Lucid Diagnostics Provides Business Update and Preliminary First Quarter 2022 Financial Results

Lucid Diagnostics Inc. (Nasdaq: LUCD) (“Lucid”, the “Company”), a commercial-stage, cancer prevention medical diagnostics company, and majority-owned subsidiary of PAVmed Inc. (Nasdaq: PAVM, PAVMZ) (“PAVmed”), today provided a business update for the Company and presented preliminary financial results for the three months ended March 31, 2022.

Conference Call and Webcast

A conference call and webcast for today’s business update and first quarter 2022 financial results will take place at 4:30 PM EDT. To access the conference call, listeners should dial 877-407-0789 toll-free in the U.S., and international listeners should dial 201-689-8562 and ask to join the “Lucid Diagnostics Business Update Conference Call”. The conference call will be available live via a webcast and for replay at the investor relations section of the Company’s website at https://ir.luciddx.com. Following the conclusion of the conference call, a replay will be available for one week and can be accessed by dialing 844-512-2921 toll-free in the U.S. or 412-317-6671, followed by the PIN number: 13729511.

Business Update Highlights

“I am delighted to report that Lucid Diagnostics is making excellent progress on all fronts and that we continue to lay a solid foundation for our long-term growth strategy,” said Lishan Aklog, M.D., Lucid’s Chairman and Chief Executive Officer. “Our team continues to drive EsoGuard^® commercialization, expand our sales infrastructure, execute the second stage of our Lucid Test Center rollout, transition to our own fully staffed laboratory, and work tirelessly to secure EsoGuard reimbursement. Our balance sheet remains strong, providing us with the necessary resources to execute this strategy.”

Highlights from the first quarter and recent weeks include:

• On April 4^th, the American College of Gastroenterology (“ACG”) updated its clinical guideline for the diagnosis and management of esophageal precancer, endorsing, for the first time, nonendoscopic biomarker screening as an acceptable alternative to costly and invasive endoscopy to detect precancer and prevent highly lethal esophageal cancer. The updated guideline supports esophageal precancer screening utilizing Lucid’s EsoGuard^® DNA Test on samples collected with its EsoCheck^® Cell Collection Device, the only such nonendoscopic biomarker screening test available.
• Lucid processed 533 commercial EsoGuard tests in the first quarter of 2022, which represents a 76% increase sequentially from the fourth quarter of 2021 and a nearly 500% increase annually from the first quarter of 2021. The Company continued to expand its sales infrastructure consistent with its year-end goals.
• Lucid completed its first stage of its Lucid Test Center program covering metropolitan areas in seven states. The Company subsequently launched the second stage of the program and plans to open test centers in nine additional states this year. The Company hired an experienced Director of Clinical Services to oversee the expansion.
• LucidDx Labs Inc. (“LucidDx Labs”), a wholly owned subsidiary of Lucid, acquired the assets necessary to operate its own CLIA-certified, CAP-accredited clinical laboratory effective February 25, 2022. The Company hired an experienced VP of Laboratory Operations who will oversee an accelerated transition from the current management service agreement to the lab being fully staffed by Lucid employees. It also upgraded its revenue cycle management provider which for the first time will begin billing and processing claims directly on behalf of Lucid.
• LucidDx Labs entered into Lucid’s first commercial payer agreement—a participating provider agreement with MediNcrease Health Plans, LLC, a national, directly-contracted, multi-specialty PPO provider network with over 8 million lives covered through its clients and payers. The agreement provides for reimbursement rates at a percent of charges for services rendered, including the performance of the EsoGuard test.
• Medicare Administrative Contractor Palmetto GBA’s MolDX Program published a proposed foundational Local Coverage Determination (“LCD”) for tests designed to detect upper gastrointestinal precancer and cancer, an important step in Lucid’s efforts to secure Medicare coverage for EsoGuard. As part of the public review process which extends to May 14, 2022, Lucid, along with multiple other stakeholders, will be submitting comments suggesting important modifications to the proposed LCD. The Company, along with other stakeholders, also participated in a substantive Open Meeting held by the MolDx Program on May 10, 2022.

Preliminary Financial Results

• For the three months ended March 31, 2022, EsoGuard related revenues were $0.2 million. Operating expenses were approximately $11.9 million, which include stock-based compensation expenses of $3.8 million. GAAP net loss attributable to common stockholders was approximately $12.3 million, or $(0.35) per common share.
• As shown below and for the purpose of illustrating the effect of stock-based compensation and other non-cash expenses on the Company’s financial results, the Company’s preliminary non-GAAP adjusted loss for the three months ended March 31, 2022, was approximately $8.2 million or $(0.23) per common share.
• Lucid had cash and cash equivalents of $47.9 million as of March 31, 2022, compared to $53.7 as of December 31, 2021.
• On March 28, 2022, the Company entered into a Common Stock Purchase Agreement (the “Purchase Agreement”) with CF Principal Investments LLC (“Cantor”), an affiliate of Cantor Fitzgerald, relating to a committed equity facility (the “Facility”). Pursuant to the Purchase Agreement, the Company has the right to sell to Cantor up to $50.0 million of its common shares (the “Shares”), subject to certain conditions and limitations set forth in the Purchase Agreement. 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 a price related to the current market price.
• Sales of the Shares to Cantor under the Purchase Agreement and the timing of any sales, will be determined by the Company from time to time at its sole discretion and will depend on a variety of factors, including, among other things, market conditions, the trading price of the Shares, and determinations by the Company regarding the use of proceeds of such Shares. Upon the satisfaction of the conditions to Cantor’s obligation to purchase Shares, the Company will have the right, from time to time during the 36-month period after the commencement of the Facility, to direct Cantor to purchase up to a maximum number of Shares on any trading day. The purchase price of the Shares will be 96% of the volume-weighted average price of the Shares on such trading day.
• The unaudited financial results for the three months ended March 31, 2022, are expected to be filed with the SEC on Form 10-Q on May 16, 2022 and will then be available at www.luciddx.com or www.sec.gov.

Lucid Non-GAAP Measures

• To supplement our unaudited financial results presented in accordance with U.S. generally accepted accounting principles (GAAP), management provides certain non-GAAP financial measures of the Company’s financial results. These non-GAAP financial measures include net loss before interest, taxes, depreciation, and amortization (EBITDA), and non-GAAP adjusted loss, which further adjusts EBITDA for stock-based compensation expense and other non-cash income and expenses, if any. The foregoing non-GAAP financial measures of EBITDA and non-GAAP adjusted loss are not recognized terms under U.S. GAAP.
• Non-GAAP financial measures are presented with the intent of providing greater transparency to the information used by us in our financial performance analysis and operational decision-making. We believe these non-GAAP financial measures provide meaningful information to assist investors, shareholders, and other readers of our unaudited financial statements in making comparisons to our historical financial results and analyzing the underlying performance of our results of operations. These non-GAAP financial measures are not intended to be, and should not be, a substitute for, considered superior to, considered separately from or as an alternative to, the most directly comparable GAAP financial measures.
• Non-GAAP financial measures are provided to enhance readers’ overall understanding of our current financial results and to provide further information for comparative purposes. Management believes the non-GAAP financial measures provide useful information to management and investors by isolating certain expenses, gains, and losses that may not be indicative of our core operating results and business outlook. Specifically, the non-GAAP financial measures include non-GAAP adjusted loss, and its presentation is intended to help the reader understand the effect of the loss on the issuance or modification of convertible securities, the periodic change in fair value of convertible securities, the loss on debt extinguishment, and the corresponding accounting for non-cash charges on financial performance. In addition, management believes non-GAAP financial measures enhance the comparability of results against prior periods.