Stock-Based Compensation

6 Months Ended

Jun. 30, 2024

Retirement Benefits [Abstract]

Stock-Based Compensation

Note 11 — Stock-Based Compensation

PAVmed Inc. 2014 Long-Term Incentive Equity Plan

The PAVmed Inc. 2014 Long-Term Incentive Equity Plan (the “PAVmed 2014 Equity Plan”) is designed to enable PAVmed to offer employees, officers, directors, and consultants, as defined, an opportunity to acquire shares of common stock of PAVmed. The types of awards that may be granted under the PAVmed 2014 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 PAVmed compensation committee.

A total of 1,835,970 shares of common stock of PAVmed are reserved for issuance under the PAVmed 2014 Equity Plan, with 77,379 shares available for grant as of June 30, 2024. The share reservation is not diminished by a total of 66,720 PAVmed Inc. stock options and restricted stock awards granted outside the PAVmed 2014 Equity Plan as of June 30, 2024. In January 2024, the number of shares available for grant was increased by 432,452 in accordance with the evergreen provisions of the plan.

Note 11 — Stock-Based Compensation - continued

PAVmed Stock Options

PAVmed stock options granted under the PAVmed 2014 Equity Plan and stock options granted outside such plan are summarized as follows:

	Number of Stock Options			Weighted Average Exercise Price		Remaining Contractual Term (Years)		Intrinsic Value(2)
Outstanding stock options at December 31, 2023		1,192,458		$	26.18		7.3	$	—
Granted(1)		79,500		$	2.28
Exercised		—		$	—
Forfeited		(36,909	)	$	12.25
Outstanding stock options at June 30, 2024(3)		1,235,049		$	25.06		6.8	$	—
Vested and exercisable stock options at June 30, 2024		850,180		$	32.88		5.9	$	—

(1)	Stock options granted under the PAVmed 2014 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 PAVmed common stock on each of June 30, 2024 and December 31, 2023 and the exercise price of the underlying PAVmed 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 60,054 stock options granted outside the PAVmed 2014 Equity Plan, as of June 30, 2024 and December 31, 2023.

On February 22, 2024, the Company granted 59,500 stock options under the PAVmed Inc 2014 Equity Plan with a weighted average exercise price of $1.85. Each such option will vest one-third after one year then ratably over the next eight quarters. In addition, on February 22, 2024, a total of 390,000 restricted stock awards were granted to the Board of Directors under the PAVmed 2014 Equity Plan, with such restricted stock awards having an aggregate fair value of approximately $0.7 million, which was measured using the respective grant date quoted closing price per share of PAVmed Inc. common stock, with the fair value recognized as stock-based compensation expense ratably on a straight-line basis over the vesting period, which is commensurate with the service period. The vesting of the restricted stock awards vest ratably on an annual basis over a three year period with the initial annual vesting date of November 30, 2024. The restricted stock awards are subject to forfeiture if the requisite service period is not completed.

PAVmed Restricted Stock Awards

PAVmed restricted stock awards granted under the PAVmed 2014 Equity Plan and restricted stock awards granted outside such plan are summarized as follows:

	Number of Restricted Stock Awards			Weighted Average Grant Date Fair Value
Unvested restricted stock awards as of December 31, 2023		70,527		$	38.77
Granted		390,000			1.85
Vested		(4,064	)		5.79
Forfeited		—			—
Unvested restricted stock awards as of June 30, 2024		456,463		$	7.45

Lucid Diagnostics Inc. 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 above. 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 14,324,038 shares of common stock of Lucid Diagnostics are reserved for issuance under the Lucid Diagnostics 2018 Equity Plan, with 768,595 shares available for grant as of June 30, 2024. The share reservation is not diminished by a total of 523,300 stock options and 50,000 restricted stock awards granted outside the Lucid Diagnostics 2018 Equity Plan, as of June 30, 2024. 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.

Note 11 — 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:

	Number of Stock Options			Weighted Average Exercise Price		Remaining Contractual Term (Years)		Intrinsic Value(2)
Outstanding stock options at December 31, 2023		5,504,383		$	2.00		8.5	$	765
Granted(1)		3,519,000		$	1.23
Exercised		(3,333	)	$	1.31
Forfeited		(275,424	)	$	1.63
Outstanding stock options at June 30, 2024(3)		8,744,626		$	1.70		8.6	$	199
Vested and exercisable stock options at June 30, 2024		3,082,590		$	2.26		7.3	$	199

(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 June 30, 2024 and December 31, 2023 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 523,300 stock options granted outside the Lucid Diagnostics 2018 Equity Plan, as of June 30, 2024 and December 31, 2023.

On February 22, 2024, Lucid granted 2,895,000 stock options under the Lucid Diagnostics Inc 2018 Equity Plan with a weighted average exercise price of $1.25. Each option will 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:

	Number of Restricted Stock Awards			Weighted Average Grant Date Fair Value
Unvested restricted stock awards as of December 31, 2023		2,337,440		$	8.99
Granted		1,600,000			1.03
Vested		(26,912	)		4.56
Forfeited		(13,088	)		4.56
Unvested restricted stock awards as of June 30, 2024		3,897,440		$	5.77

In May 2024, a total of 1,600,000 restricted stock awards were granted to management under the Lucid Diagnostics 2018 Equity Plan, with such restricted stock awards having an aggregate fair value of approximately $1.5 million, which was measured using the respective grant date quoted closing price per share of Lucid Diagnostics Inc. common stock, with the fair value recognized as stock-based compensation expense ratably on a straight-line basis over the vesting period, which is commensurate with the service period. The vesting of the restricted stock awards vest on a single vest date of May 20, 2026. The restricted stock awards are subject to forfeiture if the requisite service period is not completed.

Consolidated Stock-Based Compensation Expense

The consolidated stock-based compensation expense recognized by each of PAVmed and Lucid Diagnostics for both the PAVmed 2014 Equity Plan and the Lucid Diagnostics 2018 Equity Plan, with respect to stock options and restricted stock awards as discussed above, for the periods indicated, was as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Cost of revenue	$	44	$	31	$	80	$	54
Sales and marketing expenses		387		455		790		899
General and administrative expenses		1,214		1,674		2,292		5,262
Research and development expenses		259		347		624		711
Total stock-based compensation expense	$	1,904	$	2,507	$	3,786	$	6,926

Note 11 — Stock-Based Compensation - continued

Stock-Based Compensation Expense Recognized by Lucid Diagnostics

As noted, the consolidated stock-based compensation expense presented above is inclusive of stock-based compensation expense recognized by Lucid Diagnostics, inclusive of each of: stock options granted under the PAVmed 2014 Equity Plan to the three physician inventors of the intellectual property underlying the Amended CWRU License Agreement; and stock options and restricted stock awards granted to employees of PAVmed and non-employee consultants under the Lucid Diagnostics 2018 Equity Plan. The stock-based compensation expense recognized by Lucid Diagnostics for both the PAVmed 2014 Equity Plan and the Lucid Diagnostics 2018 Equity Plan, with respect to stock options and restricted stock awards as discussed above, for the periods indicated, was as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Lucid Diagnostics 2018 Equity Plan – cost of revenue	$	33	$	16	$	58	$	28
Lucid Diagnostics 2018 Equity Plan – sales and marketing		326		247		597		470
Lucid Diagnostics 2018 Equity Plan – general and administrative		609		836		937		3,348
Lucid Diagnostics 2018 Equity Plan – research and development		138		66		258		136
PAVmed 2014 Equity Plan - cost of revenue		11		9		22		16
PAVmed 2014 Equity Plan - sales and marketing		39		120		118		253
PAVmed 2014 Equity Plan - general and administrative		1		8		4		164
PAVmed 2014 Equity Plan - research and development		44		97		141		192
Total stock-based compensation expense – recognized by Lucid Diagnostics	$	1,201	$	1,399	$	2,135	$	4,607

The consolidated 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 PAVmed 2014 Equity Plan and the Lucid Diagnostics 2018 Equity Plan, as discussed above, is as follows:

	Unrecognized Expense		Weighted Average Remaining Service Period (Years)
PAVmed 2014 Equity Plan
Stock Options	$	2,103		1.7
Restricted Stock Awards	$	660		2.4
Lucid Diagnostics 2018 Equity Plan
Stock Options	$	4,665		2.1
Restricted Stock Awards	$	2,305		1.8

Note 11 — Stock-Based Compensation - continued

Stock-based compensation expense recognized with respect to stock options granted under the PAVmed 2014 Equity Plan was based on a weighted average estimated fair value of such stock options of $1.47 per share and $5.25 per share during the six month periods ended June 30, 2024 and 2023, respectively, calculated using the following weighted average Black-Scholes valuation model assumptions:

	Six Months Ended June 30,
	2024			2023
Expected term of stock options (in years)		5.8			5.7
Expected stock price volatility		90	%		88	%
Risk free interest rate		4.3	%		3.7	%
Expected dividend yield		—	%		—	%

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 $0.80 per share and $0.87 per share during the six month periods ended June 30, 2024 and 2023, respectively, calculated using the following weighted average Black-Scholes valuation model assumptions:

	Six Months Ended June 30,
	2024			2023
Expected term of stock options (in years)		5.7			5.6
Expected stock price volatility		74	%		75	%
Risk free interest rate		4.4	%		3.7	%
Expected dividend yield		—	%		—	%

PAVmed Inc. Employee Stock Purchase Plan (“PAVmed ESPP”)

A total of 34,332 shares and 38,216 shares of common stock of the Company were purchased for proceeds of approximately $62 and $182, on March 31, 2024 and 2023, respectively, under the PAVmed ESPP. The March 31, 2023 purchase was partially settled through the redeployment of 12,590 shares of treasury stock. The PAVmed ESPP has a total reserve of 300,001 shares of common stock of PAVmed of which 139,863 shares are available for issue as of June 30, 2024. In January 2024, the number of shares available-for-issue was increased by 166,667 in accordance with the evergreen provisions of the plan.

Lucid Diagnostics Inc. Employee Stock Purchase Plan (“Lucid ESPP”)

A total of 511,884 shares and 231,987 shares of common stock of Lucid Diagnostics were purchased for proceeds of approximately $353 and $276 on March 31, 2024 and 2023, respectively, under the Lucid ESPP. The Lucid ESPP has a total reserve of 1,500,000 shares of common stock of Lucid Diagnostics of which 395,886 shares are available for issue as of June 30, 2024. In January 2024, the Lucid board authorized an increase in the number of shares available for issue by 500,000.