PAVmed Inc.

Previous wording

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 Quarterly Report on Form 10-Q and the documents we have filed as exhibits to this Form 10-Q and the Form 10-K completely and with the understanding our actual future results may be materially different from what we expect. We do not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

Current wording

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

Previous wording

Our current focus is multi-fold. We continue to support commercial expansion and execution of EsoGuard, which is the flagship product of our subsidiary, Lucid Diagnostics, of which we remain the shareholder with the largest voting interest. In addition, through a separate majority-owned subsidiary, Veris Health, we offer the Veris Cancer Care Platform. We are focused in the immediate term on entering into strategic partnership opportunities with leading academic oncology systems to expand access to the Veris Cancer Care Platform, while concurrently developing an implantable physiological monitor, designed to be implanted alongside a chemotherapy port, which will interface with the Veris Cancer Care Platform. In terms of other existing products and technologies, we have adopted an incubator-type platform where we are looking to obtain financing on a product-by-product basis as necessary to advance each asset to a meaningful inflection point along its path to commercialization. Finally, as resources permit, we will continue to explore external innovations that fulfill our project selection criteria without limiting ourselves to any target sector, specialty or condition.

Current wording

Our current focus is multi-fold. We continue to support commercial expansion and execution of EsoGuard, which is the flagship product of our subsidiary, Lucid Diagnostics, of which we remain the shareholder with the largest voting interest. In addition, through a separate majority-owned subsidiary, Veris Health, we offer the Veris Cancer Care Platform. We are focused in the immediate term on entering into strategic partnership opportunities with leading academic oncology systems to expand access to the Veris Cancer Care Platform, while concurrently developing an implantable physiological monitor, designed to be implanted alongside a chemotherapy port, which will interface with the Veris Cancer Care Platform. In terms of other existing products and technologies, we have adopted an incubator-type platform, PMX, where we are looking to obtain financing on a product-by-product basis as necessary to advance each asset to a meaningful inflection point along its path to commercialization. Finally, as resources permit, we will continue to explore external innovations that fulfill our project selection criteria without limiting ourselves to any target sector, specialty or condition.

Previous wording

On March 18, 2025, Lucid announced that its ENVET-BE clinical utility study has been accepted for publication in Gastroenterology & Hepatology—the fifth peer-reviewed publication of clinical utility data for Lucid’s EsoGuard® Esophageal DNA Test, and the second to present findings from a real-world screening population. The manuscript, entitled “Enhancing the Diagnostic Yield of EGD for Diagnosis of Barrett’s Esophagus Through Methylated DNA Biomarker Triage,” demonstrates that confirmatory upper endoscopy (EGD) performed in EsoGuard-positive patients had a substantially higher diagnostic yield for detecting esophageal precancer (Barrett’s Esophagus or BE) than the expected yield of screening EGD alone in at-risk patients. The ENVET-BE study reviewed real-world data from a cohort of 199 EsoGuard-positive patients who completed confirmatory EGD. The overall positive diagnostic yield for BE was 2.4-fold higher than the expected yield of screening EGD alone, based on disease prevalence within an at-risk population. The yield was nearly three-fold higher in patients meeting American College of Gastroenterology (ACG) screening criteria.

Current wording

In April 2025, Lucid’s fifth peer-reviewed clinical utility manuscript, “Enhancing the Diagnostic Yield of EGD for Diagnosis of Barrett’s Esophagus Through Methylated DNA Biomarker Triage,” was published inGastroenterology & Hepatology. This manuscript presents clinical utility data from the ENVET-BE study, which is the second to assess the clinical utility of EsoGuard in a real-world screening population. The ENVET-BE study analyzed 209 EsoGuard-positive patients who underwent biomarker triage and confirmatory EGD in the 2023 calendar year, to test the hypothesis that EGDs performed on patients who first triage positive on EsoGuard have higher diagnostic yield than screening EGDs alone. The yield of screening EGDs was estimated by literature-established disease prevalence (10.6%). A 2.4-fold increase in BE detection compared with the performance goal was observed for the full study population. In the cohort meeting American College of Gastroenterology (ACG) criteria for BE screening, the diagnostic yield was increased by 2.7-fold.

Previous wording

On March 13, 2025, Lucid announced that Highmark Blue Cross Blue Shield, an independent licensee of the Blue Cross and Blue Shield Association, has issued a positive coverage policy for non-invasive screening of esophageal precancer and cancer in New York state. The new policy will cover EsoGuard in patients who meet established criteria for esophageal precancer testing consistent with professional society guidelines.

Current wording

On March 13, 2025, Lucid announced that Highmark Blue Cross Blue Shield, an independent licensee of the Blue Cross and Blue Shield Association, has issued a positive coverage policy for non-invasive screening of esophageal precancer and cancer in New York state. The new policy, which became effective as of May 26, 2025, will cover EsoGuard in patients who meet established criteria for esophageal precancer testing consistent with professional society guidelines.

Previous wording

On April 17, 2025, the Company entered into a Sales Agreement (the “Sales Agreement”) with Maxim Group LLC, as sales agent (“Maxim”), pursuant to which the Company may offer and sell, from time to time through or to Maxim, shares of its common stock. Under the Sales Agreement, the Company may not issue or sell through Maxim a dollar amount of shares that would exceed $2,880,000 of shares. The Company will pay Maxim a commission of 3.0% of the aggregate gross sales prices of the shares. The Company intends to use the net proceeds from any such sales for working capital and general corporate purposes.

Current wording

On April 17, 2025, the Company entered into a Sales Agreement (the “Sales Agreement”) with Maxim Group LLC, as sales agent (“Maxim”), pursuant to which the Company may offer and sell, from time to time through or to Maxim, shares of its common stock. Under the Sales Agreement, the Company may not issue or sell through Maxim a dollar amount of shares that would exceed $2.88 million of shares. The Company will pay Maxim a commission of 3.0% of the aggregate gross sales prices of the shares. The Company intends to use the net proceeds from any such sales for working capital and general corporate purposes.

Previous wording

The net proceeds from the Lucid CMPO, after deducting the underwriting discount and other expenses of the Lucid CMPO, were approximately $16.1 million. Lucid intends to use the net proceeds from the Lucid CMPO for working capital and general corporate purposes.

Current wording

On April 11, 2025, Lucid closed on the sale of 14,375,000 shares of its common stock, pursuant to its previously announced offering of shares of common stock at a price of $1.20 per share (the “Lucid CMPO”). The net proceeds from the Lucid CMPO, after deducting the underwriting discount and other expenses of the Lucid CMPO, were approximately $16.2 million. Lucid intends to use the net proceeds from the Lucid CMPO for working capital and general corporate purposes.

Previous wording

The net proceeds of the Lucid RDO, after deducting the estimated placement agent’s fees and other expenses of the Lucid RDO, were approximately $14.9 million. Lucid intends to use the net proceeds from the Lucid RDO for working capital and other general corporate purposes.

Current wording

On March 5, 2025, Lucid closed on the sale of 13,939,330 shares of its common stock, pursuant to its previously announced offering of shares of common stock at a price of $1.10 per share (the “Lucid RDO”). The net proceeds of the Lucid RDO, after deducting the estimated placement agent’s fees and other expenses of the Lucid RDO, were approximately $14.9 million. Lucid intends to use the net proceeds from the Lucid RDO for working capital and other general corporate purposes.

Previous wording

Until September 10, 2024, the date of deconsolidation of Lucid Diagnostics from PAVmed’s consolidated results, the cost of revenues recognized primarily 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 have incurred expenses for tests in the period in which the activities occur, therefore, gross margin as a percentage of revenue has varied from quarter to quarter due to costs being incurred in one period that relate to revenues recognized in a later period.

Current wording

The Company’s cost of revenue from subscription revenue was derived from its Veris Health Cancer Care Platform. Until September 10, 2024, the date of deconsolidation of Lucid Diagnostics from PAVmed’s consolidated results, the cost of revenues recognized was primarily from the delivery of patient EsoGuard test results and included 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 have incurred expenses for tests in the period in which the activities occur, therefore, gross margin as a percentage of revenue has varied from quarter to quarter due to costs being incurred in one period that relate to revenues recognized in a later period.

Previous wording

Sales and marketing expenses consist primarily of salaries and related costs for employees engaged in sales, sales support and marketing activities, as well as advertising and promotion expenses. We anticipate our sales and marketing expenses to decrease in the future compared to historical periods due to the deconsolidation of Lucid, as going forward, the expenses associated with the sales and marketing operations for the Lucid EsoGuard test will no longer be recorded within the Company’s operating results.

Current wording

Sales and marketing expenses consist primarily of salaries and related costs for employees engaged in sales, sales support and marketing activities, as well as advertising and promotion expenses. We anticipate our sales and marketing expenses to decrease in the future compared to historical periods ending on or prior to September 30, 2024 due to the deconsolidation of Lucid as of September 10, 2024, as going forward, the expenses associated with the sales and marketing operations for the Lucid EsoGuard test will no longer be recorded within the Company’s operating results.

Previous wording

We anticipate our general and administrative expenses will decrease in the future compared to historical periods due to the deconsolidation of Lucid, as going forward, the general and administrative expenses, including third-party payor reimbursement costs, incurred by Lucid will no longer be recorded within the Company’s operating results. In the future, general and administrative expenses will include those expenses related to being a public company, including fees and expenses for audit, legal, regulatory, tax-related services, insurance premiums and investor relations costs associated with maintaining compliance as a public company for PAVmed and its majority-owned subsidiaries.

Current wording

We anticipate our general and administrative expenses will decrease in the future compared to historical periods ending on or prior to September 30, 2024 due to the deconsolidation of Lucid as of September 10, 2024, as going forward, the general and administrative expenses, including third-party payor reimbursement costs, incurred by Lucid will no longer be recorded within the Company’s operating results. In the future, general and administrative expenses will include those expenses related to being a public company, including fees and expenses for audit, legal, regulatory, tax-related services, insurance premiums and investor relations costs associated with maintaining compliance as a public company for PAVmed and its majority-owned subsidiaries.

Previous wording

The reported research and development activities, including our clinical trials, were focused principally on the acceleration of EsoGuard and Veris Cancer Care Platform commercialization. Due to the deconsolidation of Lucid, going forward, the expenses in respect of the Company’s research and development activities will include those associated with research and development activities related to the Veris Cancer Care Platform, the PMX incubator program and other products in our pipeline as well as applicable new technologies, as resources permit.

Current wording

The expenses of our research and development activities, including our clinical trials, for historical periods ending on or prior to September 30, 2024 were principally related to EsoGuard and the Veris Cancer Care Platform. Due to the deconsolidation of Lucid on September 10, 2024, the expenses in respect of the Company’s research and development activities for subsequent historical periods and future periods will include those associated with research and development activities related to the Veris Cancer Care Platform, the PMX incubator program and other products in our pipeline as well as applicable new technologies, as resources permit.

Previous wording

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

Current wording

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

Previous wording

In the three months ended March 31, 2025, cost of revenue was less than $0.1 million as compared $1.7 million for the corresponding period in the prior year. The net decrease of $1.7 million was principally related to Lucid’s results not being included in our operating results for the three months ended March 31, 2025 as compared to the prior year, during which all three months of Lucid’s operating results were so included.

Current wording

In the three months ended June 30, 2025, cost of revenue costs were less than $0.1 million, as compared to $1.7 million for the corresponding period in the prior year. The net decrease of $1.6 million principally related to Lucid’s results not being included in our operating results for the three months ended June 30, 2025 as compared to the prior year, during which all three months of Lucid’s operating results were so included.

Previous wording

In the three months ended March 31, 2025, sales and marketing costs were approximately $0.2 million as compared to $4.3 million for the corresponding period in the prior year. The net decrease of $4.1 million was principally related to Lucid’s results not being included in our operating results for the three months ended March 31, 2025 as compared to the prior year, during which all three months of Lucid’s operating results were so included.

Current wording

In the three months ended June 30, 2025, sales and marketing costs were approximately $0.2 million as compared to $4.2 million for the corresponding period in the prior year. The net decrease of $4.0 million principally related to Lucid’s results not being included in our operating results for the three months ended June 30, 2025 as compared to the prior year, during which all three months of Lucid’s operating results were so included.

Previous wording

In the three months ended March 31, 2025, general and administrative costs were approximately $4.4 million as compared to $6.7 million for the corresponding period in the prior year. The net decrease of $2.3 million was principally related to Lucid’s results not being included in our operating results for the three months ended March 31, 2025 as compared to the prior year, during which all three months of Lucid’s operating results were so included.

Current wording

In the three months ended June 30, 2025, general and administrative costs were approximately $3.7 million as compared to $7.0 million for the corresponding period in the prior year. The net decrease of $3.3 million principally related to Lucid’s results not being included in our operating results for the three months ended June 30, 2025 as compared to the prior year, during which all three months of Lucid’s operating results were so included.

Previous wording

In the three months ended March 31, 2025, research and development costs were approximately $0.8 million as compared to $1.9 million for the corresponding period in the prior year. The net decrease of $1.1 million was principally related to Lucid’s results not being included in our operating results for the three months ended March 31, 2025 as compared to the prior year, during which all three months of Lucid’s operating results were so included.

Current wording

In the three months ended June 30, 2025, research and development costs were approximately $0.8 million as compared to $1.6 million for the corresponding period in the prior year. The net decrease of $0.8 million principally related to Lucid’s results not being included in our operating results for the three months ended June 30, 2025 as compared to the prior year, during which all three months of Lucid’s operating results were so included.

Previous wording

The amortization of acquired intangible assets was zero in the three months ended March 31, 2025, as compared to $0.4 million for the corresponding period in the prior year. The decrease of $0.4 million in the current period was due to certain acquired intangible assets being fully amortized in February 2024.

Current wording

The amortization of acquired intangible assets was zero in the three months ended June 30, 2025, as compared to $0.1 million for the corresponding period in the prior year. The decrease of $0.1 million in the current period was due to certain acquired intangible assets being fully amortized in February 2024.

Previous wording

The three months ended March 31, 2025 as compared to three months ended March 31, 2024* - continued*

Current wording

The three months ended June 30, 2025 as compared to the three months ended June 30, 2024* - continued*

Previous wording

At March 31, 2025, the fair value of the Company’s investment in Lucid was $46.6 million, with the company recognizing an unrealized gain on its investment in Lucid of $21.0 million in the accompanying unaudited condensed consolidated statements of operations for the three months ended March 31, 2025. The fair value of common shares of Lucid held by the Company was determined using the closing price of Lucid’s common stock per share on March 31, 2025 of $1.49.

Current wording

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

Previous wording

In the three months ended March 31, 2025 and March 31, 2024, the change in the fair value of our convertible notes was less than $0.1 million and $2.2 million of expense, respectively, related to the April 2022 Senior Convertible Note, the September 2022 Senior Convertible Note, and (for the three months ended March 31, 2024 only) the Lucid March 2023 Senior Convertible Note. The April 2022 Senior Convertible Note, the September 2022 Senior Convertible Note, and the Lucid March 2023 Senior Convertible Note were initially measured at their issue-date estimated fair value and subsequently remeasured at estimated fair value as of each applicable reporting period date. The Company initially recognized an aggregate of $4.3 million of fair value non-cash expense on the issue dates.

Current wording

In the six months ended June 30, 2025 and June 30, 2024, the change in the fair value of our convertible notes was approximately $0.3 million and $2.7 million of expense, respectively, related to the April 2022 Senior Convertible Note, the September 2022 Senior Convertible Note, and (for the six months ended June 30, 2024 only) the Lucid March 2023 Senior Convertible Note. The April 2022 Senior Convertible Note, the September 2022 Senior Convertible Note, and the Lucid March 2023 Senior Convertible Note were initially measured at their issue-date estimated fair value and subsequently remeasured at estimated fair value as of each applicable reporting period date. The Company initially recognized an aggregate of $4.3 million of fair value non-cash expense on the issue dates.

Previous wording

In the three months ended March 31, 2025, a debt extinguishment loss in the aggregate of less than $0.1 million was recognized in connection with our April 2022 Senior Convertible Note and September 2022 Senior Convertible Note as discussed below.

Current wording

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

Previous wording

In comparison, in the three months ended March 31, 2024, a debt extinguishment loss in the aggregate of approximately $0.4 million was recognized in connection with our April 2022 Senior Convertible Note and the September 2022 Senior Convertible Note as discussed below.

Current wording

In comparison, in the six months ended June 30, 2024, a debt extinguishment loss in the aggregate of approximately $1.1 million was recognized in connection with our April 2022 Senior Convertible Note, September 2022 Senior Convertible Note and the Lucid March 2023 Senior Convertible Note as discussed below.

Previous wording

We have financed our operations principally through the public and private issuances of our common stock, preferred stock, common stock purchase warrants, and debt, both at the PAVmed level and, in the case of Lucid, at the subsidiary level. We are subject to all of the risks and uncertainties typically faced by medical device and diagnostic and medical device companies that devote substantially all of their efforts to the commercialization of their initial product and services and ongoing R&D and clinical trials. We experienced net income before noncontrolling interests of approximately $18.6 million and used approximately $1.6 million of cash in operations for the three months ended March 31, 2025. Financing activities provided $3.1 million of cash during the three months ended March 31, 2025. We ended the quarter with cash on-hand of $2.7 million as of March 31, 2025. We expect to continue to experience recurring losses and negative cash flows from operations, and will continue to fund our operations with debt and/or equity financing transactions. The Company’s ability to continue operations 12 months beyond the issuance of the financial statements, will depend upon its ability to control its operating costs within the limits of the amounts collected from its management service contracts with its non-consolidated subsidiaries, to substantially increase its revenues from the Veris Cancer Care platform, and to raise additional capital through various potential sources including equity or debt financings or refinancing or restructuring existing debt obligations. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date the accompanying unaudited condensed consolidated financial statements are issued.

Current wording

We have financed our operations principally through the public and private issuances of our common stock, preferred stock, common stock purchase warrants, and debt, both at the PAVmed level and, in the case of Lucid and Veris, at the subsidiary level, as well as through management fees under our management service contract with Lucid. We are subject to all of the risks and uncertainties typically faced by medical device and diagnostic and medical device companies that devote substantially all of their efforts to the commercialization of their initial products and services and ongoing R&D and clinical trials. We experienced net income before noncontrolling interests of approximately $6.3 million and used approximately $2.8 million of cash in operations for the six months ended June 30, 2025. Financing activities provided $5.6 million of cash during the six months ended June 30, 2025. We ended the quarter with cash on-hand of $4.0 million as of June 30, 2025. We expect to continue to experience recurring losses and negative cash flows from operations, and will continue to fund our operations with debt and/or equity financing transactions. The Company’s ability to continue operations 12 months beyond the issuance of the financial statements, will depend upon its ability to control its operating costs within the limits of the amounts collected from its management service contracts with its non-consolidated subsidiaries, to substantially increase its revenues from the Veris Cancer Care platform, and to raise additional capital through various potential sources including equity or debt financings or refinancing or restructuring existing debt obligations. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date the accompanying unaudited condensed consolidated financial statements are issued.

Previous wording

Effective as of March 31, 2022, we entered into a Securities Purchase Agreement (the “SPA”) with an accredited investor, pursuant to which we agreed to sell, and the investor agreed to purchase an aggregate of $50.0 million face value principal of Senior Secured Convertible Notes. On April 4, 2022, we completed an initial closing under the SPA, in which we sold to the investor a Senior Secured Convertible Note with a face value principal of $27.5 million (the “April 2022 Senior Convertible Note”). The April 2022 Senior Secured Convertible Note had an initial contractual maturity date of April 4, 2024, which maturity date the investor agreed to extend by one year, to April 4, 2025. The April 2022 Senior Convertible Note was satisfied in full in connection with the Exchange.

Current wording

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

Previous wording

On September 8, 2022, we completed an additional closing under the SPA, in which we sold to the investor an additional Senior Secured Convertible Note with a face value principal of $11.25 million (the “September 2022 Senior Convertible Note”). The September 2022 Senior Secured Convertible Note had an initial contractual maturity date of September 6, 2024, which maturity date has been now extended to December 31, 2025. The September 2022 Senior Convertible Note may be converted into or otherwise paid in shares of our common stock as described in Note 10,Debt.

Current wording

On September 8, 2022 we sold to the same investor an additional Senior Secured Convertible Note with a face value principal of $11.25 million (the “September 2022 Senior Convertible Note”). The September 2022 Senior Secured Convertible Note had an initial contractual maturity date of September 6, 2024, which maturity date has been now extended to December 31, 2025. The September 2022 Senior Convertible Note is more fully described in Note 10,Debt.

Previous wording

Under the April 2022 Senior Convertible Note (until it was satisfied in full on January 17, 2025 upon consummation of the Exchange), the September 2022 Senior Convertible Note and the SPA, we are 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. We also are subject to financial covenants requiring that (i) the amount of our available cash equal or exceed $8.0 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 to (b) our average market capitalization over the prior ten trading days, not exceed 30% (the “Debt to Market Cap Ratio Test”), and (iii) that our market capitalization shall at no time be less than $75 million (the “Market Cap Test” and, together with the Debt to Market Cap Ratio Test, the “Financial Tests”). The holder of the September 2022 Senior Convertible Note agreed, effective as of the consummation of the Exchange, to waive any non-compliance with the Financial Tests through December 31, 2025. Based on that separate waiver, as of March 31, 2025, the Company was in compliance with the Financial Tests.

Current wording

Under the the September 2022 Senior Convertible Note and the SPA, we are 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. We also are subject to financial covenants requiring that (i) the amount of our available cash equal or exceed $8.0 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 to (b) our average market capitalization over the prior ten trading days, not exceed 30% (the “Debt to Market Cap Ratio Test”), and (iii) that our market capitalization shall at no time be less than $75 million (the “Market Cap Test” and, together with the Debt to Market Cap Ratio Test, the “Financial Tests”). The holder of the September 2022 Senior Convertible Note agreed to waive any non-compliance with the Financial Tests through December 31, 2025.

Previous wording

See Note 10*, Debt*, to the Financial Statements for additional information about the SPA, the April 2022 Senior Convertible Note, and the September 2022 Senior Convertible Note. See also Note 4,Equity Method Investment, to the Financial Statements for additional information about the September 2022 Senior Convertible Note as it relates to the MSA.

Current wording

See Note 10*, Debt*, to the Financial Statements for additional information about the September 2022 Senior Convertible Note. See also Note 4,Equity Method Investment, to the Financial Statements for additional information about the September 2022 Senior Convertible Note as it relates to the MSA.

Previous wording

In the three months ended March 31, 2025, the Company sold 1,216,565 shares through its at-the-market equity facility for net proceeds of approximately $0.8 million, after payment of 3% commissions.

Current wording

In the six months ended June 30, 2025, the Company sold 1,216,565 shares through its at-the-market equity facility for net proceeds of approximately $0.8 million, after payment of 3% commissions.

Previous wording

The Subscription Agreement contains customary representations, warranties, covenants and indemnities of the Company and the Investors, as well as a covenant by the Company to provide the Investors with protection against subsequent equity raises by the Company or Veris at a lower purchase price (solely to the extent the Investors continue to hold the shares issued in the Offering), with such protection to be effected through the issuance of additional shares of Veris’ common stock. In addition, the Company (i) agreed to solicit the affirmative vote of its stockholders by no later than its next meeting of stockholders, which will be held no later than June 30, 2025, for approval, for the purposes of the rules of The Nasdaq Stock Market LLC, of the issuance of all of the shares underlying the Pre-Funded Warrants, and to hold additional meetings quarterly thereafter to the extent such approval is not obtained, (ii) granted the Investors a 100% participation right in future offerings of equity securities of the Company or its majority-owned subsidiaries, subject to existing participation rights of the Company’s debt holder, and (iii) agreed not to incur, and not to permit its majority-owned subsidiaries to incur, any indebtedness until August 18, 2026, subject to certain exceptions. In accordance with the Subscription Agreement, the Company also entered into a registration rights agreement (the “Registration Rights Agreement”) with the Investors, pursuant to which the Company agreed to file a registration statement covering the resale of the shares of the Company’s common stock issued in the Offering, including the shares underlying the Pre-Funded Warrants.

Current wording

The Subscription Agreement contains customary representations, warranties, covenants and indemnities of the Company and the Investors, as well as a covenant by the Company to provide the Investors with protection against subsequent equity raises by the Company or Veris at a lower purchase price (solely to the extent the Investors continue to hold the shares issued in the Offering), with such protection to be effected through the issuance of additional shares of Veris’ common stock. In addition, the Company (i) agreed to solicit the affirmative vote of its stockholders by no later than its next meeting of stockholders, which will be held no later than June 30, 2025, for approval, for the purposes of the rules of The Nasdaq Stock Market LLC, of the issuance of all of the shares underlying the Pre-Funded Warrants, and to hold additional meetings quarterly thereafter to the extent such approval is not obtained, (ii) granted the Investors a 100% participation right in future offerings of equity securities of the Company or its majority-owned subsidiaries, subject to existing participation rights of the Company’s debt holder, and (iii) agreed not to incur, and not to permit its majority-owned subsidiaries to incur, any indebtedness until August 18, 2026, subject to certain exceptions. In accordance with the Subscription Agreement, the Company also entered into a registration rights agreement (the “Registration Rights Agreement”) with the Investors, pursuant to which the Company agreed to file a registration statement covering the resale of the shares of the Company’s common stock issued in the Offering, including the shares underlying the Pre-Funded Warrants. This registration statement was filed and became effective as of April 15, 2025.

Previous wording

The Pre-Funded Warrants become exercisable upon the receipt of the stockholder approval described above, expire on February 18, 2030, and have an exercise price of $0.001 per share, subject to adjustment as described below. The Pre-Funded Warrants may be exercised for cash, or on a cashless basis. In the event the Pre-Funded Warrants are exercised on a cashless basis, the holder will be entitled to receive a number of shares of the Company’s common stock equal to (x) the excess of the market value of a share of the Company’s common stock over the exercise price, multiplied by (y) the number of shares as to which the Pre-Funded Warrant is being exercised, divided by (z) the market value of a share of the Company’s common stock. The exercise price and number and type of securities or other property issuable on exercise of the Pre-Funded Warrants may be adjusted in certain circumstances, including in the event of a stock split or combination, stock dividend, or a recapitalization, reorganization, merger or similar transaction. In addition, a holder of the Pre-Funded Warrants will be entitled to participate in rights offerings or pro rata distributions by the Company. However, there will be no adjustment for issuances of shares of common stock at a price below the exercise price.

Current wording

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

Previous wording

The discussion and analysis of our financial condition and results of operations is based on our unaudited condensed consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”). The preparation of these unaudited condensed consolidated financial statements requires us to make estimates and assumptions that affect the amounts reporting in our unaudited condensed consolidated financial statements and accompanying notes. On an ongoing basis, we evaluate our estimates and judgements. In accordance with U.S. GAAP, we base our estimates on historical experience and on various other factors that are believed to be appropriate under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. Our critical accounting estimates are as disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 as filed with the SEC on March 24, 2025. There have been no material changes to our critical accounting estimates in the three months ended March 31, 2025.

Current wording

The discussion and analysis of our financial condition and results of operations is based on our unaudited condensed consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”). The preparation of these unaudited condensed consolidated financial statements requires us to make estimates and assumptions that affect the amounts reporting in our unaudited condensed consolidated financial statements and accompanying notes. On an ongoing basis, we evaluate our estimates and judgments. In accordance with U.S. GAAP, we base our estimates on historical experience and on various other factors that are believed to be appropriate under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. Our critical accounting estimates are as disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 as filed with the SEC on March 24, 2025. There have been no material changes to our critical accounting estimates in the three months ended June 30, 2025.