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 UNITED
STATES

 SECURITIES
AND EXCHANGE COMMISSION

 Washington,
DC 20549

 FORM

 (Mark
One)

 ANNUAL
 REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For
the fiscal year ended December 31, 2023

 OR

 TRANSITION
 REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For
the transition period from _____ to _____

 Commission
File Number: 001-40901

 LUCID

 (Exact
Name of Registrant as Specified in Its Charter)

 Delaware

 82-5488042

 (State
 or Other Jurisdiction of

 (IRS
 Employer

 Incorporation
 or Organization)

 Identification
 No.)

 Madison Avenue

 25th
 Floor

 New
 York, NY

 10017

 (Address
 of Principal Executive Offices)

 (Zip
 Code)

 (917) 813-1828

 (Registrant's
Telephone Number, Including Area Code)

 Securities
registered pursuant to Section 12(b) of the Exchange Act:

 Title
 of each Class

 Trading
 Symbol(s)

 Name
 of each Exchange on which Registered

 Common
 Stock, $0.001 par value per share

 LUCD

 The
 NASDAQ Stock Market LLC

 Securities
registered under Section 12(g) of the Exchange Act:

 None.

by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No

by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes
 No

by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes No

by check mark whether the registrant has submitted electronically Interactive Data File required to be submitted pursuant to Rule 405
of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was
required to submit such files). Yes No

by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of "large accelerated filer", "accelerated filer"
, "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

 Large
 Accelerated filer

 Accelerated
 filed

 Non-accelerated
 filer

 Smaller
 reporting company

 Emerging
 growth company

 If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to section 13(c) of the Exchange Act

by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C.7262(b)) by the registered
public accounting firm that prepared or issued its audit report.

 If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements.

by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b).

by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No

 As
of June 30, 2023, the last business day of the registrant's most recently completed second fiscal quarter, the aggregate market
value of the registrant's voting stock held by non-affiliates was approximately $ 14.4 million, based on 10,331,863 shares of common
stock held by non-affiliates and a last reported sales price per share of the registrant's common stock of $1.39 on such date.

 As
of March 21, 2024 there were 48,244,798 shares of the registrant's Common Stock, par value $0.001 per share, issued and outstanding
(with such number of shares inclusive of shares of common stock underlying unvested restricted stock awards granted under the Lucid Diagnostics
Inc. 2018 Long-Term Incentive Equity Plan as of such date).

 DOCUMENTS
INCORPORATED BY REFERENCE

 Portions
of the registrant's definitive proxy statement for its 2024 annual meeting of stockholders are incorporated by reference into Part
III of this Form 10-K where indicated. Such definitive proxy statement will be filed with the U.S. Securities and Exchange Commission
within 120 days after the year ended December 31, 2023.

 TABLE
OF CONTENTS

 Item
 1.

 Business

 Item
 1A.

 Risk Factors

 Item
 1B.

 Unresolved Staff Comments

 Item
 1C.

 Cybersecurity

 Item
 2.

 Property

 Item
 3.

 Legal Proceedings

 Item
 4.

 Mine Safety Disclosures

 Item
 5.

 Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 Item
 6.

 [Reserved]

 Item
 7.

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

 Item
 7A.

 Quantitative and Qualitative Disclosure About Market Risk

 Item
 8.

 Financial Statements and Supplementary Data

 Item
 9.

 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

 Item
 9A.

 Controls and Procedures

 Item
 9B.

 Other Information

 Item
 9C.

 Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

 Item
 10.

 Directors, Executive Officers, and Corporate Governance

 Item
 11.

 Executive Compensation

 Item
 12.

 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 Item
 13.

 Certain Relationships and Related Transactions and Director Independence

 Item
 14.

 Principal Accountant Fees and Services

 Item
 15.

 Exhibits and Financial Statement Schedules

 Item
 16.

 Form 10-K Summary

 i

 FORWARD-LOOKING
STATEMENTS

 This
Annual Report on Form 10-K (this "Form 10-K"), including the discussion and analysis of our consolidated financial
condition and results of operations set forth under Item 7 of this Form 10-K, contains forward-looking statements that involve substantial risks and uncertainties. All
statements, other than statements of historical facts, contained in this Form 10-K, including statements regarding our future
results of operations and financial position, business strategy and plans and objectives of management for future operations, are
forward-looking statements. The words "may," "will," "should," "expects,"
"plans," "anticipates," "could," "intends," "target,"
"projects," "contemplates," "believes," "estimates," "predicts,"
"potential" or "continue" or the negative of these terms or other similar expressions are intended to
identify forward-looking statements, although not all forward-looking statements contain these identifying words. Forward-looking
statements are not guarantees of future performance and the Company's actual results may differ significantly from those
expressed or implied in the forward-looking statements. Factors that might cause such differences include, but are not limited to,
those discussed in Item 1A of Part I of the Form 10-K under the heading "Risk Factors."

 Important
factors that may affect our actual results include:

 our
 limited operating history;

 our
 financial performance, including our ability to generate revenue;

 our
 ability to obtain regulatory approval for the commercialization of our products;

 the
 risk that the FDA will cease to exercise enforcement discretion with respect to LDTs, like EsoGuard;

 the
 ability of our products to achieve market acceptance;

 our
 success in retaining or recruiting, or changes required in, our officers, key employees or directors;

 our
 potential ability to obtain additional financing when and if needed;

 our
 ability to protect our intellectual property;

 our
 ability to complete strategic acquisitions;

 our
 ability to manage growth and integrate acquired operations;

 the
 potential liquidity and trading of our securities;

 our
 regulatory and operational risks;

 cybersecurity
 risks;

 risks
 related to the COVID-19 pandemic and other health-related emergencies;

 risks
 related to our relationship with PAVmed; and

 our
 estimates regarding expenses, future revenue, capital requirements and needs for additional financing.

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

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

 ii

 Part
I

 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"). References
in this Form 10-K to "we," "us" and "our" are to Lucid and, unless the context otherwise requires,
its subsidiaries.

 We
believe that our flagship product, the EsoGuard Esophageal DNA Test, performed on samples collected with the EsoCheck Esophageal Cell
Collection Device, constitutes the first and only commercially available diagnostic test capable of serving as a widespread testing tool
with the goal of preventing EAC deaths, through early detection of esophageal precancer in at-risk GERD patients.

is a bisulfite-converted targeted next-generation sequencing (NGS) DNA assay performed on surface esophageal cells collected with EsoCheck.
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. 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%). 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%.

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. When vacuum suction is applied,
the balloon and sampled cells are pulled into the capsule, protecting them from contamination and dilution by cells outside of the targeted
region during device withdrawal. We believe this proprietary Collect+Protect technology makes EsoCheck the only noninvasive esophageal
cell collection device capable of such anatomically targeted and protected sampling.

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. 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. 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. 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. Based on this revision, we believe the cohort recommended for screening consists of an
estimated 30 million U.S. individuals with at least 3 established risk factors for BE. Accordingly, we believe EsoGuard's total
addressable U.S. market opportunity approximates $60 billion based on an effective Medicare payment of $1,938 and the estimated 30 million
U.S. patients recommended for screening by clinical practice guidelines. (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. As discussed below under the heading "Reimbursement and Market Access",
in October 2020, CMS granted EsoGuard final Medicare payment determination of $1,938.01, effective January 1, 2021.)

 Unfortunately,
for a variety of reasons, less than 10% of at-risk patients who are recommended for screening undergo traditional invasive upper gastrointestinal
endoscopy (EGD). We believe that the profound tragedy of an EAC diagnosis is that likely death could have been prevented if the at-risk
patient had been screened and then undergone surveillance and curative endoscopic esophageal ablation of dysplastic BE.

 Since
mortality rates are high even in early stage EAC, preventing EAC deaths requires detection and intervention at the precancer stage. Most
of the necessary elements for such an early detection program are already well established—an at-risk population (at-risk GERD
patients), a precancer (BE), and an intervention which can halt progression to EAC (endoscopic esophageal ablation). Until recently,
the only missing element for such an early detection program is a widespread screening tool that can detect BE prior to EAC.

 We
believe EsoGuard, used with EsoCheck, constitutes that missing element—the first and only commercially available diagnostic test
capable of serving as a widespread testing tool with the goal of preventing EAC deaths through early detection of esophageal precancer
and cancer in patients with 3 or more risk factors.

Guidelines for At-Risk Population

 The
subgroup of long-standing or severe GERD patients at-risk for BE and progression to EAC is well defined in clinical practice guidelines,
including the American College of Gastroenterology ("ACG") BE Guidelines. In its Recommendation 5, the ACG suggests a single screening
endoscopy in patients with chronic GERD symptoms and 3 or more additional risk factors for BE, including male sex, age greater than 50
years, White race, tobacco smoking, obesity, and family history of BE or EAC in a first-degree relative.

 An
ACG clinical guideline entitled " Diagnosis and Management of Barrett's Esophagus: An Updated ACG Guideline,"
the first such update since 2016, was published online in April 2022 in the American Journal of Gastroenterology. The clinical guideline
reiterates the ACG's long-standing recommendation for esophageal precancer screening in at-risk patients with GERD. 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. The summary of evidence for this recommendation
includes a reference to the seminal NIH-funded, multicenter, case-control study published in 2018 in Science Translational Medicine,
which demonstrated that EsoGuard is highly accurate at detecting esophageal precancer and cancer, including on samples collected with
EsoCheck.

 In
July 2022, the American Gastroenterology Association ("AGA") published in their "Clinical Practice Update on New Technology
and Innovation for Surveillance and Screening in Barrett's Esophagus" updated clinical guidance that mirrors the same furnished
by the ACG as described above, endorsing the use of non-endoscopic cell collection tools to screen for BE like our EsoCheck Cell Collection
Device, which is cited in the update, as an acceptable alternative to endoscopy to directly address the need for noninvasive screening
tools that are easy to administer, patient friendly, and cost-effective for the detection of BE. The clinical practice update by the
AGA also significantly expands the target population for esophageal precancer screening, including for EsoGuard and EsoCheck, by recommending,
for the first time, screening in at-risk patients without symptoms of GERD. The AGA does so by adding a history of chronic GERD as merely
an additional, seventh risk factor to the six risk factors for BE and EAC that have traditionally identified at-risk symptomatic patients
recommended for screening.

 Commercialization

 Our
EsoGuard commercialization efforts span multiple channels including targeting primary care and GI physicians, who have generally embraced
our message that EsoGuard has the potential to expand the funnel of BE-EAC patients who will need long term EGD surveillance and, potentially,
treatment with endoscopic esophageal ablation.

 To
assure sufficient testing capacity and geographic coverage, we have undertaken multiple ways for patients have access to our test.
Initially, we built a limited network of our own physical Lucid Test Centers, staffed by Lucid-employed clinical personnel, where
patients can undergo the EsoCheck procedure and have the sample sent for EsoGuard testing at our CLIA-certified laboratory. Our
current test center network currently includes locations in metropolitan areas in Arizona, California, Colorado, Florida, Idaho,
Illinois, Nevada, Ohio, Oregon, Texas and Utah.

 In
addition to our own test center locations, we have broadened patient access to our test by establishing a satellite test center program,
whereby we are making our personnel available to perform cell collection services inside physician offices or in certain geographies,
closely nearby physician offices by way of our Lucid Mobile Testing Unit.

 Also,
in January 2023, we completed our first #CheckYourFoodTube Precancer Testing Event, with the San Antonio Fire Department (the "SAFD")
during Firefighter Cancer Awareness Month as designated by the International Association of Fire Fighters (IAFF). A total of 391 members
who were deemed to be at-risk for esophageal precancer, underwent a brief, on-site, noninvasive cell collection procedure, performed
by our clinical personnel using EsoCheck. Since then, additional testing events have been hosted with the SAFD, and similar events
have been held with fire departments throughout the country. These events are ongoing and are an extension of Lucid's satellite
test center program, which brings our precancer testing directly to patients—at their physician's office and now at testing
day events.

 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 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.

 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.
In October 2020, CMS granted EsoGuard final Medicare payment determination of $1,938.01, effective January 1, 2021.

 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 substantially identical LCD was published by Noridian
Healthcare Solutions, the MAC whose geographic jurisdiction covers our CLIA laboratory in Lake Forest, CA.) The LCD outlines
criteria for future coverage that MolDX expects upper gastrointestinal precancer and cancer molecular diagnostic tests to meet.
These criteria include active GERD with at least two risk factors, as well as evidence of analytic validity, clinical validity, and
clinical utility. 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.

 In
parallel with preparing to submit EsoGuard for Technical Assessment with MolDX, we are aggressively pursuing EsoGuard commercial insurer
payment and coverage. Although the claim adjudication cycle can be prolonged during the early commercialization of a new test, we have
received and are continuing to receive out-of-network commercial insurance payments for the EsoGuard test, which accounts for the vast
majority of our revenue to date.

 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.

Utility and Clinical Trials

 Demonstrating
EsoGuard's clinical utility, which requires providing evidence that the test has a meaningful impact on clinical practice, is very
important for a variety of purposes, including, importantly, for Medicare and private payor payment and coverage. It has been established
that one of the most important factors to private payors in deciding whether to grant payment and coverage will be demonstration that
the EsoGuard test, when ordered by physicians, provides information that can be used to
identify or exclude patients who would benefit from additional management and/or treatment. 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, 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. 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. 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. These four manuscripts will be submitted for peer review in the first half of 2024.

 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. 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). 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.

 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).

 Manufacturing

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. 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.

 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. We are required to pay CWRU royalties on net sales of licensed products as
follows: 5% of net sales of less than $100 million per year; and 8% of net sales greater than $100 million per year. We are also
required to pay CWRU minimum annual royalty payments as follows: $50,000 per year, beginning January 1 following the first
anniversary of a commercial sale of a licensed product; $150,000 per year, if net sales of a licensed product exceed $25 million in
a year; $300,000 per year, if net sales of a licensed product exceed $50 million in a year; and $600,000 per year, if net sales of a
licensed product exceed $100 million in a year. Minimum yearly royalty amounts are subject to increase based on the percentage
change in the CPI-W Consumer Price Index and are credited against the royalties otherwise due. The license agreement was subject to
four regulatory and commercialization milestones, of which one remains unachieved and unpaid. The remaining milestone is the FDA PMA
submission of a licensed product, upon the achievement of which we will pay CWRU a milestone payment of $200,000. 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.

 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. In December 2019, our CLIA-certified then-laboratory partner, completed documentation of EsoGuard analytical
validity allowing us to commercialize it as a LDT.

 In
February 2020, we received FDA "Breakthrough Device Designation" for EsoGuard as an in-vitro diagnostic ("IVD")
medical device. The FDA Breakthrough Device Program was created to offer patients more timely access to breakthrough technologies which
provide for more effective treatment or diagnosis of life-threatening or irreversibly debilitating human disease or conditions by expediting
their development, assessment and review through enhanced communications and more efficient and flexible clinical study design, including
more favorable pre/post market data collection balance. The Centers for Medicare and Medicaid Services and the United States Congress
continue to work to provide an expedited coverage pathway for emerging technologies.

 In
May 2021, we received CE Mark certification for EsoCheck (under the Medical Devices Directive 93/42/EEC), and in June 2021, we completed
CE Mark self-certification for EsoGuard (under the European In-Vitro Diagnostic Devices Directive (IVDD 98/79/EC)), indicating both may
be marketed in CE Mark European countries.

 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. If finalized, FDA believes
that this phaseout may also foster the manufacturing of innovative IVDs for which FDA has determined there is a reasonable assurance
of safety and effectiveness. As 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.

 It
is currently anticipated that FDA will finalize the proposed policy by April 2024. Once the final policy is released, we will implement
the QS requirements in the recommended staged approach and conduct pre-submission meetings with FDA to seek agreement on regulatory pathway
for EsoGuard premarket submission. As required by the final policy, we will submit the regulatory premarket submission to the FDA as
per the timeframe defined in the final policy. 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.

 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.

 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. Since March 2022, we have conducted EsoGuard testing at our own
laboratory with, until February 10, 2023, the assistance of RDx, which had continued to provide certain testing and related services
for the laboratory in accordance with the terms of a management services agreement ("MSA RDx"). Our subsidiary LucidDx
Labs and RDx agreed to terminate the MSA RDx effective as of February 10, 2023, such that LucidDx Labs from and after such date has
operated the laboratory itself, which the Company believes has improved the efficiency of the performance of the EsoGuard
assay.

 In
November 2023, LucidDx Labs launched EsoGuard 2.0, which uses multiplexing thereby allowing both genes to be interrogated on a single
DNA sample. The next-generation assay underwent rigorous analytical and clinical validation studies, including head-to-head comparisons
of multiplexed triplicate consensus versus singleplex techniques, consistent with CLIA standards. 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. Given the large market for pre-cancer testing, we likely will face numerous competitors,
some of which possess significantly greater financial and other resources and development capabilities than us. Our EsoGuard test faces
competition from procedure-based detection technologies such as upper endoscopy, and other testing technologies such as multi-cancer
early detection products. Our EsoCheck device faces competition from other manufactures with devices designed to collect cell samples
from targeted regions of the esophagus. 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. Our competitors may also
be developing additional methods of detecting esophageal cancer and pre-cancer that have not yet been announced.

 We
will also compete in the marketplace to recruit and retain qualified scientific, management and sales personnel, as well as in acquiring
technologies and licenses complementary to our products or advantageous to our business. We are aware of several companies that compete
or are developing technologies in our current and future products areas. In order to compete effectively, our products will have to achieve
market acceptance, receive adequate insurance coverage and reimbursement, be cost effective and be simultaneously safe and effective.

 EsoCure

 The EsoCure Esophageal Ablation
Device is a novel technology that allows a clinician to treat dysplastic BE before it can progress to EAC, a highly lethal esophageal
cancer, and to do so without the need for complex and expensive capital equipment.

 In connection with our efforts to
expand our presence in the EAC diagnostic market, in March 2022, PAVmed and Lucid entered into an intercompany license agreement whereby
Lucid was granted the rights to commercialize EsoCure for the treating dysplastic BE. Under the intercompany license, Lucid will pay PAVmed
a 5% royalty on all EsoCure sales up to $100 million per calendar year, and 8% above that threshold.

 PAVmed has successfully completed a pre-clinical feasibility animal study of EsoCure demonstrating excellent, controlled
circumferential ablation of the esophageal mucosal lining. An acute and survival animal study of EsoCure Esophageal Ablation Device has
also been completed, demonstrating successful direct thermal balloon catheter ablation of esophageal lining through the working channel
of a standard endoscope. When resources permit, PAVmed may conduct additional development work and animal testing of EsoCure to support
a future FDA 510(k) submission.

 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.

 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. 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. 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. Similarly, PAVmed will have the power to determine
matters submitted to a vote of our stockholders without the consent of our other stockholders, to prevent a change in control of us, and
to take other actions that might be favorable to PAVmed, without prior notice to other stockholders. Even if PAVmed's ownership
falls below 50%, PAVmed may retain substantial influence on such matters and may remain our controlling stockholder. PAVmed's controlling
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"). Under the MSA, PAVmed provides management, technical and administrative services to us, including
without limitation services related to research and development, regulatory clearance, manufacture, and commercialization of our products,
as well as services related to corporate financial, accounting and legal matters. The terms of this agreement are intended to be consistent
with the terms that we could have negotiated with unaffiliated third parties; however, they may actually be more or less favorable. Under
the PBERA, PAVmed has agreed to pay certain payroll and benefit-related expenses in respect of our personnel
on our behalf, and we reimburse PAVmed for the same. 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). 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.

Events

 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.

 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. 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). 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).

 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"). 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). Each share of the Series B Preferred Stock
has a stated value of $1,000 and a conversion price of $1.2444. 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. The Series B
Preferred Stock votes with our common stock on an as converted basis (subject to certain beneficial ownership and Nasdaq limitations
described elsewhere in this Form 10-K). 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).

 All the shares of Series A Preferred
Stock and Series A-1 Preferred Stock were exchanged for shares of Series B Preferred Stock in the Series B Offering and Exchange and,
as a result, no shares of Series A Preferred Stock or Series A-1 Preferred Stock remain outstanding.

 On October 17, 2023, we sold 5,000 shares of Series A-1 Preferred Stock, solely to accredited investors (all of which
were including in the 10,670 shares of Series A-1 Preferred exchanged for Series B Preferred Stock in the Series B Offering and Exchange).
The aggregate gross proceeds to Lucid of this offering were $5.0 million.

 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 currently have applied for, license or own 20 domestic and foreign patents covering the EsoGuard and EsoCheck products
and related technology. Each of the technologies noted below is protected by multiple families, and only the earliest expiration for
the first of the families is listed. 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). For EsoGuard, families are pending that, when granted, will offer additional
protections until at least 2037.

 Technology

 Year

 May
 2034

 August
 2024

 The
EsoCheck and EsoGuard technology is protected by patents in the United States and internationally, and our policy is to continue to aggressively
file patent applications, both independently and in collaboration with CWRU, as appropriate, to protect this technology and other of
our proprietary technologies relating to our business, including inventions and improvements to inventions. Under the CWRU License Agreement,
CWRU has agreed to apply for patent coverage, at our expense, in any country requested by us, to the extent such protection is reasonably
attainable. We seek patent protection, as appropriate, on:

 the
 product itself including all embodiments with future commercial potential;

 the
 methods of using the product; and

 the
 methods of manufacturing the product.

 In
addition to filing and prosecuting patent applications in the United States, we intend to file counterpart patent applications in other
countries where there is a value in doing so. Foreign filings can be cumbersome and expensive, and we will pursue such filings when we
believe they are warranted as we try to balance our international commercialization plans with our desire to protect the global value
of the technology.

 The
term of individual patents depends upon the legal term of the patents in the countries in which they are obtained. In most countries
in which we file, the patent term is 20 years from the earliest date of filing a non-provisional patent application. In the United States,
a patent's term may be shortened if a patent is terminally disclaimed over another patent or as a result of delays in patent prosecution
by the patentee, and a patent's term may be lengthened by patent term adjustment, which compensates a patentee for administrative
delays by the U.S. Patent and Trademark Office ("USPTO") in granting a patent, or patent term extension, which restores time
lost due to regulatory delays.

 We
intend to continuously reassess and fine-tune our intellectual property strategy in order to fortify the position of our business in
the United States and internationally. 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.

 We
also rely upon trade secrets, know-how, 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. 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.

 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 " ". 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.

 In
the United States, third-party payors continue to implement initiatives that restrict the use of certain technologies to those that meet
certain clinical evidentiary requirements. In addition to uncertainties surrounding coverage policies, there are periodic changes to
reimbursement. Third-party payors regularly update reimbursement amounts and also from time to time revise the methodologies used to
determine reimbursement amounts. This includes annual updates to payments to physicians, hospitals and ambulatory surgery centers for
procedures during which our products are used. An example of payment updates is the Medicare program's updates to hospital and
physician payments, which are done on an annual basis using a prescribed statutory formula. In the past, when the application of the
formula resulted in lower payment, Congress has passed interim legislation to prevent the reductions.

 See
" Reimbursement and Market Access " above for a fuller discussion of the reimbursement status for EsoCheck and EsoGuard.

 Government
Regulation

 Key
U.S. 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".

 Our
marketing of any medical device product we may develop, license, or acquire, including traditional medical devices such as EsoCheck,
and IVD products such as EsoGuard, is subject to FDA regulation.

 In
 June 2019, we received FDA 510(k) clearance for EsoCheck, permitting us to market it in the U.S. as a cell collection device indicated
 for use in the collection and retrieval of surface cells of the esophagus in the general population of adults, 22 years of age and
 older. In 2022, we received FDA clearance to expand EsoCheck's indications for use to include adults and adolescents, 12 years
 of age and older. In 2023, we further received FDA clearance to permit us to market EsoCheck as non-sterile.

 In
 December 2019, RDx, our then-CLIA-certified laboratory partner completed documentation of EsoGuard analytical validity allowing us
 to commercialize it as an LDT. In March 2022, we transferred EsoGuard testing to our own CLIA-certified laboratory, upon our acquisition
 of certain assets from RDx as described elsewhere in this report.

 FDA
defines an LDT as "an IVD product that is intended for clinical use and designed, manufactured and used within a single laboratory."
FDA has long maintained that it has clear regulatory authority over LDTs and has chosen to fully exercise its authority for certain classes
of "single laboratory" IVD products which would satisfy its definition of an LDT, such as direct-to-consumer tests that do
not involve a health care provider. 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.

 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. If finalized, FDA believes
that this phaseout may also foster the manufacturing of innovative IVDs for which FDA has determined there is a reasonable assurance
of safety and effectiveness. As 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.

 It
is currently anticipated that FDA will finalize the proposed policy by April 2024. Once the final policy is released, we will implement
the QS requirements in the recommended staged approach and conduct pre-submission meetings with FDA to seek agreement on regulatory pathway
for EsoGuard premarket submission. As required by the final policy, we will submit the regulatory premarket submission to the FDA as
per the timeframe defined in the final policy. 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.

 Since
only EsoCheck is FDA cleared, we are not permitted to jointly market it with EsoGuard. 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. 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. 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.

 FDA
"Breakthrough Device" is highly-coveted special designation under FDA's Breakthrough Devices Program, established pursuant
to the 21st Century Cures Act and the FDA Reauthorization Act of 2017, which seeks to offer patients and healthcare providers timely
access to medical devices which "provide for more effective treatment or diagnosis of life-threatening or irreversibly debilitating
human disease or conditions" by speeding up their development, assessment and review through (i) enhanced communications, (ii)
more efficient and flexible clinical study design, including more favorable pre/post market data collection balance and (iii) priority
review of regulatory submissions. Once effective, MCIT would provide each Breakthrough Device with four years of national Medicare coverage
starting on the date of FDA market authorization. In February 2020 we were granted Breakthrough Device designation for EsoGuard on esophageal
samples collected using EsoCheck. Pursuant to this designation and as defined by the final policy to be released by FDA in April 2024,
we will be working with FDA to submit the premarket submission for EsoGuard.

 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. FDA regulations govern, among other
things, the development, testing, manufacturing, labeling, safety, storage, recordkeeping, market clearance or approval, advertising
and promotion, import and export, marketing and sales, and distribution of medical devices and products.

 In
the United States, medical devices are subject to varying degrees of regulatory control and are classified in one of three classes depending
on the extent of controls the FDA determines are necessary to reasonably ensure their safety and efficacy:

 Class
I: general controls, such as labeling and adherence to quality system regulations;

 Class
II: special controls, pre-market notification (often referred to as a 510(k) application), specific controls such as performance standards,
patient registries, post-market surveillance, additional controls such as labeling and adherence to quality system regulations; and

 Class
III: special controls and approval of a de novo request or PMA application, likely with clinical data requirements.

 In
general, the higher the classification, the greater the time and cost to obtain approval to market. There are no
"standardized" requirements for approval, even within each class. For example, FDA could grant 510(k) status, but
require a human clinical trial, a typical requirement of a PMA. They could also initially assign a device Class III status but end
up clearing a device as a 510(k) device or under a de novo classification pathway if certain requirements are met. The range of the
number and expense of the various requirements is significant. 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. We cannot predict fully how FDA will classify our products, nor
predict what requirements will be placed upon us to obtain market clearance or approval, or even if they will clear or approve our
products at all. 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.

Trials of Medical Devices and Diagnostic Tests

 One
or more clinical trials may be necessary to support an FDA submission. Clinical studies of unapproved or uncleared medical devices or
diagnostic tests being studied for uses for which they are not approved or cleared (investigational devices) must be conducted in compliance
with FDA requirements. If an investigational device could pose a significant risk to patients, the sponsor company must submit an Investigational
Device Exemption, or IDE application to FDA prior to initiation of the clinical study. An IDE application must be supported by appropriate
data, such as animal and laboratory test results, showing that it is safe to test the device on humans and that the testing protocol
is scientifically sound. The IDE is reviewed by FDA within 30 calendar days after receipt by FDA and FDA can issue a disapproval, conditional
approval or full approval for the study to begin depending on the remaining FDA questions following review. Clinical studies of investigational
devices may not begin until an IRB has approved the study.

 During
any study, the sponsor must comply with FDA's IDE requirements. These requirements include investigator selection, trial monitoring,
adverse event reporting, and record keeping. The investigators must obtain patient informed consent, rigorously follow the investigational
plan and study protocol, control the disposition of investigational devices, and comply with reporting and record keeping requirements.
We, FDA, or the IRB at each institution at which a clinical trial is being conducted may suspend a clinical trial at any time for various
reasons, including a belief that the subjects are being exposed to an unacceptable risk. 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. These include:

 FDA
 Quality Systems Regulation (QSR), which governs, among other things, how manufacturers design, test manufacture, exercise quality
 control over, and document manufacturing of their products;

 labeling
 and claims regulations, which prohibit the promotion of products for unapproved or "off-label" uses and impose other
 restrictions on labeling; and

 the
 Medical Device Reporting regulation, which requires reporting to FDA of certain adverse experience associated with use of the product.

 We
will continue to be subject to inspection by FDA to determine our compliance with regulatory requirements.

 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.
Failure to comply with statutory and regulatory requirements subjects a manufacturer to possible legal or regulatory action, including
the seizure or recall of products, injunctions, consent decrees placing significant restrictions on or suspending manufacturing operations,
and civil and criminal penalties. Adverse experiences with the device must be reported to FDA and could result in the imposition of marketing
restrictions through labeling changes or in device withdrawal. Device clearances or approvals may be withdrawn if compliance with regulatory
requirements is not maintained or if problems concerning safety or efficacy of the product occur following the approval. We expect to
use contract manufacturers to manufacture our products for the foreseeable future we will therefore be dependent on their compliance
with these requirements to market our products. We work closely with our contract manufacturers to assure that our products are in strict
compliance with these regulations.

 Laboratory
Certification, Accreditation and Licensing

 Our
CLIA-certified laboratory is subject to U.S. and state laws and regulations regarding the operation of clinical laboratories. CLIA requirements
and laws of certain states, including those of California, New York, Maryland, Pennsylvania, Rhode Island and Florida, impose certification
requirements for clinical laboratories, and establish standards for quality assurance and quality control, among other things. CLIA provides
that a state may adopt different or more stringent regulations than federal law and permits states to apply for exemption from CLIA if
the state's laboratory laws are equivalent to, or more stringent than, CLIA. For example, the State of New York's clinical
laboratory regulations, which have received an exemption from CLIA, contain provisions that are in certain respects more stringent than
federal law. Therefore, as long as New York maintains a licensure program that is CLIA-exempt, we will need to comply with New York's
clinical laboratory regulations in order to offer our clinical laboratory products and services in New York.

 We
have current certificates to perform clinical laboratory testing. Clinical laboratories are subject to inspection by regulators and to
sanctions for failing to comply with applicable requirements. Sanctions available under CLIA and certain state laws include prohibiting
a laboratory from running tests, requiring a laboratory to implement a corrective plan, and imposing civil monetary penalties. If our
CLIA-certified laboratory fails to meet any applicable requirements of CLIA or state law, that failure could adversely affect any future
CMS consideration of our technologies, prevent their approval entirely, and/or interrupt the commercial sale of any products and services
and otherwise cause us to incur significant expense.

 Other
U.S. 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.

 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. If our operations are found to be in violation of any
of the health regulatory laws described above or any other laws that apply to us, we may be subject to penalties, including potentially
significant criminal and civil and administrative penalties, damages, fines, disgorgement, imprisonment, exclusion from participation
in government healthcare programs, contractual damages, reputational harm, administrative burdens, diminished profits and future earnings,
and the curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and our
results of operations. To the extent that any of our products are sold in a foreign country, we may be subject to similar foreign laws,
which may include, for instance, applicable post-marketing requirements, including safety surveillance, anti-fraud and abuse laws and
implementation of corporate compliance programs and reporting of payments or transfers of value to healthcare professionals.

 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.

 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. A manufacturer's failure to submit timely, accurately and
completely the required information for all payments, transfers of value or ownership or investment interests may result in civil monetary
penalties of up to an aggregate of $150,000 per year, and up to an aggregate of $1 million per year for "knowing
failures." Manufacturers that produce at least one product reimbursed by Medicare, Medicaid, or Children's Health Insurance
Program and (i) if the product is a drug or biological, and it requires a prescription (or physician's authorization) to administer;
or (ii) if the product is a device or medical supply, and it requires premarket approval or premarket notification by the FDA are required
to comply with the Open Payments (commonly referred to as the Sunshine Act) filing requirements under CMS. We currently do not have any
products covered by Medicare, Medicaid, or Children's Health Insurance Program as none of our products have premarket approval
or clearance notification. We expect once our products receive regulatory clearance, we will be required to comply with the Sunshine
Act provisions.

states also mandate implementation of commercial compliance programs, and other states impose restrictions on device manufacturer marketing
practices and require tracking and reporting of gifts, compensation and other remuneration to healthcare professionals and entities.
The shifting commercial compliance environment and the need to build and maintain robust and expandable systems to comply with different
compliance or reporting requirements in multiple jurisdictions increase the possibility a healthcare company may fail to comply fully
with one or more of these requirements.

 Federal
Anti-Kickback Statute

 The
Federal Anti-Kickback Statute prohibits, among other things, knowingly and willfully offering, paying, soliciting or receiving any remuneration
(including any kickback, bribe or rebate), directly or indirectly, overtly or covertly, to induce or in return for purchasing, leasing,
ordering or arranging for or recommending the purchase, lease or order of any good, facility, item or service reimbursable, in whole
or in part, under Medicare, Medicaid or other federal healthcare programs. The term "remuneration" has been broadly interpreted
to include anything of value. Although there are a number of statutory exceptions and regulatory safe harbors protecting some common
activities from prosecution, the exceptions and safe harbors are drawn narrowly. Practices that involve remuneration that may be alleged
to be intended to induce prescribing, purchases or recommendations may be subject to scrutiny if they do not qualify for an exception
or safe harbor. Failure to meet all of the requirements of a particular applicable statutory exception or regulatory safe harbor does
not make the conduct per se illegal under the Anti-Kickback Statute. Instead, the legality of the arrangement will be evaluated on a
case-by-case basis based on a cumulative review of all its facts and circumstances. Several courts have interpreted the statute's
intent requirement to mean that if any one purpose of an arrangement involving remuneration is to induce referrals of federal healthcare
covered business, the Anti-Kickback Statute has been violated.

 Additionally,
the intent standard under the Anti-Kickback Statute was amended by the Patient Protection and Affordable Care Act of 2010, as amended
by the Health Care and Education Reconciliation Act of 2010, collectively the Affordable Care Act, to a stricter standard such that a
person or entity no longer needs to have actual knowledge of the statute or specific intent to violate it in order to have committed
a violation. In addition, the Affordable Care Act codified case law that a claim including items or services resulting from a violation
of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the federal civil False Claims Act.

 Federal
False Claims Act

 The
False Claims Act prohibits, among other things, any person or entity from knowingly presenting, or causing to be presented, a false or
fraudulent claim for payment or approval to the federal government or knowingly making, using or causing to be made or used a false record
or statement material to a false or fraudulent claim to the federal government. A claim includes "any request or demand"
for money or property presented to the U.S. government. The False Claims Act also applies to false submissions that cause the government
to be paid less than the amount to which it is entitled, such as a rebate. Intent to deceive is not required to establish liability under
the False Claims Act. Several pharmaceutical, device and other healthcare companies have been prosecuted under these laws for, among
other things, allegedly providing free product to customers with the expectation that the customers would bill federal programs for the
product. 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 False Claims Act prohibits
the making or presenting of a claim to the government knowing such claim to be false, fictitious, or fraudulent and, unlike civil claims
under the False Claims Act, requires proof of intent to submit a false claim.

 The
Foreign Corrupt Practices Act

 The
Foreign Corrupt Practices Act, or the "FCPA," prohibits any U.S. individual or business from paying, offering, or authorizing
payment or offering of anything of value, directly or indirectly, to any foreign official, political party or candidate for the purpose
of influencing any act or decision of the foreign entity in order to assist the individual or business in obtaining or retaining business.
The FCPA also obligates companies whose securities are listed in the United States to comply with accounting provisions requiring the
company to maintain books and records that accurately and fairly reflect all transactions of the corporation, including international
subsidiaries, and to devise and maintain an adequate system of internal accounting controls for international operations. 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.

 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. The cost containment measures that
payors and providers are instituting and the effect of any healthcare reform initiative implemented in the future could significantly
reduce our revenues from the sale of our products. Alternatively, the shift away from fee-for-service agreements to capitated payment
models may support the value of our products which can be shown to decrease resource utilization and lead to cost savings for both payors
and providers.

 HIPAA
and Other Privacy Laws

 The
Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical
Health Act ("HIPAA") established comprehensive protection for the privacy and security of health information. The HIPAA standards
apply to three types of organizations, or "Covered Entities": health plans, healthcare clearinghouses, and healthcare providers
that conduct certain healthcare transactions electronically. Covered Entities and their business associates must have in place administrative,
physical, and technical standards to guard against the misuse of individually identifiable health information. Some of our activities,
including at our Lucid Test Centers and within our clinical trials, involve interactions with patients and their health information which
implicate HIPAA. Our activities also involve us entering into specific kinds of relationships with Covered Entities and business associates
of Covered Entities, which also implicate HIPAA. Penalties for violations of HIPAA include civil money and criminal penalties.

 Our
activities must also comply with other applicable privacy laws, which impose restrictions on the access, use and disclosure of personal
information. More state and international privacy laws are being adopted. Many state laws are not preempted by HIPAA because they are
more stringent or are broader in scope than HIPAA. Since 2020 we have also had to comply with the California Consumer Privacy Act of
2018, which protects personal information other than health information covered by HIPAA. In the E.U., the General Data Protection Regulation
("GDPR") took effect in May 2018 and imposes increasingly stringent data protection and privacy rules. All of these laws
may impact our business and may change periodically, which could have an effect on our business operations if compliance becomes substantially
costlier than under current requirements. Our failure to comply with these privacy laws or significant changes in the laws restricting
our ability to obtain patient samples and associated patient information could significantly impact our business and our future business
plans.

 Self-Referral
Law

 The
federal "self-referral" law, commonly referred to as the "Stark" law, provides that physicians who, personally
or through a family member, have ownership interests in or compensation arrangements with a laboratory are prohibited from making a referral
to that laboratory for laboratory tests reimbursable by Medicare, and also prohibits laboratories from submitting a claim for Medicare
payments for laboratory tests referred by physicians who, personally or through a family member, have ownership interests in or compensation
arrangements with the testing laboratory. The Stark law contains a number of specific exceptions which, if met, permit physicians who
have ownership or compensation arrangements with a testing laboratory to make referrals to that laboratory and permit the laboratory
to submit claims for Medicare payments for laboratory tests performed pursuant to such referrals. 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.

 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. We may be subject to regulations and product registration requirements
in the areas of product standards, packaging requirements, labeling requirements, import and export restrictions and tariff regulations,
duties and tax requirements. Whether or not we obtain FDA approval for a product, we would need to obtain the necessary approvals by
the comparable foreign regulatory authorities before we can commence clinical trials or marketing of the product in foreign countries
and jurisdictions. 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.

 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.

 MDD
refers to Medical Device Directive 93/42/EEC, which for nearly three decades provided the essential requirements and conformity assessment
procedure that medical devices must undergo to be affixed with a CE Mark and sold in CE Mark European countries. MDD is now obsolete
and has been replaced by MDR. MDR refers to Regulation (EU) 2017/745 and incorporates several new concepts and registrations, stricter
oversight of manufacturers by notified bodies, universal device identification (UDI) marking, and increased post-market surveillance
requirements.

 Similarly,
IVDD refers to In-Vitro Diagnostic Medical Devices Directive (98/79/EC), which for over twenty years has provided the essential requirements
and conformity assessment procedure that in-vitro diagnostic medical devices must undergo to be affixed with a CE Mark and sold in CE
Mark European countries. On May 26, 2022, IVDD will be replaced by IVDR, which refers to Regulation (EU) 2017/746, and has an expanded
scope, risk-based classification, more rigorous clinical evidence and surveillance requirements, and more stringent documentation.

 Both
MDR and IVDR have sunset provisions for medical device and IVD certifications under MDD and IVD, respectively. Both EsoGuard and EsoCheck
will require recertification under their stricter regulations in the coming years. Failure to secure these recertifications under MDR
and IVDR will halt our ability to commercialize our products in the CE Mark European countries. As these are entirely new regulations,
the cost, time and risk associated with these recertifications is difficult to predict.

 In
addition, the United Kingdom, which is a major target market for us, has left the European Union ("Brexit") and will transition
from CE Mark certification to its own UKCA mark certification. We will need to secure UKCA mark certification for EsoGuard and EsoCheck
before their CE Mark certifications expire in the UK. Since this is an entirely new process, it is difficult to predict the cost, time
and risk associated with transitioning to UKCA certification.

 In
the European Union, the manufacture of medical devices is subject to good manufacturing practice (GMP), as set forth in the relevant
laws and guidelines of the European Union and its member states. Compliance with GMP is generally assessed by the competent regulatory
authorities. Typically, quality system evaluation is performed by a Notified Body, which also recommends to the relevant competent authority
for the European Community CE Marking of a device. The Competent Authority may conduct inspections of relevant facilities, and review
manufacturing procedures, operating systems and personnel qualifications. Each device manufacturing facility must be audited on a periodic
basis by the Notified Body. Further inspections may occur over the life of the product.

 Any
action against us for violation of these or similar foreign laws, even if we successfully defend against it, could cause us to incur
significant legal expenses and divert our management's attention from the operation of our business.

 Other
Laws

 Occupational
Safety and Health

 In
addition to its comprehensive regulation of health and safety in the workplace in general, the Occupational Safety and Health Administration
has established extensive requirements aimed specifically at laboratories and other healthcare-related facilities. In addition, because
our operations may require employees to use certain hazardous chemicals, we also must comply with regulations on hazard communication
and hazardous chemicals in laboratories. These regulations require us, among other things, to develop written programs and plans, which
must address methods for preventing and mitigating employee exposure, the use of personal protective equipment, and training.

 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.

 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. There were no material capital expenditures for environmental control facilities in the years ended December
31, 2023 and 2022.

 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"). In addition, we are obligated to reimburse PAVmed for certain payroll benefit and
expenses related to our employees pursuant to the PBERA, which may be settled in shares of our common stock, at PAVmed's
election. No employees are covered by a collective bargaining agreement. We consider our relationship with our employees to be
good.

 Corporate
Information

 We
were incorporated in Delaware on May 8, 2018. Our corporate offices are located at 360 Madison Avenue, 25th Floor, New York, NY 10017,
and our main telephone number is (917) 813-1828.

 Available
Information

 We
make available free of charge through our website (www.luciddx.com) our periodic reports and registration statements filed with the United
States Securities and Exchange Commission ("SEC"), including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q,
Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). We make these reports available through our website as soon as reasonably
practicable after we electronically file such reports with, or furnish such reports to the SEC.

 We
also make available, free of charge on our website, the reports filed with the SEC by our named executive officers, directors, and 10%
stockholders pursuant to Section 16 under the Exchange Act as soon as reasonably practicable after those filings are provided to us by
those persons. The public also may read and copy any materials we file with the SEC at the SEC's Public Reference Room at 100 F
Street, NE., Washington, DC 20549, on official business days during the hours of 10 a.m. to 3 p.m. The public may obtain information
on the operation of the Public Reference Room by calling the Commission at 1-800-SEC-0330. The SEC also maintains an Internet site (
that contains reports, proxy and information statements, and other information regarding us that we file electronically with the SEC.

 Our
website address is www.luciddx.com. 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.

 Item
1A. Risk Factors

 The
following risk factors and other information included in this Annual Report on Form 10-K should be carefully considered. The risks and
uncertainties described below are not the only ones we face. Additional risks and uncertainties not presently known to us or we presently
deem less significant may also impair our business operations. If any of the following risks occur, our business, financial condition,
results of operations and future growth prospects could be materially and adversely affected.

 Risks
Factor Summary

 Our
business is subject to numerous risks and uncertainties that you should consider before investing in our common stock. These risks are
described more fully below and include, but are not limited to, risks relating to the following:

 Risks
Associated with Our Financial Condition

 We
 have incurred operating losses since our inception and may not be able to achieve profitability.

 We have concluded there is substantial doubt of our ability to continue as a going concern and our independent registered public
accounting firm's report on our financial statements contains an explanatory paragraph describing our ability to continue as a going concern.

 To raise capital, we have issued a significant amount of
 convertible securities under which we expect to issue a correspondingly significant amount of shares of our common stock upon
 conversion thereof. In addition, we may issue shares of our capital stock or debt securities in the future in order to raise capital
 to fund our operations. All of the foregoing would dilute the equity interest of our stockholders and might cause a change in
 control of our ownership.

 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.

 Our
 quarterly operating results could be subject to significant fluctuation, which could increase the volatility of our stock price and
 cause losses to our stockholders.

 Servicing
 our indebtedness may require a significant amount of cash, and the restrictive covenants contained in our indebtedness could adversely
 affect our business plan, liquidity, financial condition, and results of operations.

 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. If demand for our EsoGuard test grows, we may lack
 adequate facility space and capabilities to meet increased processing requirements. 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.

 Our
 results of operations can be adversely affected by labor shortages, turnover, and labor cost increases.

 We
 expect to rely on courier delivery services to transport EsoCheck devices and EsoGuard specimen kits to physicians and other medical
 professionals and samples back to laboratory facilities for analysis. If these delivery services are disrupted or become prohibitively
 expensive, customer satisfaction and our business could be negatively impacted.

 If
 we attempt to bring any other products or services to market in addition to the EsoGuard test and EsoCheck device, we likely will
 be required to make significant investments in research and development, which ultimately may prove unsuccessful. Our future performance
 may be affected by the success of products we have not yet developed, licensed, acquired.

 Our
 officers may allocate their time to other businesses thereby potentially limiting the amount of time they devote to our affairs.
 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.

 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. While we are confident that the proposed
 policy will not have a material impact on our business, there can be no assurance that will be the case.

 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.

 may not be jointly marketed as a combined product with EsoCheck without first securing FDA approval of the combined product as an
 IVD device. If FDA deems that we are jointly marketing such an IVD product with EsoCheck without FDA approval of the combined product
 as an IVD device, we would be subject to FDA enforcement action which could limit or halt commercialization of our products, and
 result in FDA sanctions which could severely impact our business.

 Securing
 FDA approval of EsoGuard as an IVD device, separately or as a combined product with EsoCheck, is a complex process requiring substantial
 time, commitment of resources and expense without any assurance that FDA will grant such approval.

 to obtain regulatory approvals in foreign jurisdictions will prevent us from marketing our products internationally.

 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.

 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. 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.

 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.

 laboratories and medical diagnostic companies are subject to extensive and frequently changing federal, state, and local laws. We
 could be subject to significant fines and penalties if we fail (or if our prior unrelated third-party laboratory partner previously
 failed) to comply with these laws and regulations.

 We
 operate Lucid Test Centers where prescribing physicians can send patients for EsoGuard testing, including undergoing specimen collection
 using EsoCheck. 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.

 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. Telemedicine is subject to numerous federal and state regulations and faces particularly intense
 scrutiny by these regulators. If we fail to comply with federal healthcare regulations, we could face substantial penalties, sanctions,
 fines or prosecution and our business, operations and financial condition could be adversely affected.

 Many
 aspects of our business, beyond the specific elements described above, are subject to complex, intertwined, costly and/or burdensome
 federal health care laws and regulations which may open to interpretation and be subject to varying levels of discretionary enforcement.
 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.

 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.

 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.

 Risks
Associated with Our Relationship with 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.

 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 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 Our Financial Condition

 We
have incurred operating losses since our inception and may not be able to achieve profitability.

 We
have incurred net losses since our inception. For the years ended December 31, 2023 and 2022, we had a net loss of $52.7
million and $56.2 million, respectively. Our ability to generate sufficient revenue from any of our products in development, and to transition
to profitability and generate consistent positive cash flows is dependent upon factors that may be outside of our control. We expect
that our operating expenses will continue to increase as we continue to develop, pursue regulatory clearance or approval for and commercialize
our products, build our manufacturing, sales and other commercial infrastructure, and incur additional operational and reporting costs
associated with being a public company. As a result, we expect to continue to incur operating losses for the foreseeable future.

 We
are subject to all of the risks and uncertainties typically faced by a medical device and diagnostic company devoting substantially all
its efforts to the commercialization of its initial products and services and ongoing research and development activities and clinical
trials.

 We
have concluded there is substantial doubt of our ability to continue as a going concern and our independent registered public accounting
firm's report on our financial statements contains an explanatory paragraph describing our ability to continue as a going concern.

 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. Additionally, our independent registered
public accounting firm's report on our consolidated financial statements includes an explanatory paragraph expressing substantial doubt
about our ability to continue as a going concern. Our plans to address this going concern risk include pursuing further financings in
addition to the recently completed offering of Series B Preferred Stock (in which we raised over $18 million), seeking to restructure
our outstanding indebtedness and pursuing additional offerings of debt and/or equity securities. The consolidated financial statements
do not include any adjustments that might result from our inability to consummate such offerings or our ability to continue as a going
concern. Moreover, there is no assurance if we consummate additional offerings, we will raise sufficient proceeds in such offerings to
pay our financial obligations as they become due. These factors raise substantial doubt about our ability to continue as a going concern.

 To
raise capital, we have issued a significant amount of convertible securities under which we expect to issue a correspondingly
significant amount of shares of our common stock upon conversion thereof. In addition, we may issue shares of our capital stock or
debt securities in the future in order to raise capital to fund our operations. All of the foregoing would dilute the equity
interest of our stockholders and might cause a change in control of our ownership.

 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. 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).

 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).

 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).
The number of shares of our common stock to be issued under the March 2023 Senior Convertible Note may be substantially greater than
this amount if we make the required amortization payments in shares of our common stock (or upon conversion of the principal and
interest in certain other circumstances as described elsewhere in this filing), because in such event the number of shares to be
issued will be determined based on the then current market price (but in any event not more than fixed conversion price per share or
less than $0.30 per share). We cannot predict the market price of our common stock at any future date, and therefore, we are unable
to accurately forecast or predict the total amount of shares that ultimately may be issued under the March 2023 Senior Convertible
Note. However, assuming that all amortization payments are made as scheduled in shares of common stock at a price equal to the
current market price of $1.11 per share, we estimate that we would issue 9,927,027 shares to the noteholder.

 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. Under the
amendment, the monthly fee due from the Company to PAVmed was increased from $0.75 million to $0.83 million. In accordance with the
MSA and the PBERA, on January 26, 2024, PAVmed elected to receive payment of $4.675 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. 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.

 Furthermore,
we have issued and expect to continue to issue equity awards, including stock options, under our 2018 Long-Term Incentive Equity Plan
(the "Lucid Diagnostics Inc. 2018 Equity Plan") and our Employee Stock Purchase Plan (the "Lucid Diagnostics Inc. ESPP").
In addition, in March 2022, we entered into a committed equity facility with an affiliate of Cantor. Under the terms of the facility,
Cantor has committed to purchase up to $50 million in shares of our common shares stock from time to time at the our request. In November
2022, we also entered into an "at-the-market offering" for up to $6.5 million of our common stock that may be offered and
sold under a Controlled Equity Offering Agreement between us and Cantor. 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.

 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.

 The
issuance of additional shares of our common stock or any number of shares of our preferred stock, and the availability for sale of such
shares in the public markets:

 may
 significantly dilute the equity interest of our current investors;

 may
 subordinate the rights of holders of common stock if preferred stock is issued with rights
 senior to those afforded to our common stockholders;

 may
 cause a change in control if a substantial number of our shares of common stock are issued,
 which may affect, among other things, our ability to use our net operating loss carryforwards,
 if any, and most likely also result in the resignation or removal of some or all of our present
 officers and directors; and

 may
 adversely affect prevailing market prices for our common stock.

 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
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.

 Our
future capital requirements depend on many factors, including our research, development, and sales and marketing activities. We
intend to continue to make investments to support our business growth. 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.

 Our
need for additional funds may be affected by:

 the
 cost and timing of expanding our sales, marketing and distribution capabilities;

 the
 effect of competing technological and market developments; and

 the
 extent to which we acquire or invest in businesses, products and technologies, although we currently have no commitments or agreements
 relating to any of these types of transactions.

 Under
our existing management services agreement and payroll and benefit expense reimbursement agreement with PAVmed, PAVmed may determine
the form and timing of our satisfaction of our obligations under such agreements. To the extent PAVmed elects for this obligation to
be paid in cash, that would increase our need to raise additional capital. In this regard, because of the challenges PAVmed has faced in terms of raising capital itself, PAVmed has become
highly dependent on us to fund its operations, primarily through electing for the payment in cash by us of our obligations under our management
services agreement with PAVmed.

 Debt
or preferred stock financing, if available, may involve covenants restricting our operations or our ability to incur additional debt
or issue additional preferred stock, and may contain other terms that are not favorable to us or our stockholders. Additional equity
financing may result in substantial dilution to our existing stockholders. If we do not have, or are not able to obtain, sufficient funds,
we may have to delay product development initiatives or license to third parties the rights to commercialize products or technologies
that we would otherwise seek to market. We also may have to reduce manufacturing, distribution, marketing, customer support or other
resources devoted to our products.

 Our
quarterly operating results could be subject to significant fluctuation, which could increase the volatility of our stock price and cause
losses to our stockholders.

 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.

 Servicing
our indebtedness may require a significant amount of cash, and the restrictive covenants contained in our indebtedness could adversely
affect our business plan, liquidity, financial condition, and results of operations.

 We
may be required to repay or redeem, or to pay interest on, the March 2023 Senior Convertible Note or any future permitted indebtedness
incurred by us or our subsidiaries, in cash. Despite our right to pay the interest and principal balance of the March 2023 Senior Convertible
Note by issuing shares of our common stock, we may be required to repay such indebtedness in cash, if we do not meet certain customary
equity conditions (including minimum price and volume thresholds) or in certain other circumstances. For example, we may be required
to repay the outstanding principal balance and accrued but unpaid interest, along with a premium, upon the occurrence of certain changes
of control or an event of default.

 Our
ability to make payments of the principal of, to pay interest on, or to redeem our indebtedness in cash, depends on our future performance,
which is subject to economic, financial, competitive and other factors beyond our control. 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. These payment obligations and covenants could have important consequences
on our business. In particular, they could:

 us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness;

 limit,
 among other things, our ability to borrow additional funds and otherwise raise additional capital, and our ability to conduct acquisitions,
 joint, ventures or similar arrangements, as a result of our obligations to make such payments and comply with the restrictive covenants
 in the indebtedness;

 limit
 our flexibility in planning for, or reacting to, changes in our businesses and the industries in which we operate;

 increase
 our vulnerability to general adverse economic and industry conditions; and

 place
 us at a competitive disadvantage compared to our competitors that have lower fixed costs.

 The
debt service requirements of any other permitted indebtedness we incur or issue in the future, as well as the restrictive covenants contained
in the governing documents for any such indebtedness, could intensify these risks.

 If
we are unable to make the required cash payments, there could be a default under one or more of the instruments governing our indebtedness.
Any such default or acceleration may further result in an event of default and acceleration of our other indebtedness. In such event,
or if a default otherwise occurs under our indebtedness, including as a result of our failure to comply with the financial or other covenants
contained therein, the holders of our indebtedness could require us to immediately repay the outstanding principal and interest on such
indebtedness in cash, in some cases subject to a premium. Furthermore, the holders of our secured indebtedness could foreclose on their
security interests in our assets.

 If
we are required to make payments under our indebtedness in cash and are unable to generate sufficient cash flow from operations, we may
be required to sell assets, or we may seek to refinance the remaining balance, by either refinancing with the holder of the indebtedness,
by raising sufficient funds through a sale of equity or debt securities or by obtaining a credit facility. No assurances can be given
that we will be successful in making the required payments under our indebtedness, or in refinancing our obligations on favorable terms,
or at all. Our ability to refinance our indebtedness will depend on the capital markets and our financial condition at such time. A failure
to refinance could have a material adverse effect on our liquidity, financial position, and results of operations. Should we refinance,
it could be dilutive to shareholders or impose onerous terms on us.

 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.

 Since
we have a limited operating history, and have not generated any significant revenues, you will have little basis upon which to evaluate
our ability to achieve our business objective. We are subject to all of the problems, expenses, delays and other risks inherent in any
new business, as well as problems inherent in establishing name recognition and business reputation.

 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.

 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. (Nasdaq: EXAS) have published preliminary data on such biomarkers and have publicly expressed a commitment
to advancing them to commercialization. Investigators at Johns Hopkins University associated with a privately held firm called Previse
have published limited data on methylation biomarkers for BE. Of note, both groups used the EsophaCap "sponge-on-a-string"
cell collection device.

 Other
manufacturers have developed noninvasive esophageal cell collection devices most notably "sponge-on-a-string" devices which
may compete with EsoCheck. 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. The expanded sponge brushes the lining of the
esophagus as it is withdrawn and retrieved. 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,
these devices do not provide anatomic targeting nor protect their sample from dilution and contamination during device withdrawal, future
biomarkers may have sufficient sensitivity to detect BE-EAC despite such dilution and contamination. Manufacturers may also be developing
new tools that have not yet been announced that provide noninvasive esophageal cell sampling with the same or better protection from
dilution and contamination as EsoCheck.

 Several
well-capitalized companies are developing "liquid biopsy" tests for early cancer detection based on circulating tumor DNA.
Although none of these tests yet purport to detect early precancer in the bloodstream, technological advances could result in sufficient
sensitivity to do so generally and for conditions along the BE-EAC spectrum. 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.

 Additional,
still unproven, technologies with the potential to compete with EsoGuard and EsoCheck in the future, include breath tests and oral tests
which may be capable of identifying the presence of BE. For example, there is early data to suggest that an "electric nose"
device which measures volatile organic compounds (VOCs) developed by The eNose Company, based in the Netherlands, may be able to identify
patients with BE. 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.

 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. 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. Our potential competitors may have substantially greater financial, marketing,
sales, distribution, manufacturing, and technological resources. These competitors may also have broader product lines and greater name
recognition than we do. Many of these competitors will have obtained FDA or other regulatory clearances or approvals, and patent protection,
for their products, or are in the process of seeking such clearances, approvals, and protection. Certain of our potential competitors
may commercialize their products in advance of our products. In addition, our competitors may make technical advances that render our
products obsolete. We may be unable to respond to such technical advances, especially given our focus on the EsoGuard and EsoCheck technology.
Although there can be no assurance that we will pursue the development of any products other than EsoGuard and EsoCheck, even if we do
develop new marketable products or services, our current and future competitors may develop products and services that are more commercially
attractive than ours, and they may bring those products and services to market earlier or more effectively than us.

 We
expect to derive substantially all of our revenues from the EsoGuard and EsoCheck products.

 Although
we may develop additional products based on the technology underlying our EsoGuard and EsoCheck products, or other related technologies
we develop, license, or acquire, we presently expect to derive substantially all of our revenues from sales of our EsoGuard and EsoCheck
products. As such, any factor adversely affecting sales of our products, including the product development and release cycles, regulatory
issues, intellectual property rights issues, market acceptance, product competition, performance and reliability, reputation, price competition
and economic and market conditions, and the other factors discussed in this filing, could adversely affect our business prospects, financial
condition and results of operations, and could threaten the viability of our business.

 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.

 We
are highly dependent on the intellectual property licensed from CWRU, pursuant to which we license the technology underlying our EsoGuard
and EsoCheck products. Other products or services we may develop also may rely on the same technology. In the event that we default in
the payment of any amount when due under the License Agreement, and such amount is not paid within 30 days of notice of nonpayment, CWRU
may terminate the exclusivity of the license or terminate the License Agreement in full. Furthermore, if we breach the agreement, and
we do not cure such breach within the applicable time period, in addition to seeking damages, CWRU could terminate the License Agreement.
Any termination of the License Agreement resulting in the loss of the licensed rights would prevent us from marketing and selling the
EsoGuard and EsoCheck products and any other products or services we may develop based on the same underlying technology. Any termination
of the exclusivity of the license could damage our competitive position within the marketplace. In addition, disputes may also arise
between us and CWRU regarding the License Agreement. If any such dispute results in an impairment of our ability to use the intellectual
property, we may be unable to commercialize the EsoGuard and EsoCheck products and any other product or service we may develop based
on the same underlying technology. 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. Our ability to generate revenues from product sales and to achieve profitability
will depend upon our ability to successfully commercialize the EsoGuard and EsoCheck products and any other products, tests or services
we develop. Because we have just begun to offer our products, tests or services for sale, we have no basis to predict whether any of
our products will achieve market acceptance. 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.

 The
sizes of the markets for our current and future products have not been established with precision, and may be smaller than we estimate.

 Our
estimates of the annual total addressable markets for our current products are based on a number of internal and third-party estimates,
including, without limitation, the number of patients with esophageal cancer and precancer, the number of individuals who are at a higher
risk for developing cancer, and the assumed prices at which we can sell tests for markets that have not been established. While we believe
our assumptions and the data underlying our estimates are reasonable, these assumptions and estimates may not be correct and the conditions
supporting our assumptions or estimates may change at any time, thereby reducing the predictive accuracy of these underlying factors.
As a result, our estimates of the annual total addressable market for our current or future products may prove to be incorrect. If the
actual number of patients who would benefit from our products, the price at which we can sell our products, or the annual total addressable
market for our products is smaller than we have estimated, it may impair our sales growth and have an adverse impact on our business.

 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.

 Long-term
adoption of our products as well as payment and coverage for them may depend on their recommendation in clinical practice guidelines.
These include professional society guidelines published by gastroenterology specialty societies, such as the American College of Gastroenterology
(ACG), the American Gastroenterological Association (AGA), and the American Society for Gastrointestinal Endoscopy (ASGE), internal medicine
and family practice societies such as the American College of Physicians (ACP) and American Academy of Family Physicians (AAFP), and
oncology societies such as the American Cancer Society (ACS). These also include federal agencies and federally funded affiliates such
as the U.S. Preventative Services Task Force ("USPSTF") and the Agency for Healthcare Research & Quality ("AHRQ").
The recommendations in these clinical practice guidelines may shape payors' coverage decisions.

 The
USPSTF, a panel of primary care physicians and epidemiologists and other national experts funded by the U.S. Department of Health and
Human Services' AHRQ, makes influential recommendations on clinical preventative services. We may seek a USPSTF recommendation
in the future. The process of USPSTF recommendation development is lengthy, requires high quality supporting evidence for a positive
recommendation, and the outcome of any USPSTF process is uncertain.

 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
capacity to conduct clinical trials and commercialize our products will depend in part on our ability to manufacture or provide our products
on a large scale, at a competitive cost and in accordance with regulatory requirements. We must establish and maintain a commercial scale
manufacturing process for all of our products to complete clinical trials. 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.

 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 have limited experience in large-scale
product manufacturing, nor do we have the resources or facilities to manufacture most of our products on a commercial scale. We cannot
guarantee that we or our third-party manufacturers will be able to increase capacity in a timely or cost-effective manner, or at all.

 Initially,
we will not directly manufacture our products and will rely on third parties to do so for us. If our manufacturing and distribution agreements
are not satisfactory, we may not be able to develop or commercialize products as planned. In addition, we may not be able to contract
with third parties to manufacture our products in an economical manner. Furthermore, third-party manufacturers may not adequately perform
their obligations, may delay clinical development or submission of products for regulatory approval or otherwise may impair our competitive
position. We may not be able to enter into or maintain relationships with manufacturers that comply with good manufacturing practices.
If a product manufacturer fails to comply with good manufacturing practices, we could experience significant time delays or we may be
unable to commercialize or continue to market the products. Changes in our manufacturers could require costly new product testing and
facility compliance inspections. In the United States, failure to comply with good manufacturing practices or other applicable legal
requirements can lead to federal seizure of violative products, injunctive actions brought by the federal government, and potential criminal
and civil liability on the part of a company and its officers and employees. Because of these and other factors, we may not be able to
replace our manufacturing capacity quickly or efficiently in the event that our manufacturers are unable to manufacture our products
at one or more of their facilities. As a result, the sales and marketing of our products could be delayed or we could be forced to develop
our own manufacturing capacity, which could require substantial additional funds and personnel and compliance with extensive regulations.

 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.

 Our
EsoGuard test is performed in a single commercial clinical laboratory facility. If demand for our EsoGuard test grows, we may lack adequate
facility space and capabilities to meet increased processing requirements. 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. The laboratory facility, without purchasing additional
lab equipment applicable to our test, is expected to have an annual capacity of approximately 50,000 tests per year. 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. In addition, our financial condition
may be adversely affected if they are unable to complete these expansion projects on budget and otherwise on terms and conditions acceptable
to us. Finally, our financial condition will be adversely affected if demand for our products and services does not materialize in line
with our current expectations and if, as a result, we end up building excess capacity that does not yield a reasonable return on our
investment.

 If
our present, or any future, laboratory facilities were to be damaged, destroyed or otherwise unable to operate, whether due to fire,
floods, storms, tornadoes, other inclement weather events or natural disasters, employee malfeasance, terrorist acts, power outages,
or otherwise, our business could be severely disrupted. We may not be able to perform our EsoGuard test or generate test reports as promptly
as patients and healthcare providers require or expect, or possibly not at all. If we are unable to perform our EsoGuard test or generate
test reports within a timeframe that meets patient and healthcare provider expectations, our business, financial results and reputation
could be materially harmed.

 We
currently maintain insurance against damage to our property and equipment and against business interruption, subject to deductibles and
other limitations. If we have underestimated our insurance needs with respect to an interruption, or if an interruption is not subject
to coverage under our insurance policies, we may not be able to cover our losses.

 Our
results of operations can be adversely affected by labor shortages, turnover, and labor cost increases.

 Labor
is a significant component of operating our business. A number of factors may adversely affect the labor force available to us or increase
labor costs, including high employment levels, federal unemployment subsidies, increased wages offered by other employers, vaccine mandates
and other government regulations and our responses thereto. As more employers offer remote work, we may have more difficulty recruiting
for jobs that require on-site attendance, such as certain clinical laboratory and sales roles. Although we have not experienced any material
labor shortage to date, we have recently observed an overall tightening and increasingly competitive labor market. 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. If we are unable to hire and retain employees capable of performing at a high
level, or if mitigating measures we may take to respond to a decrease in labor availability have unintended negative effects, our business
could be adversely affected.

 Additionally,
the operations of our vendors and partners could also suffer from labor shortages, turnover, and labor cost increases which could result
in supply chain disruptions and increases in the costs of the products and services we purchase, each of which could adversely affect
our operations.

 We
expect to rely on courier delivery services to transport EsoCheck devices and EsoGuard specimen kits to physicians and other medical
professionals and samples back to laboratory facilities for analysis. If these delivery services are disrupted or become prohibitively
expensive, customer satisfaction and our business could be negatively impacted.

 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. Disruptions in delivery service, whether
due to bad weather, natural disaster, labor disruptions, terrorist acts or threats, or for other reasons, can adversely affect customer
satisfaction, specimen quality and our ability to provide our services on a timely basis. If the courier delivery services that transport
EsoCheck devices or EsoGuard specimen kits institute significant price increases, our profitability would be negatively affected and
we may need to identify alternative delivery methods, if possible, modify our service model, or attempt to raise our pricing, which may
not be possible with regard to Medicare claims or commercially practicable with regard to commercial claims.

 If
we attempt to bring any other products or services to market in addition to the EsoGuard test and EsoCheck device, we likely will be
required to make significant investments in research and development, which ultimately may prove unsuccessful. Our future performance
may be affected by the success of products we have not yet developed, licensed, acquired.

 Although
there can be no assurance that we will pursue the development of any products or services other than the EsoGuard test and EsoCheck device,
we may develop additional products or services based on the same underlying technologies or other technologies we develop, license, or
acquire. If we attempt to bring any other such products or services to market, we likely will incur significant expenses on research
and development efforts, which ultimately may prove unsuccessful.

 Our
officers may allocate their time to other businesses thereby potentially limiting the amount of time they devote to our affairs. This
conflict of interest could have a negative impact on our operations.

 Our
officers and directors are not required to commit their full time to our affairs, which could create a conflict of interest when allocating
their time between our operations and their other commitments. We presently expect each of our employees to devote such amount of time
as they reasonably believe is necessary to our business. All of our officers are engaged, at least to some degree, in other business
endeavors and are not obligated to devote any specific number of hours to our affairs. If our officers' other business affairs
require them to devote more substantial amounts of time to such affairs, it could limit their ability to devote time to our affairs and
could have a negative impact on our operations. We cannot assure you these conflicts will be resolved in our favor.

 Our
ability to be successful will be totally dependent upon the efforts of our key personnel.

 Our
ability to successfully carry out our business plan is dependent upon the efforts of our key personnel. We cannot assure you that
any of our key personnel will remain with us for the immediate or foreseeable future. The unexpected loss of the services of our key
personnel could have a detrimental effect on us. We may also be unable to attract and retain additional key personnel in the future.
We are limited in shares available for issuance under our long-term incentive plan, which could limit our ability to attract and
retain key personnel, until such amount is increased. An inability to attract and retain key personnel may impact our ability to
continue and grow our operations.

 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.

of our officers and directors have fiduciary obligations to other companies engaged in medical device business activities. Accordingly,
they may participate in transactions and have obligations that may be in conflict or competition with our business. As a result, a potential
business opportunity may be presented by certain members of our board or management team to another entity prior to its presentation
to us and we may not be afforded the opportunity to engage in such a transaction.

 Our
business may suffer if we are unable to manage our growth.

 If
we fail to effectively manage our growth, our ability to execute our business strategy could be impaired. Any unanticipated rapid growth
of our business may place a strain on our management, operations and financial systems. We need to ensure our existing systems and controls
are adequate to support our business and its anticipated 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.

 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). 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.

 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.

 We
may in the future enter into transactions to acquire other businesses, products, services or technologies. Because we have not made
any major acquisitions to date, our ability to do so successfully is unproven. If we do identify suitable candidates, we may not be
able to make such acquisitions on favorable terms or at all. Any acquisitions we make in the future may not strengthen our products,
technologies or businesses or otherwise improve our competitive position, and these transactions may be viewed negatively by
investors, healthcare providers, patients and others. For example, we may be unable to timely and effectively integrate the acquired
businesses into our business; we may lose key employees; we may encounter potential unknown liabilities and unforeseen risks,
including liabilities associated with contracts containing consent and/or other provisions that may be triggered by the
acquisitions; we may be unable to realize the anticipated benefits of the acquisitions or do so within the anticipated timeframe; or
we may be unable to effectively manage our expanded operations. In addition to the risks outlined above, we may decide to incur debt
in connection with an acquisition or issue our common stock or other securities to the stockholders of the acquired company, which
would reduce the percentage ownership of our existing stockholders. 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.

 We
may become subject in the ordinary course of business to material legal actions related to, among other things, intellectual property
disputes, contract disputes, data and privacy issues, professional liability and employee-related matters. We may also receive inquiries
and requests for information from governmental agencies and bodies, including CMS or private payors, requesting comment and/or information
on allegations of billing irregularities, billing and pricing arrangements, or privacy practices that are brought to our attention through
audits or third parties. Legal actions could result in substantial monetary damages, as well as damage to our reputation with customers
and diversion of the attention of our management, which could have a material adverse effect upon its business.

 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.

 Successful
commercialization of our EsoGuard test and EsoCheck device, and of any other product or service we develop, license or acquire depends,
in large part, on the availability of adequate reimbursement from private or governmental third-party payors.

 EsoGuard's
PLA code 0114U has been granted "gapfill" determination through the CMS CLFS process, allowing us to engage directly with
Medicare Administrative Contractor ("MAC") Palmetto GBA, whose Molecular Diagnostics Program ("MolDx") performs
technical assessment of molecular diagnostic tests on behalf of itself and other MACs. Although CMS granted EsoGuard final Medicare payment
determination of $1,938.01, effective January 1, 2021, we have not received a final Medicare local coverage determination from MolDx.
Most recently, in May 2023, a final Local Coverage Determination ("LCD") L39256, entitled " Molecular Testing for
Detection of Upper Gastrointestinal Metaplasia, Dysplasia, and Neoplasia " became effective on the CMS website by MAC Palmetto
GBA. (A substantially identical LCD was published by Noridian Healthcare Solutions, the MAC whose geographic jurisdiction covers our
CLIA laboratory in Lake Forest, CA.) The LCD outlines criteria for future coverage that MolDX expects upper gastrointestinal precancer
and cancer molecular diagnostic tests to meet. These criteria include active GERD with at least two risk factors, as well as evidence
of analytic validity, clinical validity, and clinical utility. 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. 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.

 Commercial
third-party payors often rely upon Medicare coverage policy and payment limitations in setting their own reimbursement policies. Third-party
payors are increasingly attempting to contain healthcare costs by limiting both coverage and the level of reimbursement for new healthcare
products. As a result, there is uncertainty surrounding whether EsoGuard or EsoCheck will be eligible for coverage by third-party payors
or, if eligible for coverage, what the reimbursement rates will be. Reimbursement of esophageal precancer and cancer screening by a third-party
payor may depend on a number of factors, including a payor's determination that tests using our technologies are sufficiently sensitive
and specific for esophageal cancer and precancer; not experimental or investigational; approved or recommended by the major guidelines
organizations; reliable, safe and effective; medically necessary; appropriate for the specific patient; and cost-effective.

 Coverage
determinations and reimbursement rates are also subject to the effects of federal and state coverage mandates and other healthcare regulations
and reform initiatives as described below. As noted below, federal and state coverage mandates may be deemed not to apply to EsoGuard
and EsoCheck, may be interpreted in a manner unfavorable to us, may be difficult to enforce and are subject to repeal or modification.

 In
addition to the risk of adverse reimbursement decisions, we also may experience material delays in obtaining such reimbursement decisions
and payment for our EsoGuard test and EsoCheck device that are beyond our control. Further, there can be no assurance that CMS and other
third-party payors who initially decide to cover our products will continue to do so. Coverage determinations and reimbursement rates
are subject to change, including as a result of reimbursement rate adjustments under the Protecting Access to Medicare Act of 2014, ("PAMA")
as described below, and we cannot guarantee that even if we initially achieve coverage and adequate reimbursement rates, they will continue
to be applicable to our products in the future. Furthermore, it is possible that Medicare or other federal payors that provide reimbursement
for our tests may suspend, revoke or discontinue coverage at any time, may require co-payments from patients, or may reduce the reimbursement
rates payable to us.

 If
we are unable to obtain favorable decisions from third-party payors, including CMS and managed care organizations, approving reimbursement
at adequate levels for our EsoGuard test and EsoCheck device, and any other product or service we may develop, or if coverage is later
revoked or reimbursement levels are reduced, our commercial success will be compromised, our ability to raise capital may be restricted
and our revenues would be significantly limited. 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.

 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 example, if we do not have
a contract with a given payor, we may be deemed an "out-of-network" provider by that payor, which could result in the payor
allocating a portion of the cost of the EsoGuard test or EsoCheck device to the patient, notwithstanding any applicable coverage mandate.
We may be unsuccessful in our efforts to enter into, or maintain, a network contract with a given payor, and we expect that our network
status with a given payor may change from time to time for a variety of reasons, many of which may be outside our control. To the extent
EsoGuard or EsoCheck is out of network for a given payor, physicians may be less likely to prescribe EsoGuard and EsoCheck for their
patients and their patients may be less likely to comply with those prescriptions that are written. Also, some payors may require that
they give prior authorization for an EsoGuard test or EsoCheck device before they are willing to pay for it or review claims post-service
to ensure the service was medically appropriate for specific patients. Prior authorization and other medical management practices may
require that we, patients or physicians provide the payor with extensive medical records and other information. Prior authorization and
other medical management practices impose a significant additional cost on us, may be difficult to comply with given our position as
a laboratory that generally does not have direct access to patient medical records, may make physicians less likely to prescribe EsoGuard
and EsoCheck for their patients, and may make patients less likely to comply with physician orders for EsoGuard and EsoCheck, all or
any of which may have an adverse effect on our revenues. Payment rates also may vary according to the use of the product and the clinical
setting in which it is used, may be based on payments allowed for lower cost products that are already reimbursed and may be incorporated
into existing payments for other services.

 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. While we are confident that the proposed policy
will not have a material impact on our business, there can be no assurance that will be the case.

 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. If finalized, FDA believes
that this phaseout may also foster the manufacturing of innovative IVDs for which FDA has determined there is a reasonable assurance
of safety and effectiveness. As 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.

 It
is currently anticipated that FDA will finalize the proposed policy by April 2024. Once the final policy is released, we will implement
the QS requirements in the recommended staged approach and conduct pre-submission meetings with FDA to seek agreement on regulatory pathway
for EsoGuard premarket submission. As required by the final policy, we will submit the regulatory premarket submission to the FDA as
per the timeframe defined in the final policy. 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. However, there can be no assurance that we will be able to successfully transition the
platform to fulfill the QS requirements, if and when required by FDA, and our failure to do so could have a material impact on our ability
to commercialize EsoGuard and on our business as a whole.

 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.

 We
perform the EsoGuard test in our own CLIA-certified commercial clinical laboratory, and like all clinical laboratories which perform
non-research laboratory testing on human samples in the U.S., it is regulated by CMS through CLIA and associated federal regulations
set forth in 42 CFR § 493, as well as through other federal and state laws and regulations. Federal CLIA requirements and laws of
certain states impose certification requirements for clinical laboratories, establish standards for quality assurance and quality control,
among other things. Some state laws restrict laboratory marketing activities, which may adversely affect our ability to market our laboratory
services. Clinical laboratories are subject to inspection by regulators, and to sanctions for failing to comply with applicable requirements.
Sanctions available under CLIA include prohibiting a laboratory from running tests, requiring a laboratory to implement a corrective
plan, and imposing civil monetary penalties. 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.

may not be jointly marketed as a combined product with EsoCheck without first securing FDA approval of the combined product as an IVD
device. If FDA deems that we are jointly marketing such an IVD product with EsoCheck without FDA approval of the combined product as
an IVD device, we would be subject to FDA enforcement action which could limit or halt commercialization of our products, and result
in FDA sanctions which could severely impact our business.

has received FDA 510(k) clearance permitting us to market it in the U.S. as a cell collection device indicated for use in the collection
and retrieval of surface cells of the esophagus in the general population of adults, 22 years of age and older. EsoGuard, on the other
hand, has not received FDA approval to be marketed as an IVD device and is being marketed as an LDT. As such we must market EsoGuard
and EsoCheck as separate products. Jointly marketing EsoGuard as a combined product with EsoCheck would require us to secure FDA approval
of the combined product as an IVD device. If we were to jointly market such products, even inadvertently, without such FDA approval we
would be subject to FDA enforcement actions which could result in fines, unanticipated compliance expenditures, recall or seizures of
our products, total or partial suspension of production or distribution, restrictions on labeling and promotion, termination of ongoing
research, disqualification of data for submission to regulatory authorities, enforcement actions, injunctions and criminal prosecution.
Responding to such actions could cause us to incur significant expense, limit or halt commercialization of our products and severely
impact our business.

 Securing
FDA approval of EsoGuard as an IVD device, separately or as a combined product with EsoCheck, is a complex process requiring substantial
time, commitment of resources and expense without any assurance that FDA will grant such approval.

 FDA
has indicated to us through its pre-submission process that jointly marketing EsoGuard combined with EsoCheck as an IVD device would
be subject to PMA premarket approval, the most stringent FDA premarket medical device scientific and regulatory review process, which
requires sufficient valid scientific evidence in addition to general and special controls to assure that it is safe and effective for
its intended use(s). If we choose, or are required, as a result of changes in LDT regulation, to secure FDA approval of EsoGuard as an
IVD device, even if not combined with EsoCheck, we expect we would this require FDA PMA approval.

 The
process of securing FDA PMA approval is complex and requires substantial time, commitment of resources and expense. The process may take
many years to complete, and approval may never be obtained. It requires us to demonstrate with substantial evidence, gathered in preclinical
and large, complex well-controlled clinical trials, that the planned product is safe and effective for use for as intended. We may not
conduct such a trial or may not successfully enroll or complete any such trial, if required. Any products we may develop may not achieve
the required primary endpoint in the clinical trial and may not receive regulatory approval. We must also demonstrate that the manufacturing
facilities, processes and controls for any products we may develop are adequate.

 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. If we are unable to successfully obtain or maintain regulatory clearance
or approval to sell any products we may develop in the U.S., our business, financial condition, results of operations and growth prospects
could be adversely affected. Furthermore, delays in receipt of clearances or approvals could materially delay or prevent us from commercializing
our products and services or result in substantial additional costs that could decrease our profitability. Even if we were to successfully
obtain and maintain regulatory clearance or approval for a product, any clearance or approval might contain significant limitations related
to use restrictions for specified age groups, warnings, precautions or contraindications, or may be subject to burdensome post-approval
study or risk management requirements.

 FDA
can delay, limit, or deny clearance or approval of a future product for many reasons, including but not limited to:

 a
 future product may not be deemed to be safe and effective;

 FDA
 officials may not find the data from clinical and preclinical studies sufficient;

 FDA
 may not approve our or our third-party manufacturer's processes or facilities; or

 FDA
 may change its clearance or approval policies or adopt new regulations.

 If
any products we may develop fail to demonstrate safety and efficacy, or otherwise do not gain regulatory clearance or approval, our business
and results of operations will be materially and adversely harmed.

to obtain regulatory approvals in foreign jurisdictions will prevent us from marketing our products internationally.

 We
intend to seek, as resources permit, distribution and marketing partners for one or more of the products we are developing in foreign
countries. The approval procedures vary among countries and can involve additional clinical testing, and the time required to obtain
approval may differ from that required to obtain FDA approval. Moreover, clinical studies or manufacturing processes conducted in one
country may not be accepted by regulatory authorities in other countries. Approval by FDA does not ensure approval by regulatory authorities
in other countries, and approval by one or more foreign regulatory authorities does not ensure approval by regulatory authorities in
other foreign countries or by FDA. 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. 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.

 For
any product approved pursuant to a PMA, we are required to seek supplemental approval for many types of changes to the approved product,
for which we will need to determine whether a PMA supplement or other regulatory filing is needed or whether the change may be reported
via the PMA Annual Report. Similarly, any modification to a 510(k)-cleared device that could significantly affect its safety or effectiveness,
or that would constitute a major change in its intended use, design, or manufacture, requires new 510(k) clearance or, possibly, approval
of a new PMA. If the FDA requires us to seek approvals or clearances for modifications to our previously approved or cleared products,
for which we concluded that new approvals or clearances are unnecessary, we may be required to cease marketing or distribution of our
products or to recall the modified product until we obtain the approval or clearance, and we may be subject to significant regulatory
fines or penalties. Foreign regulatory regimes may have comparable requirements, which present the same or substantially similar risks.

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. 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.

 Initiating
and completing clinical trials necessary to support regulatory submission will be time-consuming and expensive and their outcome uncertain.
Moreover, the results of early clinical trials are not necessarily predictive of future results, and any product we advance into clinical
trials may not have favorable results in early or later clinical trials. 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. Patient enrollment in clinical trials and completion of patient participation and follow-up depend on many factors, including
the size of the patient population, the nature of the trial protocol, the attractiveness of, or the discomforts and risks associated
with, the treatments received by patients enrolled as subjects, the availability of appropriate clinical trial investigators, support
staff, and proximity of patients to clinical sites and ability to comply with the eligibility and exclusion criteria for participation
in the clinical trial and patient compliance. For example, patients may be discouraged from enrolling in our clinical trials if the trial
protocol requires them to undergo extensive post-treatment procedures or follow-up to assess the safety and effectiveness of our products
or if they determine that the treatments received under the trial protocols are not attractive or involve unacceptable risks, discomforts
or expenditures. Patients may also not participate in our clinical trials if they choose to participate in contemporaneous clinical trials
of competitive products. In addition, patients participating in clinical trials may die before completion of the trial or suffer adverse
medical events unrelated to investigational products.

 Development
of sufficient and appropriate clinical protocols to demonstrate safety and efficacy may be required and we may not adequately develop
such protocols to support clearance and approval. Further, FDA may require us to submit data on a greater number of patients than it
originally anticipated and/or for a longer follow-up period or change the data collection requirements or data analysis for any clinical
trials. Delays in patient enrollment or failure of patients to continue to participate in a clinical trial may cause an increase in costs
and delays in the approval and attempted commercialization of our products or result in the failure of the clinical trial. FDA may not
consider our data adequate to demonstrate safety and efficacy. Such increased costs and delays or failures could adversely affect our
business, operating results and prospects.

 We
expect to depend on clinical investigators, medical institutions and contract research organizations to perform the clinical trials.
If these parties do not successfully carry out their contractual duties or obligations or meet expected deadlines, or if the quality,
completeness or accuracy of the clinical data they obtain is compromised due to the failure to adhere to our clinical protocols or for
other reasons, our clinical trials may have to be extended, delayed or terminated. Many of these factors would be beyond our control.
We may not be able to enter into replacement arrangements without undue delays or considerable expenditures. If there are delays in testing
or approvals as a result of the failure to perform by third parties, our research and development costs would increase, and we may not
be able to obtain regulatory clearance or approval for EsoGuard and any other products we may develop. In addition, we may not be able
to establish or maintain relationships with these parties on favorable terms, if at all. Each of these outcomes would harm our ability
to market EsoGuard and any other products we may develop, license or acquire, or to achieve sustained profitability.

 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. Success in pre-clinical evaluation and
early clinical trials does not ensure that later clinical trials will be successful, and we cannot be sure that the later trials will
replicate the results of prior trials and pre-clinical studies. The clinical trial process may fail to demonstrate that our product candidates
are safe and effective for the proposed indicated uses or otherwise influence medical decisions in the manner we need to show to evidence
the clinical utility of our product candidates, which could cause us to abandon a product candidate and may delay development of others.
Any delay or termination of our clinical trials will delay the filing of our product submissions and, ultimately, our ability to commercialize
our product candidates and generate revenues (in particular where evidence of clinical utility is a critical factor to payor's
decisions around reimbursement). It is also possible that patients enrolled in clinical trials will experience adverse side effects that
are not currently part of the product candidate's profile.

 Our
principal ongoing clinical trials are those that relate to EsoGuard. For a summary of the status and certain information concerning the
results of those trials, please see above under " Background and Overview—Clinical Utility and Clinical Trials ".

 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.

 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.

 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.

 Our
products are the subject of multiple clinical trials and we anticipate they will continue to be so in the future. We have implemented
measures to ensure that data and biological samples that we receive have been collected from, and any procedures that have been performed
using our products have been on, subjects who have provided appropriate informed consent. When we utilize clinical research contractor
or partner with other third parties in connection with our studies, we rely upon them to comply with the requirements to obtain the subject's
informed consent and to comply with applicable laws and regulations. The collection of data and samples in many different countries results
in complex legal questions regarding the adequacy of informed consent and the status of genetic material under a large number of different
legal systems. Those informed consents could be challenged and prove invalid, unlawful, or otherwise inadequate for our purposes. Any
such findings against us, could force us to stop accessing or using data and samples or servicing or conducting clinical trials, which
would hinder our product offerings or development. We could also become involved in legal actions, which could consume our management
and financial resources.

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.

 Even
after regulatory clearance or approval has been obtained for our products, the cleared or approved product and its manufacturer remain
subject to continual review by FDA or non-U.S. regulatory authorities. Our cleared or approved products may be subject to limitations
on the indicated uses for which the product may be marketed, as in the case of the FDA 510(k) marketing clearance for our EsoCheck cell
collection device. Furthermore, future approvals may contain requirements for potentially costly post-marketing follow-up studies to
monitor the safety and efficacy of the approved product. There is a risk that FDA may modify or withdraw the approval of a product if
the results of a post-approval study are not satisfactory or are inconsistent with previous studies. We may rely on third parties, such
as contract research organizations, medical institutions and clinical investigators to conduct any post-approval studies. We will have
limited control over the activities of these third parties and any post-approval studies may be delayed or halted prior to its completion
for reasons outside our control.

 In
addition, we and our cleared or approved products will be subject to extensive and ongoing regulatory requirements by FDA and other regulatory
authorities with regard to the labeling, packaging, adverse event reporting, storage, advertising, promotion and recordkeeping for our
products. We and our contract manufacturers also will be required to comply with current good manufacturing practice ("cGMP")
regulations regarding the manufacture of our products, which include requirements related to quality control and quality assurance as
well as the corresponding maintenance of records and documentation. Further, regulatory authorities must approve these manufacturing
facilities before they can be used to manufacture medical devices, and these facilities are subject to continual review and periodic
inspections by FDA and other regulatory authorities for compliance with cGMP regulations. Operations at these facilities could be interrupted
or halted if FDA or other governmental agency deems the findings of such inspections unsatisfactory.

to comply with FDA or other regulatory requirements could result in fines, unanticipated compliance expenditures, recall or seizures
of our products, total or partial suspension of production or distribution, restrictions on labeling and promotion, termination of ongoing
research, disqualification of data for submission to regulatory authorities, enforcement actions, injunctions and criminal prosecution.
If we or a third party discover previously unknown problems with a product, such as adverse events of unanticipated severity or frequency,
or problems with the facility where the product is manufactured, a regulatory authority may impose restrictions on that product, the
manufacturer or us, including requiring recall of the product from the market or suspension of manufacturing. We also may voluntarily
recall a product. Any recalls could have an adverse effect on our ability to provide our products, which in turn would adversely affect
our financial condition.

 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.

 Our
labeling, advertising, promotional materials and user training materials must comply with FDA and other applicable laws and regulations,
including the prohibition of the promotion of a medical device for a use that has not been cleared or approved by FDA. Obtaining 510(k)
clearance or PMA approval only permits us to promote our products for the uses specifically cleared by FDA. Use of a device outside its
cleared or approved indications is known as "off-label" use. Physicians and consumers may use our products off-label because
FDA does not restrict or regulate a physician's choice of treatment within the practice of medicine nor is there oversight on patient
use of over-the-counter devices. Although we may request additional cleared indications for our current products, FDA may deny those
requests, require additional expensive clinical data to support any additional indications or impose limitations on the intended use
of any cleared product as a condition of clearance. 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.

 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. It is also possible that other federal, state,
or foreign enforcement authorities might take action if they consider our labeling, advertising, promotional, or user training materials
to constitute promotion of an unapproved use, which could result in significant fines, penalties, or other adverse actions under other
statutory authorities, such as laws prohibiting false claims for reimbursement. In that event, we would be subject to extensive fines
and penalties and our reputation could be damaged and adoption of the products would be impaired. Although we intend to refrain from
statements that could be considered off-label promotion of our products, FDA or another regulatory agency could disagree and conclude
that we have engaged in off-label promotion. In addition, any such off-label use of our products may increase the risk of injury to patients,
and, in turn, the risk of product liability claims, and such claims are expensive to defend and could divert our management's attention
and result in substantial damage awards against us.

laboratories and medical diagnostic companies are subject to extensive and frequently changing federal, state, and local laws. We could
be subject to significant fines and penalties if we fail (or if our prior unrelated third-party laboratory partner previously failed)
to comply with these laws and regulations.

 As
a provider of clinical diagnostic products and services, we are subject (and our prior third-party laboratory partner previously was
subject) to extensive and frequently changing federal, state, and local laws and regulations governing various other aspects of our business.
In particular, the clinical laboratory industry is subject to significant governmental certification and licensing regulations, as well
as federal and state laws regarding:

 test
 ordering and billing practices;

 marketing,
 sales and pricing practices;

 health
 information privacy and security, including the Health Insurance Portability and Accountability Act of 1996, or HIPAA, as amended
 by the Health Information Technology for Economic and Clinical Health Act of 2009, or HITECH, and comparable state laws;

 insurance;

 anti-markup
 legislation; and

 consumer
 protection.

 We
are also required to comply with FDA regulations, including with respect to our labeling and promotion activities. In addition, advertising
of our tests is subject to regulation by the Federal Trade Commission, ("FTC") and advertising of laboratory services is
regulated by certain state laws. Violation of any FDA requirement could result in enforcement actions, such as seizures, injunctions,
civil penalties and criminal prosecutions, and violation of any FTC or state law requirement could result in injunctions and other associated
remedies, all of which could have a material adverse effect on our business. Most states also have similar regulatory and enforcement
authority for devices. 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.

 Healthcare
policy has been a subject of extensive discussion in the executive and legislative branches of the federal and many state governments
and healthcare laws and regulations are subject to change. Development of the existing commercialization strategy for our EsoGuard test
and EsoCheck device has been based on existing healthcare policies. We cannot predict what additional changes, if any, will be proposed
or adopted or the effect that such proposals or adoption may have on our business, financial condition and results of operations.

 If
we or our partners fail to comply with these laws and regulations, we could incur significant fines and penalties and our reputation
and prospects could suffer. Additionally, any such partners could be forced to cease offering our products and services in certain jurisdictions,
which could materially disrupt our business.

 We
operate Lucid Test Centers where prescribing physicians can send patients for EsoGuard testing, including undergoing specimen collection
using EsoCheck. 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.

 As
part of our commercialization efforts for EsoGuard, we are operating Lucid Test Centers in jurisdictions where a licensed health care
professional, employed or contracted by us, will perform the esophageal cell collection procedure using EsoCheck and then package the
specimen for transport to our CLIA-certified commercial clinical laboratory. The Lucid Test Centers may be deemed laboratory draw stations
or outpatient centers or clinics, which may be subject to state licensure and operating requirements. In addition, states may require
personnel performing the specimen collection procedure to be licensed and may require collaboration with or supervision by a physician.
The health care professionals may also be subject to malpractice claims. We will need to purchase insurance policies to cover such claims
but the coverage limits on such policies may be insufficient to cover any monetary awards for damages granted for such claims. In certain
states, our Lucid Test Centers may trigger the corporate practice of medicine doctrine, a general prohibition in some jurisdictions against
non-licensed individuals or corporations owning medical practices or employing physicians and other licensed HCPs. In many states, a
general business corporation cannot directly employ health care professionals or enter any arrangement where the physicians or the healthcare
professional is in any way controlled or directed by the corporation. Complying with these state regulations can be complex, burdensome
and costly and we may be unable to do so in certain states, limiting our commercialization efforts and business in those states. The
Lucid Test Centers may be subject to additional state regulations relating to the distribution of the collection devices, test orders,
patient consents, medical necessity requirements and billing regulations.

 We
have invested heavily in regulatory and compliance infrastructure in an effort to ensure compliance with this regulatory framework, however,
we cannot guarantee that we will remain in compliance with these rules at all times. Our failure to comply with these regulations in
the operation of these Lucid Test Centers or in managing the personnel interacting with patients at these centers could subject us to
sanctions, fines or other enforcement actions. Responding to these actions may be costly and time-consuming and may require us to cease
operations at these centers which may limit our commercialization efforts 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. Telemedicine is subject to numerous federal and state regulations and faces particularly intense scrutiny by these
regulators. If we fail to comply with federal healthcare regulations, we could face substantial penalties, sanctions, fines or prosecution
and our business, operations and financial condition could be adversely affected.

 One
element of our growth strategy is to expand EsoGuard commercialization across multiple channels, including by partnership with telemedicine
providers. The logistics required to manage a patient's journey through a telemedicine program, in a manner which is compliant
with all applicable regulations, are complex and require very careful coordination between us and our third-party telemedicine and laboratory
partners broadly operating within our quality management system. Our activities and the activities of our third-party partners on our
behalf within this telemedicine program are subject to numerous federal and state regulations. The telemedicine provider itself may be
subject to additional state regulations relating to the corporate practice of medicine, test orders, patient consents, medical necessity
requirements and billing regulations. Telemedicine faces particularly intense scrutiny from regulators due to numerous cases of companies
failing to operate in this space with a properly functioning regulatory and compliance infrastructure.

 We
cannot guarantee that our personnel or those of our third-party partners will comply with the applicable regulations at all times. If
any such personnel fail to comply with regulations, we could face substantial penalties, sanctions, fines or prosecution and our business,
operations and financial condition could be adversely affected.

 Many
aspects of our business, beyond the specific elements described above, are subject to complex, intertwined, costly and/or burdensome
federal health care laws and regulations which may open to interpretation and be subject to varying levels of discretionary enforcement.
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.

 Even
though we do not and do not expect to control referrals of healthcare services or bill directly to Medicare, Medicaid or other third-party
payors, certain federal and state healthcare laws and regulations pertaining to fraud and abuse and patients' rights are and will
be applicable to our business. We could be subject to healthcare fraud and abuse and patient privacy regulation by both the federal government
and the states in which we conduct our business. The regulations that may affect our ability to operate include, without limitation:

 the
 federal healthcare program Anti-Kickback Statute, which prohibits, among other things, any person from knowingly and willfully offering,
 soliciting, receiving, or providing remuneration, directly or indirectly, in exchange for or to induce either the referral of an
 individual for, or the purchase, order or recommendation of, any good or service for which payment may be made under federal healthcare
 programs, such as the Medicare and Medicaid programs;

 the
 U.S. Foreign Corrupt Practices Act, or "FCPA," which prohibits payments or the provision of anything of value to foreign
 officials for the purpose of obtaining or keeping business;

 the
 federal False Claims Act, or "FCA," which prohibits, among other things, individuals or entities from knowingly presenting,
 or causing to be presented, false claims, or knowingly using false statements, to obtain payment from the federal government, and
 which may apply to entities like us which provide coding and billing advice to customers;

 federal
 criminal laws that prohibit executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare
 matters;

 the
 federal transparency requirements under the Health Care Reform Law requires manufacturers of drugs, devices, biologics and medical
 supplies to report to the Department of Health and Human Services information related to physician payments and other transfers of
 value and physician ownership and investment interests;

 the
 federal Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic
 and Clinical Health Act, which governs the conduct of certain electronic healthcare transactions and protects the security and privacy
 of protected health information, and

 state
 law equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to items or services
 reimbursed by any third-party payor, including commercial insurers.

 The
Patient Protection and Affordable Care Act (the "PPACA"), among other things, amends the intent requirement of the Federal
Anti-Kickback Statute and criminal healthcare fraud statutes. A person or entity no longer needs to have actual knowledge of this statute
or specific intent to violate it. In addition, the PPACA provides that the government may assert that a claim including items or services
resulting from a violation of the Federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the FCA.

 In
2018, Congress passed Eliminating Kickbacks in Recovery Act ("EKRA") as part of the Substance Use-Disorder Prevention that
Promotes Opioid Recovery and Treatment for Patients and Communities Act. Similar to the Anti-Kickback Statute, EKRA imposes criminal
penalties for knowing or willful payment or offer, or solicitation or receipt, of any remuneration, whether directly or indirectly, overtly
or covertly, in cash or in kind, in exchange for the referral or inducement of laboratory testing (among other healthcare services) unless
a specific exception applies. However, unlike the Anti-Kickback Statute, EKRA is not limited to services covered by federal or state
healthcare programs but applies more broadly to services covered by "healthcare benefit programs," including commercial insurers.
EKRA potentially expands the universe of arrangements that could be subject to government enforcement under federal fraud and abuse laws.
In addition, while the Anti-Kickback Statute includes certain exceptions that are widely relied upon in the healthcare industry, not
all of those same exceptions apply under EKRA. 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.

 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. Any penalties, damages, fines, exclusions, curtailment
or restructuring of our operations could adversely affect our ability to operate our business and our financial results. The risk of
us being found in violation of these laws is increased by the fact that many of these laws are broad and their provisions are open to
a variety of interpretations. Any action against us for violation of these laws, even if we successfully defend against that action and
the underlying alleged violations, could cause us to incur significant legal expenses and divert our management's attention from
the operation of our business. If the physicians or other providers or entities with whom we do business are found to be non-compliant
with applicable laws, they may be subject to sanctions, which could also have a negative impact on our business. Moreover, achieving
and sustaining compliance with applicable federal and state privacy, security and fraud laws may prove costly.

 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.

 The
regulations that govern pricing and reimbursement for new products vary widely from country to country. Some countries require approval
of the sale price of a product before it can be marketed. In many countries, the pricing review period begins after marketing clearance
or approval is granted. In some foreign markets, pricing remains subject to continuing governmental control even after initial approval
is granted. As a result, we might obtain regulatory clearance or approval for a product in a particular country, but then be subject
to price regulations that delay our commercial launch of the product and negatively impact the revenue we are able to generate from the
sale of the product in that country. In addition, to obtain reimbursement or pricing approval in some countries, we may be required to
conduct a clinical trial that compares the cost-effectiveness of our product to other available therapies. 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.

 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. If we are unsuccessful, we may not receive payment for EsoGuard tests we perform
for patients on a timely basis, if at all, and we may not be able to provide services for patients with certain healthcare plans. We
may face lawsuits by government or commercial payors if they believe they have overpaid us for our EsoGuard test services. We may face
write-offs of doubtful accounts, disputes with payors and patients, and long collection cycles. We may face patient dissatisfaction,
complaints or lawsuits, including to the extent EsoGuard tests are not fully covered by insurers and patients become responsible for
all or part of the price of the test. As a result, patient compliance in fulfilling prescriptions for EsoGuard could be adversely affected.
To the extent patients express dissatisfaction with our billing practices to their physicians, those physicians may be less likely to
prescribe EsoGuard for other patients, and our business would be adversely affected.

 Even
if payors do agree to cover EsoGuard, our billing and collections process may be complicated by the following and other factors, which
may be beyond our control:

 disputes
 among payors as to which payor is responsible for payment;

 disparity
 in coverage among various payors or among various healthcare plans offered by a single payor;

 payer
 medical management requirements, including prior authorization requirements;

 differing
 information and billing requirements among payors; and

 failure
 by patients or physicians to provide complete and correct billing information.

 Furthermore,
our contracts with a commercial payor may not permit us to bill patients insured by that payor for amounts beyond deductibles, co-payments
and co-insurance as prescribed in the coverage agreement between the payor and the patients. Moreover, when contracted payors do not
cover an EsoGuard test, for example, for failure to satisfy prior-authorization or other payor medical management requirements, we may
not be permitted to collect the balance from the patient and our business may be adversely impacted.

 The
uncertainty of receiving payment for our EsoGuard test and complex laboratory billing processes could negatively affect our business
and our operating results.

 Healthcare
reform measures could hinder or prevent our products' commercial success.

 There
may well be legislative and regulatory proposals at the federal and state levels directed at containing or lowering the cost of health
care. We cannot predict the initiatives that may be adopted in the future or their full impact. 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.

 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. Amendments may require us to resubmit our clinical study protocols to an IRB for reexamination,
which may impact the costs, timing or successful completion of a clinical study. In light of widely publicized events concerning the
safety risk of certain drug and medical device products, regulatory authorities, members of Congress, the Governmental Accounting Office,
medical professionals and the general public have all raised concerns about potential safety issues. These events have resulted in the
recall and withdrawal of medical device products, revisions to product labeling that further limit use of products and establishment
of risk management programs that may, for instance, restrict distribution of certain products or require safety surveillance or patient
education. The increased attention to safety issues may result in a more cautious approach by FDA or other regulatory authorities to
clinical studies and the medical device approval process. Adverse event data from clinical studies may receive greater scrutiny with
respect to product safety, which may make FDA or other regulatory authorities more likely to terminate or suspend clinical studies before
completion, or require longer or additional clinical studies that may result in substantial additional expense and a delay or failure
in obtaining approval or approval for a more limited indication than originally sought.

 Given
the serious public health risks of high profile adverse safety events with certain products, FDA or other regulatory authorities may
require, as a condition of approval, costly risk evaluation and mitigation strategies, which may include safety surveillance, restricted
distribution and use, patient education, enhanced labeling, special packaging or labeling, expedited reporting of certain adverse events,
preapproval of promotional materials and restrictions on direct-to-consumer advertising.

 Our
medical products may in the future be subject to product recalls that could harm our reputation, business, and financial results.

 FDA
has the authority to require the recall of commercialized medical device products in the event of material deficiencies or defects in
design or manufacture. In the case of FDA, the authority to require a recall must be based on an FDA finding that there is a reasonable
probability that the device would cause serious injury or death. Manufacturers may, under their own initiative, recall a product if any
material deficiency in a device is found. A government-mandated or voluntary recall by us or one of our distributors could occur as a
result of component failures, manufacturing errors, design or labeling defects or other deficiencies and issues. Recalls of any of our
products would divert managerial and financial resources and have an adverse effect on our financial condition and results of operations.
FDA requires that certain classifications of recalls be reported to FDA within ten working days after the recall is initiated. Companies
are required to maintain certain records of recalls, even if they are not reportable to FDA. We may initiate voluntary recalls involving
our products in the future that we determine do not require notification of 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 our
medical products have been reported to FDA.

 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.

 Under
FDA medical device reporting regulations, medical device manufacturers are required to report to FDA information that a device has or
may have caused or contributed to a death or serious injury or has malfunctioned in a way that would likely cause or contribute to death
or serious injury if the malfunction of the device or one of our similar devices were to recur. If we fail to report these events to
FDA within the required timeframes, or at all, FDA could take enforcement action against us. Any such adverse event involving our products
also could result in future voluntary corrective actions, such as recalls or customer notifications, or agency action, such as inspection
or enforcement action. Any corrective action, whether voluntary or involuntary, as well as defending ourselves in a lawsuit, will require
the dedication of our time and capital, distract management from operating our business, and may harm our reputation and financial results.

 Product
liability lawsuits against us could cause us to incur substantial liabilities and to limit commercialization of our products.

 We
face an inherent risk of product liability exposure related to the sale of the EsoGuard and EsoCheck products and any other products
we develop. The marketing, sale and use of our products could lead to the filing of product liability claims against us if someone alleges
product failures, product malfunctions, manufacturing flaws, or design defects resulted in injury to patients. We may also be subject
to liability for a misunderstanding of, or inappropriate reliance upon, the information we provide. If we cannot successfully defend
ourselves against claims that a product we developed caused injuries, we may incur substantial liabilities. Regardless of merit or eventual
outcome, liability claims may result in:

 decreased
 demand for our products;

 injury
 to our reputation and significant negative media attention;

 withdrawal
 of patients from clinical studies or cancellation of studies;

 significant
 costs to defend the related litigation and distraction to our management team;

 substantial
 monetary awards to patients;

 loss
 of revenue; and

 the
 inability to commercialize any products that we may develop.

 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.

 The
HIPAA privacy, security and breach notification regulations, including the expanded requirements under HITECH, establish comprehensive
federal standards with respect to the uses and disclosures of protected health information, or "PHI," by health plans, healthcare
providers and healthcare clearinghouses, in addition to setting standards to protect the confidentiality, integrity and security of 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;

 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.

 We
have implemented practices intended to meet the requirements of the HIPAA privacy, security and breach notification regulations, as required
by law. We are required to comply with federal privacy, security and breach notification regulations as well as varying state privacy,
security and breach notification laws and regulations, which may be more stringent than federal HIPAA requirements. In addition, for
healthcare data transfers from other countries relating to citizens of those countries, we must comply with the laws of those countries.
The federal privacy regulations restrict our ability to use or disclose patient identifiable data, without patient authorization, for
purposes other than payment, treatment, healthcare operations and certain other specified disclosures such as public health and governmental
oversight of the healthcare industry.

 HIPAA
provides for significant fines and other penalties for wrongful use or disclosure of PHI, including potential civil and criminal fines
and penalties. Computer networks are always vulnerable to breach and unauthorized persons may in the future be able to exploit weaknesses
in the security systems of our computer networks and gain access to PHI. Additionally, we share PHI with third-parties who are legally
obligated to safeguard and maintain the confidentiality of PHI. Unauthorized persons may be able to gain access to PHI stored in such
third-parties computer networks. Any wrongful use or disclosure of PHI by us or such third-parties, including disclosure due to data
theft or unauthorized access to our or our third-parties computer networks, could subject us to fines or penalties that could adversely
affect our business and results of operations. Although the HIPAA statute and regulations do not expressly provide for a private right
of damages, we could also incur damages under state laws to private parties for the wrongful use or disclosure of confidential health
information or other private personal information.

 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.

 Our
success depends significantly on our ability to protect the patents, trademarks, trade secrets, copyrights and the other intellectual
property rights for the technology used, or expected to be used, in our products. We rely primarily on patent protection and trade secrets,
including the patents to the EsoGuard and EsoCheck technologies licensed by us from CWRU, as well as a combination of copyright and trademark
laws and nondisclosure and confidentiality agreements to protect the technology and other intellectual property on which we rely. However,
these legal means afford only limited protection and may not adequately protect our rights or permit us to gain or maintain any competitive
advantage. In addition, although we have the right to direct CWRU to seek patent protection for the EsoGuard and EsoCheck technology
in additional countries, we have limited control over the prosecution of any such application and have limited control over CWRU's
other intellectual property practices as they relate to the EsoGuard and EsoCheck technologies. Despite our intellectual property rights
practices, it may be possible for a third party to copy or otherwise obtain and use the technology on which we rely without authorization,
develop similar technology independently or design around our patents. Furthermore, protecting intellectual property rights is costly
and time consuming. We are responsible for the costs of CWRU in preparing, filing and prosecuting any patents related to the EsoGuard
technology (subject to a provision for cost sharing in the event CWRU grants additional licenses to the technology, none of which would
be permitted to overlap with our field of use).

 Patents
relied on by us may expire or may be challenged, invalidated, or circumvented, which could limit our ability to stop competitors from
marketing related technologies. If any of the patents fails to protect the technology used by us, it would make it easier for our competitors
to offer similar products. In addition, there is no assurance that competitors will not be able to design around the patents. Upon expiration
of the patents, we may lose some of our rights to exclude others from making, using, selling, or importing products using the technology
based on the expired patents. We cannot be assured that any pending or future patent applications for the technology on which we rely
will result in the issuance of a patent to us. The U.S. Patent and Trademark Office, or the "PTO," may deny or require significant
narrowing of claims in the patent applications, and patents issued as a result of the patent applications, if any, may not provide us
with significant commercial protection or be issued in a form that is advantageous to us. We could also incur substantial costs in proceedings
before the PTO.

 We
also rely on unpatented proprietary technology. We cannot assure you that we can meaningfully protect all our rights in our unpatented
proprietary technology or that others will not independently develop substantially equivalent proprietary products or processes or otherwise
gain access to our unpatented proprietary technology. We seek to protect our know-how and other unpatented proprietary technology with
confidentiality agreements and/or intellectual property assignment agreements with our team members, independent distributors and consultants.
However, such agreements may not be enforceable or may not provide meaningful protection for our proprietary information in the event
of unauthorized use or disclosure or other breaches of the agreements or in the event that our competitors discover or independently
develop similar or identical designs or other proprietary information. Our trade secrets may be vulnerable to disclosure or misappropriation
by employees, contractors, and other persons.

 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.

 Furthermore,
we may not be able to obtain patent protection and other intellectual property rights in all the countries in which we operate, and under
the laws of such countries, patents and other intellectual property rights may be unavailable or limited in scope.

 Any
inability on our part to adequately protect our intellectual property may have a material adverse effect on our business, financial condition
and results of operations.

 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.

 The
medical device industry is characterized by vigorous protection and pursuit of intellectual property rights. Companies in the medical
device industry have used intellectual property litigation to gain a competitive advantage in the marketplace. From time to time, third
parties may assert against us or CWRU their patent, copyright, trademark, and other intellectual property rights relating to technologies
that are important to our business. Searches for existing intellectual property rights may not reveal important intellectual property
and our competitors may also have filed for patent protection, information which is not publicly available, just as claimed trademark
rights may not be revealed through our searches. We may be subject to claims that our team members or CWRU's personnel have disclosed,
or that we have used, or CWRU has used, trade secrets or other proprietary information of our team members' or CWRU's personnel's
former employers. Our efforts to identify and avoid infringing upon third parties' intellectual property rights may not always
be successful. Any claims that our products or processes infringe these rights, regardless of their merit or resolution, could be costly,
time consuming and may divert the efforts and attention of our management and technical personnel. In addition, we may not prevail in
such proceedings given the complex technical issues and inherent uncertainties in intellectual property litigation. In any infringement
litigation against CWRU relating to the EsoGuard technology, we will have the right to assume the defense of such suit at our expense.

 Any
claims of patent or other intellectual property infringement against us or CWRU, even those without merit, could:

 increase
 the cost of our products;

 be
 expensive and/or time consuming to defend;

 result
 in our being required to pay significant damages to third parties;

 force
 us to cease making or selling products that incorporate the challenged intellectual property;

 us to redesign, reengineer or rebrand our products and technologies;

 us to enter into royalty or licensing agreements in order to obtain the right to use a third party's intellectual property
 on terms that may not be favorable or acceptable to us;

 us to develop alternative non-infringing technology, which could require significant effort and expense;

 us to indemnify third parties pursuant to contracts in which we have agreed to provide indemnification for intellectual property
 infringement claims;

 result
 in our customers or potential customers deferring or limiting their purchase or use of the affected products impacted by the claims
 until the claims are resolved; and

 otherwise
 have a material adverse effect on our business.

 Any
of the foregoing could affect our ability to compete or have a material adverse effect on our financial condition and results of operations.

 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.

 We
believe that the success of our business will depend, in significant part, on obtaining patent protection for our products and technologies,
defending our patents and preserving our trade secrets and other proprietary intellectual property rights. Our failure to pursue any
potential claim could result in the loss of our proprietary intellectual property rights and harm our position in the marketplace. Therefore,
we may be forced to pursue litigation to enforce our rights. 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.

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
ability to execute our business strategy depends, in part, on the continued and uninterrupted performance of our information technology
("IT") systems that support our operations and our research and development efforts, and those IT systems within the control
of our contract manufacturers. We are substantially dependent on those IT systems to receive and process EsoGuard test orders, securely
store patient health records and deliver the results of our EsoGuard tests. IT systems are vulnerable to damage from a variety of sources,
including telecommunications or network failures, malicious human acts including cyberattacks, and natural disasters. Despite the precautionary
measures we have taken to prevent unanticipated problems that could affect our IT systems, and the precautionary measures taken by our
contract parties, sustained or repeated system failures that interrupt our ability to generate and maintain data, and in particular to
operate our clinical laboratory, could adversely affect our ability to operate our business. 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. Delays in integration or disruptions to our business from implementation of these new
or upgraded systems could have a material adverse impact on our financial condition and operating results. There can be no assurance
that our process of improving existing systems, developing new systems to support our expanding operations, integrating new systems,
protecting confidential patient information, and improving service levels will not be delayed or that additional systems issues will
not arise in the future. Failure to adequately protect and maintain the integrity of our information systems issues and data may result
in a material adverse effect on our financial position, results of operations and cash flows.

 Our
internal computer systems, or those used by our third-party research institution collaborators, vendors or other contractors or consultants,
may suffer security breaches.

 In
the ordinary course of our business, we and our contract manufacturers store sensitive data, including intellectual property, proprietary
business information, personally identifiable information of our employees and patient health records, in our data centers and on our
networks. The integrity and protection of our own data, and that of our customers and employees, is critical to our business. The regulatory
environment governing information, security and privacy laws is increasingly demanding and continues to evolve. Despite the implementation
of security measures by us and by our contractors, our internal computer systems and those of our contractors may be vulnerable to security
breaches and damage from computer viruses, unauthorized access and ransomware attacks, including the unauthorized encryption of data
stored on our computer network. Any such breach or attack could materially affect business operations and result in a loss of data, damage
to our IT systems, or inappropriate disclosure of confidential or proprietary information, including protected health information, which
is protected by HIPAA and other laws. Any such access, disclosure, or other loss of information could result in legal claims or proceedings,
liability under laws that protect the privacy of personal information, damage to our reputation, and delays in the commercialization
of our products. In addition, we could incur additional cost, expense and the diversion of time and resources to recover from such an
attack, and any such attach could cause our management to conclude that our disclosure controls and procedures were not effective.

 Risks
Associated with Our Relationship with 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.

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. 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. Thus, we are a majority-owned subsidiary of PAVmed, and PAVmed has
a controlling financial interest. In addition, as long as PAVmed continues to control more than 50% of our voting securities, PAVmed
will have the ability to take stockholder action without the vote of any other stockholder and without having to call a stockholder
meeting. 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.

 PAVmed's
interests and objectives as a stockholder may not align with, or may even directly conflict with, your interests and objectives as a
stockholder. For example, PAVmed may be more or less interested in us entering into a transaction or conducting an activity due to the
impact such transaction or activity may have on PAVmed as a company, independent of us. 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
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.

 With
the goal of mitigating the risks flowing from PAVmed's control position, we have decided not to seek exemption as a "controlled
company" from the corporate governance rules of Nasdaq, and therefore will be bound by the same corporate governance principles
as other public companies, including the requirement that a majority of our directors be independent and that we maintain audit, compensation
and nominating committees comprised of independent directors. However, our decision not to rely on the "controlled company"
exemption could change. Although we do not anticipate changing our decision, for so long as a majority of our outstanding common stock
is held by PAVmed (or by any other stockholder or group of stockholders), we could choose to rely on this exemption in the future to
avoid complying with certain of the Nasdaq corporate governance rules, including the rules that require us to have a board comprised
of at least 50% independent directors, to have board nominations either selected, or recommended for the board's selection, by
either a nominating committee comprised solely of independent directors or by a majority of the independent directors and to have officer
compensation determined, or recommended to the board for determination, either by a compensation committee comprised solely of independent
directors or by a majority of the independent directors. Any decision to rely on the "controlled company" exemption will
be disclosed in our annual proxy statement.

 If PAVmed's debt is accelerated due to
its default under the terms thereof, PAVmed could cease to have voting control of the Company.

currently has a significant amount of convertible debt outstanding, which begins to mature in April 2025, and has from time to time
been in default thereunder. PAVmed is currently in compliance with the financial and other covenants under such indebtedness,
although from time to time since the date of issuance of such notes (including, in the case of the indebtedness to market
capitalization ratio test under such notes, as of December 31, 2023), PAVmed was not in compliance with certain financial covenants
thereunder. While the holder of such indebtedness agreed to waive any such non-compliance, there can be no assurance that it will do
so in the future. If the debtholder elects to accelerate PAVmed's indebtedness rather than waiving any such non-compliance, it
is likely PAVmed will not have sufficient cash on hand to pay the amounts due on an acceleration, in which case it may be required
to satisfy its obligations through the transfer of its shares of common stock of the Company to such debtholder. In such event, the
debtholder in turn would 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.

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
certificate of incorporation includes a provision stating that we renounce any interest or expectancy in, or being offered an opportunity
to participate in, any business opportunities, that are presented to our officers, directors, employees or stockholders, or affiliates
thereof, who are also officers, directors, employees or stockholders of PAVmed or affiliates thereof, each a "PAVmed Party,"
and in which a PAVmed Party may have an interest or expectancy, a "PAVmed Opportunity," except as may be prescribed by any
written agreement between us and PAVmed approved by our Board of Directors. In addition, no PAVmed Party will have any duty to communicate
or present such business opportunities to us, and no PAVmed Party will be liable to our company or our stockholders for breach of any
fiduciary duty, including by reason of a PAVmed Party pursuing or acquiring any PAVmed Opportunity. Pursuant to the management services
agreement, no PAVmed Party will pursue any opportunity related to commercializing the EsoGuard diagnostic test and the EsoCheck cell
collection device or developing and commercializing other products that use or enhance the same underlying technology.

 As
a result of the foregoing, a potential business opportunity may be presented by certain members of our management team to another entity
prior to its presentation to us and we may not be afforded the opportunity to engage in such a transaction. In addition, if any PAVmed
Party becomes aware of a potential business opportunity that is a PAVmed Opportunity (other than those specified in the management services
agreement), including any such opportunity relating to any other diagnostic test or medical device, he or she will be entitled to present
those opportunities to another PAVmed Party prior to presenting them to us. Accordingly, any conflicts of interest among us and our officers,
directors, stockholders or their affiliates, including PAVmed and certain of our officers and directors, relating to business opportunities
may not be resolved in our favor, and in cases where the business opportunity is a PAVmed Opportunity and it is presented to another
PAVmed Party, we have waived our right to monetary damages in the event of any such conflict.

 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.

 We
will continue to use PAVmed's services under the MSA until such time as our Board of Directors determines it would be in our best
interest to engage a dedicated management team. Upon termination or amendment of the MSA, we may need to create our own financial, administrative,
operational and other support systems or contract with third parties to replace PAVmed's systems. As such systems will be new,
it may take additional time to fully implement and stabilize these systems. In order to successfully implement our own systems and operate
as a stand-alone business, we must be able to attract and retain a number of highly skilled employees.

 The
services provided under the MSA may not be sufficient to meet our needs and, after we terminate the MSA, we may not be able to replace
these services or facilities at favorable costs and on favorable terms, if at all. Any gap in the services provided by PAVmed, or failure
or significant downtime in our own financial or administrative systems once established, could result in unexpected costs, impact our
results and/or prevent us from paying our suppliers and employees and performing other administrative services on a timely basis and
could materially harm our business, financial condition, results of operations and cash flows.

 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.

 Disputes
may arise between PAVmed and us in a number of areas relating to our past and ongoing relationships, including:

 employee
 allocation, retention and recruiting;

 the
 nature, quality, and pricing of the services PAVmed has agreed to provide us; and

 business
 opportunities that may be attractive to both PAVmed and us.

 We
may not be able to resolve any potential conflicts, and even if we do, the resolution may be less favorable than if we were dealing with
an unaffiliated party.

 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.

 The
trading market for our common stock will depend, in part, on the research and reports that securities or industry analysts publish about
us or our business. Securities and industry analysts currently publish research on our company, but there is no assurance that they will
continue to do so. If no securities or industry analysts cover our company, the trading price for our common stock would likely be negatively
impacted. If one or more of the analysts who cover us downgrade our stock or publish inaccurate or unfavorable research about our business,
our stock price would likely decline. In addition, if our operating results fail to meet the forecast of analysts, our stock price would
likely decline. If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, demand for
our common stock could decrease, which might cause our stock price and trading volume to 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
common stock is listed on the Nasdaq Capital Market. We are required to meet certain financial and liquidity criteria to maintain the
listing of our common stock on Nasdaq. 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.

 If
Nasdaq delists our common stock from trading on its exchange, or we voluntarily remove our common stock from listing, we could face significant
material adverse consequences, including:

 a
 limited availability of market quotations for our common stock;

 reduced
 liquidity with respect to our common stock;

 a
 determination that our shares of common stock are "penny stock" which will require brokers trading in our shares of common
 stock to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market
 for our shares of common stock;

 a
 limited amount of news and analyst coverage for our company; and

 a
 decreased ability to issue additional securities or obtain additional financing in the future.

 Our
stock price may be volatile, and holders of our common stock could incur substantial losses.

 Our
stock price is likely to be volatile. The stock market in general, and the market for life science companies, and medical device
companies in particular, have experienced extreme volatility that has often been unrelated to the operating performance of
particular companies. 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. 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. 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.

 In
addition, on February 15, 2024, PAVmed paid a distribution to its shareholders of approximately 3.3 million shares of our common
stock, thereby increasing our public float and the size of our shareholder base, both of which could increase volatility of our
common stock. PAVmed could make similar distributions in the future, which could further increase the volatility of our stock
price.

 The
market price for our common stock may be influenced by many broad market and industry factors. These broad market and industry factors
may seriously harm the market price of our common stock, regardless of our operating performance. In addition, the market price for our
common stock may be subject to price movements that may not comport with macro, industry or company-specific fundamentals, including,
without limitation, the sentiment of retail investors (including as may be expressed on financial trading and other social media sites
and online forums), the direct access by retail investors to broadly available trading platforms, the amount and status of short interest
in our securities, access to margin debt, trading in options and other derivatives on our common stock and any related hedging and other
trading factors. In the past, following periods of volatility in the market, securities class-action litigation has often been instituted
against companies. Such litigation, if instituted against us, could result in substantial costs and diversion of management's attention
and resources, which could materially and adversely affect our business, financial condition, results of operations and growth prospects.

 We
do not intend to pay any dividends on our common stock at this time.

 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. It is the present intention of our Board of Directors to retain all earnings, if any, for use in
our business operations and, accordingly, our Board of Directors does not anticipate declaring any dividends on our common stock in the
foreseeable future. As a result, any gain you will realize on our common stock will result solely from the appreciation of such shares.

 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.

 As
a public company, we will incur significant legal, accounting and other expenses that we would not incur as a private company. We will
be subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, the other rules and regulations of the Securities
and Exchange Commission, or "SEC," and the rules and regulations of Nasdaq. The expenses that will be required in order to
adequately prepare for being a public company will be material, and compliance with the various reporting and other requirements applicable
to public companies will require considerable time and attention of management. For example, the Sarbanes-Oxley Act and the rules of
the SEC and national securities exchanges have imposed various requirements on public companies, including requiring establishment and
maintenance of effective disclosure and financial controls. Our management and other personnel will need to devote a substantial amount
of time to these compliance initiatives. These rules and regulations will continue to increase our legal and financial compliance costs
and will make some activities more time-consuming and costly, and could also make it more difficult for us to attract and retain qualified
personnel to serve on our Board of Directors, our board committees, or as executive officers.

 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.

 Ensuring
that we have adequate internal financial and accounting controls and procedures in place so that we can produce accurate financial statements
on a timely basis is a costly and time-consuming effort that needs to be re-evaluated frequently. As a public company, we will be required
to maintain internal controls over financial reporting and to report any material weaknesses in such internal controls. Section 404 of
the Sarbanes-Oxley Act requires annual management assessment of the effectiveness of our internal control over financial reporting. However,
our auditors will not be required to formally attest to the effectiveness of our internal control over financial reporting pursuant to
Section 404 of the Sarbanes-Oxley Act until we are no longer an emerging growth company if we continue to take advantage of the exemptions
available to us through the JOBS Act.

 Implementing
any appropriate changes to our internal controls may distract our officers and employees, entail substantial costs to modify our existing
processes and take significant time to complete. These changes may not, however, be effective in maintaining the adequacy of our internal
controls, and any failure to maintain that adequacy, or consequent inability to produce accurate financial statements on a timely basis,
could increase our operating costs and harm our business. In addition, investors' perceptions that our internal controls are inadequate
or that we are unable to produce accurate financial statements on a timely basis could cause investors to lose confidence in the accuracy
and completeness of our financial reports and could cause the market price of our common stock to 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 subject to changing rules and regulations promulgated by a number of governmental and self-regulatory organizations, including the
SEC and Nasdaq, as well as evolving investor expectations around corporate governance and environmental and social practices and disclosures.
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.

 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.

 We
are an "emerging growth company," as defined in the Jumpstart Our Business Startups Act, or the JOBS Act, which was enacted
in April 2012. For as long as we continue to be an emerging growth company, we may take advantage of exemptions from various reporting
requirements that are applicable to other public companies that are not emerging growth companies, including not being required to comply
with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, reduced disclosure
obligations regarding executive compensation in our periodic reports and proxy statements and exemptions from the requirements of holding
a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
We could be an emerging growth company for up to five years, although circumstances could cause us to lose that status earlier. We will
remain an emerging growth company until the earlier of (1) the last day of the fiscal year following the fifth anniversary of the completion
of our initial public offering, (2) the last day of the fiscal year in which we have total annual gross revenue of at least $1.07 billion,
(3) the date on which we are deemed to be a large accelerated filer, which means the market value of our common stock that is held by
non-affiliates exceeds $700.0 million as of the prior June 30th, and (4) the date on which we have issued more than $1.0 billion in non-convertible
debt securities during the prior three-year period. We cannot predict if investors will find our common stock less attractive because
we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading
market for our common stock and our stock price may suffer or be more volatile.

 Under
the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of
the JOBS Act until such time as those standards apply to private companies. We have elected to use the extended transition period for
complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier
of the date we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition
period under the JOBS Act.

 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.

 Provisions
in our corporate charter and our bylaws may discourage, delay or prevent a merger, acquisition or other change in control of us that
stockholders may consider favorable, including transactions in which stockholders might otherwise receive a premium for their shares.
These provisions could also limit the price that investors might be willing to pay in the future for shares of our common stock, thereby
depressing the market price of our common stock. In addition, these provisions may frustrate or prevent any attempts by our stockholders
to replace or remove our current management by making it more difficult for stockholders to replace members of our Board of Directors.
Because our Board of Directors is responsible for appointing the members of our management team, these provisions could in turn affect
any attempt by our stockholders to replace current members of our management team. 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.

 Moreover,
because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which
prohibits a person who owns in excess of 15% of our outstanding voting stock from merging or combining with us for a period of three
years after the date of the transaction in which the person acquired in excess of 15% of our outstanding voting stock, unless the merger
or combination is approved in a prescribed manner.

 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.

 Our
amended and restated certificate of incorporation will require, to the fullest extent permitted by law, subject to limited exceptions,
that derivative actions brought in our name, actions against directors, officers and employees for breach of fiduciary duty and other
similar actions may be brought only in the Court of Chancery in the State of Delaware and, if brought outside of Delaware, the stockholder
bringing the suit will be deemed to have consented to service of process on such stockholder's counsel in any action brought to
enforce the exclusive forum provision. Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock
shall be deemed to have notice of and consented to the forum provisions in our amended and restated certificate of incorporation.

 Notwithstanding
the foregoing, Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability
created by the Exchange Act or the rules and regulations thereunder. In addition, Section 22 of the Securities Act creates concurrent
jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the
rules and regulations thereunder. As a result, the exclusive forum provision will provide that the Court of Chancery and the federal
district court for the District of Delaware will have concurrent jurisdiction over any action arising under the Securities Act or the
rules and regulations thereunder, and the exclusive forum provision will not apply to suits brought to enforce any duty or liability
created by the Exchange Act or the rules and regulations thereunder or any other claim for which the federal courts have exclusive jurisdiction.
To the extent the exclusive forum provision restricts the courts in which our stockholders may bring claims arising under the Securities
Act and the rules and regulations thereunder, there is uncertainty as to whether a court would enforce such provision. Investors cannot
waive compliance with the federal securities laws and the rules and regulations promulgated thereunder.

 This
exclusive forum provision may limit a stockholder's ability to bring a claim in a judicial forum that it finds favorable for disputes
with us or any of our directors, officers, other employees or stockholders, which may discourage lawsuits with respect to such claims.
By requiring a stockholder to bring such a claim in the Court of Chancery (or the federal district court for the District of Delaware,
in the case of an action under the Securities Act or the rules and regulations thereunder), the exclusive forum provision also may increase
the costs to a stockholder of bringing such a claim. 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.

 Item
1B. Unresolved Staff Comments

 Not
applicable.

 Item
1C. Cybersecurity

 Governance

 Our
board administers its cybersecurity risk oversight function directly through our audit committee. Our audit committee has primary responsibility
for overseeing our risk assessment and risk management policies (including with respect to cybersecurity matters). Our audit committee
regularly discusses with management, counsel, and auditors the Company's major risk exposures. This includes potential financial
impact on the Company and the steps taken to monitor and control those risks. Additionally, our board is informed regarding the risks
facing the Company and coordinates with management and our cybersecurity team to ensure our board receives regular risk assessment updates
from management.

 We
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.

 CyberTeam
provides our board and executive leadership team with periodic updates about our cybersecurity program and material risks. This includes
updates on cybersecurity practices, programs, and the status of projects designed to strengthen internal cybersecurity and data protection.

 Risk
Management and Strategy

 Processes
for identifying and assessing cybersecurity risks

 Senior
management, with the support of CyberTeam, monitors current events and trends related to cybersecurity and assesses any potential impact
on current systems and operations. Third-party partners who are in possession of our confidential information are generally required
to notify us in the event of a cybersecurity incident within their systems that have, or are reasonably likely to, compromise the security
of such information. When appropriate, we enlist CyberTeam to perform a risk and security assessment of the cybersecurity protocols and
procedures of critical third-party partners.

 Processes
for managing cybersecurity risks

 CyberTeam
tracks risks and incidents related to cybersecurity until the risk is mitigated to an acceptable level or fully remediated. When risks
are identified, CyberTeam oversees mitigation plans with the risk owner which are communicated to necessary teams and remediation steps
are taken.

 Processes
for incorporating cybersecurity risks into the overall risk management process

 Our
process for identifying, assessing, and managing risks related to cybersecurity generally involves CyberTeam regularly meeting with our
executive leadership team, and when appropriate, our board and/or audit committee to discuss cybersecurity related risks identified and
the potential likelihood and severity of each risk.

 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.

 Item
2. Property

 Our
corporate offices are located at 360 Madison Avenue, 25th Floor, New York, NY 10017, which is leased through our parent corporation PAVmed
Inc. The lease for this space is for seven years and eight months, starting on February 1, 2023, and may not be terminated prior to expiration
of its stated term, except in limited circumstances due to misconduct by our landlord.

 The
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. At this time, we consider our facility space to be
commensurate with our current operations. Notwithstanding, we may obtain additional office space in the future, as warranted by our business
operations.

 Item
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. The Company is not aware of any such pending legal or other proceedings that are reasonably likely to have a material impact
on the Company. Notwithstanding, legal proceedings are subject to inherent uncertainties, and an unfavorable outcome could include monetary
damages, and excessive verdicts can result from litigation, and as such, could result in a material adverse impact on the Company's
business, financial position, results of operations, and /or cash flows. 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.

 Part
II - Other Information

 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. 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.
We do not anticipate paying dividends in the foreseeable future but expect to retain earnings to finance the growth of our business.
Subject to the restrictions described below and applicable law, our board of directors has complete discretion on whether to pay dividends.
Even if our board of directors decides to pay dividends, the form, frequency and amount will depend upon our future operations and earnings,
capital requirements and surplus, general financial condition, contractual restrictions, amongst and other factors deemed relevant.

 As
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. Furthermore, our common stock is junior to our preferred stock
with respect to certain in-kind dividends payable to the holders of such preferred stock.

 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. 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. The holders of the Series B 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.

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.

 Item
6. [Reserved]

 Item
7. Management's Discussion and Analysis of Financial Condition and Results of Operations

 The
following discussion and analysis of our consolidated financial condition and results of operations should be read together with our
consolidated financial statements and related notes appearing elsewhere in this Annual Report on Form 10-K (the "Financial Statements").
Some of the information contained in this discussion and analysis or set forth elsewhere in this Annual Report on Form 10-K, including
information with respect to our plans and strategy for our business and related financing, includes forward-looking statements involving
risks and uncertainties and should be read together with the "Forward-Looking Statements" and "Risk Factors"
sections of this Annual Report on Form 10-K for a discussion of important factors which could cause actual results to differ materially
from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

 Unless
the context otherwise requires, (i) "we", "us", and "our", and the "Company", "Lucid"
and "Lucid Diagnostics" refer to Lucid Diagnostics Inc. and its subsidiaries LucidDx Labs Inc. ("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 "Conformit Europ enne" 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.

 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.

 We
believe that our flagship product, the EsoGuard Esophageal DNA Test, performed on samples collected with the EsoCheck Esophageal Cell
Collection Device, constitutes the first and only commercially available diagnostic test capable of serving as a widespread tool for
the early detection of esophageal precancer, including Barrett's Esophagus ("BE"), in at-risk patients. Early detection
of esophageal precancer allows patients to undergo appropriate monitoring and treatment, as indicated by clinical practice guidelines,
in an effort to prevent progression to esophageal cancer.

is a bisulfite-converted targeted next-generation sequencing (NGS) DNA assay performed on surface esophageal cells collected with EsoCheck.
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. 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%). 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%.

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. When vacuum suction is applied,
the balloon and sampled cells are pulled into the capsule, protecting them from contamination and dilution by cells outside of the targeted
region during device withdrawal. We believe this proprietary Collect+Protect technology makes EsoCheck the only noninvasive esophageal
cell collection device capable of such anatomically targeted and protected sampling.

and EsoCheck are based on patented technology licensed by Lucid from Case Western Reserve University ("CWRU"). 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.

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.

 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.

 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"). 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). Each share of the Series B Preferred Stock
has a stated value of $1,000 and a conversion price of $1.2444. 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. 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).

 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.

 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).
The aggregate gross proceeds to Lucid of this offering was $5.0 million.

 Results
of Operations

 Overview

 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. 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. 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.

 Cost
of revenue

 Cost
of revenues recognized from the delivery of patient EsoGuard test results includes costs related to EsoCheck device usage, shipment of
test collection kits, royalties and the cost of services to process tests and provide results to physicians. We incur expenses for tests
in the period in which the activities occur, therefore, gross margin as a percentage of revenue may vary from quarter to quarter due
to costs being incurred in one period that relate to revenues recognized in a later period.

 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.

 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.

 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. We anticipate our sales and marketing expenses will increase in the future, to the extent we expand our commercial sales
and marketing operations as resources permit and insurance reimbursement coverage for our EsoGuard test expands.

 General
and administrative expenses

 General
and administrative expenses consist primarily of professional fees for accounting, tax, audit and legal services (including those fees
incurred as a result of our being a public company), consulting fees, expenses associated with obtaining and maintaining patents within
our intellectual property portfolio, and certain employee costs, along with the portion of the MSA Fee allocated to general and administrative
expenses.

 We
anticipate our general and administrative expenses will increase in the future to the extent our business operations grow. Furthermore,
we anticipate continued expenses related to being a public company, including fees and expenses for audit, legal, regulatory, tax-related
services, insurance premiums and investor relations costs associated with maintaining compliance as a public company.

and development expenses

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.

 We
plan to incur research and development expenses for the foreseeable future as we continue the development of our existing products as
well as new innovations. Our research and development activities, including our clinical trials, are focused principally on facilitating
insurer reimbursement, encouraging physician adoption and developing product improvements or extending the utility of the lead products
in our pipeline, including EsoCheck and EsoGuard.

 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.

 Results
of Operations - continued

 The
year ended December 31, 2023 as compared to year ended December 31, 2022

 In
the year ended December 31, 2023, revenue was $2.4 million as compared to $0.4 million in the prior year. The $2.0 million increase principally
relates to the revenue for our EsoGuard Esophageal DNA Test performed in our own CLIA laboratory. 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.

 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:

 $1.6 million increase in EsoCheck and EsoGuard supplies costs; and

 $0.8 million increase in compensation related costs, including stock-based compensation.

 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. The net increase of $0.3 million was principally related to:

 $2.0 million increase in compensation related costs principally as a result of an increase in headcount, including stock-based compensation;
 and

 $1.7 million decrease in third party marketing expenses.

 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. The net decrease of $4.7 million was principally related to:

 $8.3 million decrease in stock-based compensation;

 $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

 $0.3 million increase related to outside professional services and facility related costs.

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. The net decrease of $4.0 million was principally related to:

 $5.5 million decrease in development costs, particularly in clinical trial activities and outside professional and consulting fees
 with respect to EsoCure;

 $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

 $0.8 million increase in compensation related costs, including stock-based compensation.

 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.

 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. 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 Company initially
recognized a $0.8 million fair value non-cash expense on the issue date.

 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.

 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. 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. Additionally, we are developing expanded clinical evidence
to support insurance reimbursement adoption by government and private insurers. Further, as resources permit, the Company also intends
to pursue development of other products and services.

 Our
ability to generate revenue depends upon our ability to successfully advance the commercialization of EsoGuard, including significantly
expanding insurance reimbursement coverage, while also completing the clinical studies, product and service development, and necessary
regulatory approval thereof. There are no assurances, however, we will be able to obtain an adequate level of financial resources required
for the long-term commercialization and development of our products and services.

 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 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 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. 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.
These factors raise substantial doubt about the Company's ability to continue as a going concern within one year after the date
the accompanying consolidated financial statements are issued.

 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"). 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). Each share of the Series B Preferred Stock
has a stated value of $1,000 and a conversion price of $1.2444. 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. 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).

 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.

 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). The aggregate gross proceeds to Lucid of this offering was $5.0 million.

 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. 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.

 The March 2023 Senior Convertible Note has a 7.875% annual stated interest
rate, a contractual conversion price of $5.00 per share of the Company's common stock (subject to standard adjustments in the event
of any stock split, stock dividend, stock combination, recapitalization or other similar transaction), and a contractual maturity date
of the two-year anniversary of the date of issuance. The principal of the March 2023 Senior Convertible Note and accrued interest thereon
is convertible at the option of the holder into the Company's common stock at the contractual conversion price. In addition, the
principal of the March 2023 Senior Convertible Note amortizes over 18 months commencing six months after its issuance. The amortization
payments and accrued interest on the March 2023 Senior Convertible Note are payable in shares of the Company's common stock (subject
to the satisfaction of certain customary equity conditions and except for interest payable prior to September 21, 2023), at prices based
on the then current market price.

 Under
the March 2023 Senior Convertible Note, the Company is subject to certain customary affirmative and negative covenants regarding the
incurrence of indebtedness, the existence of liens, the repayment of indebtedness and the making of investments, the payment of cash
in respect of dividends, distributions or redemptions, the transfer of assets, the maturity of other indebtedness, and transactions
with affiliates, among other customary matters. Under the March 2023 Senior Convertible Note, the Company is also subject to
financial covenants requiring that (i) the amount of the Company's available cash shall equal or exceed $5.0 million at all
times, (ii) the ratio of (a) the outstanding principal amount of the notes issued under the SPA, accrued and unpaid interest thereon
and accrued and unpaid late charges, as of the last day of any fiscal quarter commencing with September 30, 2023 to (b) the
Company's average market capitalization over the prior ten trading days, shall not exceed 30%, and (iii) the Company's
market capitalization shall at no time be less than $30 million (the "Financial Tests"). As of December 31, 2023, the
Company was in compliance, and as of the date hereof, the Company is in compliance, with the Financial Tests.

 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).

 Committed
Equity Facility and ATM Facility

 In
March 2022, we entered into a committed equity facility with a Cantor affiliate. Under the terms of the committed equity facility, the
Cantor affiliate has committed to purchase up to $50 million of our common stock from time to time at our request. While there are distinct
differences, the committed equity facility is structured similarly to a traditional at-the-market equity facility, insofar as it allows
us to raise primary equity capital on a periodic basis at prices based on the existing market price. 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.

 In
November 2022, Lucid Diagnostics also entered into an "at-the-market offering" for up to $6.5 million of its common stock
that may be offered and sold under a Controlled Equity Offering Agreement between Lucid Diagnostics and Cantor. 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.

 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. Additionally, our daily operations have been and continue to
be conducted in part by personnel employed by PAVmed, for which we incur an MSA Fee expense. The MSA Fee is charged on a monthly
basis and is subject-to periodic adjustment corresponding with changes in the services provided by PAVmed personnel to the Company,
with any such change in the MSA Fee being subject to approval of the Company and PAVmed boards of directors. 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. 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). 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).

 In
addition, on November 30, 2022, we entered into a payroll and benefit expense reimbursement agreement (the "PBERA") with
PAVmed. Historically, PAVmed has paid for certain payroll and benefit-related expenses in respect of our personnel on our behalf, and
we have reimbursed PAVmed for the same. Pursuant to the PBERA, PAVmed will continue to pay such expenses, and we will continue to reimburse
PAVmed for the same. The PBERA provides that the expenses will be reimbursed on a quarterly basis or at such other frequency as the parties
may determine, in cash or, subject to approval by PAVmed's and our boards of directors, in shares of our common stock, with such
shares valued at the volume weighted average price of such stock during the final ten trading days preceding the later of the two dates
on which such stock issuance is approved by PAVmed's and our boards of directors (subject to a floor price of $0.40 per share),
or in a combination of cash and shares. However, in no event will we issue any shares of our common stock to PAVmed in satisfaction of
all or any portion of the expenses if the issuance of such shares of our common stock would exceed the maximum number of shares of common
stock that we may issue under the rules or regulations of Nasdaq, unless we obtain the approval of our stockholders as required by the
applicable rules of the Nasdaq for issuances of shares of our common stock in excess of such amount.

 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. 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.

 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. GAAP. The preparation
of these consolidated financial statements requires us to make estimates and assumptions affecting the reported amounts of assets, liabilities,
and equity, along with the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the
reported amounts of expenses during the corresponding periods. In accordance with U.S. GAAP, we base our estimates on historical experience
and on various other assumptions we believe are reasonable under the circumstances. Actual results may differ from these estimates under
different assumptions or conditions. 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.

Recognition

 Revenues
are recognized when the satisfaction of the performance obligation occurs, in an amount that reflects the consideration we expect to
collect in exchange for those services. Our revenue is primarily generated by its laboratory testing services utilizing its EsoGuard
Esophageal DNA tests. The services are completed upon release of a patient's test result to the ordering healthcare provider. Revenue
recognized is inclusive of both variable consideration in connection with an individual patient's third-party insurance coverage
policy and fixed consideration in connection with a contracted services arrangement with an unrelated third party legal entity. To determine
revenue recognition for the arrangements that we determine are within the scope of ASC 606, Revenue from Contracts with Customers, we
perform the following five steps: (1) identify the contract(s) with a customer, (2) identify the performance obligations in the contract,
(3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract and (5) recognize
revenue when (or as) the entity satisfies a performance obligation.

 The
key aspects we consider include the following:

 Contracts —Our
customer is primarily the patient, but we do not enter into a formal reimbursement contract with a patient. We establish a contract with
a patient in accordance with other customary business practices, which is the point in time an order is received from a provider and
a patient specimen has been returned to the laboratory for testing. Payment terms are a function of a patient's existing insurance
benefits, including the impact of coverage decisions with Center for Medicare & Medicaid Services ("CMS") and applicable
reimbursement contracts established between us and payers. However, when a patient is considered self-pay, we require payment from the
patient prior to the commencement of our performance obligations. Our consideration can be deemed variable or fixed depending on the
structure of specific payer contracts, and we consider collection of such consideration to be probable to the extent that it is unconstrained.

 Performance
obligations —A performance obligation is a promise in a contract to transfer a distinct good or service (or a bundle of goods
or services) to the customer. Our contracts have a single performance obligation, which is satisfied upon rendering of services, which
culminates in the release of a patient's test result to the ordering healthcare provider. We elected the practical expedient related
to the disclosure of unsatisfied performance obligations, as the duration of time between providing testing supplies, the receipt of
a sample, and the release of a test result to the ordering healthcare provider is far less than one year.

 Transaction
price —The transaction price is the amount of consideration that we expects to collect in exchange for transferring promised
goods or services to a customer, excluding amounts collected on behalf of third parties (for example, some sales taxes). The consideration
expected to be collected from a contract with a customer may include fixed amounts, variable amounts, or both.

 If
the consideration derived from the contracts is deemed to be variable, we estimate the amount of consideration to which it will be entitled
in exchange for the promised goods or services. We limit the amount of variable consideration included in the transaction price to the
unconstrained portion of such consideration. In other words, we recognize revenue up to the amount of variable consideration that is
not subject to a significant reversal until additional information is obtained or the uncertainty associated with the additional payments
or refunds is subsequently resolved.

 When
we do not have significant historical experience or that experience has limited predictive value, the constraint over estimates of variable
consideration may result in no revenue being recognized upon delivery of patient EsoGuard test results to the ordering healthcare provider.
As such, we recognize revenue up to the amount of variable consideration not subject to a significant reversal until additional information
is obtained or the uncertainty associated with additional payments or refunds, if any, is subsequently resolved. Differences between
original estimates and subsequent revisions, including final settlements, represent changes in estimated expected variable consideration,
with the change in estimate recognized in the period of such revised estimate. With respect to a contracted service arrangement, the
fixed consideration revenue is recognized on an as-billed basis upon delivery of the laboratory test report with realization of such
fixed consideration deemed probable based upon actual historical experience.

 Allocate
transaction price —The transaction price is allocated entirely to the performance obligation contained within the contract with
a customer on the basis of the relative standalone selling prices of each distinct good or service.

 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.

 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.

 Under
Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 815, Derivative
and Hedging, ("ASC 815"), a financial instrument containing embedded features and/or options may be required to be bifurcated
from the financial instrument host and recognized as separate derivative asset or liability, with the bifurcated derivative asset or
liability initially measured at estimated fair value as of the transaction issue date and then subsequently remeasured at estimated fair
value as of each reporting period balance sheet date.

 Alternatively,
FASB ASC Topic 825, Financial Instruments, ("ASC 825") provides for the "fair value option" ("FVO")
election. In this regard, ASC 825-10-15-4 provides for the FVO election (to the extent not otherwise prohibited by ASC 825-10-15-5) to
be afforded to financial instruments, wherein the financial instrument is initially measured at estimated fair value as of the transaction
issue date and then subsequently remeasured at estimated fair value as of each reporting period balance sheet date, with changes in the
estimated fair value recognized as other income (expense) in the statement of operations. The estimated fair value adjustment of the
March 2023 Senior Convertible Note is presented in a single line item within other income (expense) in the accompanying consolidated
statement of operations (as provided for by ASC 825-10-50-30(b)). Further, as required by ASC 825-10-45-5, to the extent a portion of
the fair value adjustment is attributed to a change in the instrument-specific credit risk, such portion would be recognized as a component
of other comprehensive income ("OCI") (for which there was no such adjustment with respect to the March 2023 Senior Convertible
Note).

 The
estimated fair values reported utilized the Company's common stock price along with certain Level 3 inputs, in the development of Monte Carlo simulation models, discounted cash flow analyses, and /or Black-Scholes valuation models.
The estimated fair values are subjective and are affected by changes in inputs to the valuation models and analyses, including the Company's
common stock price, the Company's dividend yield, the risk-free rates based on U.S. Treasury security yields, and certain other
Level-3 inputs including, assumptions regarding the estimated volatility in the value of the Company's common stock price and the
volatility of similar entities within the medical device industry. Changes in these assumptions can materially affect the estimated fair
values.

 See
Note 12, Financial Instruments Fair Value Measurements, with respect to the FVO election; and Note 13, Debt, for a discussion
of the March 2023 Senior Convertible Note.

 Stock-Based
Compensation

 Stock-based
awards are made to members of the board of directors of the Company, the Company's employees and non-employees, under each of the
Lucid Diagnostics Inc. 2018 Equity Plan and the PAVmed Inc. 2014 Equity Plan.

 The
grant-date estimated fair value of the stock-based award is recognized on a straight-line basis over the requisite service period, which
is generally the vesting period of the respective stock-based award, with such straight-line recognition adjusted, as applicable, so
the cumulative expense recognized is at-least equal-to-or-greater-than the estimated fair value of the vested portion of the respective
stock-based award as of the reporting date.

 The
Company uses the Black-Scholes valuation model to estimate the fair value of stock options granted under both the PAVmed Inc. 2014 Equity
Plan and the Lucid Diagnostics Inc. 2018 Equity Plan, which requires the Company to make certain weighted-average valuation estimates
and assumptions for stock-based awards, principally as follows:

 With
 respect to the PAVmed Inc. 2014 Equity Plan, the expected stock price volatility is based on the historical stock price volatility
 of PAVmed Inc. common stock over the period commensurate with the expected term with respect to stock options granted to the board
 of directors and employees in the years ended December 31, 2023 and 2022;

 With
 respect to stock options granted under the Lucid Diagnostics Inc. 2018 Equity Plan, the expected stock price volatility is based
 on the historical stock price volatility of Lucid Diagnostics Inc. common stock and the volatilities of similar entities within the
 medical device industry over the period commensurate with the expected term with respect to stock options granted to employees in
 the years ended December 31, 2023 and 2022;

 The
 risk-free interest rate is based on the interest rate payable on U.S. Treasury securities in effect at the time of grant for a period
 commensurate with either the expected term or the remaining contractual term, as applicable, of the stock option; and,

 The
 expected dividend yield is based on annual dividends of $0.00 as there have not been dividends paid to-date, and there is no plan
 to pay dividends for the foreseeable future.

 The
price per share of Lucid Diagnostics Inc. common stock used in the computation of estimated fair value of stock options and restricted
stock awards granted under the Lucid Diagnostics Inc. 2018 Equity Plan is its quoted closing price per share.

 The
price per share of PAVmed Inc. common stock used in the computation of estimated fair value of stock options and restricted stock awards
granted under the PAVmed Inc. 2014 Equity Plan is its quoted closing price per share.

 Recent Accounting Standards Updates Adopted

 In June 2016, the FASB issued Accounting Standards Update ("ASU") No. 2016-13, Financial Instruments-Credit
Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The updated guidance requires companies to measure all expected
credit losses for financial instruments held at the reporting date based on historical experience, current conditions, and reasonable
supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial
assets, including trade receivables. 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.

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. 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. We are
currently evaluating the impact this update will have on our consolidated financial statements and disclosures.

 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 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. We are currently evaluating the impact this update will have on our
consolidated financial statements and disclosures.

 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 amendments in this update should be applied prospectively, and the effective date for each amendment will
be the date on which the SEC's removal of that related disclosure from Regulation S-X or S-K becomes effective. 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.

 Item
7A. Quantitative and Qualitative Disclosure About Market Risk

 Not
applicable.

 Item
8. Financial Statements and Supplementary Data

 Our
consolidated financial statements, together with the report of our independent registered public accounting firm, appear herein commencing
on page F-1 of this Annual Report on Form 10-K and are incorporated herein by reference.

 Item
9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

 None.

 Item
9A. Controls and Procedures

 Evaluation
of Disclosure Controls and Procedures

 Our
management, with the participation of our principal executive officer and our principal financial officer, evaluated the effectiveness
of our disclosure controls and procedures as of December 31, 2023. Based on such evaluation, our principal executive officer and principal
financial officer concluded our disclosure controls and procedures (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act)
were effective as of such date to provide reasonable assurance the information required to be disclosed by us in the reports we file
or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's
rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure information
required to be disclosed by us in the reports we file or submit under the Exchange Act is accumulated and communicated to our management,
including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required
disclosure.

 Management's
Report on Internal Control Over Financial Reporting

 Our
management is responsible for establishing and maintaining an adequate system of internal control over financial reporting, as such term
is defined in Exchange Act Rules 13(a)-15(f). Our system of internal control over financial reporting is designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance
with accounting principles generally accepted in the U.S.

 Our
internal control over financial reporting includes those policies and procedures that:

 pertain
 to the maintenance of records, in reasonable detail, accurately and fairly reflect our transactions and dispositions of our assets;

 provide
 reasonable assurance our transactions are recorded as necessary to permit preparation of our financial statements in accordance with
 accounting principles generally accepted in the U.S., and our receipts and expenditures are being made only in accordance with authorizations
 of our management and our directors; and

 provide
 reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets could
 have a material effect on the financial statements.

 Due
to its inherent limitations, a system of internal control over financial reporting can provide only reasonable assurance and may not
prevent or detect all misstatements. Further, because of changes in conditions, effectiveness of internal controls over financial reporting
may vary over time. Our system contains self-monitoring mechanisms, so actions will be taken to correct deficiencies as they are identified.

 Our
management conducted an evaluation of the effectiveness of the system of internal control over financial reporting based on the framework
in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based
on this evaluation, our management concluded our system of internal control over financial reporting was effective as of December 31,
2023.

 This
Form 10-K does not include an attestation report of our independent registered public accounting firm regarding internal control over
financial reporting. Management's report was not subject to attestation by our registered public accounting firm pursuant to the
rules of the SEC to permit us to provide only management's report in this Form 10-K.

 Changes
to Internal Controls Over Financial Reporting

 There
has been no change in our internal controls over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange
Act) that occurred during the quarter ended December 31, 2023 that has materially affected, or is reasonably likely to materially affect,
our internal controls over financial reporting.

 Item
9B. Other Information

 Rule 10b5-1 Trading Plans

 During the fiscal quarter ended
December 31, 2023, none of our directors or officers (as defined in Rule 16a-1 under the Exchange Act) adopted or terminated a "Rule
10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement" (as those terms are defined in Item 408 of Regulation
S-K).

 Item
9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

 Not
applicable.

 PART
III

 Item
10. Directors, Executive Officers and Corporate Governance

 The
information required by this Item 10 is incorporated by reference to our Proxy Statement for the 2024 Annual Meeting of Stockholders
to be filed with the Securities and Exchange Commission within 120 days of the fiscal year ended December 31, 2023.

 Item
11. Executive Compensation

 The
information required by this Item 11 is incorporated by reference to our Proxy Statement for the 2024 Annual Meeting of Stockholders
to be filed with the Securities and Exchange Commission within 120 days of the fiscal year ended December 31, 2023.

 Item
12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 The
information required by this Item 12 is incorporated by reference to our Proxy Statement for the 2024 Annual Meeting of Stockholders
to be filed with the Securities and Exchange Commission within 120 days of the fiscal year ended December 31, 2023.

 Item
13. Certain Relationships and Related Transactions, and Director Independence

 The
information required by this Item 13 is incorporated by reference to our Proxy Statement for the 2024 Annual Meeting of Stockholders
to be filed with the Securities and Exchange Commission within 120 days of the fiscal year ended December 31, 2023.

 Item
14. Principal Accounting Fees and Services

 The
information required by this Item 14 is incorporated by reference to our Proxy Statement for the 2024 Annual Meeting of Stockholders
to be filed with the Securities and Exchange Commission within 120 days of the fiscal year ended December 31, 2023.

 PART
IV

 Item
15. Exhibits and Financial Statement Schedules

 (a)

 The
 following documents filed as a part of the report:

 (1)

 The
 following financial statements:

 Report of Independent Registered Public Accounting Firm (PCAOB ID #688)

 Consolidated Balance Sheets

 Consolidated Statements of Operations

 Consolidated Statements of Changes in Stockholders' Equity (Deficit)

 Consolidated Statements of Cash Flows

 Notes to Consolidated Financial Statements

 (2)

 The
 financial statement schedules:

 Schedules
 other than those listed above are omitted for the reason they are not required or are not applicable, or the required information
 is shown in the financial statements or notes thereto. Columns omitted from schedules filed have been omitted because the information
 is not applicable.

 (3)

 The
 following exhibits:

 Incorporation
 by Reference

 Exhibit
 No.

 Description

 Form

 Exhibit
 No.

 Date

 2.1

 Asset Purchase Agreement, dated as of February 25, 2022, by and among LucidDx Labs Inc., Lucid Diagnostics Inc. and ResearchDx, Inc.

 2.1

 3/3/2022

 3.1.1

 Amended and Restated Certificate of Incorporation

 S-1/A

 3.1

 3.1.2

 Amendment to Amended and Restated Certificate of Incorporation

 3.1

 6/21/2023

 3.1.3

 Form of Certificate of Designation of Preferences, Rights and Limitations of Series B Convertible Preferred Stock

 3.1

 3/14/2024

 3.2

 Amended and Restated Bylaws

 S-1/A

 3.2

 4.1

 Description of Registrant's Securities

 *

 4.2

 Common Stock Certificate

 S-1/A

 4.1

 4.3

 Form of Senior Secured Convertible Note

 4.1

 3/14/23

 10.1#

 Lucid Diagnostics Inc. Amended and Restated 2018 Long-Term Incentive Equity Plan.

 S-8

 2/10/2023

 10.2

 Amended and Restated License Agreement, dated as of August 23, 2021, by and between Case Western Reserve University and Lucid Diagnostics Inc.

 S-1/A

 10.2

 10/1/2021

 10.3

 License Agreement, dated as of May 20, 2019, by and between PAVmed Inc. and Lucid Diagnostics Inc.

 S-1/A

 10.3

 10/1/2021

 10.4.1

 Management Services Agreement, dated as of May 12, 2018, by and between PAVmed Inc. and Lucid Diagnostics Inc.

 S-1/A

 10.4.1

 10.4.2

 Amendment to Management Services Agreement, dated as of March 1, 2019, by and between PAVmed Inc. and Lucid Diagnostics Inc.

 S-1/A

 10.4.2

 10.4.3

 Second Amendment to Management Services Agreement, dated as of June 5, 2019, by and between PAVmed Inc. and Lucid Diagnostics Inc.

 S-1/A

 10.4.3

 10.4.4

 Third Amendment to Management Services Agreement, dated as of July 20, 2020, by and between PAVmed Inc. and Lucid Diagnostics Inc.

 S-1/A

 10.4.4

 10.4.5

 Fourth Amendment to Management Services Agreement, dated as of February 1, 2021, by and between PAVmed Inc. and Lucid Diagnostics Inc.

 S-1/A

 10.4.5

 10.4.6

 Fifth Amendment to Management Services Agreement, dated as of November 10, 2021, by and between PAVmed Inc. and Lucid Diagnostics Inc.

 10.4.6

 3/14/2023

 10.4.7

 Sixth Amendment to Management Services Agreement, dated as of August 11, 2022, by and between PAVmed Inc. and Lucid Diagnostics Inc.

 10.1

 12/2/2022

 10.4.8

 Seventh Amendment to Management Services Agreement, dated as of May 9, 2023, by and between PAVmed Inc. and Lucid Diagnostics Inc.

 10.7

 5/15/2023

 10.4.9

 Eighth Amendment to Management Services Agreement, dated as of March 22, 2024, by and between PAVmed Inc. and Lucid Diagnostics Inc.

 *

 10.5

 Payroll and Benefit Expense Reimbursement Agreement, dated as of November 30, 2022, by and between PAVmed Inc. and Lucid Diagnostics Inc.

 10.2

 12/2/2022

 Incorporation
 by Reference

 Exhibit
 No.

 Description

 Form

 Exhibit
 No.

 Date

 10.6#

 Form of Stock Option Agreement.

 10.9

 3/14/2023

 10.7#

 Form of Indemnification Agreement.

 S-1/A

 10.9

 10/8/2021

 10.8

 Quality & Manufacturing Master Services Agreement, dated as of September 1, 2021, by and between Coastline International, Inc. and Lucid Diagnostics Inc.

 S-1/A

 10.11

 10/1/2021

 10.9#

 Form of Restricted Stock Agreement.

 S-1/A

 10.12#

 10/8/2021

 10.10#

 Employment Agreement with Lishan Aklog, M.D.

 10.1

 1/20/2022

 10.11#

 Employment Agreement with Dennis M. McGrath

 10.2

 1/20/2022

 10.12.1#

 Employment Agreement with Shaun O'Neil

 10.1

 3/23/2022

 10.12.2#

 Amendment to Employment Agreement with Shaun O'Neil

 *

 10.13#

 Employment Agreement with Michael Gordon

 10.16

 3/14/2023

 10.14.1

 Common Stock Purchase Agreement, dated as of March 28, 2022, by and between CF Principal Investments LLC and Lucid Diagnostics Inc.

 10.1

 4/1/2022

 10.14.2

 Registration Rights Agreement, dated as of March 28, 2022, by and between CF Principal Investments LLC and Lucid Diagnostics Inc.

 10.2

 4/1/2022

 10.15

 Controlled Equity Offering SM, dated as of November 23, 2022, by and between Cantor Fitzgerald & Co. and Lucid Diagnostics Inc.

 S-3

 1.2

 11/23/2022

 10.16.1

 Form of Securities Purchase Agreement

 10.2

 3/14/23

 10.16.2

 Form of Guaranty

 10.3

 3/14/23

 10.16.3

 Form of Registration Rights Agreement

 10.1

 3/24/23

 10.17.1

 Exchange Agreement, dated as of March 13, 2023, by and between Lucid Diagnostics Inc. and the purchasers of Series B Preferred Stock party thereto

 10.1

 3/14/2024

 10.17.2

 Registration Rights Agreement Agreement, dated as of March 13, 2023, by and between Lucid Diagnostics Inc. and the purchasers of Series B Preferred Stock party thereto

 10.2

 3/14/2024

 10.18#

 Lucid Diagnostics Inc. Employee Stock Purchase Plan

 S-8

 10.1

 3/15/2022

 14.1

 Code of Ethics

 1 0-K

 14.1

 3/14/2023

 21.1

 List of Subsidiaries

 *

 23.1

 Consent of Marcum LLP

 *

 31.1

 Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 *

 31.2

 Certification of Principal Financial and Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 *

 32.1

 Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 *

 32.2

 Certification of Principal Financial and Accounting Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 *

 97.1

 Form of Compensation Clawback Policy

 *

 Inline
 and Supplementary Data" of this Annual Report on Form 10-K.

 *

 Inline

 *

 *
Filed herewith.

 #
Indicates management contract or compensatory plan.

Certain confidential portions of this exhibit were omitted by means of marking such portions with asterisks because the identified confidential
portions (i) are not material and (ii) would be competitively harmful if publicly disclosed.

Certain exhibits and schedules have been omitted pursuant to Item 601(b)(10) of Regulation S-K. The registrant hereby undertakes to furnish
a copy of any omitted exhibit or schedule upon request by the Securities and Exchange Commission.

 Item
16. Form 10-K Summary

 None

 SIGNATURES

 Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.

 Lucid
 Diagnostics Inc.

 March

 By:

 /s/
 Dennis M. McGrath

 Dennis
 M. McGrath

 Chief
 Financial Officer

 (Principal
 Financial and Accounting Officer)

 Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the report has been signed by the following persons on behalf
of the Registrant and in the capacities and on the dates indicated. Each person whose signature appears below hereby authorizes both
Lishan Aklog, M.D. and Dennis M. McGrath or either of them acting in the absence of the others, as his or her true and lawful attorney-in-fact
and agent, with full power of substitution and re-substitution for him or her and in his or her name, place and stead, in any and all
capacities to sign any and all amendments to this report, and to file the same, with all exhibits thereto and other documents in connection
therewith, with the United States Securities and Exchange Commission.

 Signature

 Title

 Date

 /s/
 Lishan Aklog, M.D.

 Chairman
 of the Board of Directors

 March

 Lishan
 Aklog, M.D.

 Chief
 Executive Officer

 (Principal
 Executive Officer)

 /s/
 Dennis M. McGrath

 Chief
 Financial Officer

 March

 Dennis
 M. McGrath

 (Principal
 Financial and Accounting Officer)

 /s/
 Stanley N. Lapidus

 Vice
 Chairman

 March

 Stanley
 N. Lapidus

 /s/
 Debra J. White

 March

 Debra
 J. White

 /s/
 James L. Cox, M.D.

 March

 James
 L. Cox, M.D.

 /s/
 Jacque J. Sokolov, M.D.

 March

 Jacque
 J. Sokolov, M.D.

 /s/
 Ronald M. Sparks

 March

 Ronald
 M. Sparks

 LUCID

 and

 (a

TO CONSOLIDATED FINANCIAL STATEMENTS

 Financial
 Statements

 Page

 Report of Independent Registered Public Accounting Firm (PCAOB ID # 688)

 Consolidated Balance Sheets as of December 31, 2023 and 2022

 Consolidated Statements of Operations for the years ended December 31, 2023 and 2022

 Consolidated Statements of Changes in Stockholders' Equity (Deficit) for the years ended December 31, 2023 and 2022

 Consolidated Statements of Cash Flows for the years ended December 31, 2023 and 2022

 Notes to Consolidated Financial Statements

 F- 1

 REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 To
the Stockholders and Board of Directors of

 Lucid
Diagnostics, Inc.

 Opinion
on the Financial Statements

 We
have audited the accompanying consolidated balance sheets of Lucid Diagnostics Inc. and Subsidiaries (the "Company") as of
December 31, 2023 and 2022, the related consolidated statements of operations, changes in stockholders' equity (deficit) and cash
flows for each of the two years in the period ended December 31, 2023, and the related notes (collectively referred to as the "financial
statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the
Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the two years in the period
ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

 Explanatory Paragraph – Going Concern

 The accompanying consolidated financial statements
have been prepared assuming that the Company will continue as a going concern. As more fully described in Note 2, the Company has a significant
working capital deficiency, has incurred significant losses and needs to raise additional funds to meet its obligations and sustain its
operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in
regard to these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might
result from the outcome of this uncertainty.

 Basis
for Opinion

 These
financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's
financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board
(United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal
securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 We
conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company
is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits
we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion
on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

 Our
audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error
or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding
the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits
provide a reasonable basis for our opinion.

 /s/
 Marcum LLP

 Marcum
LLP

 We
have served as the Company's auditor since 2019.

 New
York, NY

 March

 F- 2

 LUCID

 and

 (a

 CONSOLIDATED
BALANCE SHEETS

 (in
thousands except number of shares and per share data)

 Assets:

 Current assets:

 Cash

 $
 18,896

 $
 22,474

 Accounts receivable

 Inventory

 Prepaid expenses, deposits, and other current assets

 2,854

 1,754

 Total current assets

 22,073

 24,356

 Fixed assets, net

 1,334

 1,592

 Operating lease right-of-use assets

 1,307

 2,008

 Intangible assets, net

 1,424

 3,445

 Other assets

 1,132

 1,108

 Total assets

 $
 27,270

 $
 32,509

 Liabilities, Preferred Stock and Stockholders' Equity (Deficit)

 Current liabilities:

 Accounts payable

 $
 1,146

 $
 1,056

 Accrued expenses and other current liabilities

 3,841

 1,447

 Operating lease liabilities, current portion

 1,106

 Senior Secured Convertible Note - at fair value

 —

 Due To: PAVmed Inc. - MSA Fee and operating expenses

 9,339

 4,960

 Total current liabilities

 29,382

 8,425

 Operating lease liabilities, less current portion

 1,037

 Total liabilities

 29,581

 9,462

 Commitments and contingencies

 -

 -

 Stockholders' Equity:

 Preferred stock, $ 0.001 par value, 20,000,000 shares authorized; Series A and Series A-1 Convertible Preferred Stock, issued and outstanding 18,625 at December 31, 2023 and no shares issued and outstanding at December 31, 2022

 —

 Common stock, $ 0.001 par value, 200,000,000 shares authorized; 42,329,864 and 40,518,792 shares issued and outstanding as of December 31, 2023 and December 31, 2022, respectively

 Additional paid-in capital

 129,763

 121,081

 Accumulated deficit

 ( 150,741
)

 ( 98,075
)

 Total Stockholders' Equity (Deficit)

 ( 2,311
)

 23,047

 Total Liabilities and Stockholders' Equity (Deficit)

 $
 27,270

 $
 32,509

 See
accompanying notes to the consolidated financial statements.

 F- 3

 LUCID

 and

 (a

 CONSOLIDATED
STATEMENTS OF OPERATIONS

 (in
thousands except number of shares and per share data)

 2023

 2022

 Years Ended

 2023

 2022

 $
 2,428

 $

 Operating expenses:

 Cost of revenue

 5,979

 3,614

 Sales and marketing

 16,404

 16,134

 General and administrative

 19,254

 23,974

 Amortization of acquired intangible assets

 2,021

 1,649

 Research and development

 7,252

 11,257

 Total operating expenses

 50,910

 56,628

 Operating loss

 ( 48,482
)

 ( 56,251
)

 Other income (expense):

 Interest income

 Interest expense

 ( 416
)

 ( 8
)

 Change in fair value - Senior Secured Convertible Note

 ( 2,980
)

 —

 Loss on issue and offering costs - Senior Secured Convertible Note

 ( 1,186
)

 —

 Debt extinguishments loss - Senior Secured Convertible Note

 ( 26
)

 —

 Other income (expense), net

 ( 4,184
)

 Loss before provision for income tax

)

)

 Provision for income taxes

 —

 —

 $
)

 $
)

 Net loss per share - basic and diluted

 $
 ( 1.26
)

 $
 ( 1.55
)

 Weighted average common shares outstanding, basic and diluted

 41,756,129

 36,172,421

 See
accompanying notes to the consolidated financial statements.

 F- 4

 LUCID

 and

 (a

 CONSOLIDATED
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)

 for
the YEARS ENDED December 31, 2023 and 2022

 (in
thousands except number of shares and per share data)

 Shares

 Amount

 Shares

 Amount

 Capital

 Deficit

 Total

 Preferred Stock

 Common Stock

 Additional Paid-In

 Accumulated

 Shares

 Amount

 Shares

 Amount

 Capital

 Deficit

 Total

 Balance as of December 31, 2021

 —

 $
 —

 34,917,907

 $

 $
 96,608

 $
 ( 41,904
)

 $
 54,739

 Exercise - stock options - Lucid Diagnostics Inc. 2018 Equity Plan

 —

 —

 965,341

 —

 Stock-based compensation - Lucid Diagnostics Inc. 2018 Equity Plan

 —

 —

 —

 —

 13,859

 —

 13,859

 Stock-based compensation - PAVmed Inc. 2014 Equity Plan

 —

 —

 —

 —

 1,132

 —

 1,132

 Vest - restricted stock awards

 —

 —

 169,320

 —

 —

 —

 —

 CapNostics, LLC transfer

 —

 —

 —

 —

 ( 211
)

 —

 ( 211
)

 Issuance common stock - APA-RDx - Termination payment

 —

 —

 326,701

 —

 —

 Issuance - Committed Equity Facility, net of financing charges

 —

 —

 680,263

 1,766

 —

 1,767

 Purchase - Employee Stock Purchase Plan

 —

 —

 84,030

 —

 —

 Issuance - Due To: PAVmed Inc. Settlement in Common Stock

 —

 —

 3,375,230

 6,471

 —

 6,475

 —

 —

 —

 —

 —

)

)

 Balance as of December 31, 2022

 —

 $
 —

 40,518,792

 $

 $
 121,081

 $
 ( 98,075
)

 $
 23,047

 Balance

 —

 $
 —

 40,518,792

 $

 $
 121,081

 $
 ( 98,075
)

 $
 23,047

 Stock-based compensation - Lucid Diagnostics Inc. 2018 Equity Plan

 —

 —

 —

 —

 5,762

 —

 5,762

 Stock-based compensation - PAVmed Inc. 2014 Equity Plan

 —

 —

 —

 —

 1,060

 —

 1,060

 Vest - restricted stock awards

 —

 —

 303,980

 —

 —

 —

 —

 Conversions - Senior Secured Convertible Note

 —

 —

 115,388

 —

 —

 Issuance common stock - APA-RDx - Termination payment

 —

 —

 553,436

 —

 —

 Issuance - At-The-Market Facility, net of financing charges

 —

 —

 230,068

 —

 Purchase - Employee Stock Purchase Plan

 —

 —

 508,200

 —

 —

 Issuance - Series A and Series A-1 Preferred Stock

 —

 —

 —

 —

 Issue common stock - vendor service agreement

 —

 —

 100,000

 —

 —

 —

 —

 —

 —

 —

)

)

 Balance as of December 31, 2023

 $

 42,329,864

 $

 $
 129,763

 $
 ( 150,741
)

 $
 ( 2,311
)

 Balance

 $

 42,329,864

 $

 $
 129,763

 $
 ( 150,741
)

 $
 ( 2,311
)

 See
accompanying notes to the consolidated financial statements.

 F- 5

 LUCID

 and

 (a

 CONSOLIDATED
STATEMENTS OF CASH FLOWS

 (in
thousands except number of shares and per share data)

 2023

 2022

 2023

 2022

 Cash flows from operating activities

 $
)

 $
)

 Adjustments to reconcile net loss to net cash used in operating activities

 Depreciation and amortization expense

 2,499

 1,936

 Stock-based compensation - Lucid Diagnostics Inc. 2018 Equity Plan

 5,762

 13,859

 Stock-based compensation - PAVmed Inc. 2014 Equity Plan

 1,060

 1,132

 Change in fair value - Senior Secured Convertible Note

 2,980

 —

 Loss on issue - Senior Secured Convertible Note

 1,111

 —

 Debt extinguishment loss - Senior Secured Convertible Note

 —

 APA-RDx: Issue common stock - termination payment

 Issue common stock - vendor service agreement

 —

 Changes in operating assets and liabilities:

 Accounts receivable

 ( 28
)

 Prepaid expenses and other current assets

 ( 1,160
)

 1,163

 Accounts payable

 ( 445
)

 Accrued expenses and other current liabilities

 2,394

 Due To: PAVmed Inc. - operating expenses, employee related costs, MSA Fee

 4,380

 7,672

 Net cash flows used in operating activities

 ( 32,817
)

 ( 29,685
)

 Cash flows from investing activities

 Purchase of equipment

 ( 221
)

 ( 908
)

 Asset acquisition

 —

 ( 3,200
)

 Net cash flows used in investing activities

 ( 221
)

 ( 4,108
)

 Cash flows from financing activities

 Proceeds – issue of preferred stock

 —

 Proceeds – issue of Senior Convertible Note

 10,000

 —

 Proceeds – issue of common stock – Committed Equity Facility

 —

 1,807

 Proceeds – issue of common stock – At-The-Market Facility

 —

 Proceeds – exercise of stock options

 —

 Proceeds – issue common stock – Employee Stock Purchase Plan

 Net cash flows provided by financing activities

 29,460

 2,611

 Net increase (decrease) in cash

 ( 3,578
)

 ( 31,182
)

 Cash, beginning of period

 22,474

 53,656

 Cash, end of period

 $
 18,896

 $
 22,474

 See
accompanying notes to the consolidated financial statements.

 F- 6

 LUCID

 and

 (a

 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS

 (amounts
in these accompanying notes are presented in thousands, except number of shares and per-share amounts.)

 Note
1 — The Company

 Description
of the Business

 Lucid
Diagnostics Inc. ("Lucid", "Lucid Diagnostics" or the "Company") 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"). Lucid is a majority-owned subsidiary of PAVmed Inc. ("PAVmed").

 The
Company believes that its flagship product, the EsoGuard Esophageal DNA Test, performed on samples collected with the EsoCheck Esophageal
Cell Collection Device, constitutes the first and only commercially available diagnostic test capable of serving as a widespread tool
for the early detection of esophageal precancer in at-risk GERD patients. Early detection of esophageal precancer allows patients to
undergo appropriate monitoring and treatment, as indicated by clinical practice guidelines, in an effort to prevent progression to esophageal
cancer.

is a bisulfite-converted next-generation sequencing (NGS) DNA assay performed on surface esophageal cells collected with EsoCheck. Cell
samples, including those collected with EsoCheck, as discussed below, are sent to our laboratory, for testing and analyses using our
proprietary EsoGuard NGS DNA assay.

is a FDA 510(k) and CE Mark cleared noninvasive swallowable balloon capsule catheter device capable of sampling surface esophageal cells
in a less than a 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, when inflated, to gently swab surface esophageal cells. When
vacuum suction is applied, the balloon and sampled cells are pulled into the capsule, protecting them from contamination and dilution
by cells outside of the targeted region during device withdrawal. The Company believes that this proprietary Collect+Protect technology
makes EsoCheck the only noninvasive esophageal cell collection device capable of such anatomically targeted and protected sampling.

and EsoCheck are based on patented technology licensed by Lucid from Case Western Reserve University ("CWRU"). EsoGuard and
EsoCheck have been developed to provide an accurate, non-invasive, patient-friendly test 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.

 F- 7

 Note 2 — Liquidity and Going Concern

 The Company's management is
required to assess an entity's ability to continue as a going concern within one year of the date of the financial statements being
issued. In each reporting period, including interim periods, an entity is required to assess conditions known and reasonably knowable
as of the financial statement issuance date to determine whether it is probable an entity will not meet its financial obligations within
one year from the financial statement issuance date. Substantial doubt about an entity's ability to continue as a going concern
exists when conditions and events, considered in the aggregate, indicate it is probable the entity will be unable to meet its financial
obligations as they become due within one year after the date the financial statements are issued.

 The Company has financed its operations
principally through public and private issuances of its common stock, preferred stock, and debt. The Company is 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.
The Company generated $ 2.4 million of revenues for the year ended December 31, 2023, however the Company does not expect to generate
positive cash flows from operating activities in the near future.

 The Company incurred a net loss
of approximately $ 52.7 million and had net cash flows used in operating activities of approximately $ 32.8 million for the year ended December 31,
2023. As of December 31, 2023, the Company had negative working capital of approximately $ 7.3 million, with such working capital
inclusive of the Senior Secured Convertible Note classified as a current liability of an aggregate of approximately $ 14.0 million and
approximately $ 18.9 million of cash.

 The Company's ability to continue operations beyond March 2025, will depend upon generating substantial
revenue that is conditioned upon 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. These factors raise substantial doubt about the Company's ability to continue as a going concern within one year
after the date the accompanying consolidated financial statements are issued.

 Note
3 — Summary of Significant Accounting Policies

 Significant
Accounting Policies

 Basis
of Presentation

 The
accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the
United States of America ("U.S. GAAP"), and applicable rules and regulations of the United States Securities and Exchange
Commission ("SEC"), and include the accounts of the Company and its wholly-owned subsidiaries, LucidDx Labs Inc and CapNostics
LLC. All intercompany transactions and balances have been eliminated in consolidation. The Company is a majority-owned consolidated subsidiary
of PAVmed, which has a majority equity ownership interest and has financial control of the Company. The Company manages its operations
as a single operating segment for the purposes of assessing performance and making operating decisions.

 All
amounts in the accompanying consolidated financial statements and these notes thereto are presented in thousands of dollars, if not otherwise
noted as being presented in millions of dollars, except for shares and per share amounts.

 Use
of Estimates

 In
preparing the consolidated financial statements in conformity with U.S. GAAP, management is required to make estimates and assumptions
that affect the reported amounts of assets and liabilities and the disclosure of contingent losses, as of the date of the consolidated
financial statements, as well as the reported amounts of revenue and expenses during the reporting period. Significant estimates in these
consolidated financial statements include those related to the estimated fair value of stock-based equity awards, intangible assets and
estimate of fair value of debt obligations. Other significant estimates include the estimated incremental borrowing rate, the provision
or benefit for income taxes and the corresponding valuation allowance on deferred tax assets. Additionally, management's assessment
of the Company's ability to continue as a going concern involves the estimation of the amount and timing of future cash inflows
and outflows. On an ongoing basis, the Company evaluates its estimates and assumptions. The Company bases its estimates on historical
experience and on various other assumptions believed to be reasonable. Due to inherent uncertainty involved in making estimates, actual
results reported in future periods may be affected by changes in these estimates.

 Cash

 The
Company maintains its cash at a major financial institution with high credit quality. At times, the balance of its cash deposits may
exceed federally insured limits. The Company has not experienced losses on deposits with commercial banks and financial institutions
which exceed federally insured limits.

 F- 8

 Note

 Offering
Costs

 Offering
costs consist of certain legal, accounting, and other advisory fees incurred related to the Company's efforts to raise debt and
equity capital. Offering costs in connection with equity financing are recognized as either an offset against the financing proceeds
to extent the underlying security is equity classified or a current period expense to extent the underlying security is liability classified
or for which the fair value option is elected. Offering costs, lender fees, and warrants issued in connection with debt financing, to
the extent the fair value option is not elected, are recognized as debt discount, which reduces the reported carrying value of the debt,
with the debt discount amortized as interest expense, generally over the contractual term of the debt agreement, to result in a constant
rate of interest. Offering costs associated with in-process capital financing are accounted for as deferred offering costs.

Recognition

 Revenues
are recognized when the satisfaction of the performance obligation occurs, in an amount that reflects the consideration the Company expects
to collect in exchange for those services. The Company's revenue is primarily generated by its laboratory testing services utilizing
its EsoGuard Esophageal DNA tests. The services are completed upon release of a patient's test result to the ordering healthcare
provider. Revenue recognized is inclusive of both variable consideration in connection with an individual patient's third-party
insurance coverage policy and fixed consideration in connection with a contracted services arrangement with an unrelated third party
legal entity. To determine revenue recognition for the arrangements that the Company determines are within the scope of ASC 606, Revenue
from Contracts with Customers, the Company performs the following five steps: (1) identify the contract(s) with a customer, (2) identify
the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance
obligations in the contract and (5) recognize revenue when (or as) the entity satisfies a performance obligation.

 The
key aspects considered by the Company include the following:

 Contracts —The
Company's customer is primarily the patient, but the Company does not enter into a formal reimbursement contract with a patient.
The Company establishes a contract with a patient in accordance with other customary business practices, which is the point in time an
order is received from a provider and a patient specimen has been returned to the laboratory for testing. Payment terms are a function
of a patient's existing insurance benefits, including the impact of coverage decisions with Center for Medicare & Medicaid
Services ("CMS") and applicable reimbursement contracts established between the Company and payers. However, when a patient
is considered self-pay, the Company requires payment from the patient prior to the commencement of the Company's performance obligations.
The Company's consideration can be deemed variable or fixed depending on the structure of specific payer contracts, and the Company
considers collection of such consideration to be probable to the extent that it is unconstrained.

 Performance
obligations —A performance obligation is a promise in a contract to transfer a distinct good or service (or a bundle of goods
or services) to the customer. The Company's contracts have a single performance obligation, which is satisfied upon rendering of
services, which culminates in the release of a patient's test result to the ordering healthcare provider. The Company elects the
practical expedient related to the disclosure of unsatisfied performance obligations, as the duration of time between providing testing
supplies, the receipt of a sample, and the release of a test result to the ordering healthcare provider is far less than one year.

 Transaction
price —The transaction price is the amount of consideration that the Company expects to collect in exchange for transferring
promised goods or services to a customer, excluding amounts collected on behalf of third parties (for example, some sales taxes). The
consideration expected to be collected from a contract with a customer may include fixed amounts, variable amounts, or both.

 If
the consideration derived from the contracts is deemed to be variable, the Company estimates the amount of consideration to which it
will be entitled in exchange for the promised goods or services. The Company limits the amount of variable consideration included in
the transaction price to the unconstrained portion of such consideration. In other words, the Company recognizes revenue up to the amount
of variable consideration that is not subject to a significant reversal until additional information is obtained or the uncertainty associated
with the additional payments or refunds is subsequently resolved.

 When
the Company does not have significant historical experience or that experience has limited predictive value, the constraint over estimates
of variable consideration may result in no revenue being recognized upon delivery of patient EsoGuard test results to the ordering healthcare
provider. As such, the Company recognizes revenue up to the amount of variable consideration not subject to a significant reversal until
additional information is obtained or the uncertainty associated with additional payments or refunds, if any, is subsequently resolved.
Differences between original estimates and subsequent revisions, including final settlements, represent changes in estimated expected
variable consideration, with the change in estimate recognized in the period of such revised estimate. With respect to a contracted service
arrangement, the fixed consideration revenue is recognized on an as-billed basis upon delivery of the laboratory test report with realization
of such fixed consideration deemed probable based upon actual historical experience.

 Allocate
transaction price —The transaction price is allocated entirely to the performance obligation contained within the contract with
a customer on the basis of the relative standalone selling prices of each distinct good or service.

 Practical
Expedients —The Company does not adjust the transaction price for the effects of a significant financing component, as at contract
inception, the Company expects the collection cycle to be one year or less.

 F- 9

 Note

 Inventory

 The Company carries test supply
inventories to support our laboratory activities. The inventories are carried at the lower of weighted average cost and net realizable
value and expensed through cost of sales as the supplies are used.

 Fixed
Assets

 Fixed
assets are stated at cost and depreciated using the straight-line method over the assets' estimated useful lives. Additions and
improvements are capitalized, including direct and indirect costs incurred to validate equipment and bring to working conditions. The
costs for maintenance and repairs are expensed as incurred.

 Leases

 The
Company adopted FASB ASC Topic 842, Leases, ("ASC 842") effective December 31, 2021. All significant lease agreements
and contractual agreements with embedded lease agreements are accounted for under the provisions of ASC 842, wherein, if the contractual
arrangement: involves the use of a distinct identified asset; provides for the right to substantially all the economic benefits from
the use of the asset throughout the contractual period; and provides for the right to direct the use of the asset. A lease agreement
is accounted for as either a finance lease or an operating lease. Under both a finance lease and an operating lease, the Company recognizes
as of the lease commencement date a lease right-of-use ("ROU") asset and a corresponding lease payment liability.

 A
lease ROU asset represents the Company's right to use an underlying asset for the lease term, and the lease liability represents
its contractual obligation to make lease payments. The lease ROU asset is measured at the lease commencement date as the present value
of the future lease payments plus initial direct costs incurred. The Company recognizes lease expense of the amortization of the lease
ROU asset for an operating lease on a straight-line basis over the lease term; and for financing leases on a straight-line basis unless
another basis is more representative of the pattern of economic benefit. The operating ROU asset also includes any lease incentives received
for improvements to leased property, when the improvements are lessee-owned. For improvements to leased property that are lessor-owned,
the Company includes amounts the Company incurred for the improvements as ROU assets which are amortized on a straight-line basis over
the life of the lease.

 The
lease liability is measured at the lease commencement date with the discount rate generally based on the Company's incremental
borrowing rate (to the extent the lease implicit rate is not known nor determinable), with interest expense recognized using the interest
method for financing leases.

leases may include options to extend or terminate the agreement. The Company does not assume renewals in determination of the lease term
unless the renewals are deemed to be reasonably certain at lease commencement. As well, an option to terminate is considered unless it
is reasonably certain the Company will not exercise the option. The Company elected the practical expedient to not recognize a lease
ROU asset and lease payment liability for leases with a term of twelve months or less ("short-term leases"), resulting in
the aggregate lease payments being recognized on a straight line basis over the lease term. The Company's leases with a commencement
date prior to January 1, 2022 were short-term leases and therefore did not require recording a ROU asset or lease liability at December
31, 2021. Additionally, the Company elected the practical expedient to not separate lease and non-lease components.

 Intangible
Assets

 Purchased
intangible assets are recorded at cost and depreciated using the straight-line method over the assets' estimated useful life. See
Note 10, Intangible Assets, net, for further information with respect to purchased intangible assets.

 Impairment
- Long Lived Assets

 The
Company reviews its long-lived assets, including intangible assets with finite lives, for recoverability whenever events or changes in
circumstances indicate the carrying amount of the assets may not be fully recoverable. The Company evaluates assets for potential impairment
by comparing estimated future undiscounted net cash flows to the carrying amount of the asset. If the carrying amount of the assets exceeds
the estimated future undiscounted cash flows, impairment is measured based on the difference between the carrying amount of the assets
and fair value which is generally an expected present value cash flow technique. The assessment and determination of the existence of
an impairment indicator comprises measurable operating performance criteria as well as qualitative factors deemed relevant and appropriate
to such evaluation.

 F- 10

 Note

 Stock-Based
Compensation

 Stock-based
awards are made to members of the board of directors of the Company, the Company's employees and non-employees, under each of the
Lucid Diagnostics 2018 Equity Plan and the PAVmed 2014 Equity Plan. The Company accounts for stock-based compensation in accordance with
the provisions of FASB ASC Topic 718, Stock Compensation ("ASC 718").

 The
grant-date estimated fair value of the stock-based award is recognized on a straight-line basis over the requisite service period, which
is generally the vesting period of the respective stock-based award, with such straight-line recognition adjusted, as applicable, so
the cumulative expense recognized is at-least equal-to-or-greater-than the estimated fair value of the vested portion of the respective
stock-based award as of the reporting date.

 The
Company uses the Black-Scholes valuation model to estimate the fair value of stock options granted under both the PAVmed 2014 Equity
Plan and the Lucid Diagnostics 2018 Equity Plan, which requires the Company to make certain weighted-average valuation estimates and
assumptions for stock-based awards, principally as follows:

 With
 respect to the PAVmed 2014 Equity Plan, the expected stock price volatility is based on the historical stock price volatility of
 PAVmed common stock over the period commensurate with the expected term with respect to stock options granted to the board of
 directors and employees in the years ended December 31, 2023 and 2022;

 With
 respect to stock options granted under the Lucid Diagnostics 2018 Equity Plan, the expected stock price volatility is based on the
 historical stock price volatility of Lucid Diagnostics common stock and the volatilities of similar entities within the medical device
 industry over the period commensurate with the expected term with respect to stock options granted to employees in the years ended
 December 31, 2023 and 2022;

 The
 risk-free interest rate is based on the interest rate payable on U.S. Treasury securities in effect at the time of grant for a period
 commensurate with either the expected term or the remaining contractual term, as applicable, of the stock option; and,

 The
 expected dividend yield is based on annual dividends of $ 0.00 as there have not been dividends paid to-date, and there is no plan
 to pay dividends for the foreseeable future.

 The
price per share of Lucid Diagnostics common stock used in the computation of estimated fair value of stock options and restricted stock
awards granted under the Lucid Diagnostics 2018 Equity Plan is its quoted closing price per share.

 The
price per share of PAVmed common stock used in the computation of estimated fair value of stock options and restricted stock awards granted
under the PAVmed 2014 Equity Plan is its quoted closing price per share.

 Financial
Instruments Fair Value Measurements

 FASB
ASC Topic 820, Fair Value Measurement, (ASC 820) defines fair value as the price which would be received to sell an asset or paid
to transfer a liability in an orderly transaction between market participants at a transaction measurement date. The ASC 820 three-tier
fair value hierarchy prioritizes the inputs used in the valuation methodologies, as follows:

 Level

 Valuations
 based on quoted prices for identical assets and liabilities in active markets.

 Level

 Valuations
 based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities
 in active markets, quoted prices for identical or similar assets and liabilities in markets which are not active, or other inputs
 observable or can be corroborated by observable market data.

 Level

 Valuations
 based on unobservable inputs reflecting the Company's own assumptions, consistent with reasonably available assumptions made
 by other market participants. These valuations require significant judgment.

 As
of December 31, 2023 and 2022, the carrying values of cash, and accounts payable, approximate their respective fair value
due to the short-term nature of these financial instruments.

 F- 11

 Note

 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.

 Under
Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 815, Derivative
and Hedging, ("ASC 815"), a financial instrument containing embedded features and/or options may be required to be bifurcated
from the financial instrument host and recognized as separate derivative asset or liability, with the bifurcated derivative asset or
liability initially measured at estimated fair value as of the transaction issue date and then subsequently remeasured at estimated fair
value as of each reporting period balance sheet date.

 Alternatively,
FASB ASC Topic 825, Financial Instruments, ("ASC 825") provides for the "fair value option" ("FVO")
election. In this regard, ASC 825-10-15-4 provides for the FVO election (to the extent not otherwise prohibited by ASC 825-10-15-5) to
be afforded to financial instruments, wherein the financial instrument is initially measured at estimated fair value as of the transaction
issue date and then subsequently remeasured at estimated fair value as of each reporting period balance sheet date, with changes in the
estimated fair value recognized as other income (expense) in the statement of operations. The estimated fair value adjustment of the
March 2023 Senior Convertible Note is presented in a single line item within other income (expense) in the accompanying consolidated
statement of operations (as provided for by ASC 825-10-50-30(b)). Further, as required by ASC 825-10-45-5, to the extent a portion of
the fair value adjustment is attributed to a change in the instrument-specific credit risk, such portion would be recognized as a component
of other comprehensive income ("OCI") (for which there was no such adjustment with respect to the March 2023 Senior Convertible
Note).

 See
Note 12, Financial Instruments Fair Value Measurements, with respect to the FVO election; and Note 13, Debt, for a discussion
of the March 2023 Senior Convertible Note.

and Development Expenses

and development expenses are recognized as incurred and include the salary and stock-based compensation of employees engaged in product
research and development activities, and the costs related to the Company's various contract research service providers, suppliers,
engineering studies, supplies, and outsourced testing and consulting fees, as well as depreciation expense and rental costs for equipment
used in research and development activities, and fees incurred for access to certain facilities of contract research service providers.

 Patent
Costs and Purchased Patent License Rights

 Patent
related costs in connection with filing and prosecuting patent applications and patents filed by the Company are expensed as incurred
and are included in the line item captioned "general and administrative expenses" in the accompanying consolidated statements
of operations. Patent fee reimbursement expense incurred under the patent license agreement agreements are included in the line item
captioned "research and development expenses" in the accompanying consolidated statements of operations.

 The
Company has entered into agreements with third parties to acquire technologies for potential commercial development. Such agreements
generally require an initial payment by the Company when the contract is executed. The purchase of patent license rights for use in research
and development activities, including product development, are expensed as incurred and are classified as research and development expense.
Additionally, the Company may be obligated to make future royalty payments in the event the Company commercializes the technology and
achieves a certain sales volume. In accordance with Financial Accounting Standards Board ("FASB") Accounting Standard Codification
("ASC") Topic 730, "Research and Development", ("ASC 730"), expenditures for research and development,
including upfront licensing fees and milestone payments associated with products not yet been approved by the United States Food and
Drug Administration ("FDA"), are charged to research and development expense as incurred. Future contract milestone and /or
royalty payments will be recognized as expense when achievement of the milestone is determined to be probable and the amount of the corresponding
milestone can be objectively estimated.

 F- 12

 Note

 Income
Taxes

 The
Company accounts for income taxes using the asset and liability method, as required by FASB ASC Topic 740, Income Taxes, (ASC 740). Current
tax liabilities or receivables are recognized for estimated income tax payable and/or refundable for the current year. Deferred tax assets
and deferred tax liabilities are recognized for estimated future tax consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax basis, along with net operating loss and tax credit carryforwards.
Deferred tax assets and deferred tax liabilities are measured using enacted tax rates expected to apply to taxable income in the years
in which those temporary differences are expected to be recovered or settled. Changes in deferred tax assets and deferred tax liabilities
are recorded in the provision for income taxes.

 Under
ASC 740, a "more-likely-than-not" criterion is applied when assessing the estimated realization of deferred tax assets through
their utilization to reduce future taxable income, or with respect to a deferred tax asset for tax credit carryforward, to reduce future
tax expense. A valuation allowance is established, when necessary, to reduce deferred tax assets, net of deferred tax liabilities, when
the assessment indicates it is more-likely-than-not, the full or partial amount of the net deferred tax asset will not be realized. As
a result of the evaluation of the positive and negative evidence bearing upon the estimated realizability of net deferred tax assets,
and based on a history of operating losses, it is more-likely-than-not the deferred tax assets will not be realized, and therefore a
valuation allowance reserve equal to the full amount of the deferred tax assets, net of deferred tax liabilities, has been recognized
as a charge to income tax expense as of December 31, 2023 and 2022.

 The
Company recognizes the benefit of an uncertain tax position it has taken or expects to take on its income tax return if such a position
is more-likely-than-not to be sustained upon examination by the taxing authorities, with the tax benefit recognized being the largest
amount having a greater than 50% likelihood of being realized upon ultimate settlement. As of December 31, 2023, the Company does no t
have any unrecognized tax benefits resulting from uncertain tax positions.

 The
Company's policy is to record interest and penalties related to income taxes as part of its income tax provision. There were no
amounts accrued for penalties or interest as of December 31, 2023 and December 31, 2022 or recognized during the years ended December
31, 2023 and 2022. The Company is not aware of any issues under review to potentially result in significant payments, accruals, or material
deviations from its position.

 Net
Loss Per Share

 The
net loss per share is computed by dividing each of the respective net loss by the number of "basic weighted average common
shares outstanding" and diluted weighted average shares outstanding" for the reporting period indicated. The basic
weighted-average shares common shares outstanding are computed on a weighted average based on the number of days the shares of
common stock of the Company are issued and outstanding during the respective reporting period indicated. The diluted weighted
average common shares outstanding are the sum of the basic weighted-average common shares outstanding plus the number of common
stock equivalents' incremental shares on an if-converted basis, computed using the treasury stock method, computed on a
weighted average based on the number of days the incremental shares would potentially be issued and outstanding during the periods
indicated, if dilutive. The Company's common stock equivalents include convertible preferred stock, stock options and unvested
restricted stock awards granted under the Lucid Diagnostics 2018 Long-Term Incentive Equity Plan.

 Notwithstanding,
as the Company has a net loss for each reporting period presented, only the basic weighted average common shares outstanding are used
to compute the basic and diluted net loss per share for each reporting period presented.

 JOBS
Act EGC Accounting Election

 The
Company is an "emerging growth company" or "EGC", as defined in the Jumpstart Our Business Startups Act of 2012
(the "JOBS Act"). Under the JOBS Act, an EGC can delay adopting new or revised accounting standards issued after the enactment
of the JOBS Act until such time as those standards apply to private companies. The Company has irrevocably elected to avail itself of
this exemption from new or revised accounting standards, and, therefore, will not be subject to the same new or revised accounting standards
as public companies who are not an EGC.

 F- 13

 Note

 Reclassifications

prior-year amounts have been reclassified to conform to the current year presentation, which includes presenting interest income and
classification of certain general and administrative expenses and research and development expenses within operating expenses on the
statements of operations, in the consolidated financial statements and accompanying notes to the consolidated financial statements. The
impact of the reclassifications made to prior year amounts is not material and did not affect net loss.

 Recently Adopted Accounting Pronouncements

 In
June 2016, the FASB issued Accounting Standards Update ("ASU") No. 2016-13, Financial Instruments-Credit Losses (Topic 326):
Measurement of Credit Losses on Financial Instruments. The updated guidance requires companies to measure all expected credit losses
for financial instruments held at the reporting date based on historical experience, current conditions, and reasonable supportable forecasts.
This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets, including trade
receivables. 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.

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. 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. We are
currently evaluating the impact this update will have on our consolidated financial statements and disclosures.

 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 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. We are currently evaluating the impact this update will have on our
consolidated financial statements and disclosures.

 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 amendments in this update should be applied prospectively, and the effective date for each amendment will
be the date on which the SEC's removal of that related disclosure from Regulation S-X or S-K becomes effective. 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. The Company is currently evaluating the potential impact of this guidance on its
consolidated financial statements.

 F- 14

 Note
4 — Revenue from Contracts with Customers

Commercialization Agreement

 The
Company entered into the EsoGuard Commercialization Agreement, dated August 1, 2021, with its former commercial laboratory service provider,
ResearchDx Inc. ("RDx"), an unrelated third-party. The EsoGuard Commercialization Agreement was on a month-to-month basis
and was terminated on February 25, 2022 upon the execution of an asset purchase agreement ("APA") dated February 25, 2022,
between LucidDx Labs, a wholly-owned subsidiary of the Company, and RDx, with such agreement further discussed in Note 6, Asset Purchase
Agreement and Management Services Agreement.

Recognized

 In
the year ended December 31, 2023, the Company recognized revenue of $ 2,428, resulting from the delivery of patient EsoGuard test results.
Revenue recognized from customer contracts deemed to include a variable consideration transaction price is limited to the unconstrained
portion of the variable consideration. The Company's revenue for the year ended December 31, 2022 was $ 377, resulting from the
delivery of patient EsoGuard test results, along with the revenue recognized under the EsoGuard Commercialization Agreement, which represented
the minimum fixed monthly fee of $ 100 for the period January 1, 2022 to the February 25, 2022 termination date as discussed above. The
monthly fee was deemed to be collectible for such period as RDx has timely paid the applicable respective monthly fee.

 Cost
of Revenue

 The
cost of revenues principally includes the costs related to the Company's laboratory operations (excluding estimated costs associated
with research activities), the costs related to the EsoCheck cell collection device, cell sample mailing kits and license royalties.

 In
the year ended December 31, 2023, the cost of revenue was $ 5,979, primarily related to costs for our laboratory operations and EsoCheck
device supplies. The Company's cost of revenue for the year ended December 31, 2022 was $ 3,614, primarily related to costs for
our laboratory operations and EsoCheck device supplies, along with the costs attributable to delivering the services under the EsoGuard
Commercialization Agreement for the period January 1, 2022 through its termination on February 25, 2022.

 Note
5 — Related Party Transactions

 The
aggregate Due To: PAVmed Inc. for the periods indicated is summarized as follows:

 Schedule of Due To: PA Vmed Inc

 MSA Fees

 Employee-Related Costs

 PAVmed Inc. OBO Payments

 Total

 Balance - December 31, 2022

 $
 1,650

 $
 3,026

 $

 $
 4,960

 MSA fees

 9,000

 —

 —

 9,000

 ERC - Benefits

 —

 1,828

 —

 1,828

 On Behalf Of (OBO) activities

 —

 —

 1,035

 1,035

 Cash payments to PAVmed Inc.

 ( 4,500
)

 ( 1,691
)

 ( 1,293
)

 ( 7,484
)

 Balance - December 31, 2023

 $
 6,150

 $
 3,163

 $

 $
 9,339

 F- 15

 Note
5 — Related Party Transactions - continued

- Management Services Agreement

 The
Company's daily operations are also managed in part by personnel employed by PAVmed, for which the Company incurs a service fee,
referred to as the "MSA Fee", according to the provisions of a Management Services Agreement ("MSA") with PAVmed.
The MSA does not have a termination date, but may be terminated by the Company's board of directors. The MSA Fee is charged on
a monthly basis and is subject-to periodic adjustment corresponding with changes in the services provided by PAVmed personnel to the
Company, with any such change in the MSA Fee being subject to approval of the boards of directors of each of the Company and PAVmed.
The respective companies' boards of directors approved an amendment to the MSA to increase the MSA Fee to $ 750 per month, effective
January 1, 2023, which was entered into by PAVmed and the Company on May 9, 2023. During the six months ended December 31, 2022, MSA
fees were $ 550 per month. During the six months ended June 30, 2022, MSA Fees were $ 390 per month.

 Subsequent
to December 31, 2023, in March 2024, we entered into an eighth amendment to the MSA. Under
the amendment, the monthly fee due from the Company to PAVmed was increased from $ 750 to $ 833. Subsequent to December 31, 2023, on January
26, 2024, PAVmed elected to receive payment of $ 4,675 of fees and reimbursements due from Lucid, through the issuance of 3,331,771 shares
of Lucid Diagnostics common stock.

 The
MSA Fee expense classification in the consolidated statement of operations for the periods noted is as follows:

of MSA Fee Expense Classification in Statements of Operations

 2023

 2022

 Years Ended

 2023

 2022

 Sales & Marketing

 $

 $
 1,043

 General & Administrative

 6,350

 3,066

 Research & Development

 2,214

 1,531

 Total MSA Fee

 $
 9,000

 $
 5,640

 The
classification of the MSA Fee as presented above is based on the PAVmed classification of employee salary expense and other operating
expenses. In this regard, PAVmed classifies employee salary expense as sales and marketing expenses for employees performing sales, sales
support and marketing activities, research and development expenses for those employees who are engaged in product and services engineering
development and design and /or clinical trials activities, and other employees and activities classified as general and administrative.

 F- 16

 Note
6 — Asset Purchase Agreement and Management Services Agreement

 Asset
Purchase Agreement and Management Services Agreement - ResearchDx Inc.

 Through
its wholly-owned subsidiary, LucidDx Labs Inc. ("LucidDx Labs"), the Company entered into an asset purchase agreement ("APA")
dated February 25, 2022, with ResearchDx, Inc. ("RDx"), an unrelated third-party - "APA-RDx". Under the APA-RDx,
LucidDx Labs acquired certain assets from RDx which were combined with other property and equipment to establish a Company-owned CLIA
certified, CAP accredited commercial clinical laboratory capable of performing the EsoGuard Esophageal DNA assay, inclusive of DNA
extraction, next generation sequencing ("NGS") and specimen storage. Prior to February 25, 2022, RDx provided such laboratory
services at its owned CLIA-certified, CAP-accredited clinical laboratory. In connection with the execution and delivery of the APA-RDx,
LucidDx Labs Inc. and RDx entered into a separate management services agreement ("MSA-RDx"), dated and effective February
25, 2022, pursuant to which RDx provided certain testing and related services for the Laboratory.

 The
total purchase price consideration payable under the APA-RDx is a face value of $ 3,200 comprised of three contractually specified periodic
payments. The APA-RDx is being accounted for as an asset acquisition, with the recognition of an intangible asset of approximately $ 3,200,
which is included in "Intangible assets, net" on the accompanying consolidated balance sheet, as further discussed in Note
10, Intangible Assets, net.

 Termination
of Management Services Agreement and Modification of Other Payment Obligations - ResearchDx Inc.

 On
February 14, 2023, through LucidDx Labs Inc, the Company entered into an agreement (the "MSA Termination Agreement") with
RDx, pursuant to which the parties mutually agreed to terminate the MSA-RDx without cause. The termination was effective as February
10, 2023. Until the termination of the management service agreement with RDx, RDx had continued to provide certain testing and related
services for the Laboratory in accordance with the terms of the MSA-RDx.

 The
MSA Termination Agreement reduces the remaining amounts of the earnout payments and management fees due under the APA-RDx and the MSA-RDx
to $ 713. The payment was satisfied through the issuance of 553,436 shares of the Company's common stock in February 2023. The Company
was not required to make any cash payments in connection with the termination.

 Note
7 — Prepaid Expenses, Deposits, and Other Current Assets

 Prepaid
expenses and other current assets consisted of the following as of:

 Schedule of Prepaid Expenses and Other Current Assets

 Advanced payments to service providers and suppliers

 $

 $

 Prepaid insurance

 Deposits

 1,981

 1,331

 Total prepaid expenses, deposits and other current assets

 $
 2,854

 $
 1,754

 Note
8 — Fixed Assets

 Fixed
assets, less accumulated depreciation, consisted of the following as of:

of Fixed Assets

 Estimated Useful Life

 Computer and office equipment

 2 - 5 years

 $

 $

 Laboratory equipment

 3 - 7 years

 1,702

 1,526

 Furniture and fixtures

 3 - 5 years

 Leasehold improvements

 - (1)

 Total Fixed Assets

 2,101

 1,881

 Less Accumulated Depreciation

 ( 767
)

 ( 289
)

 Total Fixed Assets, net

 $
 1,334

 $
 1,592

 (1)

 Lesser
 of remaining lease term or estimated useful life.

 Depreciation
expense of $ 478 and $ 287 for the years ended December 31, 2023 and 2022, respectively, is included in general and administrative expenses
in the accompanying consolidated statements of operations.

 F- 17

 Note
9 — Leases

 During
the year ended December 31, 2023, the Company entered into additional lease agreements that have commenced and are classified as operating
leases and short-term leases for additional Lucid Test Centers.

 The
components of lease expense were as follows:

of Components of Lease Expense

 2023

 2022

 2023

 2022

 Operating lease cost

 $
 1,214

 $

 Short-term lease cost

 Variable lease cost

 Total lease cost

 $
 1,359

 $
 1,066

 The
Company's future lease payments as of December 31, 2023, which are presented as operating lease liabilities, current portion and
operating lease liabilities, less current portion on the Company's consolidated balance sheets are as follows:

of Future Lease Payments of Operating Lease Liabilities

 2024

 $
 1,161

 2025

 2026

 2027

 Total lease payments

 $
 1,375

 Less: imputed interest

 ( 70
)

 Present value of lease liabilities

 $
 1,305

 Supplemental
disclosure of cash flow information related to the Company's cash and non-cash activities with its leases are as follows:

of Cash Flow Supplemental Information

 2023

 2022

 Cash paid for amounts included in the measurement of lease liabilities

 Operating cash flows from operating leases

 $
 1,207

 $

 Non-cash investing and financing activities

 Right-of-use assets obtained in exchange for new operating lease liabilities

 $

 $
 2,763

 Weighted-average remaining lease term - operating leases (in years)

 1.39

 2.03

 Weighted-average discount rate - operating leases

 7.875
 %

 7.875
 %

 As
of December 31, 2023 and 2022, the Company's right-of-use assets from operating leases were $ 1,307 and $ 2,008, respectively,
which are reported in operating lease right-of-use assets in the consolidated balance sheets. As of December 31, 2023 and 2022, the Company had outstanding operating lease obligations of $ 1,305 and $ 1,999, respectively, of which $ 1,106 and $ 962, respectively,
are reported in operating lease liabilities, current portion and $ 199 and $ 1,037, respectively, are reported in operating lease liabilities
less current portion in the Company's consolidated balance sheets. The Company calculates its incremental borrowing rates for specific
lease terms, used to discount future lease payments, as a function of the financing terms the Company would likely receive on the open
market.

 F- 18

 Note
10 — Intangible Assets, net

 Intangible
assets, less accumulated amortization, consisted of the following as of:

 Schedule of Intangible Assets

 Estimated Useful Life

 Defensive technology

 60 months

 $
 2,105

 $
 2,105

 Laboratory licenses and certifications and laboratory information management software

 24 months

 3,200

 $
 3,200

 Total Intangible assets

 5,305

 5,305

 Less Accumulated Amortization

 ( 3,881
)

 ( 1,860
)

 Intangible Assets, net

 $
 1,424

 $
 3,445

 The
defensive technology intangible asset of $ 2.1 million (and approximately $ 0.2 million of accumulated amortization) was recognized by
the Company as of the April 1, 2022 effective date of the transfer of CapNostics, LLC ("CapNostics") to the Company from
PAVmed Subsidiary Corp (a wholly-owned subsidiary of PAVmed). The transfer was accounted for as entities under common control. The defensive
technology intangible asset was recognized by PAVmed Subsidiary Corp upon its acquisition of CapNostics, an unrelated third-party, for
total purchase consideration paid on the October 5, 2021 acquisition date of approximately $ 2.1 million in cash. The CapNostics transaction
was accounted for as an asset acquisition, resulting in the recognition of the defensive technology intangible asset. The defensive technology
intangible asset is being amortized on a straight-line basis over an expected useful life 60 months commencing on the acquisition date.

 As
noted in Note 6, Asset Purchase Agreement and Management Services Agreement, the asset purchase agreement between the Company
and ResearchDx Inc. ("APA-RDx"), is being accounted for as an asset acquisition. The intangible assets recognized under the
APA-RDx are the laboratory licenses and certifications (inclusive of a CLIA certification, CAP accreditation, and clinical laboratory
licenses for five (5) U.S. States transferred to the Company from RDx), and a laboratory information management software perpetual-use
royalty-free license granted under the APA-RDx, with such intangible asset having a useful life of twenty-four months commencing on the
APA-RDx February 25, 2022 transaction date.

 Amortization
expense of the intangible assets discussed above was $ 2,021 and $ 1,649 for the years ended December 31, 2023 and 2022, respectively,
and is included in amortization of acquired intangible assets in the accompanying consolidated statements of operations. As of December
31, 2023, the estimated future amortization expense associated with the Company's finite-lived intangible assets for each of the
five succeeding fiscal years is as follows:

 Schedule of Future Amortization Expense

 2024

 $

 2025

 2026

 Total

 $
 1,424

 Note
11 — Accrued Expenses and Other Current Liabilities

 Accrued
expenses and other current liabilities consisted of the following items as of:

 Schedule of Accrued Expenses and Other Current Liabilities

 Compensation and Employee Benefits

 $
 1,178

 $

 CWRU Amended License Agreement - Royalty fee

 Operating expenses

 2,018

 Other

 —

 Total accrued expenses and other current liabilities

 $
 3,841

 $
 1,447

 F- 19

 Note
12 — Financial Instruments Fair Value Measurements

 Recurring
Fair Value Measurements

 The
fair value hierarchy table for the reporting date noted is as follows:

 Schedule of Financial Liabilities Measured at Fair Value on Recurring Basis

 Fair Value Measurement on a Recurring Basis at Reporting Date Using 1

 Level-1

 Inputs

 Level-2

 Inputs

 Level-3

 Inputs

 Total

 March 2023 Senior Convertible Note

 $
 —

 $
 —

 $

 $

 Totals

 $
 —

 $
 —

 $

 $

 There were no transfers
between the respective Levels during the year ended December 31, 2023.

 As
discussed in Note 13, Debt, the Company issued a Senior Secured Convertible Note dated March 21, 2023 with a $ 11.1 million face
value principal ("March 2023 Senior Convertible Note"). The convertible note is accounted for under the ASC 825-10-15-4 fair
value option ("FVO") election, wherein, the financial instrument is initially measured at its issue date estimated fair value
and subsequently remeasured at estimated fair value on a recurring basis at each reporting period date.

 The
estimated fair value of the financial instruments classified within the Level 3 category was determined using both observable inputs
and unobservable inputs. Unrealized gains and losses associated with liabilities within the Level 3 category include changes in fair
value attributable to both observable (e.g., changes in market interest rates) and unobservable (e.g., changes in unobservable long-
dated volatilities) inputs.

 The
estimated fair value of the March 2023 Senior Convertible Note as of each of March 21, 2023 (date of issuance) and December 31, 2023
were computed using a Monte Carlo simulation of the present value of its cash flows using a synthetic credit rating analysis and a required
rate-of-return, using the following assumptions:

 Schedule of Fair Value Assumption Used

 March 2023 Senior Convertible Note:
March 21, 2023

 March 2023 Senior Convertible Note:

 Fair Value

 $
 11,900

 $

 Face value principal payable

 $
 11,111

 $
 11,019

 Required rate of return

 11.00
 %

 10.00
 %

 Conversion Price

 $
 5.00

 $
 5.00

 Value of common stock

 $
 1.54

 $
 1.41

 Expected term (years)

 2.00

 1.22

 Volatility

 75.00
 %

 60.00
 %

 Risk free rate

 4.09
 %

 4.56
 %

 Dividend yield

 —
 %

 —
 %

 The
estimated fair values reported utilized the Company's common stock price along with certain Level 3 inputs (as discussed in
the table above), in the development of Monte Carlo simulation models, discounted cash flow analyses, and /or Black-Scholes
valuation models. The estimated fair values are subjective and are affected by changes in inputs to the valuation models and
analyses, including the Company's common stock price, the Company's dividend yield, the risk-free rates based on U.S.
Treasury security yields, and certain other Level-3 inputs including, assumptions regarding the estimated volatility in the value of
the Company's common stock price and the volatility of similar entities within the medical device industry. Changes in these assumptions can materially affect the estimated fair values.

 F- 20

 Note
13 — Debt

 The
fair value and face value principal outstanding of the March 2023 Senior Convertible Note as of the dates indicated are as follows:

 Summary
of Outstanding Debt

 Contractual Maturity Date

 Stated Interest Rate

 Conversion Price per Share

 Face Value Principal Outstanding

 Fair Value

 March 2023 Senior Convertible Note

 March 21, 2025

 7.875
 %

 $
 5.00

 $
 11,019

 $

 Balance as of December 31, 2023

 $
 11,019

 $

 The
changes in the fair value of debt during the year ended December 31, 2023 is as follows:

of Changes in Fair Value of Debt

 March 2023

 Senior

 Convertible

 Note

 Other Income (expense)

 Fair Value - December 31, 2022

 $
 —

 $
 —

 Face value principal – issue date

 11,111

 $
 —

 Fair value adjustment – issue date

 ( 789
)

 Installment repayments – common stock

 ( 92
)

 —

 Non-installment payments – common stock

 ( 49
)

 —

 Change in fair value

 2,191

 ( 2,191
)

 Fair Value at December 31, 2023

 $

 -

 Other Income (Expense) - Change in fair value – year ended December 31, 2023

 $
 ( 2,980
)

 March
2023 Senior Secured Convertible Note

 Lucid
Diagnostics entered into a Securities Purchase Agreement ("SPA") dated March 13, 2023, with an accredited institutional investor
("Investor", "Lender", and /or "Holder"), wherein Lucid agreed to sell, and the Investor agreed to
purchase, an aggregate of $ 11.1 million face value principal of debt.

 Under
the SPA, Lucid issued in a registered direct offering under its effective shelf registration statement a Senior Secured Convertible Note
dated March 21, 2023, referred to herein as the "March 2023 Senior Convertible Note", with such note having a $ 11.1 million
face value principal, a 7.875 % annual stated interest rate, a contractual conversion price of $ 5.00 per share of the Company's
common stock (subject to standard adjustments in the event of any stock split, stock dividend, stock combination, recapitalization or
other similar transaction), and a contractual maturity date of March 21, 2025. The March 2023 Senior Convertible Note may be converted
into shares of common stock of the Company at the Holder's election.

 The
March 2023 Senior Convertible Note proceeds were $ 9.925 million after deducting a $ 1.186 million lender fee and offering costs. The lender
fee and offering costs were recognized as of the March 21, 2023 issue date as a current period expense in other income (expense) in the
Company's consolidated statement of operations.

 During
the period from March 21, 2023 to September 20, 2023, the Company was required to pay interest expense only (on the $11.1 million face
value principal), at 7.875 % per annum, computed on a 360 day year. The Company paid in cash interest expense of $ 391 for the year ended
December 31, 2023.

 F- 21

 Note
13 — Debt - continued

 Commencing
September 21, 2023, and then on each of the successive first and tenth trading day of each month thereafter through to and including
March 14, 2025 (each referred to as an "Installment Date"); and on the March 21, 2025 maturity date, the Company will be
required to make a principal repayment of $ 292 together with accrued interest thereon, with such 38 payments referred to herein as the
"Installment Amount", settled in shares of common stock of the Company, subject to customary equity conditions, including
minimum share price and volume thresholds, or at the election of the Company, in cash, in whole or in part.

 In
addition to the Installment Amount repayments, the Holder may elect to accelerate the conversion of future Installment Amount repayments,
and interest thereon, subject to certain restrictions, as defined, utilizing the then current conversion price of the most recent Installment
Date conversion price.

 The
payment of all amounts due and payable under this senior convertible note is guaranteed by all of Lucid Diagnostics' subsidiaries;
and the obligations under this senior convertible note are secured by all of the assets of Lucid Diagnostics and its subsidiaries.

 Lucid
is subject to certain customary affirmative and negative covenants regarding the rank of the note, along with the incurrence of further
indebtedness, the existence of liens, the repayment of indebtedness and the making of investments, the payment of cash in respect of
dividends, distributions or redemptions, the transfer of assets, the maturity of other indebtedness, and transactions with affiliates,
among other customary matters.

 Lucid
is subject to financial covenants requiring: (i) a minimum of $5.0 million of available cash at all times; (ii) the ratio of (a) the
outstanding principal amount of the total senior convertible notes outstanding, accrued and unpaid interest thereon and accrued and unpaid
late charges to (b) the Company's average market capitalization over the prior ten trading days, as of the last day of any fiscal
quarter commencing with September 30, 2023, to not exceed 30%; and (iii) the Company's market capitalization to at no time be less
than $30 million. As of December 31, 2023, the Company was in compliance, and as of the date hereof, the Company is in compliance, with
the Financial Tests.

 The
March 2023 Senior Convertible Note installment payments may be made in shares of Lucid Diagnostics common stock at a conversion price
that is the lower of the contractual conversion price and 82.5 % of the two lowest VWAPs during the last 10 trading days preceding the
date of conversion, subject to a conversion price floor of $ 0.30. The notes are also subject to certain provisions that may require redemption
upon the occurrence of an event of default, a change of control, or certain equity issuances.

 In
the year ended December 31, 2023, approximately $ 92 of principal repayments along with approximately $ 48 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
$ 166 (with such fair value measured as the respective conversion date quoted closing price of the common stock of the Company). The conversions
resulted in a debt extinguishment loss of $ 26 in the year ended December 31, 2023. Subsequent to December 31, 2023, as of March 21,
2024, approximately $ 260 of interest expense thereon, was settled
through the issuance of 242,390 shares of common stock of the Company, with such shares having a fair value of approximately $ 359
(with such fair value measured as the respective conversion date quoted closing price of the common stock of the Company).

 Note
14 — Stock-Based Compensation

 Lucid
Diagnostics 2018 Long-Term Incentive Equity Plan

 The
Lucid Diagnostics Inc. 2018 Long-Term Incentive Equity Plan ("Lucid Diagnostics 2018 Equity Plan") is separate and apart
from the PAVmed 2014 Equity Plan discussed below. The Lucid Diagnostics 2018 Equity Plan is designed to enable Lucid Diagnostics to offer
employees, officers, directors, and consultants, an opportunity to acquire shares of common stock of Lucid Diagnostics. The types of
awards that may be granted under the Lucid Diagnostics 2018 Equity Plan include stock options, stock appreciation rights, restricted
stock, and other stock-based awards subject to limitations under applicable law. All awards are subject to approval by the Lucid Diagnostics
compensation committee.

 A
total of 11,644,000 shares of common stock of Lucid Diagnostics are reserved for issuance under the Lucid Diagnostics 2018 Equity Plan,
with 2,832,133 shares available for grant as of December 31, 2023. The share reservation is not diminished by a total of 423,300 stock
options and 50,000 restricted stock awards granted outside the Lucid Diagnostics 2018 Equity Plan, as of December 31, 2023. In January
2024, the number of shares available for grant was increased by 2,680,038 in accordance with the evergreen provisions of the plan.

 F- 22

 Note
14 — Stock-Based Compensation - continued

 Lucid
Diagnostics Stock Options

 Lucid
Diagnostics stock options granted under the Lucid Diagnostics 2018 Equity Plan and stock options granted outside such plan are summarized
as follows:

of Stock Options Issued and Outstanding Activities

 Number of

 Stock Options

 Weighted

 Average

 Exercise Price

 Remaining

 Contractual

 Term (Years)

 Intrinsic Value (2)

 Outstanding stock options at December 31, 2021

 1,419,242

 $
 0.73

 7.0

 Granted (1)

 2,365,000

 $
 3.68

 Exercised

 ( 965,342
)

 $
 0.72

 Forfeited

 ( 253,523
)

 $
 3.83

 Outstanding stock options at December 31, 2022

 2,565,377

 $
 3.14

 8.3

 $

 Granted (1)

 3,618,000

 $
 1.32

 Exercised

 —

 $
 —

 Forfeited

 ( 678,994
)

 $
 2.75

 Outstanding stock options at December 31, 2023 (3)

 5,504,383

 $
 2.00

 8.5

 $

 Vested and exercisable stock options at December 31, 2023

 2,339,527

 $
 2.30

 7.8

 $

 (1)

 Stock
 options granted under the Lucid Diagnostics 2018 Equity Plan and those granted outside such plan generally vest one-third in one
 year then ratably over the next eight quarters, and have a ten-year contractual term from date-of-grant.

 (2)

 The
 intrinsic value is computed as the difference between the quoted price of the Lucid Diagnostics common stock on each of December
 31, 2023 and December 31, 2022 and the exercise price of the underlying Lucid Diagnostics stock options, to the extent such quoted
 price is greater than the exercise price.

 (3)

 The
 outstanding stock options presented in the table above, are inclusive of 423,300 stock options granted outside the Lucid Diagnostics
 2018 Equity Plan, as of December 31, 2023 and December 31, 2022.

 Subsequent
to December 31, 2023,
on February 22, 2024, the company granted 2,895,000 stock options to employees and directors under the Lucid Diagnostics Inc 2018
Equity Plan with a weighted average exercise price of $ 1.25 for which will generally vest one-third
after one year then ratably over the next eight quarters.

 Lucid
Diagnostics Restricted Stock Awards

 Lucid
Diagnostics restricted stock awards granted under the Lucid Diagnostics 2018 Equity Plan and restricted stock awards granted outside
such plan are summarized as follows:

of Restricted Stock Award Activity

 Number of Restricted

 Stock Awards

 Weighted Average

 Grant Date Fair Value

 Unvested restricted stock awards as of December 31, 2021

 1,940,740

 $
 12.76

 Granted

 320,000

 4.53

 Vested

 ( 169,320
)

 13.48

 Forfeited

 —

 —

 Unvested restricted stock awards as of December 31, 2022 (1)

 2,091,420

 $
 11.44

 Granted

 550,000

 1.29

 Vested

 ( 303,980
)

 11.95

 Forfeited

 —

 —

 Unvested restricted stock awards as of December 31, 2023

 2,337,440

 $
 8.99

 (1)

 The
 unvested restricted stock awards presented in the table above, are inclusive of 50,000 restricted stock awards granted outside the
 Lucid Diagnostics 2018 Equity Plan as of December 31, 2022. These 50,000 restricted stock awards were fully vested during the year
 ended December 31, 2023.

Inc. 2014 Equity Plan

 The
PAVmed 2014 Long-Term Incentive Equity Plan (the "PAVmed 2014 Equity Plan"), is separate and apart from the Lucid Diagnostics
2018 Equity Plan (as such equity plan is discussed above).

 F- 23

 Note
14 — Stock-Based Compensation - continued

 Stock-Based
Compensation Expense

 The
stock-based compensation expense recognized by the Company for both the Lucid Diagnostics 2018 Equity Plan and the PAVmed 2014 Equity
Plan, for the periods indicated, was as follows:

of Stock-Based Compensation Expense

 2023

 2022

 Years Ended

 2023

 2022

 Lucid Diagnostics 2018 Equity Plan – cost of revenue

 $

 $

 Lucid Diagnostics 2018 Equity Plan – sales and marketing

 Lucid Diagnostics 2018 Equity Plan - general and administrative

 4,455

 12,691

 Lucid Diagnostics 2018 Equity Plan - research and development

 PAVmed 2014 Equity Plan - cost of revenue

 PAVmed 2014 Equity Plan - sales and marketing

 PAVmed 2014 Equity Plan - general and administrative

 PAVmed 2014 Equity Plan - research and development

 Total stock-based compensation expense

 $
 6,822

 $
 14,991

 The
stock-based compensation expense, as presented above, is inclusive of: stock options and restricted stock awards granted under the Lucid
Diagnostics 2018 Equity Plan to employees of PAVmed, the physician inventors of the technology licensed under the Amended CWRU License
Agreement, and members of the board of directors of Lucid Diagnostics, as well as the stock options granted under the PAVmed 2014 Equity
Plan to the physician inventors.

 As
of December 31, 2023, unrecognized stock-based compensation expense and weighted average remaining requisite service period with respect
to stock options and restricted stock awards issued under each of the Lucid Diagnostics 2018 Equity Plan and the PAVmed 2014 Equity Plan,
as discussed above, is as follows:

of Unrecognized Compensation Expense and Weighted Average Remaining Service Period

 Unrecognized

 Expense

 Weighted Average

 Remaining Service

 Period (Years)

 Lucid Diagnostics 2018 Equity Plan

 Stock Options

 $
 3,566

 2.0

 Restricted Stock Awards

 $
 1,167

 2.2

 PAVmed 2014 Equity Plan

 Stock Options

 $

 2.1

 Stock-based
compensation expense recognized with respect to stock options granted under the Lucid Diagnostics 2018 Equity Plan was based on a weighted
average estimated fair value of such stock options of $ 0.88 per share and $ 2.30 per share during the years ended December 31, 2023
and 2022, respectively, calculated using the following weighted average Black-Scholes valuation model assumptions:

of Stock-based Compensation Valuation Assumptions

 2023

 2022

 2023

 2022

 Expected term of stock options (in years)

 5.6

 5.6

 Expected stock price volatility

 %

 %

 Risk free interest rate

 3.9
 %

 2.1
 %

 Expected dividend yield

 —
 %

 —
 %

 Lucid
Diagnostics Inc Employee Stock Purchase Plan ("Lucid ESPP")

 A
total of 231,987 shares
of common stock of Lucid Diagnostics were purchased for proceeds of approximately $ 276 on
March 31, 2023 under the Lucid ESPP. A total of 276,213 and 84,030 shares
of common stock of Lucid Diagnostics were purchased for proceeds of approximately $ 275 and
$ 109 on
September 30, 2023 and 2022, respectively, under the Lucid ESPP. The Lucid ESPP has a total reservation of 1,000,000 shares
of common stock of which 407,770 shares
are available for issue as of December 31, 2023. In January 2024, our board authorized an increase in the number of shares available
for issue by 500,000.

 F- 24

 Note
15 — Stockholders' Equity

 Series
A Preferred Stock Offering

 On
March 7, 2023, the Company issued 13,625 shares of newly designated Series A Convertible Preferred Stock, par value $ 0.001 per share
(the "Series A Preferred Stock"), to accredited investors at a purchase price of $ 1,000 per share, for aggregate gross proceeds
to the Company of $ 13.625 million. In connection with the issuance the Company filed a Certificate of Designation of Preferences, Rights
and Limitations of the Series A Preferred Stock with the Secretary of State of the State of Delaware (the "Certificate of Designation").
The key terms of the Series A Preferred Stock are as follows:

 Each
share of Series A Preferred Stock is convertible at the option of the holder, subject to certain beneficial ownership limitations into
such number of shares of the Company's common stock, equal to the number of Series A Preferred Shares to be converted, multiplied
by the stated value of $ 1,000 (the "Stated Value"), divided by the conversion price in effect at the time of the conversion.
The initial conversion price is $ 1.394, subject to adjustment in the event of stock splits, stock dividends, and similar transactions.
The Series A Preferred Stock is convertible into shares of our common stock at any time at the option of the holder from and after the
six-month anniversary of its issuance, and automatically converts into shares of our common stock on March 7, 2025, the second anniversary
of its issuance.

 The
Series A Preferred Stock will be senior to the Common Stock and any other class of the Company's capital stock that is not by its
terms senior to or pari passu with the Series A Preferred Stock.

 The
holders of Series A Preferred Stock will be 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 A Preferred Stock then held by such Holder on March
7, 2024, 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 A Preferred Stock then held by such Holder on March 7, 2025. A holder that converts its Series A Preferred Stock prior to
March 7, 2024 or March 7, 2025, as the case may be, will not receive the dividend that accrues on such date with respect to such converted
Series A Preferred Stock. The holders of the Series A 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.

 In
the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company (or any Deemed Liquidation Event as defined
in the Certificate of Designation), the holders of shares of Series A Preferred Stock then outstanding will be entitled to be paid out
of the assets of the Company available for distribution to its stockholders, before any payment shall be made to the holders of Common
Stock by reason of their ownership thereof, an amount per share equal to the greater of (i) the Stated Value, plus any dividends accrued
but unpaid thereon, or (ii) such amount per share as would have been payable had all shares of Series A Preferred Stock been converted
into Common Stock immediately prior to such event.

 The
Series A Preferred Stock is a non-voting security, other than with respect to limited matters related to changes in terms of the Series
A Preferred Stock.

 The
Company will not effect any conversion of the Series A Preferred Stock, and a holder will not have the right to receive dividends or
convert any portion of the Series A Preferred Stock, to the extent that, after giving effect to the receipt of dividends or the conversion,
the holder (together with such holder's affiliates, and any persons acting as a group together with such holder or any of the holder's
affiliates) would beneficially own in excess of 4.99% of the Company's outstanding common stock (or, upon election of the holder,
9.99% of the Company's outstanding common stock).

 The
Company and the investors in the offering also executed a registration rights agreement (the "Series A Registration Rights Agreement"),
pursuant to which the Company agreed to file a registration statement covering the resale of the shares of Common Stock issuable pursuant
to the Series A Preferred Stock.

 Series
A-1 Preferred Stock Offering

 On
October 17, 2023, the Company issued 5,000 shares of newly designated Series A-1 Convertible Preferred Stock (the "Series
A-1 Preferred Stock"). The terms of the Series A-1 Preferred Stock are substantially identical to the terms of the Series A Preferred
Stock, except that the Series A-1 Preferred Stock has a conversion price of $ 1.2592. The aggregate gross proceeds from the sale of shares
in such offering were $ 5.0 million.

 The
Company and the investors in the offering also executed a registration rights agreement (the "Series A-1 Registration Rights Agreement"),
pursuant to which the Company agreed to file a registration statement covering the resale of the shares of Common Stock issuable pursuant
to the Series A-1 Preferred Stock.

 Subsequent to December 31, 2023, on March 13, 2024, the Company issued an additional 5,670 shares of Series A-1 Preferred
Stock, all of which was subsequently exchanged for Series B Preferred Stock (as described below).

 Series B Preferred Stock Offering and Exchange

 Subsequent
to December 31, 2023, on March 13, 2024, the Company issued 44,285
shares of newly designated Series B Convertible Preferred Stock (the "Series B Preferred Stock"). The terms of the
Series B Preferred Stock are substantially identical to the terms of the Series A Preferred Stock, except that the Series B
Preferred Stock has a conversion price of $ 1.2444,
and the Series B Preferred Stock is a voting security (subject to applicable ownership limitations). In addition, the Series B
Preferred Stock issued in exchange for Series A Preferred Stock and Series A-1 Preferred Stock may be converted, at the election of
the Company at any time after the six-month anniversary of the issuance of such shares of Series B Preferred Stock, upon written
notice given to the holders of such shares, if the volume weight average price of our common stock has been at least $ 8.00
per share (subject to adjustment in the event of stock splits, stock dividends, and similar transactions) on 20 out of 30
consecutive trading days ending within 15 trading days prior to the date on which such notice is given (subject to certain limited
exceptions). The aggregate gross proceeds from the sale of shares in such offering were $ 18.1
million.

 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 Preferred Stock Offering and Exchange, no shares of Series A Preferred
Stock or Series A-1 Preferred Stock remain outstanding.

 Lucid
Diagnostics Common Stock

 In
June 2023, the Company received shareholder approval to issue up to 200 million shares of its common stock, an increase of 100 million
shares.

 As
of December 31, 2023 and 2022 there were 42,329,864 and 40,518,792 shares of common stock issued and outstanding, respectively.
As of December 31, 2023, PAVmed holds 31,302,420 shares, representing a majority-interest equity ownership and PAVmed has a controlling
financial interest in the Company.

 F- 25

 Note
15 — Stockholders' Equity - continued

 Subsequent
to December 31, 2023, on January 26, 2024 PAVmed elected to receive payment of $ 4,675
of fees and reimbursements due from Lucid, through the issuance of 3,331,771
shares of Lucid Diagnostics common stock. Substantially all of such shares were distributed by PAVmed to its shareholders on
February 15, 2024. Following such distribution PAVmed holds 31,302,444
shares of Lucid Diagnostics common stock.

 Committed
Equity Facility and ATM Facility

 On
March 28, 2022, the Company entered into a committed equity facility with an affiliate of Cantor Fitzgerald ("Cantor"). Under
the terms of the committed equity facility, Cantor has committed to purchase up to $ 50 million of the Company's common stock from
time to time at the request of the Company. While there are distinct differences, the facility is structured similarly to a traditional
at-the-market equity facility, insofar as it allows the Company to raise primary equity capital on a periodic basis at prices based on
the existing market price. Cumulatively a total of 680,263 shares of Lucid Diagnostics' common stock were issued for net proceeds
of approximately $ 1.8 million, after a 4 % discount, as of December 31, 2023.

 In
November 2022, the Company entered into an "at-the-market offering" ("ATM") for up to $ 6.5 million of its common
stock that may be offered and sold under a Controlled Equity Offering Agreement between the Company and Cantor. In the year ended December
31, 2023, the Company sold 230,068 shares through the at-the-market equity facility for net proceeds of approximately $ 0.3 million, after
payments of 3 % commissions.

 Note
16 — Income Taxes

 Income
tax (benefit) expense for respective periods noted is as follows:

of Income Tax (Benefit) Expense

 2023

 2022

 2023

 2022

 Current

 Federal, State and Local

 $
 —

 $
 —

 Deferred

 Federal

 ( 9,281
)

 ( 12,703
)

 State and Local

 ( 6,897
)

 1,209

 Current and Deferred tax (benefit) expense

 ( 16,178
)

 ( 11,494
)

 Less: Valuation allowance reserve

 16,178

 11,494

 Income tax (benefit) expense

 $
 —

 $
 —

 The
reconciliation of the federal statutory income tax rate to the effective income tax rate for the respective period noted is as follows:

of Reconciliation of Federal Statutory Income Tax Rate

 2023

 2022

 2023

 2022

 U.S. federal statutory rate

 21.0
 %

 21.0
 %

 U.S. state and local income taxes, net of federal benefit

 6.4

 %

 7.2
 %

 Permanent differences

 ( 1.3
)%

 0.6
 %

 Tax credits

 1.5
 %

 0.5
 %

 Revaluation of state deferred taxes

 —
 %

 ( 8.8
)%

 Federal deferred true-up

 ( 0.7
)%

 —
 %

 State deferred true-up

 3.8
 %

 —
 %

 Valuation allowance

 ( 30.7
)%

 ( 20.5
)%

 Effective tax rate

 —
 %

 —
 %

 The
tax effects of temporary differences which give rise to the net deferred tax assets for the respective period noted is as follows:

of Net Deferred Tax Assets

 2023

 2022

 2023

 2022

 Deferred Tax Assets

 Net operating loss

 $
 29,059

 $
 16,015

 Debt issue costs

 —

 Stock-based compensation expense

 7,984

 6,920

 Accrued expenses

 Depreciation & amortization

 Research and development expenditures

 3,109

 2,442

 Research and development tax credit carryforwards

 1,062

 Deferred tax assets

 $
 42,170

 $
 25,992

 Deferred Tax Liabilities

 Depreciation

 —

 —

 Deferred Tax Liabilities

 $
 —

 $
 —

 Deferred tax assets, net of deferred tax liabilities

 42,170

 25,992

 Less: valuation allowance

 ( 42,170
)

 ( 25,992
)

 Deferred tax assets, net after valuation allowance

 $
 —

 $
 —

 F- 26

 Note
16 — Income Taxes - continued

 Deferred
tax assets and deferred tax liabilities resulting from temporary differences are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of the change in
the tax rate is recognized as income or expense in the period the change in tax rate is enacted.

 As
required by FASB ASC Topic 740, Income Taxes, ("ASC 740"), a "more-likely-than-not" criterion is applied when
assessing the estimated realization of deferred tax assets through their utilization to reduce future taxable income, or with respect
to a deferred tax asset for tax credit carryforward, to reduce future tax expense. A valuation allowance is established, when necessary,
to reduce deferred tax assets, net of deferred tax liabilities, when the assessment indicates it is more-likely-than-not, the full or
partial amount of the net deferred tax asset will not be realized. Accordingly, the Company evaluated the positive and negative evidence
bearing upon the estimated realizability of the net deferred tax assets, and based on the Company's history of operating losses,
concluded it is more-likely-than-not the deferred tax assets will not be realized, and therefore recognized a valuation allowance reserve
equal to the full amount of the deferred tax assets, net of deferred tax liabilities, as of December 31, 2023 and 2022.

 Lucid
Diagnostics has federal and state net operating loss ("NOL") carryforwards, available to reduce future taxable income, if
any, as of December 31, 2023 and 2022, as follows: federal NOL carryforward of approximately $ 103.5 million and $ 65.1 million, respectively,
with such federal NOL carryforward not having a statutory expiration date; and state NOL carryforward of approximately $ 103.5 million
and $ 65.1 million, respectively, with such state NOL carryforward having statutory expiration dates commencing in 2037. The Company has
not yet conducted a formal analysis and the NOL carryforward may be subject-to limitation under U.S. Internal Revenue Code ("IRC")
Section 382 (provided there was a greater than 50% ownership change, as computed under such IRC Section 382).

 As
discussed herein, on October 14, 2021, Lucid Diagnostics completed its initial public offering ("IPO") of its common stock.
While PAVmed Inc. holds a majority-interest equity ownership and has a controlling financial interest, its ownership interest was reduced
from 81.8477% before the IPO to 79.9796% after the IPO. Accordingly, Lucid Diagnostics is included in the PAVmed consolidated income
tax returns through October 13, 2021, and effective October 14, 2021, Lucid Diagnostics will file its income tax returns on a stand-alone
legal entity basis. The Lucid Diagnostics stand-alone legal entity estimated income tax provision was computed on an assumed separate
income tax return for the periods presented through October 13, 2021, wherein, the estimated income tax provision of Lucid Diagnostics
is computed as if its income tax returns were filed by Lucid Diagnostics on a stand-alone legal entity basis. Notwithstanding the absence
of a formal tax sharing agreement between PAVmed and Lucid Diagnostics, the Lucid Diagnostics stand-alone legal entity current tax expense
and /or tax refund, if any, would be settled with PAVmed(as opposed with the respective tax authority) through October 13, 2021. The
deferred tax asset and /or deferred tax liability; a valuation allowance on the deferred tax asset, net; and /or an uncertain tax position,
if any; each as discussed above, is determined based on Lucid Diagnostics stand-alone legal entity assumed filing of separate income
tax returns.

 The
Company files income tax returns in the United States in federal and applicable state and local jurisdictions. The Company's tax
filings for the years 2018 and thereafter each remain subject to examination by taxing authorities. The Company's policy is to
record interest and penalties related to income taxes as part of its income tax provision. The Company has not recognized any penalties
or interest related to its income tax provision.

 In
August 2022, the U.S. Congress passed the Inflation Reduction Act, which included a corporate minimum tax on book earnings of 15%, an
excise tax on corporate share repurchases of 1%, and certain climate change and energy tax credit incentives. The adoption of a corporate
minimum tax of 15% is not expected to impact Lucid's effective tax rate. The excise tax of 1% on corporate share buybacks will
not have an impact on the Company's effective tax rate.

 F- 27

 Note
17 — Net Loss Per Share

 The
Net loss per share basic and diluted for the respective periods indicated is as follows:

of Net Loss Per Share Basic and Diluted

 2023

 2022

 Years Ended

 2023

 2022

 Numerator

 $
)

 $
)

 Denominator

 Weighted average common shares outstanding, basic and diluted

 41,756,129

 36,172,421

 Net loss per share (1)

 Net loss per share - basic and diluted

 $
 ( 1.26
)

 $
 ( 1.55
)

 (1)
 - Convertible Preferred
Stock would potentially be considered a participating security under the two-class method of calculating net loss per share. However,
the Company has incurred net losses to-date, and as such holders are not contractually obligated to share in the losses, there is no
impact on the Company's net loss per share calculation for the periods indicated.

 Basic
weighted-average number of shares of common stock outstanding for the years ended December 31, 2023 and 2022 include the shares of
the Company issued and outstanding during such periods, each on a weighted average basis. The basic weighted average number of shares
common stock outstanding excludes common stock equivalent incremental shares, while diluted weighted average number of shares outstanding
includes such incremental shares. However, as the Company was in a loss position for all years presented, basic and diluted weighted
average shares outstanding are the same, as the inclusion of the incremental shares would be anti-dilutive. The common stock equivalents
excluded from the computation of diluted weighted average shares outstanding are as follows:

of Common Stock Equivalents Excluded from Computation of Diluted Earnings Per Share

 2023

 2022

 2023

 2022

 Stock options

 5,504,383

 2,565,377

 Unvested restricted stock awards

 2,337,440

 2,091,420

 Preferred stock

 13,744,812

 —

 Total

 21,586,635

 4,656,797

 F- 28