Debt

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

Debt

Note 11 — Debt

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

	Contractual Maturity Date	Stated Interest Rate			Conversion Price per Share		Face Value Principal Outstanding		Fair Value
April 2022 Senior Convertible Note	April 4, 2024		7.875	%	$	5.00	$	20,162	$	20,750
September 2022 Senior Convertible Note	September 6, 2024		7.875	%	$	5.00	$	11,250	$	11,650
Lucid March 2023 Senior Convertible Note	March 21, 2025		7.875	%	$	5.00	$	11,111	$	11,900
Balance as of March 31, 2023							$	42,523	$	44,300

	Contractual Maturity Date	Stated Interest Rate			Conversion Price per Share		Face Value Principal Outstanding		Fair Value
April 2022 Senior Convertible Note	April 4, 2024		7.875	%	$	5.00	$	21,497	$	22,000
September 2022 Senior Convertible Note	September 6, 2024		7.875	%	$	5.00	$	11,250	$	11,650
Balance as of December 31, 2022							$	32,747	$	33,650

The changes in the fair value of debt during the three months ended March 31, 2023 is as follows:

	April 2022 Senior Convertible Note			September 2022 Senior Convertible Note		Lucid March 2023 Senior Convertible Note		Sum of Balance Sheet Fair Value Components			Other Income (expense)
Fair Value - December 31, 2022	$	22,000		$	11,650	$	—	$	33,650		$	—
Face value principal – issue date		—			—		11,111		11,111			—
Fair value adjustment – issue date		—			—		789		789			(789	)
Installment repayments – common stock		(1,335	)		—		—		(1,335	)		—
Non-installment payments – common stock		(166	)		—		—		(166	)		—
Change in fair value		251			—		—		251			(251	)
Fair Value at March 31, 2023	$	20,750		$	11,650	$	11,900	$	44,300
Other Income (Expense) - Change in fair value – three months ended March 31, 2023											$	(1,040	)

PAVmed - Senior Secured Convertible Notes

The Company entered into a Securities Purchase Agreement (“SPA”) dated March 31, 2022, with an accredited institutional investor (“Investor”, “Lender”, and /or “Holder”), wherein, the Company agreed to sell, and the Investor agreed to purchase an aggregate of $50.0 million face value principal of debt - comprised of: an initial issuance of $27.5 million face value principal; and up to an additional $22.5 million of face value principal (upon the satisfaction of certain conditions). The debt was issued in a registered direct offering under the Company’s effective shelf registration statement.

Under the SPA, the Company issued a Senior Secured Convertible Note dated April 4, 2022, referred to herein as the “April 2022 Senior Convertible Note”, with such note having a $27.5 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 April 4, 2024. The April 2022 Senior Convertible Note may be converted into shares of common stock of the Company at the Holder’s election.

Note 11 — Debt - continued

Under the same SPA, the Company issued an additional Senior Secured Convertible Note dated September 8, 2022, referred to herein as the “September 2022 Senior Convertible Note”, with such note having a $11.25 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 September 6, 2024. The September 2022 Senior Convertible Note may be converted into shares of common stock of the Company at the Holder’s election.

The Company is subject to financial covenants requiring: (i) a minimum of $8.0 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, to not exceed 30% (except that such maximum percentage was 50% for the period from September 8, 2022 through March 5, 2023) (the “Debt to Market Cap Ratio Test”); and (iii) the Company’s market capitalization to 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”). From time to time from and after September 8, 2022 through March 12, 2023, the Company was not in compliance with the Financial Tests. As of March 12, 2023, the Investor agreed to waive any such non-compliance during such time period and thereafter through May 31, 2023.

In the three months ended March 31, 2023, approximately $1,501 of principal repayments along with approximately $15 of interest expense thereon, were settled through the issuance of 4,330,643 shares of common stock of the Company, with such shares having a fair value of approximately $2,027 (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 $0.5 million in the three months ended March 31, 2023. Subsequent to March 31, 2023, as of May 11, 2023, approximately $649 of principal repayments along with approximately $13 of interest expense thereon, were settled through the issuance of 2,183,089 shares of common stock of the Company, with such shares having a fair value of approximately $1,081 (with such fair value measured as the respective conversion date quoted closing price of the common stock of the Company).

Lucid Diagnostics - Senior Secured Convertible Notes

Lucid Diagnostics entered into a Securities Purchase Agreement (“Lucid 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. The debt was issued in a registered direct offering under the Lucid’s effective shelf registration statement.

Under the SPA dated March 13, 2023, Lucid issued a Senior Secured Convertible Note dated March 21, 2023, referred to herein as the “Lucid 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 Lucid’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 Lucid March 2023 Senior Convertible Note may be converted into shares of common stock of Lucid at the Holder’s election.

The Lucid 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 unaudited condensed consolidated statement of operations.

During the period from March 21, 2023 to September 20, 2023, Lucid is 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. Lucid paid in cash interest expense of $24 for the three months ended March 31, 2023.

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, Lucid 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 Lucid, subject to customary equity conditions, including minimum share price and volume thresholds, or at the election of Lucid, 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 Lucid’s subsidiaries; and the obligations under this senior convertible note are secured by all of the assets of Lucid 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) Lucid’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) Lucid’s market capitalization to at no time be less than $30 million.

During the three months ended March 31, 2023, the Company recognized debt extinguishment losses of approximately $525, in connection with issuing common stock for principal repayments on convertible debt mentioned above. During the three months ended March 31, 2022, the Company did not recognize debt extinguishment losses.

See Note 10, Financial Instruments Fair Value Measurements, for a further discussion of fair value assumptions.