PBERA are settled by the issuance of our stock (instead of cash), subject to applicable restrictions under securities laws (and, in the case of the PBERA, subject also to approval by our board).
PAVmed may elect that our obligations under each of the MSA and the PBERA are settled by the issuance of our stock (instead of cash), subject to applicable restrictions under securities laws (and, in the case of the PBERA, subject also to approval by our board), although under the terms of PAVmed’s convertible debt, PAVmed is required to elect that these payments be made in cash.
Manufacturing EsoCheck is currently manufactured for us by our partners Coastline International (“Coastline”), a high-volume device manufacturer, and Sage Product Development. Our current line at Coastline can produce up to 25,000 units per year. With Coastline’s improvement and expansion, there is capacity to scale exponentially. Our EsoGuard Specimen Kits are currently manufactured for us by our partner Path-Tec.
Our current line at Coastline can produce up to 25,000 units per year. With Coastline’s improvement and expansion, there is capacity to scale exponentially. Our EsoGuard Specimen Kits are currently manufactured for us by our partner Path-Tec.
Physician Payment Sunshine Act On February 8, 2013, the Centers for Medicare & Medicaid Services, or CMS, released its final rule implementing section 6002 of the Affordable Care Act known as the Physician Payment Sunshine Act that imposes annual reporting requirements on device manufacturers for payments and other transfers of value provided by them, directly or indirectly, to physicians and teaching hospitals, as well as ownership and investment interests held by physicians and their family members.
In any event, we have established a substantial regulatory and compliance infrastructure for the Lucid Test Centers and other EsoGuard programs and related activities that is designed to ensure compliance with these regulations. 12 Physician Payment Sunshine Act On February 8, 2013, the Centers for Medicare & Medicaid Services, or CMS, released its final rule implementing section 6002 of the Affordable Care Act known as the Physician Payment Sunshine Act that imposes annual reporting requirements on device manufacturers for payments and other transfers of value provided by them, directly or indirectly, to physicians and teaching hospitals, as well as ownership and investment interests held by physicians and their family members.
Before and after approval or clearance in the United States, our products are subject to extensive regulation by the FDA under the Federal Food, Drug, and Cosmetic Act and/or the Public Health Service Act, as well as by other regulatory bodies.
Pursuant to this designation, we will be working with FDA to submit the premarket submission for EsoGuard. 10 Before and after approval or clearance in the United States, our products are subject to extensive regulation by the FDA under the Federal Food, Drug, and Cosmetic Act and/or the Public Health Service Act, as well as by other regulatory bodies.
In October 2023, FDA proposed a policy under which FDA intends to phase out its general enforcement discretion approach for LDTs so that IVDs manufactured by a laboratory would generally fall under the same enforcement approach as other IVDs.
In October 2023, FDA proposed a policy under which FDA intends to phase out its general enforcement discretion approach for LDTs so that IVDs manufactured by a laboratory would generally fall under the same enforcement approach as other IVDs. On May 6, 2024, the FDA issued a final rule aimed at helping to ensure the safety and effectiveness of LDTs.
European Union We received CE Mark certification for EsoCheck under MDD and completed CE Mark self-certification for EsoGuard, which qualifies as a General IVD, under IVDD, indicating that both may be marketed in CE Mark European countries, namely the European Economic Area (the European Union, Norway, Iceland, and Lichtenstein), Switzerland, and, until July 1, 2023, the United Kingdom.
The time required to obtain clearance required by foreign countries may be longer or shorter than that required for FDA clearance, and requirements for licensing a product in a foreign country may differ significantly from FDA requirements. 14 European Union We received CE Mark certification for EsoCheck under MDD and completed CE Mark self-certification for EsoGuard, which qualifies as a General IVD, under IVDD, indicating that both may be marketed in CE Mark European countries, namely the European Economic Area (the European Union, Norway, Iceland, and Lichtenstein), Switzerland, and, until July 1, 2023, the United Kingdom.
We are subject to comparable state laws, some of which apply to all payors regardless of source of payment, and do not contain identical exceptions to the Stark law. 11 International Regulation In order to market any of our products outside of the United States, we would need to comply with numerous and varying regulatory requirements of other countries and jurisdictions regarding quality, safety and efficacy and governing, among other things, clinical trials, marketing authorization, commercial sales and distribution of our products.
International Regulation In order to market any of our products outside of the United States, we would need to comply with numerous and varying regulatory requirements of other countries and jurisdictions regarding quality, safety and efficacy and governing, among other things, clinical trials, marketing authorization, commercial sales and distribution of our products.
Prior to acquiring or licensing a technology from a third party, we will evaluate the existing proprietary rights, our ability to adequately obtain and protect these rights and the likelihood or possibility of infringement upon competing rights of others. 6 We also rely upon trade secrets, know-how, continuing technological innovation, and may rely upon licensing opportunities, to develop and maintain our competitive position.
Prior to acquiring or licensing a technology from a third party, we will evaluate the existing proprietary rights, our ability to adequately obtain and protect these rights and the likelihood or possibility of infringement upon competing rights of others.
These laws include, without limitation, anti-kickback and false claims laws, data privacy and security laws, as well as transparency laws regarding payments or other items of value provided to healthcare providers. 9 Because of the breadth of these laws and the narrowness of the statutory exceptions and safe harbors available under such laws, it is possible that some of our business activities, including certain sales and marketing practices and the provision of certain items and services to our customers, could be subject to challenge under one or more of such laws.
Because of the breadth of these laws and the narrowness of the statutory exceptions and safe harbors available under such laws, it is possible that some of our business activities, including certain sales and marketing practices and the provision of certain items and services to our customers, could be subject to challenge under one or more of such laws.
Laboratory Operations On February 25, 2022, our new, wholly owned subsidiary, LucidDx Labs Inc. (“LucidDx Labs”), acquired from ResearchDX Inc. (“RDx”), certain licenses and other related assets necessary for LucidDx Labs to operate its own new CLIA-certified, CAP-accredited clinical laboratory located in Lake Forest, CA.
(“RDx”), certain licenses and other related assets necessary for LucidDx Labs to operate its own new CLIA-certified, CAP-accredited clinical laboratory located in Lake Forest, CA.
Our longer-term strategy is to secure a specific indication, based on published guidelines, for BE testing in certain at-risk populations using EsoGuard on samples collected with EsoCheck. This use of EsoGuard together with EsoCheck as a testing system must be cleared or approved by the FDA as an IVD device.
Our longer-term strategy is to secure a specific indication, based on published guidelines, for BE testing in certain at-risk populations using EsoGuard on samples collected with EsoCheck.
EAC is nearly always invasive at diagnosis, and, unlike other common cancers, mortality rates are high even in its earlier stages. As discussed below under the heading “Clinical Guidelines for At-Risk Population”, in July 2022, the American Gastroenterology Association (“AGA”) significantly expanded the target population for esophageal precancer screening, recommending screening in at-risk patients without symptoms of GERD.
As discussed below under the heading “Clinical Guidelines for At-Risk Population”, in July 2022, the American Gastroenterology Association (“AGA”) significantly expanded the target population for esophageal precancer screening, recommending screening in at-risk patients without symptoms of GERD.
The license agreement terminates upon the expiration of the last-to-expire licensed patent, or on May 12, 2038, in countries where no such patents exist, or upon expiration of any exclusive marketing rights for a licensed product that have been granted by FDA or other U.S. government agency, whichever comes later. 3 Regulatory In June 2019, we received FDA 510(k) clearance to market EsoCheck in the U.S. as a device indicated for use in the collection and retrieval of surface cells of the esophagus in adults followed by FDA 510(k) clearance in 2022, expanding the use of EsoCheck in adults and pediatric populations in the U.S.
The license agreement terminates upon the expiration of the last-to-expire licensed patent, or on May 12, 2038, in countries where no such patents exist, or upon expiration of any exclusive marketing rights for a licensed product that have been granted by FDA or other U.S. government agency, whichever comes later.
We continue to expand the EsoGuard and EsoCheck evidence portfolio with additional clinical utility, clinical validity, and analytical validity data from a range of ongoing studies and those that have recently completed or will be completed in the upcoming year.
Clinical utility studies are also important for general EsoGuard commercialization by facilitating physician understanding of test indications and potential benefit to the patients. We continue to expand the EsoGuard and EsoCheck evidence portfolio with additional clinical utility and clinical validity data from a range of ongoing studies and those that will be completed in the upcoming year.
Employees Currently, as of March 21, 2024 we have 70 employees (all of whom are full-time employees), inclusive of our executive officers –our Chairman of the Board of Directors and Chief Executive Officer (“CEO”), our President and Chief Operating Officer, (“President” or “COO”), our Chief Financial Officer (“CFO”), and our General Counsel and Secretary (“General Counsel”).
There were no material capital expenditures for environmental control facilities in the years ended December 31, 2024 and 2023. 15 Employees As of March 20, 2025 we have 72 employees (all of whom are full-time employees), inclusive of our executive officers – our Chairman of the Board of Directors and Chief Executive Officer (“CEO”), our President and Chief Operating Officer, (“President” or “COO”), our Chief Financial Officer (“CFO”), and our General Counsel and Secretary (“General Counsel”).
Specimen Transportation Our commercialization activities for EsoGuard subject us to regulations of the Department of Transportation, the United States Postal Service, and the Centers for Disease Control and Prevention that apply to the surface and air transportation of clinical laboratory specimens. 12 Environmental The cost of compliance with federal, state and local provisions related to the protection of the environment has had no material effect on our Diagnostics business.
Specimen Transportation Our commercialization activities for EsoGuard subject us to regulations of the Department of Transportation, the United States Postal Service, and the Centers for Disease Control and Prevention that apply to the surface and air transportation of clinical laboratory specimens.
Intellectual Property Our business will depend on proprietary medical device and diagnostic technologies, including the EsoCheck and EsoGuard technology licensed by us. We intend to vigorously protect our proprietary technologies’ intellectual property rights in patents, trademarks and copyrights, as available through registration in the United States and internationally. Patent protection and other proprietary rights are thus essential to our business.
We intend to vigorously protect our proprietary technologies’ intellectual property rights in patents, trademarks and copyrights, as available through registration in the United States and internationally. Patent protection and other proprietary rights are thus essential to our business. We currently have applied for, license or own 20 domestic and foreign patents covering the EsoGuard and EsoCheck products and related technology.
(Solely as a matter of convenience, trademarks and trade names referred to herein may or may not be accompanied with the requisite marks of “™” or “®”.
Lucid also has proprietary rights to a range of trademarks, including, among others, Lucid Diagnostics™, LUCID™, EsoCheck®, EsoGuard®, Collect + Protect®, and EsoCheck Cell Collection Device®. (Solely as a matter of convenience, trademarks and trade names referred to herein may or may not be accompanied with the requisite marks of “™” or “®”.
GERD patients are projected to be diagnosed with EAC and approximately 16,000 will die from it. Over 80% of EAC patients will die within five years of diagnosis, making it the second most lethal cancer in the U.S.
GERD patients were diagnosed with EAC and approximately 16,000 will die from it. Over 80% of EAC patients will die within five years of diagnosis, making it the second most lethal cancer in the U.S. The U.S. incidence of EAC has increased 500% over the past four decades, while the incidences of other common cancers have declined or remained flat.
Although the LCD indicated that it found that no currently existing test has fulfilled all these criteria, it indicated that it will “monitor the evidence and may revise this determination based on the pertinent literature and society recommendations.” We expect to submit EsoGuard for Technical Assessment under this foundational LCD later this year.
Although the LCD indicated that it found that no currently existing test has fulfilled all these criteria, it indicated that it will “monitor the evidence and may revise this determination based on the pertinent literature and society recommendations.” In November 2024, we submitted to MolDx our complete clinical evidence package in support of a request for reconsideration of the non-coverage language in the LCD to secure Medicare coverage for EsoGuard.
We are party to a management services agreement with PAVmed (the “MSA”), as well as a payroll benefits and expense reimbursement agreement (the “PBERA”).
PAVmed’s substantial voting interest may discourage a change of control that other holders of our common stock may favor. We are party to a management services agreement with PAVmed (the “MSA”), as well as a payroll benefits and expense reimbursement agreement (the “PBERA”).
EsoCheck is merely offered, free of charge, as a generic esophageal cell collection device, which is FDA 510(k) cleared to be used to collect samples for any diagnostic test. We believe, however, over the long-term, once our commercialization efforts have gained significant traction, it would be useful to jointly market EsoGuard, used with EsoCheck, as a combined product.
This currently is not a significant obstacle to our commercialization efforts, which are almost entirely devoted to marketing EsoGuard. EsoCheck is merely offered, free of charge, as a generic esophageal cell collection device, which is FDA 510(k) cleared to be used to collect samples for any diagnostic test.
In parallel with preparing to submit EsoGuard for Technical Assessment with MolDX, we are aggressively pursuing EsoGuard commercial insurer payment and coverage.
In parallel with our request for reconsideration of the LCD, we are aggressively pursuing EsoGuard commercial insurer coverage and payment.
Healthcare Reform Current and future legislative proposals to further reform healthcare or reduce healthcare costs may result in lower reimbursement for our products, or for the procedures associated with the use of our products, or limit coverage of our products.
Activities that violate the FCPA, even if they occur wholly outside the United States, can result in criminal and civil fines, imprisonment, disgorgement, oversight, and debarment from government contracts. 13 Healthcare Reform Current and future legislative proposals to further reform healthcare or reduce healthcare costs may result in lower reimbursement for our products, or for the procedures associated with the use of our products, or limit coverage of our products.
We protect our proprietary rights through a variety of methods, including confidentiality agreements and/or proprietary information agreements with suppliers, employees, consultants, independent contractors and other entities who may have access to proprietary information. We will generally require employees to assign patents and other intellectual property to us as a condition of employment with us.
We also rely upon trade secrets, know-how, and continuing technological innovation, and may rely upon licensing opportunities, to develop and maintain our competitive position. We protect our proprietary rights through a variety of methods, including confidentiality agreements and/or proprietary information agreements with suppliers, employees, consultants, independent contractors and other entities who may have access to proprietary information.
Healthcare Regulation In addition to FDA restrictions on marketing and promotion of drugs and devices, other federal and state laws restrict our business practices.
Healthcare Regulation In addition to FDA restrictions on marketing and promotion of drugs and devices, other federal and state laws restrict our business practices. These laws include, without limitation, anti-kickback and false claims laws, data privacy and security laws, as well as transparency laws regarding payments or other items of value provided to healthcare providers.
We therefore may, when resources permit, pursue FDA PMA approval for EsoGuard, when used on samples collected with EsoCheck, which will allow us to jointly market them as well as provide protection against changes to LDT regulation which could threaten our ability to market EsoGuard as an LDT.
We believe, however, over the long-term, once our commercialization efforts have gained significant traction, it would be useful to jointly market EsoGuard, used with EsoCheck. We therefore may, when resources permit, pursue FDA PMA approval for EsoGuard, when used on samples collected with EsoCheck, which will allow us to jointly market them.
Both studies capture information on the diagnostic and/or therapeutic journey of subjects following EsoGuard testing, and in addition to provider decision impact, will contribute differing levels of clinical outcomes data to the Lucid evidence portfolio. Similarly, results for the Lucid-sponsored virtual-patient study are expected to be ready for analysis in mid-2024.
Both registries capture information on the diagnostic and/or therapeutic journey of subjects following EsoGuard testing, and in addition to provider decision impact, will contribute differing levels of clinical outcomes data to the Lucid evidence portfolio. Manufacturing EsoCheck is currently manufactured for us by our partners Coastline International (“Coastline”), a high-volume device manufacturer, and Sage Product Development.
Our Relationship with PAVmed We are a majority-owned subsidiary of PAVmed, and PAVmed has a controlling financial interest. We continue to depend on PAVmed to provide us various management, technical, research and development, legal, accounting, and administrative services.
(Prior to the completion of such transactions on such date, we were a majority-owned subsidiary of PAVmed.) However, PAVmed remains our largest shareholder based on voting power, and therefore retains the ability to exercise significant influence over Lucid. Moreover, we continue to depend on PAVmed to provide us various management, technical, research and development, legal, accounting, and administrative services.
FDA, however, has generally not enforced these regulatory requirements for most LDTs not in one of these classes and has generally not required these LDTs to undergo FDA premarket review of analytical validity and clinical validity, as all other IVD products must. 7 In October 2023, FDA proposed a policy under which FDA intends to phase out its general enforcement discretion approach for LDTs so that IVDs manufactured by a laboratory would generally fall under the same enforcement approach as other IVDs.
FDA, however, has generally not enforced these regulatory requirements for most LDTs not in one of these classes and has generally not required these LDTs to undergo FDA premarket review of analytical validity and clinical validity, as all other IVD products must. Since only EsoCheck is FDA cleared, we are not permitted to jointly market it with EsoGuard.
Reimbursement and Market Access As noted above, in December 2019, we secured “gapfill” determination for EsoGuard’s PLA code 0114U through the CMS CLFS process. This allowed us to engage directly with Medicare contractor Palmetto GBA and its MolDx Program on CMS payment and coverage.
We have also established an EsoGuard Telemedicine Program, in partnership with UpScript, LLC, an independent third-party telemedicine provider, that accommodates EsoGuard self-referrals from direct-to-consumer marketing. 2 Reimbursement and Market Access As noted above, in December 2019, we secured “gapfill” determination for EsoGuard’s PLA code 0114U through the CMS CLFS process.
For EsoGuard, families are pending that, when granted, will offer additional protections until at least 2037.
For EsoGuard, additional patents have been issued that offer protection until at least 2037.
In March 2024, the Company entered into an eighth amendment to the MSA with PAVmed, increasing the monthly fee due thereunder from $0.75 million to $0.83 million, effective as of January 1, 2024. The eighth amendment to the MSA was executed on March 22, 2024.
Intercompany Agreements with PAVmed On August 6, 2024, PAVmed and the Company entered into a ninth amendment to the management services agreement between PAVmed and Lucid (“MSA”) to increase the monthly fee thereunder from $0.83 million per month to $1.05 million per month, effective as of July 1, 2024.
All of our consulting agreements assign to us all new and improved intellectual property that arise during the term of the agreement. Lucid also has proprietary rights to a range of trademarks, including, among others, Lucid Diagnostics™, LUCID™, EsoCheck®, EsoGuard®, Collect + Protect®, and EsoCheck Cell Collection Device®.
We will generally require employees to assign patents and other intellectual property to us as a condition of employment with us. All of our consulting agreements assign to us all new and improved intellectual property that arise during the term of the agreement.
The U.S. incidence of EAC has increased 500% over the past four decades, while the incidences of other common cancers have declined or remained flat. In nearly all cases, EAC silently progresses until it manifests itself with new symptoms of advanced disease.
In nearly all cases, EAC silently progresses until it manifests itself with new symptoms of advanced disease. EAC is nearly always invasive at diagnosis, and, unlike other common cancers, mortality rates are high even in its earlier stages.
Finally, the “EsoGuard case-control study” (“BE-2”), a Lucid-sponsored clinical validation study, resumed enrollment in 2023 and is expected to continue through 2024. This data will further supplement what has previously been produced by the two NCI-funded studies (Moinova, et al. Sci Transl Med. 2018; BETRNet).
This data will further supplement what has previously been published from the four earlier clinical validation studies from Moinova et. al. (2018), Moinova et. al. (2024), Greer et. al., (2024), and Shaheen et. al. (2024).
Removed
References in this Form 10-K to “we,” “us” and “our” are to Lucid and, unless the context otherwise requires, its subsidiaries.
Added
Item 1. Business Unless the context otherwise requires, “we”, “us”, and “our”, the “Company”, “Lucid” and “Lucid Diagnostics” refer to Lucid Diagnostics Inc. and its subsidiaries LucidDx Labs Inc. (“LucidDx Labs”) and CapNostics, LLC (“CapNostics”).
Removed
In August 2023, we contracted with the Ancira Automotive Group as a result of this initiative, providing access to esophageal precancer testing for its employees at all 12 San Antonio locations. We have also established an EsoGuard Telemedicine Program, in partnership with UpScript, LLC, an independent third-party telemedicine provider, that accommodates EsoGuard self-referrals from direct-to-consumer marketing.
Added
In March 2025, we announced that a recent update to the National Comprehensive Cancer Network® (NCCN) Clinical Practice Guidelines in Oncology (NCCN Guidelines®) focused on Esophageal and Esophagogastric Junction Cancers (Version 1.2025) has added a new section on BE screening.
Removed
Clinical utility studies are also important for general EsoGuard commercialization by facilitating physician understanding of test indications and potential benefit to the patients.
Added
The NCCN Guidelines® now reference professional society guidelines on BE screening, including the most recent ACG clinical guideline discussed above, which recommends non-endoscopic biomarker testing, such as EsoGuard performed on samples collected with EsoCheck, as an acceptable alternative to invasive upper endoscopy to detect esophageal precancer.
Removed
These efforts include planned publication of the results from the previously discussed “Multi-center, Single-arm EsoGuard clinical validation study” (“BE-1”) which will also be presented at Digestive Disease Week (DDW) 2024; this third clinical validation study evaluates EsoGuard performance in the intended-use population.
Added
In January 2025, we expanded on our direct contracting initiative by launching a cash-pay program targeting concierge medicine, as an important component of our strategic efforts to expand our contractually-guaranteed revenue. We have already contracted with concierge medicine practices across the country under this initiative.
Removed
Publication of real-world experience of EsoCheck as a nonendoscopic cell collection device is also planned (previously presented as a poster at DDW 2023), in addition to results from EsoGuard analytical validation studies performed by LucidDx Labs, and a summary of real-world outcomes from several hundred patients who tested positive with EsoGuard and underwent confirmatory endoscopic evaluation.
Added
This allowed us to engage directly with Medicare contractor Palmetto GBA and its MolDx Program on CMS payment and coverage. In October 2020, CMS granted EsoGuard final Medicare payment determination of $1,938.01, effective January 1, 2021.
Removed
These four manuscripts will be submitted for peer review in the first half of 2024.
Added
These efforts include completion of the ESOGUARD-BE2 study, a large multi-center case control study recruiting patients from large academic institutions in the Netherlands and across the U.S., in the first half of the year and submission for peer review of a publication of the results in the second half of 2025.
Removed
Additionally, the Lucid-sponsored multi-center, prospective, observational CL inical U tility of E soGuard study ( CLUE ) with >500 subjects completed enrollment in late 2023, and full results are expected to be published in mid-2024; results from an additional data snapshot of the Lucid-sponsored PREVENT and PREVENT - F ire f ighter ( FF ) registries with a combined enrollment of >1,000 subjects are expected to be published in a similar timeframe.
Added
A large, nearly 12,000 patient real-world experience of EsoCheck and EsoGuard from 18 months of commercial data is expected to be submitted for peer review publication in the first half of the year. Finally, data accrual from the PREVENT and PREVENT-FF registries remains ongoing.
Removed
Combined interim results from the PREVENT and PREVENT-FF registries focusing on provider decision impact have previously been accepted for peer review publication in Journal of Gastroenterology & Digestive Systems (ISSN: 2640-7477).
Added
Regulatory In June 2019, we received FDA 510(k) clearance to market EsoCheck in the U.S. as a device indicated for use in the collection and retrieval of surface cells of the esophagus in adults followed by FDA 510(k) clearance in 2022, expanding the use of EsoCheck in adults and pediatric populations in the U.S.
Removed
The warehousing, logistics, fulfillment and customer support of our products is managed for us by our partners HealthLink International (a leading third-party logistics company) and Path-Tec.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAs such, FDA has structured the proposed phaseout policy to contain five key stages: ● Stage 1: End the general enforcement discretion approach with respect to Medical Device Regulation (MDR) requirements and correction and removal reporting requirements 1 year after FDA publishes a final phaseout policy, which FDA intends to issue in the preamble of the final rule. ● Stage 2: End the general enforcement discretion approach with respect to requirements other than MDR, correction and removal reporting, Quality System (QS), and premarket review requirements 2 years after FDA publishes a final phaseout policy. ● Stage 3: End the general enforcement discretion approach with respect to QS requirements 3 years after FDA publishes a final phaseout policy. ● Stage 4: End the general enforcement discretion approach with respect to premarket review requirements for high-risk IVDs 3.5 years after FDA publishes a final phaseout policy, but not before October 1, 2027. ● Stage 5: End the general enforcement discretion approach with respect to premarket review requirements for moderate risk and low risk IVDs (that require premarket submissions) 4 years after FDA publishes a final phaseout policy, but not before April 1, 2028.
Biggest changeThe phaseout policy contains the following five stages: ● Stage 1: Beginning on May 6, 2025, which is one year after the publication date of the final LDT rule, FDA will expect compliance with medical device reporting (MDR) requirements, correction and removal reporting requirements, and quality system (QS) requirements regarding complaint files. ● Stage 2: Beginning on May 6, 2026, which is 2 years after the publication date of the final LDT rule, FDA will expect compliance with requirements not covered during other stages of the phaseout policy, including registration and listing requirements, labeling requirements, and investigational use requirements. ● Stage 3: Beginning on May 6, 2027, which is 3 years after the publication date of the final LDT rule, FDA will expect compliance with QS requirements (other than requirements regarding complaint files which are already addressed in stage 1). ● Stage 4: Beginning on November 6, 2027, which is 3½ years after the publication date of the final LDT rule, FDA will expect compliance with premarket review requirements for high-risk IVDs offered as LDTs (IVDs that may be classified into class III or that are subject to licensure under section 351 of the Public Health Service Act), unless a premarket submission has been received by the beginning of this stage in which case FDA intends to continue to exercise enforcement discretion for the pendency of its review. ● Stage 5: Beginning on May 6, 2028, which is 4 years after the publication date of the final LDT rule, FDA will expect compliance with premarket review requirements for moderate-risk and low-risk IVDs offered as LDTs (that require premarket submissions), unless a premarket submission has been received by the beginning of this stage in which case FDA intends to continue to exercise enforcement discretion for the pendency of its review.
In most cases, we expect to ship EsoCheck devices EsoGuard specimen kits to physicians and have the physician’s office ship samples by air express courier delivery service to our CLIA-certified laboratory for EsoGuard testing.
In most cases, we expect to ship EsoCheck devices and EsoGuard specimen kits to physicians and have the physician’s office ship samples by air express courier delivery service to our CLIA-certified laboratory for EsoGuard testing.
Among others, these provisions include the following. ● our Board of Directors will be divided into three classes with staggered three-year terms which may delay or prevent a change of our management or a change in control; 38 ● our Board of Directors will have the right to elect directors to fill a vacancy created by the expansion of our Board of Directors or the resignation, death or removal of a director, which will prevent stockholders from being able to fill vacancies on our Board of Directors; ● our certificate of incorporation will not permit cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; and ● our stockholders will be required to provide advance notice and additional disclosures in order to nominate individuals for election to our Board of Directors or to propose matters that can be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of our company.
Among others, these provisions include the following. ● our Board of Directors will be divided into three classes with staggered three-year terms which may delay or prevent a change of our management or a change in control; ● our Board of Directors will have the right to elect directors to fill a vacancy created by the expansion of our Board of Directors or the resignation, death or removal of a director, which will prevent stockholders from being able to fill vacancies on our Board of Directors; ● our certificate of incorporation will not permit cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; and ● our stockholders will be required to provide advance notice and additional disclosures in order to nominate individuals for election to our Board of Directors or to propose matters that can be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of our company.
The regulations establish a complex regulatory framework on a variety of subjects, including: ● the circumstances under which uses and disclosures of PHI are permitted or required without a specific authorization by the patient, including but not limited to treatment purposes, activities to obtain payments for our services, and our healthcare operations activities; ● a patient’s rights to access, amend and receive an accounting of certain disclosures of PHI; ● requirements to notify individuals if there is a breach of their PHI; ● the contents of notices of privacy practices for PHI; ● administrative, technical and physical safeguards required of entities that use or receive PHI; and ● the protection of computing systems maintaining electronic PHI.
The regulations establish a complex regulatory framework on a variety of subjects, including: ● the circumstances under which uses and disclosures of PHI are permitted or required without a specific authorization by the patient, including but not limited to treatment purposes, activities to obtain payments for our services, and our healthcare operations activities; ● a patient’s rights to access, amend and receive an accounting of certain disclosures of PHI; 38 ● requirements to notify individuals if there is a breach of their PHI; ● the contents of notices of privacy practices for PHI; ● administrative, technical and physical safeguards required of entities that use or receive PHI; and ● the protection of computing systems maintaining electronic PHI.
Failure to comply with these regulations could result in sanctions, fines or other enforcement actions which may be costly, time-consuming and limit our ability to utilize them and adversely impact our business. ● We intend to engage with one or more third-party telemedicine companies to provide physicians to evaluate patients and, if clinically indicated, refer the patient to our Lucid Test Centers or to a #CheckYourFoodTube Precancer Testing Event, to undergo EsoCheck specimen collection for EsoGuard testing.
Failure to comply with these regulations could result in sanctions, fines or other enforcement actions which may be costly, time-consuming and limit our ability to utilize them and adversely impact our business. ● We intend to engage with one or more third-party telemedicine companies to provide physicians to evaluate patients and, if clinically indicated, refer the patient (including to our Lucid Test Centers or to a #CheckYourFoodTube Precancer Testing Event), to undergo EsoCheck specimen collection for EsoGuard testing.
These competitors include biotechnology, diagnostic and other life science companies; academic and scientific institutions, governmental agencies, and public and private research organizations. We may be unable to compete effectively against our competitors either because their products and services are superior or more cost efficient, or because they have access to greater resources than us.
These competitors include biotechnology, diagnostic and other life science companies; academic and scientific institutions, governmental agencies, and public and private research organizations. 23 We may be unable to compete effectively against our competitors either because their products and services are superior or more cost efficient, or because they have access to greater resources than us.
If demand for the EsoGuard test outstrips this capacity, and we fail to add additional equipment and staff, or complete, or timely complete, an expansion of its available laboratory facilities, it may significantly delay our EsoGuard processing times and limit the volume of EsoGuard tests we can process, which may adversely affect our business, financial condition and results of operation.
If demand for the EsoGuard test outstrips this capacity, and we fail to add additional equipment and staff, or complete, or timely complete, an expansion of our available laboratory facilities, it may significantly delay our EsoGuard processing times and limit the volume of EsoGuard tests we can process, which may adversely affect our business, financial condition and results of operation.
We cannot predict the number, timing or size of future acquisitions or the effect that any such transactions might have on our operating results. For the foregoing reasons, the market price of our common stock may decline as a result of any acquisitions. 23 Adverse results in material litigation matters could have a material adverse effect upon our business.
We cannot predict the number, timing or size of future acquisitions or the effect that any such transactions might have on our operating results. For the foregoing reasons, the market price of our common stock may decline as a result of any acquisitions. Adverse results in material litigation matters could have a material adverse effect upon our business.
Adverse pricing limitations may hinder our ability to recoup our investment in the EsoGuard and EsoCheck products and any other products, tests or services we develop, even if our products obtain regulatory approval. Due to billing complexities in the diagnostic and laboratory service industry, we may not be able to collect payment for the EsoGuard tests we perform.
Adverse pricing limitations may hinder our ability to recoup our investment in the EsoGuard and EsoCheck products and any other products, tests or services we develop, even if our products obtain regulatory approval. 36 Due to billing complexities in the diagnostic and laboratory service industry, we may not be able to collect payment for the EsoGuard tests we perform.
In addition, insurance coverage is increasingly expensive. We may not be able to maintain insurance coverage at a reasonable cost or in an amount adequate to satisfy any liability that may arise. 32 Compliance with the HIPAA security, privacy and breach notification regulations may increase our costs.
In addition, insurance coverage is increasingly expensive. We may not be able to maintain insurance coverage at a reasonable cost or in an amount adequate to satisfy any liability that may arise. Compliance with the HIPAA security, privacy and breach notification regulations may increase our costs.
We may not be able to file for regulatory approvals and even if we file, we may not receive necessary approvals to commercialize our products in any market. Modifications to our cleared or approved products may require new clearances or premarket approvals, or may require us to cease marketing or recall the modified products until clearances are obtained.
We may not be able to file for regulatory approvals and even if we file, we may not receive necessary approvals to commercialize our products in any market. 31 Modifications to our cleared or approved products may require new clearances or premarket approvals, or may require us to cease marketing or recall the modified products until clearances are obtained.
We intend to engage with one or more third-party telemedicine companies to provide physicians to evaluate patients and, if clinically indicated, refer the patient to our Lucid Test Centers or to a #CheckYourFoodTube Precancer Testing Event, to undergo EsoCheck specimen collection for EsoGuard testing.
We intend to engage with one or more third-party telemedicine companies to provide physicians to evaluate patients and, if clinically indicated, refer the patient (including to our Lucid Test Centers or to a #CheckYourFoodTube Precancer Testing Event), to undergo EsoCheck specimen collection for EsoGuard testing.
Future litigation could result in significant costs and divert the attention of our management and key personnel from our business operations and the implementation of our business strategy. Failure in our information technology systems could significantly disrupt our operations and our research and development efforts, which could adversely impact our revenues, as well as our research, development and commercialization efforts.
Future litigation could result in significant costs and divert the attention of our management and key personnel from our business operations and the implementation of our business strategy. 40 Failure in our information technology systems could significantly disrupt our operations and our research and development efforts, which could adversely impact our revenues, as well as our research, development and commercialization efforts.
Any interruption in the operation of IT systems could have an adverse effect on our operations. 34 System upgrades, enhancements and replacements, as well as new systems, are required from time to time, and require significant expenditures and allocation of valuable employee resources.
Any interruption in the operation of IT systems could have an adverse effect on our operations. System upgrades, enhancements and replacements, as well as new systems, are required from time to time, and require significant expenditures and allocation of valuable employee resources.
Foreign regulatory regimes may have comparable requirements, which present the same or substantially similar risks. 26 Clinical trials necessary to support regulatory submission will be expensive and will require the enrollment of large numbers of patients, and suitable patients may be difficult to identify and recruit.
Foreign regulatory regimes may have comparable requirements, which present the same or substantially similar risks. Clinical trials necessary to support regulatory submission will be expensive and will require the enrollment of large numbers of patients, and suitable patients may be difficult to identify and recruit.
Our business, financial condition and results of operations could be adversely affected by the political and economic conditions of the countries in which we conduct business (although our near-term focus is on our U.S. operations).
Our business, financial condition and results of operations could be adversely affected by the political and economic conditions of the U.S. and the other countries in which we conduct business (although our near-term focus is on our U.S. operations).
Accordingly, any such termination or dispute could threaten the viability of our business. Our products may never achieve market acceptance. To date, we have not generated any significant revenues.
Accordingly, any such termination or dispute could threaten the viability of our business. 24 Our products may never achieve market acceptance. To date, we have not generated any significant revenues.
These factors include: ● challenges associated with cultural differences, languages and distance; ● differences in clinical practices, needs, products, modalities and preferences; ● longer payment cycles in some countries; ● credit risks of many kinds; ● legal and regulatory differences and restrictions; ● currency exchange fluctuations; ● foreign exchange controls that might prevent us from repatriating cash earned in certain countries; ● political and economic instability and export restrictions; ● variability in sterilization requirements for multi-usage surgical devices; ● potential adverse tax consequences; ● higher cost associated with doing business internationally; ● challenges in implementing educational programs required by our approach to doing business; ● negative economic developments in economies around the world and the instability of governments, including the threat of war, terrorist attacks, epidemic or civil unrest; ● adverse changes in laws and governmental policies, especially those affecting trade and investment; ● health epidemics and /or pandemics, such as the epidemics resulting from the Ebola virus, or the enterovirus, or the avian influenza virus, or the pandemic resulting from a novel strain of a coronavirus designated “Severe Acute Respiratory Syndrome Coronavirus 2” - or “SARS-CoV-2”, which may adversely affect our workforce as well as our local suppliers and customers; ● import or export licensing requirements imposed by governments; ● differing labor standards; ● differing levels of protection of intellectual property; ● the threat that our operations or property could be subject to nationalization and expropriation; ● varying practices of the regulatory, tax, judicial and administrative bodies in the jurisdictions where we operate; and ● potentially burdensome taxation and changes in foreign tax.
These factors include: ● varying practices of the regulatory, tax, judicial and administrative bodies in the U.S. and other jurisdictions where we operate; ● potentially burdensome taxation and changes in domestic and foreign tariffs; ● challenges associated with cultural differences, languages and distance; 27 ● differences in clinical practices, needs, products, modalities and preferences; ● longer payment cycles in some countries; ● credit risks of many kinds; ● legal and regulatory differences and restrictions; ● currency exchange fluctuations; ● foreign exchange controls that might prevent us from repatriating cash earned in certain countries; ● political and economic instability and export restrictions; ● variability in sterilization requirements for multi-usage surgical devices; ● potential adverse tax consequences; ● higher cost associated with doing business internationally; ● challenges in implementing educational programs required by our approach to doing business; ● negative economic developments in economies around the world and the instability of governments, including the threat of war, terrorist attacks, epidemic or civil unrest; ● adverse changes in laws and governmental policies, especially those affecting trade and investment; ● health epidemics and /or pandemics, such as the epidemics resulting from the Ebola virus, or the enterovirus, or the avian influenza virus, or the pandemic resulting from a novel strain of a coronavirus designated “Severe Acute Respiratory Syndrome Coronavirus 2” - or “SARS-CoV-2”, which may adversely affect our workforce as well as our local suppliers and customers; ● import or export licensing requirements imposed by governments; ● differing labor standards; ● differing levels of protection of intellectual property; and ● the threat that our operations or property could be subject to nationalization and expropriation.
For example, the results of the studies to date on EsoGuard may not be replicated by the clinical trials being undertaken to obtain PMA approval of the use of EsoGuard and EsoCheck together as an IVD device. Conducting successful clinical studies will require the enrollment of large numbers of patients, and suitable patients may be difficult to identify and recruit.
For example, the results of the studies to date on EsoGuard may not be replicated by any clinical trials undertaken to obtain PMA approval of the use of EsoGuard and EsoCheck together as an IVD device. Conducting successful clinical studies will require the enrollment of large numbers of patients, and suitable patients may be difficult to identify and recruit.
Our trade secrets may be vulnerable to disclosure or misappropriation by employees, contractors, and other persons. 33 We also rely on the use of registered and common law trademarks with respect to the brand names of some of our products. Common law trademarks provide less protection than registered trademarks.
Our trade secrets may be vulnerable to disclosure or misappropriation by employees, contractors, and other persons. 39 We also rely on the use of registered and common law trademarks with respect to the brand names of some of our products. Common law trademarks provide less protection than registered trademarks.
Risks Associated with Ownership of Our Common Stock ● If securities or industry analysts do not publish research, or publish inaccurate or unfavorable research, about our business, our stock price and trading volume could decline. ● Nasdaq may in the future delist our common stock, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions. ● Our stock price may be volatile, and holders of our common stock could incur substantial losses. ● We do not intend to pay any dividends on our common stock at this time. ● We incur significant costs as a result of operating as a public company, and our management will be required to devote substantial time to compliance initiatives. ● If we fail to establish and maintain proper and effective internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock could decline significantly. ● We are subject to evolving corporate governance and public disclosure expectations and regulations that impact compliance costs and risks of noncompliance. ● We are an “emerging growth company,” and we cannot be certain if the reduced reporting requirements applicable to emerging growth companies will make our common stock less attractive to investors. ● Provisions in our corporate charter documents and under Delaware law could make an acquisition of us more difficult and may prevent attempts by our stockholders to replace or remove our current management. ● Our charter provides, subject to limited exceptions, that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for certain stockholder litigation matters, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or stockholders.
Risks Associated with Ownership of Our Common Stock ● If securities or industry analysts do not publish research, or publish inaccurate or unfavorable research, about our business, our stock price and trading volume could decline. ● Nasdaq may in the future delist our common stock, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions. ● Our stock price may be volatile, and holders of our common stock could incur substantial losses. ● We do not intend to pay any dividends on our common stock at this time. ● We incur significant costs as a result of operating as a public company, and our management will be required to devote substantial time to compliance initiatives. ● If we fail to establish and maintain proper and effective internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock could decline significantly. ● We are subject to evolving corporate governance and public disclosure expectations and regulations that impact compliance costs and risks of noncompliance. ● We are an “emerging growth company,” and we cannot be certain if the reduced reporting requirements applicable to emerging growth companies will make our common stock less attractive to investors. ● Provisions in our corporate charter documents and under Delaware law could make an acquisition of us more difficult and may prevent attempts by our stockholders to replace or remove our current management. ● Our charter provides, subject to limited exceptions, that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for certain stockholder litigation matters, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or stockholders. 19 Risks Associated with Our Financial Condition We have incurred operating losses since our inception and may not be able to achieve profitability.
If FDA disagrees with our determinations, they could require us to report those actions as recalls. A future recall announcement could harm our reputation with customers and negatively affect its sales. In addition, FDA could take enforcement action for failing to report the recalls when they were conducted. No recalls of our medical products have been reported to FDA.
If FDA disagrees with our determinations, they could require us to report those actions as recalls. A future recall announcement could harm our reputation with customers and negatively affect its sales. In addition, FDA could take enforcement action for failing to report the recalls when they were conducted. No recalls of EsoCheck have been reported to FDA.
Such advances could put EsoGuard and EsoCheck at a significant competitive disadvantage in the esophageal precancer testing market as it would be logistically much simpler to send the patient for a routine blood draw instead of a specialized office procedure like EsoCheck, and patients would generally prefer such a blood draw over even a noninvasive procedure such as EsoCheck.
Such advances could put EsoGuard and EsoCheck at a significant competitive disadvantage in the esophageal precancer testing market as it would be logistically simpler to send the patient for a routine blood draw instead of a specialized office procedure like EsoCheck, and patients may prefer such a blood draw over even a noninvasive procedure such as EsoCheck.
Billing for diagnostic and laboratory services is a complex process. Laboratories bill many different payors including patients, private insurance companies, Medicare, Medicaid, and employer groups, all of which have different billing requirements. We are continuing to work with third-party payors to cover and reimburse EsoGuard tests.
Billing for diagnostic and laboratory services is a complex process. Laboratories bill many different payors including patients, private insurance companies, Medicare, Medicaid, concierge medicine practices and employer groups, all of which have different billing requirements. We are continuing to work with third-party payors to cover and reimburse EsoGuard tests.
In March 2024, we entered into an eighth amendment to the management services agreement with PAVmed (the “MSA”), pursuant to which PAVmed may elect to receive payment of the monthly fee under the management services agreement in cash or in shares of our common stock valued at a price based on the current market price, subject to a floor price and a maximum number of shares.
In August 2024, we entered into an ninth amendment to the management services agreement with PAVmed (the “MSA”), pursuant to which PAVmed may elect to receive payment of the monthly fee under the management services agreement in cash or in shares of our common stock valued at a price based on the current market price, subject to a floor price and a maximum number of shares.
Our certificate of incorporation authorizes the issuance of up to 200,000,000 shares of common stock, par value $.001 per share, and 20,000,000 shares of preferred stock, par value $.001 per share.
Our certificate of incorporation authorizes the issuance of up to 300,000,000 shares of common stock, par value $.001 per share, and 20,000,000 shares of preferred stock, par value $.001 per share.
Risks Associated with Our Business ● Since we have a limited operating history, and have not generated any significant revenues to date, you will have little basis upon which to evaluate our ability to achieve our business objective. ● The markets in which we operate are attractive and other companies or institutions may develop and market novel or improved technologies, which may make the EsoGuard or EsoCheck technologies less competitive or obsolete. ● We expect to derive substantially all of our revenues from the EsoGuard and EsoCheck products. ● We are highly dependent on our license agreement with CWRU, the termination of which would prevent us from commercializing our products, and which imposes significant obligations on us. ● Our products may never achieve market acceptance. ● The sizes of the markets for our current and future products have not been established with precision, and may be smaller than we estimate. ● Recommendations in published clinical practice guidelines issued by various organizations, including professional societies and federal agencies may significantly affect payors’ willingness to cover, and physicians’ willingness to prescribe, our products and services. ● We or our third-party manufacturers may not have the manufacturing and processing capacity to meet the production requirements of consumer demand or clinical testing in a timely manner. ● Our EsoGuard test is performed in a single commercial clinical laboratory facility.
Risks Associated with Our Business ● Since we have a limited operating history, and have not generated any significant revenues to date, you will have little basis upon which to evaluate our ability to achieve our business objective. ● The markets in which we operate are attractive and other companies or institutions may develop and market novel or improved technologies, which may make the EsoGuard or EsoCheck technologies less competitive or obsolete. ● We expect to derive substantially all of our revenues from the EsoGuard and EsoCheck products. ● We are highly dependent on our license agreement with CWRU, the termination of which would prevent us from commercializing our products, and which imposes significant obligations on us. ● Our products may never achieve market acceptance. ● The sizes of the markets for our current and future products have not been established with precision, and may be smaller than we estimate. ● Recommendations in published clinical practice guidelines issued by various organizations, including professional societies and federal agencies may significantly affect payors’ willingness to cover, and physicians’ willingness to prescribe, our products and services. ● We or our third-party manufacturers may not have the manufacturing and processing capacity to meet the production requirements of consumer demand or clinical testing in a timely manner. ● If demand for our EsoGuard test grows, we may lack adequate facility space and capabilities to meet increased processing requirements.
In our December 31, 2023 consolidated financial statements, we have concluded and stated our recurring losses from operations, recurring cash flows used in operations and the requirement we raise additional capital in order to fund our ongoing operations beyond March 2025 raise substantial doubt regarding our ability to continue as a going concern.
In our December 31, 2024 consolidated financial statements, we have concluded and stated our recurring losses from operations, recurring cash flows used in operations and the requirement we raise additional capital in order to fund our ongoing operations beyond March 2026 raise substantial doubt regarding our ability to continue as a going concern.
Given the large market opportunity for esophageal precancer testing we may face multiple competitors in the future, some of which possess significantly greater financial and other resources and development capabilities than us. Our EsoGuard test may face competition from new biomarkers also designed to detect esophageal precancer and conditions along the BE-EAC spectrum. The Mayo Clinic and Exact Sciences Inc.
Given the large market opportunity for esophageal precancer testing we may face multiple competitors in the future, some of which possess significantly greater financial and other resources and development capabilities than us. Our EsoGuard test may face competition from new biomarkers also designed to detect esophageal precancer and conditions along the BE-EAC spectrum.
This conflict of interest could have a negative impact on our operations. ● Our ability to be successful will be totally dependent upon the efforts of our key personnel. ● Our officers and directors have fiduciary obligations to other companies and, accordingly, may have conflicts of interest in determining to which entity a particular business opportunity should be presented. ● Our business may suffer if we are unable to manage our growth. ● Our business, financial condition and results of operations could be adversely affected by the political and economic conditions of the countries in which we conduct business. ● We may engage in acquisitions that are not successful and which could disrupt our business, cause dilution to our stockholders and reduce our financial resources. ● Adverse results in material litigation matters could have a material adverse effect upon our business. 14 Risks Associated with Healthcare Regulation, Billing and Reimbursement, and Product Safety and Effectiveness. ● If private or governmental third-party payors do not maintain reimbursement for our products at adequate reimbursement rates, we may be unable to successfully commercialize our products which would limit or slow our revenue generation and likely have a material adverse effect on our business. ● FDA has proposed a policy under which it would phase out its general enforcement discretion approach for LDTs so that IVDs manufactured at a laboratory would generally fall under the same enforcement approach as other IVDs.
Our future performance may be affected by the success of products we have not yet developed, licensed, acquired. ● Our ability to be successful will be totally dependent upon the efforts of our key personnel. ● Our officers and directors have fiduciary obligations to other companies and, accordingly, may have conflicts of interest in determining to which entity a particular business opportunity should be presented. ● Our business may suffer if we are unable to manage our growth. ● Our business, financial condition and results of operations could be adversely affected by the political and economic conditions of the U.S. and the other countries in which we conduct business. ● We may engage in acquisitions that are not successful and which could disrupt our business, cause dilution to our stockholders and reduce our financial resources. ● Adverse results in material litigation matters could have a material adverse effect upon our business. 17 Risks Associated with Healthcare Regulation, Billing and Reimbursement, and Product Safety and Effectiveness. ● If private or governmental third-party payors do not maintain reimbursement for our products at adequate reimbursement rates, we may be unable to successfully commercialize our products which would limit or slow our revenue generation and likely have a material adverse effect on our business. ● FDA has proposed a policy under which it would phase out its general enforcement discretion approach for LDTs so that IVDs manufactured at a laboratory would generally fall under the same enforcement approach as other IVDs.
A number of factors may limit the market acceptance of any of our products, including: ● the effectiveness, reliability and safety of our products, including any potential side effects, and the other competitive features of our products, including price, as compared to alternatives; ● the rate of adoption of our products by hospitals, doctors and nurses and acceptance by the health care community, and the ease of the ordering process for doctors; ● guidelines and other recommendations from medical societies and other similar organizations relating to screening for, monitoring, diagnosing and treating esophageal precancer and cancer or other medical conditions for which our products are used; ● the product labeling or product inserts required by regulatory authorities for each of our products; ● the availability and amount of insurance or other third-party reimbursement, such as Medicare, for patients using our products; ● the extent and success of our marketing efforts and those of our collaborators; ● unfavorable publicity concerning our products or similar products; and ● in the case of FDA PMA approval of the EsoGuard combined with EsoCheck as an IVD device, and in the case of any other products or services we may develop in the future, the timing of regulatory approvals of our products and market entry compared to competitive products. 20 The sizes of the markets for our current and future products have not been established with precision, and may be smaller than we estimate.
A number of factors may limit the market acceptance of any of our products, including: ● the effectiveness, reliability and safety of our products, including any potential side effects, and the other competitive features of our products, including price, as compared to alternatives; ● the rate of adoption of our products by hospitals, doctors and nurses and acceptance by the health care community, and the ease of the ordering process for doctors; ● guidelines and other recommendations from medical societies and other similar organizations relating to screening for, monitoring, diagnosing and treating esophageal precancer and cancer or other medical conditions for which our products are used; ● the product labeling or product inserts required by regulatory authorities for each of our products; ● the availability and amount of insurance or other third-party reimbursement, such as Medicare, for patients using our products; ● the extent and success of our marketing efforts and those of our collaborators; ● unfavorable publicity concerning our products or similar products; and ● in the case of FDA PMA approval of the EsoGuard combined with EsoCheck as an IVD device, and in the case of any other products or services we may develop in the future, the timing of regulatory approvals of our products and market entry compared to competitive products.
If we fail to maintain CLIA-certification or otherwise meet the applicable requirements of federal or state law regulating commercial clinical laboratories, such failure could limit or prevent our ability to perform our EsoGuard test, or any other tests which we may develop, license or acquire, affect any payor consideration of such tests, prevent their clearance or approval entirely, and/or interrupt the commercial sale and/or marketing of any such tests, cause us to incur significant expense to remedy this failure and otherwise negatively impact our business.
If we fail to maintain CLIA-certification or otherwise meet the applicable requirements of federal or state law, that failure could adversely limit or prevent its ability to perform our EsoGuard test, or any other diagnostic tests which we may develop, license or acquire, affect any payor consideration of such tests, prevent their clearance or approval entirely, and/or interrupt the commercial sale and/or marketing of any such tests, cause us to incur significant expense to remedy this failure and otherwise negatively impact our business.
Our business, financial condition and results of operations could be adversely affected by the political and economic conditions of the countries in which we conduct business.
Our business, financial condition and results of operations could be adversely affected by the political and economic conditions of the U.S. and the other countries in which we conduct business.
Delays or failures in our clinical trials will prevent us from expanding our commercial efforts and will adversely affect our business, operating results and prospects. ● The results of our clinical trials may not support our product candidate claims or may result in the discovery of adverse side effects. ● If our clinical studies do not satisfy providers, payors, patients and others as to the reliability and performance of our EsoGuard test and the EsoCheck device, or any other product or service we may develop and seek to commercialize, we may experience reluctance or refusal on the part of physicians to order, and third-party payors to pay for, such test. ● If the validity of an informed consent for a clinical trial of one of our products was challenged, we could be subject to fines, penalties, litigation, or regulatory sanctions, or other adverse consequences, including invalidating or requiring us to repeat clinical trials which could negatively affect our business and results of operations. ● EsoCheck and any other products we develop that receive regulatory clearance or approval will be subject to ongoing regulatory obligations and continued regulatory review, which may result in significant additional expense and subject us to penalties if we fail to comply with applicable regulatory requirements. ● If we are found to be promoting the use of our devices for unapproved or “off-label” uses or engaging in other noncompliant activities, we may be subject to recalls, seizures, fines, penalties, injunctions, adverse publicity, prosecution, or other adverse actions, resulting in damage to our reputation and business. ● Clinical laboratories and medical diagnostic companies are subject to extensive and frequently changing federal, state, and local laws.
Delays or failures in our clinical trials will prevent us from expanding our commercial efforts and will adversely affect our business, operating results and prospects. ● The results of our clinical trials may not support our product candidate claims or may result in the discovery of adverse side effects. ● If our clinical studies do not satisfy providers, payors, patients and others as to the reliability and performance of our EsoGuard test and the EsoCheck device, or any other product or service we may develop and seek to commercialize, we may experience reluctance or refusal on the part of physicians to order, and third-party payors to pay for, such test. ● EsoCheck and any other products we develop that receive regulatory clearance or approval will be subject to ongoing regulatory obligations and continued regulatory review, which may result in significant additional expense and subject us to penalties if we fail to comply with applicable regulatory requirements. ● If we are found to be promoting the use of our devices for unapproved or “off-label” uses or engaging in other noncompliant activities, we may be subject to recalls, seizures, fines, penalties, injunctions, adverse publicity, prosecution, or other adverse actions, resulting in damage to our reputation and business. ● Clinical laboratories and medical diagnostic companies are subject to extensive and frequently changing federal, state, and local laws.
Additionally, most foreign countries have authorities comparable to FDA and processes for obtaining marketing approvals. Obtaining and maintaining these approvals, and complying with all laws and regulations, may subject us to similar risks and delays as those we could experience under FDA, FTC and state regulation. We incur various costs in complying and overseeing compliance with these laws and regulations.
Additionally, most foreign countries have authorities comparable to FDA and processes for obtaining marketing approvals. Obtaining and maintaining these approvals, and complying with all laws and regulations, may subject us to similar risks and delays as those we could experience under FDA, FTC and state regulation.
However, even if we do submit EsoGuard for Technical Assessment as currently planned, there can be no assurance that MolDx will determine that we meet the criteria for coverage as specified in the LCD. If we are not granted coverage, or if a determination is substantially delayed, that could have a material adverse effect on our ability to commercialize EsoGuard.
However, there can be no assurance that MolDx will determine that we meet the criteria for coverage as specified in the LCD. If we are not granted coverage, or if a determination is substantially delayed, that could have a material adverse effect on our ability to commercialize EsoGuard.
Similarly, if we incur indebtedness, it could result in: ● default and foreclosure on our assets if our operating revenues are insufficient to pay our debt obligations and we are not able to refinance such obligations; ● acceleration of our obligations to repay the indebtedness even if we have made all principal and interest payments when due if the debt security contains covenants that require the maintenance of certain financial ratios or reserves, and any such covenant is breached without a waiver or renegotiation of that covenant; ● our immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand and a demand is made; ● our inability to obtain additional financing, if necessary, if the debt security contains covenants restricting our ability to obtain additional financing while such security is outstanding; and ● our inability to conduct acquisitions, joint ventures or similar arrangements if the debt security contains covenants restricting such transactions or the funding thereof or requiring prior approval of the debt holders. 17 We expect to need additional capital funding, which may be compounded by our obligations to our parent company, PAVmed, which requires its own additional capital funding.
Similarly, if we incur indebtedness, it could result in: ● default and foreclosure on our assets if our operating revenues are insufficient to pay our debt obligations and we are not able to refinance such obligations; ● acceleration of our obligations to repay the indebtedness even if we have made all principal and interest payments when due if the debt security contains covenants that require the maintenance of certain financial ratios or reserves, and any such covenant is breached without a waiver or renegotiation of that covenant; ● our immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand and a demand is made; ● our inability to obtain additional financing, if necessary, if the debt security contains covenants restricting our ability to obtain additional financing while such security is outstanding; and ● our inability to conduct acquisitions, joint ventures or similar arrangements if the debt security contains covenants restricting such transactions or the funding thereof or requiring prior approval of the debt holders.
We are confident that the proposed policy will not have a commercial impact as the Company already has a robust QS management platform for medical devices and EsoGuard will be able to transition to the platform to fulfill the QS requirements, if and when required by FDA.
We are confident that the proposed final rule will not have a commercial impact as the Company already has a robust QS management platform for medical devices and EsoGuard will be able to easily transition to the platform to fulfill the QS requirements, as required by the FDA.
Under the amendment, the monthly fee due from the Company to PAVmed was increased from $0.75 million to $0.83 million.
Under the amendment, the monthly fee due from the Company to PAVmed was increased from $0.83 million to $1.05 million.
We have not generated material revenue from operations to date, and our business may not generate cash flow from operations in the future sufficient to service our indebtedness and make necessary capital expenditures. In addition, the March 2023 Senior Convertible Note would contain, and any future indebtedness may contain, restrictive covenants, including financial covenants.
We have not generated material revenue from operations to date, and our business may not generate cash flow from operations in the future sufficient to service our indebtedness and make necessary capital expenditures. In addition, the 2024 Convertible Notes contain, and any future indebtedness may contain, restrictive covenants, including financial covenants.
Alternatively, if a court were to find the exclusive forum provision contained in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, operating results and financial condition. 39
Alternatively, if a court were to find the exclusive forum provision contained in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, operating results and financial condition. 46 Item 1B. Unresolved Staff Comments Not applicable.
A sustained labor shortage or increased turnover rates within our employee base could lead to increased costs, such as increased overtime or financial incentives to meet demand and increased wage rates to attract and retain employees, and could negatively affect our ability to efficiently operate our clinical laboratories and overall business.
Although we have not experienced any material labor shortage to date, a sustained labor shortage or increased turnover rates within our employee base could lead to increased costs, such as increased overtime or financial incentives to meet demand and increased wage rates to attract and retain employees, and could negatively affect our ability to efficiently operate our clinical laboratories and overall business.
As a result of this volatility, investors may experience losses on their investment in our common stock. For example, on March 21, 2024, the last reported sale price of our common stock was $1.11.
As a result of this volatility, investors may experience losses on their investment in our common stock. For example, on March 20, 2025, the last reported sale price of our common stock was $1.57.
The payment of cash dividends on our common stock in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition and will be within the discretion of our Board of Directors.
We have not paid any cash dividends on our shares of common stock to date. The payment of cash dividends on our common stock in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition and will be within the discretion of our Board of Directors.
Our results of operations, including our revenue and profits, assuming we are able to successfully commercialize the EsoGuard and EsoCheck products, may fluctuate significantly, depending on a variety of factors, including the following: ● our success in marketing and selling, and changes in demand for, our products, and the level of reimbursement and collection obtained for our products; ● seasonal variations affecting physician recommendations for esophageal precancer and cancer screenings and patient compliance with physician recommendations, including without limitation holidays, weather events, and other circumstances that may limit patient access to medical practices for preventive services such as esophageal precancer and cancer screening; ● our success in collecting payments from third-party payors, patients and collaborative partners, variation in the timing of these payments and recognition of these payments as revenues; ● the pricing of our products, including potential changes in CMS reimbursement rates or other reimbursement rates; ● circumstances affecting our ability to provide our products, including weather events, supply shortages, or regulatory or other circumstances that adversely affect our ability to manufacture our products or process tests in our clinical laboratory; ● fluctuations in the amount and timing of our selling and marketing costs and our ability to manage costs and expenses and effectively implement our business; and ● our research and development activities, including the timing of costly clinical trials.
Our results of operations, including our revenue and profits, assuming we are able to successfully commercialize the EsoGuard and EsoCheck products, may fluctuate significantly, depending on a variety of factors, including the following: ● our success in marketing and selling, and changes in demand for, our products, and the level of reimbursement and collection obtained for our products; ● our success in collecting payments from third-party payors, patients and collaborative partners, variation in the timing of these payments and recognition of these payments as revenues; ● the pricing of our products, including potential changes in CMS reimbursement rates or other reimbursement rates; ● circumstances affecting our ability to provide our products, including weather events, supply shortages, or regulatory or other circumstances that adversely affect our ability to manufacture our products or process tests in our clinical laboratory; ● fluctuations in the amount and timing of our selling and marketing costs and our ability to manage costs and expenses and effectively implement our business; and ● our research and development activities, including the timing of costly clinical trials.
Although we have received FDA 510(k) clearance to market EsoCheck, and EsoGuard may be performed in our own CLIA-certified commercial clinical laboratory and marketed as an LDT, if the results of any research and clinical studies conducted by us, including those conducted for the purpose of obtaining FDA approval of the combined EsoGuard and EsoCheck product as an IVD device, and our sales and marketing activities relating to communication of these results, do not convince guidelines organizations, physicians and other healthcare providers, third-party payors and patients that EsoGuard and EsoCheck are safe and effective, we may experience reluctance or refusal on the part of physicians to order, and third-party payors to pay for, EsoGuard or EsoCheck, which could adversely affect our business prospects. 27 If the validity of an informed consent for a clinical trial of one of our products was challenged, we could be subject to fines, penalties, litigation, or regulatory sanctions, or other adverse consequences, including invalidating or requiring us to repeat clinical trials which could negatively affect our business and results of operations.
Although we have received FDA 510(k) clearance to market EsoCheck, and EsoGuard may be performed in our own CLIA-certified commercial clinical laboratory and marketed as an LDT, if the results of any research and clinical studies conducted by us, including those conducted for the purpose of obtaining FDA approval of the combined EsoGuard and EsoCheck product as an IVD device, and our sales and marketing activities relating to communication of these results, do not convince guidelines organizations, physicians and other healthcare providers, third-party payors and patients that EsoGuard and EsoCheck are safe and effective, we may experience reluctance or refusal on the part of physicians to order, and third-party payors to pay for, EsoGuard or EsoCheck, which could adversely affect our business prospects.
These Lucid Test Centers are subject to federal and state regulations which may be burdensome, costly or difficult to comply with. Failure to comply with these regulations could result in sanctions, fines or other enforcement actions which may be costly, time-consuming and limit our ability to utilize them and adversely impact our business.
Failure to comply with these regulations could result in sanctions, fines or other enforcement actions which may be costly, time-consuming and limit our ability to utilize them and adversely impact our business.
In such instances, PAVmed may exercise its control over us in a way that is beneficial to PAVmed, and you will not be able to affect the outcome so long as PAVmed continues to hold a majority of the shareholder votes.
In such instances, PAVmed may exercise its influence over us in a way that is beneficial to PAVmed, and you may not be able to affect the outcome so long as PAVmed continues to hold more shareholder votes than any other shareholder.
There are 151,755,202 authorized but unissued shares of our common stock available for issuance as of March 21, 2024 (inclusive of granted but unvested restricted stock awards granted as of each such date under the Lucid Diagnostics 2018 Long-Term Incentive Equity Plan).
There are 209,246,149 authorized but unissued shares of our common stock available for issuance as of March 20, 2025 (inclusive of granted but unvested restricted stock awards granted as of each such date under the Lucid Diagnostics 2018 Long-Term Incentive Equity Plan).
There can be no assurance that FDA will ever permit us to market EsoGuard, used with EsoCheck, as a combined product. Also, any regulatory clearance or approval of a product, once obtained, may be withdrawn.
We may not conduct such a trial or may not successfully enroll or complete any such trial, if required. There can be no assurance that FDA will ever permit us to market EsoGuard, used with EsoCheck, as a combined product. Also, any regulatory clearance or approval of a product, once obtained, may be withdrawn.
PAVmed owns approximately 70.1% as of December 31, 2023 and 64.9% as of March 21, 2024 of our issued common stock (with such percentage inclusive of shares of our common stock underlying granted but unvested restricted stock awards), but excluding the voting power of any convertible securities.
PAVmed owns approximately 46% as of December 31, 2024 and 35% as of March 20, 2025 of our issued common stock (with such percentage inclusive of shares of our common stock underlying granted but unvested restricted stock awards), but excluding the voting power of any convertible securities.
Risks Associated with Our Relationship with PAVmed ● PAVmed owns a majority of our voting stock and thus it (or any successor to its stake in the Company), may control certain actions requiring a stockholder vote. ● If PAVmed’s debt is accelerated due to its default under the terms thereof, PAVmed could cease to have voting control of the Company. ● Certain conflicts of interest may arise between us and our affiliated companies, including PAVmed, and in some cases we have waived certain rights with respect thereto. ● Our ability to operate our business effectively may suffer if the MSA with PAVmed is insufficient to meet our needs or if, upon the termination of the MSA, we do not cost-effectively establish our own fully functional financial, administrative, operational and other support systems in order to operate as a stand-alone company. ● Any disputes that arise between us and PAVmed with respect to our past and ongoing relationships could harm our business operations.
Risks Associated with Our Relationship with PAVmed ● PAVmed holds more voting stock than any of our other shareholders and thus it (or any successor to its stake in the Company), may have significant influence over certain actions requiring a stockholder vote. ● As a result of the exercise by the holder of PAVmed’s convertible debt and preferred stock of its rights under the agreements governing those instruments, such holder could acquire voting control of the Company. ● Certain conflicts of interest may arise between us and our affiliated companies, including PAVmed, and in some cases we have waived certain rights with respect thereto. ● Our ability to operate our business effectively may suffer if the MSA with PAVmed is insufficient to meet our needs or if, upon the termination of the MSA, we do not cost-effectively establish our own fully functional financial, administrative, operational and other support systems in order to operate as a stand-alone company. ● Any disputes that arise between us and PAVmed with respect to our past and ongoing relationships could harm our business operations.
Even if regulatory clearance or approval of a product is granted, such clearance or approval may be subject to limitations on the intended uses for which the product may be marketed and reduce our potential to successfully commercialize the product and generate revenue from the product. 28 If FDA determines that our labeling, advertising, promotional materials, or user training materials, or representations made by our personnel, include the promotion of an off-label use for the device, or that we have made false or misleading or inadequately substantiated promotional claims, or claims that could potentially change the regulatory status of the product, the agency could take the position that these materials have misbranded our devices and request that we modify our labeling, advertising, or user training or promotional materials and/or subject us to regulatory or legal enforcement actions, including the issuance of an Untitled Letter or a Warning Letter, injunction, seizure, recall, adverse publicity, civil penalties, criminal penalties, or other adverse actions.
If FDA determines that our labeling, advertising, promotional materials, or user training materials, or representations made by our personnel, include the promotion of an off-label use for the device, or that we have made false or misleading or inadequately substantiated promotional claims, or claims that could potentially change the regulatory status of the product, the agency could take the position that these materials have misbranded our devices and request that we modify our labeling, advertising, or user training or promotional materials and/or subject us to regulatory or legal enforcement actions, including the issuance of an Untitled Letter or a Warning Letter, injunction, seizure, recall, adverse publicity, civil penalties, criminal penalties, or other adverse actions.
We may incur rapid and substantial increases or decreases in our stock price in the foreseeable future that may or may not coincide in timing with the disclosure of news or developments by us.
We may incur rapid and substantial increases or decreases in our stock price in the foreseeable future that may or may not coincide in timing with the disclosure of news or developments by us. The market price for our common stock may be influenced by many broad market and industry factors.
From March 2023 through March 2024, we issued shares of Series A Preferred Stock, Series A-1 Preferred, and Series B Preferred Stock that, in accordance with the terms thereof, could be converted into, in the aggregate, up to 49,822,240 shares of our common stock (which amount includes all future dividends that may be potentially payable in shares of our common stock).
In 2024, we issued shares of Series B Preferred Stock and Series B-1 Preferred Stock that, in accordance with the terms thereof, as of March 20, 2025 could be converted into, in the aggregate, up to 62,332,498 shares of our common stock (which amount includes all future dividends that may be potentially payable in shares of our common stock).
The results of our clinical trials may not support our product candidate claims or may result in the discovery of adverse side effects. Even if any of our clinical trials are completed as planned, it cannot be certain that study results will support product candidate claims or that FDA or foreign regulatory authorities will agree with our conclusions regarding them.
Even if our clinical trials are completed as planned, it cannot be certain that study results will support product candidate claims or that FDA or foreign regulatory authorities will agree with our conclusions regarding them.
In the last six months, between September 21, 2023 and March 21, 2024, the intra-day sale price of our common stock fluctuated between a reported low sale price of $0.99 and a reported high sale price of $1.58.
In the last six months, between September 23, 2024 and March 20, 2025, the intra-day sale price of our common stock fluctuated between a reported low sale price of $0.73 and a reported high sale price of $1.63.
Because we have not generated significant revenue or cash flow to date, and despite our recently having raised approximately $18.1 million in the Series B Offering and Exchange, we may require additional funds to: ● continue our research and development including existing and new clinical trials; ● fund our operations; ● protect our intellectual property rights or defend, in litigation or otherwise, any claims that we infringe third-party patents or other intellectual property rights; ● manufacture and distribute our products; and ● promote market acceptance of our products.
Because we have not generated significant revenue or cash flow to date, and despite our recently having raised net proceeds of approximately $14.5 million in connection with our consummation in February 2025 of a registered direct offering, and $18.3 million in connection with the issuance in November 2024 of the 2024 Convertible Notes, we may require additional funds to: ● continue our research and development including existing and new clinical trials; ● fund our operations; ● protect our intellectual property rights or defend, in litigation or otherwise, any claims that we infringe third-party patents or other intellectual property rights; ● manufacture and distribute our products; and ● promote market acceptance of our products.
As of March 21, 2024, 2,203,800 shares of our common stock were issuable under the March 2023 Senior Convertible Note, assuming the noteholder elected to convert the March 2023 Senior Convertible Note in full on such date at the fixed conversion price of $5.00 per share (based on $11.0 million in aggregate principal amount outstanding as of such date and no accrued and unpaid interest thereon).
As of March 20, 2025, 21,975,000 shares of our common stock were issuable under the 2024 Convertible Notes, assuming the noteholders elected to convert the notes in full on such date at the fixed conversion price of $1.00 per share (based on $21.975 million in aggregate principal amount outstanding as of such date and no accrued and unpaid interest thereon).
Risks Associated with Our Relationship with PAVmed PAVmed owns a majority of our voting stock and thus it (or any successor to its stake in the Company), may control certain actions requiring a stockholder vote.
Risks Associated with Our Relationship with PAVmed PAVmed holds more voting stock than any of our other shareholders and thus it (or any successor to its stake in the Company), may have significant influence over certain actions requiring a stockholder vote.
Moreover, if these or any future facilities or their equipment were damaged or destroyed, or if we experience a significant disruption in our commercial clinical laboratory operations for any reason, our ability to continue to operate our business could be materially harmed. We currently perform the EsoGuard test in a single laboratory facility in Lake Forest, CA.
Moreover, if these or any future facilities or their equipment were damaged or destroyed, or if we experience a significant disruption in our commercial clinical laboratory operations for any reason, our ability to continue to operate our business could be materially harmed. We currently have adequate capacity to process EsoGuard tests, based on current test volumes.
If we are found to be promoting the use of our devices for unapproved or “off-label” uses or engaging in other noncompliant activities, we may be subject to recalls, seizures, fines, penalties, injunctions, adverse publicity, prosecution, or other adverse actions, resulting in damage to our reputation and business.
Any recalls could have an adverse effect on our ability to provide our products, which in turn would adversely affect our financial condition. 33 If we are found to be promoting the use of our devices for unapproved or “off-label” uses or engaging in other noncompliant activities, we may be subject to recalls, seizures, fines, penalties, injunctions, adverse publicity, prosecution, or other adverse actions, resulting in damage to our reputation and business.
Similarly, PAVmed will have the ability to prevent the approval of any action submitted to the stockholders. If PAVmed does not provide any requisite consent allowing us to take any such action when requested, we will not be able to engage in the related activities and, as a result, our business and our operating results may be harmed.
If PAVmed does not provide any requisite consent allowing us to take any such action when requested, we may not be able to engage in the related activities if we do not get the required consent from our other shareholders and, as a result, our business and our operating results may be harmed.
However, a failure or delay in obtaining regulatory approval in one country may have a negative effect on the regulatory process in others. The foreign regulatory approval process may include all of the risks associated with obtaining FDA approval. We may not obtain foreign regulatory approvals on a timely basis, if at all.
The foreign regulatory approval process may include all of the risks associated with obtaining FDA approval. We may not obtain foreign regulatory approvals on a timely basis, if at all.
We cannot assure you that such services are not available at lower cost from third parties. Any payments made to PAVmed will reduce our cash flow and profits. Any disputes that arise between us and PAVmed with respect to our past and ongoing relationships could harm our business operations.
We cannot assure you that such services are not available at lower cost from third parties. Any payments made to PAVmed will reduce our cash flow and profits.
The continuing efforts of the government, insurance companies, managed care organizations and other payors of healthcare services to contain or reduce costs of health care may adversely affect: ● our ability to set a price that we believe is fair for our products; ● our ability to generate revenue and achieve or maintain profitability; and ● the availability of capital. 31 Further, changes in regulatory requirements and guidance may occur, both in the United States and in foreign countries, and we may need to amend clinical study protocols to reflect these changes.
The continuing efforts of the government, insurance companies, managed care organizations and other payors of healthcare services to contain or reduce costs of health care may adversely affect: ● our ability to set a price that we believe is fair for our products; ● our ability to generate revenue and achieve or maintain profitability; and ● the availability of capital.
Risks Associated with Our Business Since we have a limited operating history, and have not generated any significant revenues to date, you will have little basis upon which to evaluate our ability to achieve our business objective.
Should we refinance, it could be dilutive to shareholders or impose onerous terms on us. 22 Risks Associated with Our Business Since we have a limited operating history, and have not generated any significant revenues to date, you will have little basis upon which to evaluate our ability to achieve our business objective.
Also in November 2022, we entered into the PBERA with PAVmed, pursuant to which PAVmed will continue to pay certain payroll and benefit-related expenses on our behalf and we will reimburse PAVmed, in cash or, subject to approval by each of our boards of directors, in shares of our common stock valued at a price based on the current market price, subject to a floor price and a maximum number of shares.
Also in November 2022, we entered into the PBERA with PAVmed, pursuant to which PAVmed will continue to pay certain payroll and benefit-related expenses on our behalf and we will reimburse PAVmed, in cash or, subject to approval by each of our boards of directors, in shares of our common stock valued at a price based on the current market price, subject to a floor price and a maximum number of shares. 20 In addition, we may issue a substantial number of additional shares of our common stock or preferred stock or incur indebtedness, or issue or incur a combination of common and preferred stock and indebtedness, to raise additional funds or in connection with any strategic acquisition or as compensation to our officers, directors, employees and consultants or to fund investments in our current operations.
In addition, while we have no present intention to do so, our Board of Directors may determine that the cost of maintaining our listing on a national securities exchange outweighs the benefits of such listing.
If we violate the Nasdaq continued listing requirements or fail to meet any of Nasdaq’s continued listing standards, our common stock may be delisted. In addition, while we have no present intention to do so, our Board of Directors may determine that the cost of maintaining our listing on a national securities exchange outweighs the benefits of such listing.
Preliminary published data from Columbia University School of Medicine found that differences in the oral bacterial microbiome, obtained with a simple saliva sample or oral swab, may correlate with the presence of BE. 19 Although there can be no assurance that we will pursue the development of any products other than EsoGuard and EsoCheck, if we seek to develop other products, we may need to compete with a broad range of organizations in the U.S. and other countries that are engaged in the development, production and commercialization of diagnostic products and services.
Although there can be no assurance that we will pursue the development of any products other than EsoGuard and EsoCheck, if we seek to develop other products, we may need to compete with a broad range of organizations in the U.S. and other countries that are engaged in the development, production and commercialization of diagnostic products and services.
We cannot assure you that our relationships with healthcare providers, sales representatives, hospitals, customers, or any other party will not be subject to scrutiny or will survive regulatory challenge under EKRA. 30 If our operations or arrangements are found to be in violation of any of the laws described above or any other governmental regulations that apply to us, we may be subject to penalties, including civil and criminal penalties, damages, fines, exclusion from the Medicare and Medicaid programs and the curtailment or restructuring of our operations.
If our operations or arrangements are found to be in violation of any of the laws described above or any other governmental regulations that apply to us, we may be subject to penalties, including civil and criminal penalties, damages, fines, exclusion from the Medicare and Medicaid programs and the curtailment or restructuring of our operations.
(NYSE: MDT), which is similar to EsophaCap, the device we acquired in our acquisition of CapNostics LLC and is utilized almost exclusively for clinical research, is a spherical mesh sponge encapsulated in soluble gelatin that dissolves in the stomach. The expanded sponge brushes the lining of the esophagus as it is withdrawn and retrieved.
One such device, Cytosponge, previously marketed by in the U.S. by Medtronic Inc. (NYSE: MDT), which is similar to EsophaCap, the device we acquired in our acquisition of CapNostics LLC and is utilized almost exclusively for clinical research, is a spherical mesh sponge encapsulated in soluble gelatin that dissolves in the stomach.
Healthcare providers may be reluctant to prescribe our products if they believe that reimbursement for the test will not be available for a significant number of their patients. 24 Even where a third-party payor agrees to cover EsoGuard and EsoCheck at an adequate reimbursement rate, other factors may have a significant impact on the actual reimbursement we receive for an EsoGuard test or EsoCheck device from that payor.
Even where a third-party payor agrees to cover EsoGuard and EsoCheck at an adequate reimbursement rate, other factors may have a significant impact on the actual reimbursement we receive for an EsoGuard test or EsoCheck device from that payor.
For some of our products, we or our third-party manufacturers will need to have sufficient production and processing capacity in order to conduct human clinical trials, to produce products for commercial sale at an acceptable cost.
We or our third-party manufacturers may encounter difficulties with these processes at any time that could result in delays in clinical trials, regulatory submissions or the commercialization of products. 25 For some of our products, we or our third-party manufacturers will need to have sufficient production and processing capacity in order to conduct human clinical trials, to produce products for commercial sale at an acceptable cost.
If we fail to comply with these laws and regulations, we could face substantial penalties and our business, operations and financial condition could be adversely affected. ● The regulations that govern pricing and reimbursement for new products vary widely from country to country, and may adversely affect the pricing, coverage and reimbursement rates of our products in other countries. ● Due to billing complexities in the diagnostic and laboratory service industry, we may not be able to collect payment for the EsoGuard tests we perform. ● Healthcare reform measures could hinder or prevent our products’ commercial success. ● Our medical products may in the future be subject to product recalls that could harm our reputation, business, and financial results. ● If our medical products cause or contribute to a death or a serious injury, or malfunction in certain ways, we will be subject to medical device reporting regulations, which can result in voluntary corrective actions or agency enforcement actions. ● Product liability lawsuits against us could cause us to incur substantial liabilities and to limit commercialization of our products. ● Compliance with the HIPAA security, privacy and breach notification regulations may increase our costs. 15 Risks Associated with Our Intellectual Property and Technology Infrastructure ● We may not be able to protect or enforce the intellectual property rights for the technology used in, or expected to be used in, our products, which could impair our competitive position. ● We may be subject to intellectual property infringement claims by third parties which could be costly to defend, divert management’s attention and resources, and may result in liability. ● Competitors may violate the intellectual property rights for the technology used in, or expected to be used in, our products, and we may bring litigation to protect and enforce our intellectual property rights, which may result in substantial expense and may divert our attention from implementing our business strategy. ● Failure in our information technology systems could significantly disrupt our operations and our research and development efforts, which could adversely impact our revenues, as well as our research, development and commercialization efforts. ● Our internal computer systems, or those used by our third-party research institution collaborators, vendors or other contractors or consultants, may suffer security breaches.
If we fail to comply with these laws and regulations, we could face substantial penalties and our business, operations and financial condition could be adversely affected. ● The regulations that govern pricing and reimbursement for new products vary widely from country to country, and may adversely affect the pricing, coverage and reimbursement rates of our products in other countries. 18 ● Due to billing complexities in the diagnostic and laboratory service industry, we may not be able to collect payment for the EsoGuard tests we perform. ● Healthcare reform measures, including those targeting Medicare or Medicaid, could hinder or prevent our products’ commercial success. ● Our medical products may in the future be subject to product recalls that could harm our reputation, business, and financial results. ● If our medical products cause or contribute to a death or a serious injury, or malfunction in certain ways, we will be subject to medical device reporting regulations, which can result in voluntary corrective actions or agency enforcement actions. ● Product liability lawsuits against us could cause us to incur substantial liabilities and to limit commercialization of our products. ● Compliance with the HIPAA security, privacy and breach notification regulations may increase our costs.
The manufacturing processes for our products have not yet been tested at commercial levels, and it may not be possible to manufacture or process these materials in a cost-effective manner. 21 Our EsoGuard test is performed in a single commercial clinical laboratory facility.
The manufacturing processes for our products have not yet been tested at commercial levels, and it may not be possible to manufacture or process these materials in a cost-effective manner. If demand for our EsoGuard test grows, we may lack adequate facility space and capabilities to meet increased processing requirements.
In the event PAVmed is acquired or otherwise undergoes a change of control, any acquiror or successor will be entitled to exercise the voting control and contractual rights of PAVmed and may do so in a manner that could vary significantly from that of PAVmed.
In the event PAVmed is acquired or otherwise undergoes a change of control, any acquiror or successor will be entitled to exercise the voting control and contractual rights of PAVmed and may do so in a manner that could vary significantly from that of PAVmed. 41 As a result of the exercise by the holder of PAVmed’s convertible debt and preferred stock of its rights under the agreements governing those instruments, such holder could acquire voting control of the Company.
These rules and regulations continue to evolve in scope and complexity, and many new requirements have been created in response to laws enacted by the U.S. and foreign governments, making compliance more difficult and uncertain. The increase in costs to comply with such evolving expectations, rules and regulations, as well as any risk of noncompliance, could adversely impact us.
These rules and regulations continue to evolve in scope and complexity, and many new requirements have been created in response to laws enacted by the U.S. and foreign governments, making compliance more difficult and uncertain.
To the extent PAVmed elects for us to satisfy our obligations under the MSA and PBERA in shares of our common stock in the future, the interest of other shareholder of the Company would be diluted.
To the extent PAVmed elects for us to satisfy our obligations under the MSA and PBERA in shares of our common stock in the future, the interest of other shareholders of the Company would be diluted. Currently, under the terms of its outstanding convertible debt, PAVmed is required to elect to receive such payments in cash.
Presently, PAVmed controls more than 50% of the combined voting power of our common stock and our convertible securities and for as long as PAVmed continues to control more than 50% of our voting securities, PAVmed will be able to direct the election of all the members of our board of directors.
Presently, PAVmed controls less than 50% of the combined voting power of our common stock and our convertible securities and for as long as PAVmed is our largest shareholder, PAVmed will have significant influence in the election of all the members of our board of directors.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe retain Techneto, Inc. d/b/a CyberTeam (“CyberTeam”), a third party vendor that reports directly to our president and chief operating officer, to be responsible for identifying, assessing and managing the Company’s risks from cybersecurity threats. CyberTeam has been with the Company since its inception and has over 25 years of experience in cybersecurity.
Biggest changeWe retain Techneto, Inc. d/b/a CyberTeam (“CyberTeam”), a third party vendor that reports directly to our president and chief operating officer, to be responsible for identifying, assessing and managing the Company’s risks from cybersecurity threats. CyberTeam has been with the Company since the Company’s inception and has over 25 years of experience in cybersecurity.
Currently, we are not aware of any risks from cybersecurity threats, or from previous cybersecurity incidents, that have materially affected or are reasonably likely to materially affect the Company.
Currently, we are not aware of any risks from cybersecurity threats, or from previous cybersecurity incidents, that have materially affected or are reasonably likely to materially affect the Company. 47

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe Company has a lease agreement for its CLIA laboratory in California with 21,019 square feet, which has a remaining term expiring December 31, 2024. We also have lease agreements for our Lucid Test Centers in various locations in Arizona, California, Colorado, Florida, Idaho, Illinois, Nevada, Ohio, Texas and Utah that in the aggregate approximate 15,048 square feet.
Biggest changeThe Company has a lease agreement for its CLIA laboratory in California with 21,019 square feet, which has a remaining term expiring December 31, 2027. We also have lease agreements for our Lucid Test Centers in various locations in Arizona, California, Colorado, Florida, Georgia, Idaho, Michigan, Nevada, Texas and Utah that in the aggregate approximate 5,764 square feet.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings In the ordinary course of our business, particularly as it begins commercialization of its products, the Company may be subject to certain other legal actions and claims, including product liability, consumer, commercial, tax and governmental matters, which may arise from time to time.
Biggest changeItem 3. Legal Proceedings In the ordinary course of the Company’s business, particularly as it begins commercialization of its products, the Company may be subject to certain other legal actions and claims, including product liability, consumer, commercial, tax and governmental matters, which may arise from time to time.
Additionally, although the Company has specific insurance for certain potential risks, the Company may in the future incur judgments or enter into settlements of claims which may have a material adverse impact on the Company’s business, financial position, results of operations, and /or cash flows. Item 4. Mine Safety Disclosures Not applicable. 40 Part II - Other Information
Additionally, although the Company has specific insurance for certain potential risks, the Company may in the future incur judgments or enter into settlements of claims which may have a material adverse impact on the Company’s business, financial position, results of operations, and /or cash flows. Item 4. Mine Safety Disclosures Not applicable. 48 Part II - Other Information

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeAs long as the Senior Convertible Note (see “ Liquidity and Capital Resources ” in Item 7 below) is outstanding, we may not, directly or indirectly, redeem, or declare or pay any cash dividend or cash distribution on, any of our securities without the prior express written consent of the purchasers of the Senior Convertible Note.
Biggest changeAs long as the 2024 Convertible Notes (see “ Liquidity and Capital Resources ” in Item 7 below) are outstanding, we may not, directly or indirectly, redeem, or declare or pay any cash dividend or cash distribution on, any of our securities without the prior express written consent of a majority-in-interest of the holders of the 2024 Convertible Notes (subject to limited exceptions).
Our shares of common stock are held by an estimated 256 holders of record and we believe our shares of common stock are held by significantly more beneficial owners. Dividends Common Stock We have not paid any cash dividends on our common stock to date. Any future decisions regarding dividends will be made by our board of directors.
Our shares of common stock are held by an estimated 338 holders of record and we believe our shares of common stock are held by significantly more beneficial owners. Dividends Common Stock We have not paid any cash dividends on our common stock to date. Any future decisions regarding dividends will be made by our board of directors.
Under the terms of the Series B Preferred Stock, a holder that converts its Series B Preferred Stock prior to March 13, 2025 or March 13, 2026, as the case may be, will not receive the dividend that accrues on such date with respect to such converted Series B Preferred Stock.
Under the terms of the Series B-1 Preferred Stock, a holder that converts its Series B-1 Preferred Stock prior to May 6, 2025 or May 6, 2026, as the case may be, will not receive the dividend that accrues on such date with respect to such converted Series B-1 Preferred Stock.
Recent Sales of Unregistered Securities and Use of Proceeds Except as previously disclosed in our current reports on Form 8-K and quarterly reports on Form 10-Q, and except as disclosed below, we did not sell any unregistered securities or repurchase any of our securities during the fiscal year ended December 31, 2023.
Recent Sales of Unregistered Securities and Use of Proceeds Except as previously disclosed in our current reports on Form 8-K and quarterly reports on Form 10-Q, and except as disclosed below, we did not sell any unregistered securities or repurchase any of our securities during the fiscal year ended December 31, 2024. Item 6. [Reserved] 49
Series B Preferred Stock The holders of Series B Preferred Stock are entitled to dividends payable as follows: (i) a number of shares of common stock equal to 20% of the number of shares of common stock issuable upon conversion of the Series B Preferred Stock then held by such holder on March 13, 2025, and (ii) a number of shares of common stock equal to 20% of the number of shares of common stock issuable upon conversion of the Series B Preferred Stock then held by such holder on March 13, 2026.
Series B-1 Preferred Stock The holders of our Series B-1 Preferred Stock are entitled to dividends payable as follows: (i) a number of shares of common stock equal to 20% of the number of shares of common stock issuable upon conversion of the Series B-1 Preferred Stock then held by such holder on May 6, 2025, and (ii) a number of shares of common stock equal to 20% of the number of shares of common stock issuable upon conversion of the Series B-1 Preferred Stock then held by such holder on May 6, 2026.
Item 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market for Common Equity Our common stock is traded on the Nasdaq Capital Market under the symbol “LUCD”. Holders As of March 21, 2024, there were 48,244,798 shares of our common stock issued.
Item 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market for Common Equity Our common stock is traded on the Nasdaq Capital Market under the symbol “LUCD”. Holders As of March 20, 2025, there were 90,753,851 shares of our common stock issued.
Added
Series B Preferred Stock Each holder of our Series B Preferred Stock (i) was entitled to receive, and did receive, a dividend on or about March 13, 2025 equal to 20% of the number of shares of Common Stock issuable upon conversion of the Series B Preferred Stock then held by such holder on March 13, 2025, and (ii) will be entitled to receive a dividend on or about March 13, 2026 equal to a number of shares of Common Stock equal to 20% of the number of shares of Common Stock issuable upon conversion of the Series B Preferred Stock then held by such holder on March 13, 2026.
Added
A holder that voluntarily converts its Series B Preferred Stock prior to March 13, 2026 will not receive the dividend that accrues on such date with respect to such converted Series B Preferred Stock.
Added
On or about March 13, 2025, the Company issued 7,117,463 shares of its common stock as the dividend to the holders of its Series B Preferred Stock (in accordance with clause (i) of the paragraph above).
Added
The holders of the Series B-1 Preferred Stock also will be entitled to dividends equal, on an as-if-converted to shares of common stock basis, to and in the same form as dividends actually paid on shares of the common stock when, as, and if such dividends are paid on shares of the common stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe net decrease of $4.0 million was principally related to: ● approximately $5.5 million decrease in development costs, particularly in clinical trial activities and outside professional and consulting fees with respect to EsoCure; ● approximately $0.7 million increase related to the amended MSA with PAVmed due to the growth and expansion of our business and the services incurred through PAVmed; and ● approximately $0.8 million increase in compensation related costs, including stock-based compensation.
Biggest changeThe net increase of $0.9 million was principally related to: ● approximately $2.4 million decrease in stock-based compensation; ● approximately $1.8 million increase related to the amended MSA with PAVmed due to the growth and expansion of our business and the services incurred through PAVmed; ● approximately $1.2 million increase in cash compensation costs; ● approximately $1.0 million increase in third-party professional fees, including expenses related to investor relations; and ● approximately $0.7 million decrease due to a settlement payment related to the termination of the management services agreement with our former laboratory provider in 2023 and reduced expenses for legal and information technology services.
Prior to the execution of the Series B Subscription Agreements and the Exchange Agreements, we entered into subscription agreements with certain of the Series B Investors providing for the sale to such investors of 5,670 shares of Series A-1 Preferred Stock, at a purchase price of $1,000 per share, which shares the investors immediately agreed to exchange for shares of Series B Preferred Stock pursuant to the Exchange Agreements (and are included in the 10,670 shares of Series A-1 Preferred Stock set forth above).
Prior to the execution of the Series B Subscription Agreements and the Series B Exchange Agreements, we entered into subscription agreements with certain of the Series B Investors providing for the sale to such investors of 5,670 shares of Series A-1 Preferred Stock, at a purchase price of $1,000 per share, which shares the investors immediately agreed to exchange for shares of Series B Preferred Stock pursuant to the Series B Exchange Agreements (and are included in the 10,670 shares of Series A-1 Preferred Stock set forth above).
We expect that gross margin for our services will continue to fluctuate and be affected by EsoGuard test volume, our operating efficiencies, patient compliance rates, payer mix, the levels of reimbursement, and payment patterns of payers and patients.
We expect that the gross margin for our services will continue to fluctuate and be affected by EsoGuard test volume, our operating efficiencies, patient compliance rates, payer mix, the levels of reimbursement, and payment patterns of payers and patients.
We issued the March 2023 Senior Convertible Note on March 21, 2023 pursuant to the SPA. The March 2023 Senior Convertible Note proceeds were $9.925 million after deducting a $1.186 million lender fee and offering costs.
We issued the March 2023 Senior Convertible Note on March 21, 2023 pursuant to the Note SPA. The March 2023 Senior Convertible Note proceeds were $9.925 million after deducting a $1.186 million lender fee and offering costs.
While our significant accounting policies are described in more detail in our consolidated financial notes, we believe the following accounting policies to be critical to the judgments and estimates used in the preparation of our consolidated financial statements.
While our significant accounting policies are described in more detail in our consolidated financial notes, we believe the following accounting estimates to be critical to the judgments and estimates used in the preparation of our consolidated financial statements.
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 the portion of the MSA Fee (as defined in Note 5, Related Party Transactions , to our accompanying consolidated financial statements) allocated to sales and marketing expenses, which are principally costs related to PAVmed employees who are performing services for the Company.
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 the portion of the MSA Fee (as defined in Note 5, Related Party Transactions , to our accompanying audited consolidated financial statements) allocated to sales and marketing expenses, which are principally costs related to PAVmed employees who are performing services for the Company.
However, in no event will PAVmed be entitled to receive under the MSA, as amended, from and after the effective date of the eighth amendment to the MSA, more than 9,644,135 shares of our common stock (representing 19.99% of our outstanding shares of common stock as of immediately prior to the execution of the eighth amendment).
However, in no event will PAVmed be entitled to receive under the MSA, as amended, from and after the date of the eighth amendment to the MSA, more than 9,644,135 shares of our common stock (representing 19.99% of our outstanding shares of common stock as of immediately prior to the execution of the eighth amendment).
Preferred Stock Offerings On March 13, 2024, we entered into subscription agreements (each, a “Series B Subscription Agreement”) and exchange agreements (each, an “Exchange Agreement”) with certain accredited investors (collectively, the “Series B Investors”), which agreements provided for (i) the sale to the Series B Investors of 12,495 shares of our newly designated Series B Convertible Preferred Stock, par value $0.001 per share (the “Series B Preferred Stock”), at a purchase price of $1,000 per share, and (ii) the exchange by the Series B Investors of 13,625 shares of our Series A Convertible Preferred Stock, par value $0.001 per share (the “Series A Preferred Stock”), and 10,670 shares of our Series A-1 Convertible Preferred Stock, par value $0.001 per share (the “Series A-1 Preferred Stock”), held by them for 31,790 shares of Series B Preferred Stock (collectively, the “Series B Offering and Exchange”).
Preferred Stock Offerings On March 13, 2024, we entered into subscription agreements (each, a “Series B Subscription Agreement”) and exchange agreements (each, a “Series B Exchange Agreement”) with certain accredited investors (collectively, the “Series B Investors”), which agreements provided for (i) the sale to the Series B Investors of 12,495 shares of our newly designated Series B Convertible Preferred Stock, par value $0.001 per share (the “Series B Preferred Stock”), at a purchase price of $1,000 per share, and (ii) the exchange by the Series B Investors of 13,625 shares of our Series A Convertible Preferred Stock, par value $0.001 per share (the “Series A Preferred Stock”), and 10,670 shares of our Series A-1 Convertible Preferred Stock, par value $0.001 per share (the “Series A-1 Preferred Stock”), held by them for 31,790 shares of Series B Preferred Stock (collectively, the “Series B Offering and Exchange”).
The Series B Preferred Stock is a voting security. The aggregate gross proceeds of these transactions was $18.16 million (inclusive of $5.67 million of aggregate gross proceeds from the sale of the Series A-1 Preferred Stock that was immediately exchanged for Series B Preferred Stock in the transactions).
The Series B Preferred Stock is a voting security. The aggregate gross proceeds of these transactions were $18.16 million (inclusive of $5.67 million of aggregate gross proceeds from the sale of the Series A-1 Preferred Stock that was immediately exchanged for Series B Preferred Stock in the transactions).
In accordance with the MSA and the PBERA, on January 26, 2024, PAVmed elected to receive payment of approximately $4.7 million of fees and reimbursements accrued under the MSA and the PBERA through the issuance of 3,331,771 shares of the Company’s common stock. 47 Critical Accounting Policies and Estimates The discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States of America, or U.S.
In accordance with the MSA and the PBERA, on January 26, 2024, PAVmed elected to receive payment of approximately $4.7 million of fees and reimbursements accrued under the MSA and the PBERA through the issuance of 3,331,771 shares of the Company’s common stock. 59 Critical Accounting Estimates The discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States of America, or U.S.
We are subject to all of the risks and uncertainties typically faced by medical device and diagnostic companies that devote substantially all of their efforts to the commercialization of their initial product and services and ongoing research and development activities and conducting clinical trials.
We are subject to all of the risks and uncertainties typically faced by medical device and diagnostic companies that devote substantially all of their efforts to the commercialization of their initial products and services, to ongoing research and development activities, and to conducting clinical trials.
Pursuant to the MSA, as amended by the eighth amendment, the parties agreed PAVmed may elect to receive payment of the monthly MSA Fee in cash or in shares of our common stock, with such shares valued at the volume weighted average price (“VWAP”) during the final ten trading days of the applicable month (subject to a floor price of $0.70 per share).
Pursuant to the MSA, as amended, PAVmed may elect to receive payment of the monthly MSA Fee in cash or in shares of our common stock, with such shares valued at the volume weighted average price (“VWAP”) during the final ten trading days of the applicable month (subject to a floor price of $0.70 per share).
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 technologies and conducting clinical trials, including: ● costs associated with regulatory filings; ● patent license fees; ● cost of laboratory supplies and acquiring, developing, and manufacturing preclinical prototypes; and ● MSA Fee allocated to research and development.
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 technologies and conducting clinical trials, including: ● costs associated with submission of regulatory filings; ● cost of laboratory supplies and acquiring, developing, and manufacturing preclinical prototypes; and ● the portion of the MSA Fee allocated to research and development.
We expect to continue to experience recurring losses and negative cash flow from operations, and will continue to fund our operations with debt and/or equity financing transactions, including current obligations on our existing convertible debt which in accordance with management’s plans may include conversions to equity and refinancing our existing debt obligations to extend the maturity date.
We expect to continue to experience recurring losses and negative cash flow from operations, and will continue to fund our operations with debt and/or equity financing transactions, which in accordance with management’s plans may include conversions of our existing debt to equity and refinancing our existing debt obligations to extend the maturity date.
Intercompany Agreements with PAVmed From our inception in May 2018 through our IPO in October 2021, our operations were funded by PAVmed providing working capital cash advances and by PAVmed paying certain operating expenses on our behalf.
Intercompany Agreements with PAVmed From our inception in May 2018 through our initial public offering in October 2021, our operations were funded by PAVmed providing working capital cash advances and by PAVmed paying certain operating expenses on our behalf.
The Company’s ability to continue operations beyond March 2025 will depend upon generating substantial revenue that is conditioned on obtaining positive third-party reimbursement coverage for its EsoGuard Esophageal DNA Test from both government and private health insurance providers, increasing revenue through contracting directly with self-insured employers, and on its ability to raise additional capital through various potential sources including equity and/or debt financings or refinancing existing debt obligations.
The Company’s ability to continue operations 12 months beyond the issuance of the financial statements will depend upon generating substantial revenue that is conditioned on obtaining positive third-party reimbursement coverage for its EsoGuard Esophageal DNA Test from both government and private health insurance providers, increasing revenue through contracting directly with self-insured employers, and upon raising additional capital through various potential sources including equity and/or debt financings or refinancing existing debt obligations.
We are pursuing commercialization across multiple sales channels, including: the communication to and education of medical practitioners and clinicians regarding EsoGuard; the establishment of Lucid Test Centers for the collection of cell samples using EsoCheck; the launch of the mobile testing unit; ongoing #CheckYourFoodTube testing days; and our direct contracting strategic initiative.
We are pursuing commercialization across multiple sales channels, including: the communication to and education of medical practitioners and clinicians regarding EsoGuard; the establishment of Lucid Test Centers for the collection of cell samples using EsoCheck; use of our mobile testing unit; ongoing #CheckYourFoodTube testing days; and our direct contracting strategic initiative (including in the concierge medicine and employer markets sectors).
However, if the SEC has not removed the related disclosure from its regulations by June 30, 2027, the amendments will be removed from the Codification and not become effective. Early adoption is prohibited. We are currently evaluating the potential impact of this guidance on its consolidated financial statements. Off-Balance sheet arrangements We do not have any off-balance sheet arrangements.
However, if the SEC has not removed the related disclosure from its regulations by June 30, 2027, the amendments will be removed from the Codification and not become effective. Early adoption is prohibited. We are currently evaluating the potential impact of this guidance on its consolidated financial statements and disclosures.
Presentation of Dollar Amounts All dollar amounts in this Management’s Discussion and Analysis of Financial Condition and Results of Operations are presented as dollars in millions, except for share and per share amounts. 44 Results of Operations - continued The year ended December 31, 2023 as compared to year ended December 31, 2022 Revenue In the year ended December 31, 2023, revenue was $2.4 million as compared to $0.4 million in the prior year.
Presentation of Dollar Amounts All dollar amounts in this Management’s Discussion and Analysis of Financial Condition and Results of Operations are presented as dollars in millions, except for share and per share amounts. 54 Results of Operations - continued The year ended December 31, 2024 as compared to year ended December 31, 2023 Revenue In the year ended December 31, 2024, revenue was $4.3 million as compared to $2.4 million for the corresponding period in the prior year.
(“LucidDx Labs”) and CapNostics, LLC (“CapNostics”), (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, (v) “CE Mark” refers to a “Conformité Européenne” Mark, a mark indicating that a product such as a medical device conforms to the essential requirements of the relevant European directive, and (vi) “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.
(“LucidDx Labs”) and CapNostics, LLC (“CapNostics”), (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, (v) “CE Mark” refers to a “Conformité Européenne” Mark, a mark indicating that a product such as a medical device conforms to the essential requirements of the relevant European directive, and (vi) “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. 50 Overview We are a commercial-stage, cancer prevention medical diagnostics technology company focused on the millions of patients who are at risk of developing esophageal precancer and cancer, specifically highly lethal esophageal adenocarcinoma (“EAC”).
Sales and marketing expenses In the year ended December 31, 2023, sales and marketing costs were approximately $16.4 million as compared to $16.1 million in the prior year.
Sales and marketing expenses In the year ended December 31, 2024, sales and marketing costs were approximately $16.5 million as compared to $16.4 million for the corresponding period in the prior year.
This update modifies the disclosure or presentation requirements of a variety of topics in the Accounting Standards Codification to conform with certain SEC amendments in Release No. 33-10532, Disclosure Update and Simplification.
In October 2023, the FASB issued ASU No. 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative. This update modifies the disclosure or presentation requirements of a variety of topics in the Accounting Standards Codification to conform with certain SEC amendments in Release No. 33-10532, Disclosure Update and Simplification.
The aggregate gross proceeds to Lucid of this offering was $5.0 million. 46 Liquidity and Capital Resources - continued Private Placement - Securities Purchase Agreement Effective as of March 13, 2023, we entered into the SPA with an accredited institutional investor, pursuant to which we agreed to sell, and the investor agreed to purchase the March 2023 Senior Convertible Note with a face value principal of $11.1 million.
The aggregate gross proceeds from the sale of shares in such offering were $11.6 million. 57 Liquidity and Capital Resources - continued Private Placement - Securities Purchase Agreement Effective as of March 13, 2023, we entered into a Securities Purchase Agreement (the “Note SPA”) with an accredited institutional investor, pursuant to which we agreed to sell, and the investor agreed to purchase the March 2023 Senior Convertible Note with a face value principal of $11.1 million.
During the year ended December 31, 2023, approximately $0.1 million of principal repayments along with less than $0.1 million of interest expense thereon, were settled through the issuance of 115,388 shares of common stock of the Company, with such shares having a fair value of approximately $0.2 million (with such fair value measured as the respective conversion date quoted closing price of the common stock of the Company).
During the year ended December 31, 2024, approximately $8.4 million of principal repayments along with approximately $0.9 million of interest expense thereon, were settled through the issuance of 13,866,867 shares of common stock of the Company, with such shares having a fair value of approximately $13.5 million (with such fair value measured as the respective conversion date quoted closing price of the common stock of the Company).
Cumulatively, a total of 680,263 shares of common stock of the Company were issued for net proceeds of approximately $1.8 million, after a 4% discount, as of December 31, 2023.
Cumulatively, a total of 680,263 shares of common stock of the Company have been issued through our committed equity facility for net proceeds of approximately $1.8 million, after a 4% discount, as of December 31, 2024.
Research and development expenses In the year ended December 31, 2023, research and development costs were approximately $7.3 million, compared to $11.3 million in the prior year.
Research and development expenses In the year ended December 31, 2024, research and development costs were approximately $6.0 million, compared to $7.3 million for the corresponding period in the prior year.
General and administrative expenses In the year ended December 31, 2023, general and administrative costs were approximately $19.3 million as compared to $24.0 million in the prior year.
General and administrative expenses In the year ended December 31, 2024, general and administrative costs were approximately $20.2 million as compared to $19.3 million for the corresponding period in the prior year.
Other Income and Expense Change in fair value of convertible debt In the year ended December 31, 2023, the change in the fair value of our convertible note was approximately $3.0 million of expense, related to the March 2023 Senior Convertible Note.
Other Income and Expense Change in fair value of convertible debt In the year ended December 31, 2024, the change in the fair value of our convertible note was approximately $5.4 million of income, related to the 2024 Convertible Notes and the March 2023 Senior Convertible Note (as defined in Note 12 , Debt , to our accompanying consolidated financial statements).
The Company initially recognized a $0.8 million fair value non-cash expense on the issue date. 45 Results of Operations - continued The year ended December 31, 2023 as compared to year ended December 31, 2022 - continued Loss on Issue and Offering Costs - Senior Secured Convertible Note In the year ended December 31, 2023, in connection with the issue of the March 2023 Senior Convertible Note, we recognized a total of approximately $1.2 million of lender fee and offering costs paid by us.
Loss on Issue and Offering Costs - Senior Secured Convertible Note In the year ended December 31, 2023, in connection with the issue of the March 2023 Senior Convertible Note, we recognized a total of approximately $1.2 million of lender fee and offering costs paid by us.
In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280)—Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which require public companies disclose significant segment expenses and other segment items on an annual and interim basis and to provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually.
See Note 11, Financial Instruments Fair Value Measurements , with respect to the FVO election; and Note 12, Debt , for a discussion of the March 2023 Senior Convertible Note. 60 Recent Accounting Standards Updates Adopted In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280)—Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which require public companies disclose significant segment expenses and other segment items on an annual and interim basis and to provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually.
The net decrease of $4.7 million was principally related to: ● approximately $8.3 million decrease in stock-based compensation; ● approximately $3.3 million increase related to the amended MSA with PAVmed due to the growth and expansion of our business and the services incurred through PAVmed; and ● approximately $0.3 million increase related to outside professional services and facility related costs.
The net increase of $0.1 million was principally related to: ● approximately $0.1 million increase related to the amended MSA with PAVmed due to the growth and expansion of our business and the services incurred through PAVmed.
We experienced a net loss of approximately $52.7 million and used approximately $32.8 million of cash in operations during the year ended December 31, 2023. Financing activities provided $29.5 million of cash during the year ended December 31, 2023. We ended the year with cash on-hand of $18.9 million as of December 31, 2023.
We experienced a net loss of approximately $45.5 million and used approximately $44.1 million of cash in operations during the year ended December 31, 2024. Financing activities provided $48.2 million of cash during the year ended December 31, 2024. We ended the year with cash on-hand of $22.4 million as of December 31, 2024.
Recent Accounting Standards Updates Not Yet Adopted In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740)—Improvements to Income Tax Disclosures (“ASU 2023-09”), which is intended to enhance the transparency and decision usefulness of income tax disclosures.
In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740)—Improvements to Income Tax Disclosures (“ASU 2023-09”), which is intended to enhance the transparency and decision usefulness of income tax disclosures. The amendments in ASU 2023-09 provide for enhanced income tax information primarily through changes to the rate reconciliation and income taxes paid information.
The $2.0 million increase principally relates to the revenue for our EsoGuard Esophageal DNA Test performed in our own CLIA laboratory.
The $1.9 million increase principally relates to the revenue for our EsoGuard Esophageal DNA Test performed in our CLIA laboratory for the period and the consideration received for the performance of the EsoGuard Esophageal DNA Test.
The March 2023 Senior Convertible Note was initially measured at its issue date estimated fair value and subsequently remeasured at estimated fair value as of each reporting period date.
The 2024 Convertible Notes and March 2023 Senior Convertible Note were initially measured at its issue date estimated fair value and subsequently remeasured at estimated fair value as of each reporting period date. The Company initially recognized a $0.8 million fair value remeasurement as a non-cash expense on the issue date.
Practical Expedients —We do not adjust the transaction price for the effects of a significant financing component, as at contract inception, we expect the collection cycle to be one year or less. 48 Fair Value Option (“FVO”) Election Under a Securities Purchase Agreement dated March 13, 2023, the Company issued a Senior Secured Convertible Note dated March 21, 2023, referred to herein as the “March 2023 Senior Convertible Note”, which is accounted under the “fair value option election” as discussed below.
Fair Value Option (“FVO”) Election Under a Securities Purchase Agreement dated March 13, 2023, the Company issued a Senior Secured Convertible Note dated March 21, 2023, referred to herein as the “March 2023 Senior Convertible Note”, which is accounted under the “fair value option election” as discussed below.
EsoCheck is an FDA 510(k) and CE Mark cleared noninvasive swallowable balloon capsule catheter device capable of sampling surface esophageal cells in a less than five-minute office procedure. It consists of a vitamin pill-sized rigid plastic capsule tethered to a thin silicone catheter from which a soft silicone balloon with textured ridges emerges to gently swab surface esophageal cells.
It consists of a vitamin pill-sized rigid plastic capsule tethered to a thin silicone catheter from which a soft silicone balloon with textured ridges emerges to gently swab surface esophageal cells.
The guidance was adopted by the Company on January 1, 2023. The adoption of the ASU did not have an impact on the Company’s consolidated financial statements.
The guidance is effective for public entities for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The guidance was adopted by the Company on January 1, 2024. The adoption of the ASU did not have a significant impact on the Company’s consolidated financial statements.
EsoGuard and EsoCheck have been developed to provide an accurate, non-invasive, patient-friendly test for the early detection of EAC and BE, including dysplastic BE and related precursors to EAC in patients with GERD, commonly known as chronic heart burn, acid reflux, or just reflux. 42 Recent Developments Business Intercompany Agreements with PAVmed In January 2024, in accordance with the MSA and the PBERA, PAVmed elected to receive payment of $4.7 million of fees and reimbursements accrued under the MSA and the PBERA through the issuance of 3,331,771 shares of the Company’s common stock.
EsoGuard and EsoCheck have been developed to provide an accurate, non-invasive, patient-friendly test for the early detection of EAC and BE, including dysplastic BE and related precursors to EAC in patients with gastroesophageal reflux disease (“GERD”), commonly known as chronic heartburn, acid reflux, or just reflux.
The aggregate gross proceeds to Lucid of this offering was $5.0 million. 43 Results of Operations Overview Revenue The Company recognized revenue resulting from the delivery of patient EsoGuard test results when the Company considered the collection of such consideration to be probable to the extent that it is unconstrained.
The Company used a portion of the proceeds from the sale of the 2024 Convertible Notes to redeem the March 2023 Senior Convertible Note, by paying the contractual redemption price of approximately $3.6 million. 53 Results of Operations Overview Revenue The Company recognized revenue resulting from the delivery of patient EsoGuard test results when the Company considered the collection of such consideration to be probable to the extent that it is unconstrained.
In the year ended December 31, 2023, we sold 230,068 shares through our at-the-market equity facility for net proceeds of approximately $0.3 million, after payment of 3% commissions.
Cumulatively, a total of 230,068 shares of the Company have been issued through our at-the-market equity facility for net proceeds of approximately $0.3 million, after payment of 3% commissions, as of December 31, 2024. Effective as of March 4, 2025, the Company terminated the prospectus supplement for the “at-the-market offering”.
As of December 31, 2023, we had a Due To: PAVmed Inc. payment obligation liability of approximately $9.3 million, which liability is primarily comprised of our obligations under the PBERA and the MSA, as well other operating expenses paid by PAVmed on our behalf. See our accompanying consolidated financial statements Note 5 , Related Party Transactions.
As of December 31, 2024, we had a Due To: PAVmed Inc. payment obligation liability of approximately $0.0 million, which liability reflects that we had no accrued obligations under a payroll and benefit expense reimbursement agreement (the “PBERA”) and the MSA, or with respect to any other operating expenses paid by PAVmed on our behalf.
Cost of revenue In the year ended December 31, 2023, cost of revenue was approximately $6.0 million as compared to $3.6 million in the prior year. The $2.4 million increase was principally related to: ● approximately $1.6 million increase in EsoCheck and EsoGuard supplies costs; and ● approximately $0.8 million increase in compensation related costs, including stock-based compensation.
Cost of revenue In the year ended December 31, 2024, the cost of revenue was approximately $7.1 million as compared to $6.0 million for the corresponding period in the prior year.
The amendments in ASU 2023-09 provide for enhanced income tax information primarily through changes to the rate reconciliation and income taxes paid information. ASU 2023-09 is effective for the Company prospectively to all annual periods beginning after December 15, 2024. Early adoption is permitted.
ASU 2023-09 is effective for the Company prospectively to all annual periods beginning after December 15, 2024. Early adoption is permitted. The Company does not expect the standard to have a significant impact on its consolidated financial statements.
In March 2024, the Company entered into an eighth amendment to the MSA with PAVmed, increasing the monthly fee due thereunder from $0.75 million to $0.83 million, effective as of January 1, 2024.
Intercompany Agreements with PAVmed On August 6, 2024, PAVmed and the Company entered into a ninth amendment to the management services agreement between PAVmed and Lucid (“MSA”) to increase the monthly fee thereunder from $0.83 million per month to $1.05 million per month, effective as of July 1, 2024.
The net increase of $0.3 million was principally related to: ● approximately $2.0 million increase in compensation related costs principally as a result of an increase in headcount, including stock-based compensation; and ● approximately $1.7 million decrease in third party marketing expenses.
The $1.1 million increase was principally related to: ● approximately $0.5 million increase in compensation related costs, including stock-based compensation; ● approximately $0.3 million increase in third party professional fees and IT services; ● approximately $0.2 million increase in the CLIA laboratory supplies required to perform the EsoGuard Esophageal DNA tests; and ● approximately $0.1 million increase in royalty costs due to the increased EsoGuard Esophageal DNA Tests performed in the year.
See Note 13 , Debt, to our accompanying consolidated financial statements, for additional information with respect to the March 2023 Senior Convertible Note. Liquidity and Capital Resources Our current operational activities are principally focused on the commercialization of EsoGuard.
The Company incurred less than $0.1 million of debt extinguishment losses in the year ended December 31, 2023. See Note 12 , Debt , to our accompanying consolidated financial statements, for additional information with respect to the March 2023 Senior Convertible Note.
Amortization of Acquired Intangible Assets The amortization of acquired intangible assets increased to $2.0 million in the year ended December 31, 2023, as compared to $1.6 million in the prior year. The increase of $0.4 million in the current period was due to the timing of the acquired intangible assets in 2022.
The net decrease of $1.3 million was principally related to: ● approximately $1.3 million decrease in development costs, particularly in clinical trial activities and outside professional and consulting fees. 55 Results of Operations - continued The year ended December 31, 2024 as compared to year ended December 31, 2023 - continued Amortization of Acquired Intangible Assets The amortization of acquired intangible assets was approximately $0.7 million in the year ended December 31, 2024, as compared to $2.0 million for the corresponding period in the prior year.
In this regard, in January 2024, the respective companies’ boards of directors approved a eighth amendment to the MSA to increase the MSA Fee to $0.83 million per month, effective January 1, 2024. The eighth amendment to the MSA was executed on March 22, 2024.
In March 2024, PAVmed and the Company were authorized by their respective boards of directors to enter, and they did enter, into a eighth amendment to the MSA. Under this amendment, the monthly fee due from the Company to PAVmed was increased from $750 to $833, effective January 1, 2024.
The guidance is effective for public entities for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The guidance is applied retrospectively to all periods presented in the financial statements, unless it is impracticable.
The amendments in this update may be applied either prospectively or retrospectively and are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the potential impact of this guidance on its consolidated financial statements.
Removed
Overview We are a commercial-stage medical diagnostics technology company focused on the millions of patients who are at risk of developing esophageal precancer and cancer, specifically highly lethal EAC.
Added
It quantifies methylation at 31 sites on two genes, Vimentin (VIM) and Cyclin A1 (CCNA1). The assay has been evaluated in multiple studies, demonstrating sensitivity of ~90% for detecting disease along the full esophageal precancer to cancer spectrum, with a negative predictive value (NPV) of ~99%.
Removed
It quantifies methylation at 31 sites on two genes, Vimentin (VIM) and Cyclin A1 (CCNA1). Analytical validation tests of EsoGuard demonstrated approximately 97% analytical sensitivity, 95% analytical specificity, approximately 98% analytical accuracy, and 100% inter-assay and intra-assay precision.
Added
Sensitivity and NPV remain very high even for detecting early precancer, which is unprecedented for a molecular diagnostic test . EsoCheck is an FDA 510(k) and CE Mark cleared noninvasive swallowable balloon capsule catheter device capable of sampling surface esophageal cells in a less than five-minute office procedure.
Removed
Two independent clinical validation case control studies funded by the National Institute of Health utilized were performed using upper endoscopy with biopsies as the diagnostic comparator and confirmed EsoGuard accurately identifies BE. A pooled analysis of both studies demonstrated 84% sensitivity (95% confidence interval [CI] 76-90%), for detection of BE, and 86% specificity (95% CI 81-91%).
Added
Recent Developments Business Medicare Coverage In November 2024, we submitted to MolDx our complete clinical evidence package in support of a request for reconsideration of the non-coverage language in the LCD to secure Medicare coverage for EsoGuard.
Removed
Positive predictive value (PPV) and negative predictive value (NPV) were calculated using a BE prevalence of 10.6% published in a meta-analysis of U.S patients with GERD. This resulted in a PPV of approximately 42% and NPV of around 98% .
Added
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.
Removed
Financing Preferred Stock Offerings On March 13, 2024, we entered into subscription agreements (each, a “Series B Subscription Agreement”) and exchange agreements (each, an “Exchange Agreement”) with certain accredited investors (collectively, the “Series B Investors”), which agreements provided for (i) the sale to the Series B Investors of 12,495 shares of our newly designated Series B Convertible Preferred Stock, par value $0.001 per share (the “Series B Preferred Stock”), at a purchase price of $1,000 per share, and (ii) the exchange by the Series B Investors of 13,625 shares of our Series A Convertible Preferred Stock, par value $0.001 per share (the “Series A Preferred Stock”), and 10,670 shares of our Series A-1 Convertible Preferred Stock, par value $0.001 per share (the “Series A-1 Preferred Stock”), held by them for 31,790 shares of Series B Preferred Stock (collectively, the “Series B Offering and Exchange”).
Added
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.
Removed
On October 17, 2023, we sold 5,000 shares of Series A-1 Preferred Stock, solely to accredited investors (all of which were included in the 10,670 shares of Series A-1 Preferred exchanged for Series B Preferred Stock in the Series B Offering and Exchange).
Added
NCCN Clinical Practice Guidelines Update In March 2025, we announced that a recent update to the National Comprehensive Cancer Network® (NCCN) Clinical Practice Guidelines in Oncology (NCCN Guidelines®) focused on Esophageal and Esophagogastric Junction Cancers (Version 1.2025) has added a new section on BE screening.
Removed
Additionally, in the three months ended March 31, 2022, revenue was recognized with respect to the EsoGuard Commercialization Agreement, dated August 1, 2021, between the Company and RDx, a CLIA certified commercial laboratory service provider.
Added
The NCCN Guidelines® now reference professional society guidelines on BE screening, including the most recent ACG clinical guideline discussed above, which recommends non-endoscopic biomarker testing, such as EsoGuard performed on samples collected with EsoCheck, as an acceptable alternative to invasive upper endoscopy to detect esophageal precancer.
Removed
On February 25, 2022, the EsoGuard Commercialization Agreement was terminated upon our acquisition, pursuant to the APA-RDx, of certain assets necessary to operate our own CLIA certified laboratory. For a fuller description of the APA-RDx, see Note 6, Asset Purchase Agreement and Management Services Agreement , to our accompanying consolidated financial statements.
Added
Clinical Study Publications On March 18, 2025, the Company announced that its ENVET-BE clinical utility study has been accepted for publication in Gastroenterology & Hepatology—the fifth peer-reviewed publication of clinical utility data for Lucid’s EsoGuard® Esophageal DNA Test, and the second to present findings from a real-world screening population.
Removed
For the previously terminated EsoGuard Commercialization Agreement in February 2022, the cost of revenue recognized is inclusive of: a royalty fee incurred under our license agreement with CWRU; the cost of EsoCheck devices and EsoGuard mailers (cell sample shipping costs); and Lucid Test Centers operating expenses, including rent expense and supplies.
Added
The manuscript, entitled “Enhancing the Diagnostic Yield of EGD for Diagnosis of Barrett’s Esophagus Through Methylated DNA Biomarker Triage,” demonstrates that confirmatory upper endoscopy (EGD) performed in EsoGuard-positive patients had a substantially higher diagnostic yield for detecting esophageal precancer (Barrett’s Esophagus or BE) than the expected yield of screening EGD alone in at-risk patients.
Removed
During the year ended December 31, 2022, there was revenue from the EsoGuard Commercialization Agreement with RDx, recognized in first two months of the prior year period, which was terminated on February 25, 2022 when Lucid Diagnostics transitioned to its own laboratory operations.
Added
The ENVET-BE study reviewed real-world data from a cohort of 199 EsoGuard-positive patients who completed confirmatory EGD. The overall positive diagnostic yield for BE was 2.4-fold higher than the expected yield of screening EGD alone, based on disease prevalence within an at-risk population. The yield was nearly three-fold higher in patients meeting American College of Gastroenterology (ACG) screening criteria.
Removed
Prior to the execution of the Series B Subscription Agreements and the Exchange Agreements, we entered into subscription agreements with certain of the Series B Investors providing for the sale to such investors of 5,670 shares of Series A-1 Preferred Stock, at a purchase price of $1,000 per share, which shares the investors immediately agreed to exchange for shares of Series B Preferred Stock pursuant to the Exchange Agreements (and are included in the 10,670 shares of Series A-1 Preferred Stock set forth above).
Added
On November 7, 2024, the Company announced that its manuscript for its multi-center ESOGUARD BE-1 study has been accepted for publication in The American Journal of Gastroenterology, the official journal of the American College of Gastroenterology (ACG).
Removed
Each share of the Series B Preferred Stock has a stated value of $1,000 and a conversion price of $1.2444.
Added
This is the fourth publication presenting clinical validation data for the Company’s EsoGuard® Esophageal DNA Test, and the second to demonstrate its performance in an intended-use screening population. Consistent with previous studies, EsoGuard showed high sensitivity and negative predictive value in detecting esophageal precancer (Barrett’s Esophagus or BE).
Removed
The terms of the Series B Preferred Stock also include a one times preference on liquidation and a right to receive dividends equal to 20% of the number of shares of our common stock into which such Series B Preferred Stock is convertible, payable on the one-year and two-year anniversary of the issuance date.
Added
The prospective, multi-center study presented data from a cohort of patients who met ACG guideline criteria for esophageal precancer screening and underwent non-endoscopic EsoGuard testing followed by traditional upper endoscopy. EsoGuard sensitivity and negative predictive value for detecting BE were approximately 88% and 99%, respectively. Specificity and positive predictive value were approximately 81% and 30%, respectively.
Removed
The Series B Preferred Stock is a voting security. The aggregate gross proceeds of these transactions was $18.16 million (inclusive of $5.67 million of aggregate gross proceeds from the sale of the Series A-1 Preferred Stock that was immediately exchanged for Series B Preferred Stock in the transactions).
Added
No serious adverse events were reported. 51 Recent Developments - continued Business - continued Highmark Reimbursement Approval On March 13, 2025, the Company announced that Highmark Blue Cross Blue Shield, an independent licensee of the Blue Cross and Blue Shield Association, has issued a positive coverage policy for non-invasive screening of esophageal precancer and cancer in New York state.
Removed
As a result of 100% of the then-outstanding shares of Series A Preferred Stock and Series A-1 Preferred Stock being exchanged for shares of Series B Preferred Stock in the Series B Offering and Exchange, no shares of Series A Preferred Stock or Series A-1 Preferred Stock remain outstanding.
Added
The new policy will cover EsoGuard in patients who meet established criteria for esophageal precancer testing consistent with professional society guidelines.

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