Lucid Diagnostics Inc S-3, filed May 23, 2023

Lucid Diagnostics Inc. (LUCD)

S-3 2023-05-23

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Added on October 22, 2026

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	Large accelerated filer ☐	Accelerated filer ☐
	Non-accelerated filer ☒	Smaller reporting company ☒
		Emerging Growth Company ☒

ABOUT THIS PROSPECTUS	ii
MARKET AND INDUSTRY DATA	ii
TRADEMARKS	ii
NOTE ON FORWARD-LOOKING STATEMENTS AND RISK FACTOR SUMMARY	iii
GLOSSARY	iv
PROSPECTUS SUMMARY	1
THE OFFERING	6
RISK FACTORS	8
USE OF PROCEEDS	12
THE MARCH 2023 NOTE OFFERING	13
SELLING STOCKHOLDER	17
PLAN OF DISTRIBUTION OF SECURITIES	19
LEGAL MATTERS	21
EXPERTS	21
WHERE YOU CAN FIND MORE INFORMATION	21
INFORMATION INCORPORATED BY REFERENCE	21

	●	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;

	●	our 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;

	●	regulatory and operational risks;

	●	cybersecurity risks;

	●	risks related to COVID-19 pandemic; and

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

	●	“510(k)” refers to a premarket notification, submitted to the FDA by a manufacturer pursuant to section 510(k) of the FDCA and 21 CFR § 807 subpart E, of its intent to market a non-exempt Class I or Class II medical device intended for human use, for which a PMA application is not required, to demonstrate that the device to be marketed is as safe and effective, that is, substantially equivalent to, a legally marketed device, commonly known as a “predicate”; and “510(k) clearance” refers to a determination by FDA under 21 CFR § 807.100 that a medical device has been found to be substantially equivalent to a legally marketed predicate device and can be marketed in the U.S.

	●	“BE” refers to Barrett’s Esophagus, an esophageal precancer and complication of GERD in which surface cells lining the lower esophagus undergo precancerous metaplastic or dysplastic transformation from repeated exposure to stomach fluid, including acid, refluxing into the lower esophagus. BE can be nondysplastic or dysplastic. In nondysplastic BE, or “NDBE,” there is no dysplasia. In dysplastic BE, there is dysplasia, which can be early, low-grade dysplasia, or “LGD,” or advanced, high-grade dysplasia, or “HGD.”

	●	“BE-EAC spectrum” refers to conditions along the pathologic spectrum from esophageal precancer to cancer involving surface cells of the esophagus, starting with early precancerous NDBE, which can progress to LGD, then to HGD, and then to EAC.

	●	“CAP” refers to the College of American Pathologists.

	●	“CE Mark” refers to “Conformité Européenne” Mark, a mark indicating that a product such as a medical device conforms to the essential requirements of the relevant European directive and may be marketed in European Economic Area (the European Union, Norway, Iceland, and Lichtenstein), Switzerland, and, until July 1, 2023, the United Kingdom; for medical devices and in vitro devices the relevant directives had been Medical Device Directive 93/42/EEC and In-Vitro Diagnostic Medical Devices Directive 98/79/EC, respectively, but have been or will soon be replaced by Regulation (EU) 2017/745 and Regulation (EU) 2017/746, respectively.

	●	“CLIA” refers to the Clinical Laboratory Improvement Amendments of 1988 and associated regulations set forth in 42 CFR § 493, through which CMS regulates all non-research laboratory testing performed on humans in the U.S., including LDTs.

	●	“CMS” refers to the U.S. Center for Medicare and Medicaid Services.

	●	“Dysplasia” is a precursor to invasive cancer characterized by premalignant transformation which is confined to surface cells of the lining an organ and characterized by abnormal intracellular and architectural features on cytologic or histologic evaluation.

	●	“EAC” refers to esophageal adenocarcinoma, the most common and highly lethal form of esophageal cancer which universally arises from BE.

	●	“FDA” refers to the U.S. Food and Drug Administration.

	●	“FDCA” refers to the U.S. Food, Drug, and Cosmetic Act as codified in 21 CFR.

	●	“GERD” refers to gastroesophageal reflux disease, commonly known as chronic heart burn, acid reflux, or just reflux, a symptomatic or asymptomatic pathologic condition where dysfunction of the muscular valve between the stomach and esophagus allows stomach fluid, including acid, to inappropriately reflux into the lower esophagus.

	●	“LDT” or “laboratory developed test” refers to a diagnostic test, defined by 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; FDA has historically exercised enforcement discretion with regard to premarket review of LDTs and last year was explicitly prohibited by the Department of Health and Human Services from such enforcement outside the formal rule-making process.

	●	“PAVmed” refers to PAVmed Inc., our parent company, which owns a majority of our outstanding common stock.

	●	“PMA” refers to premarket approval, the most stringent FDA premarket medical device scientific and regulatory review process, codified in 21 CFR § 814, which, due to the risk associated with Class III devices, 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).

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

	●	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.

	●	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 the License Agreement, 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.

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

	●	Our business may be adversely affected by health epidemics and or pandemics, including the COVID-19 pandemic.

	●	Adverse results in material litigation matters could have a material adverse effect upon our business.

	●	Our ability to market EsoGuard, or any other IVD product that we may develop, license, or acquire, as LDTs without FDA approval, is entirely dependent on FDA continuing to exercise enforcement discretion with regard to requiring premarket review of LDTs.

	●	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.

	●	Securing FDA approval of EsoGuard, or any other IVD product we may develop, license, or acquire, 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.

	●	Clinical 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.

	●	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.

	●	EsoCheck 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.

	●	Clinical 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.

	●	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 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.

	●	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.

	●	Failure 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.

	●	PAVmed, owns a majority of our voting stock and thus may control certain actions requiring a stockholder vote.

	●	Certain 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.

	●	We may issue shares of our capital stock or debt securities in the future which could reduce the equity interest of our stockholders and might cause a change in control of our ownership.

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

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

	●	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.

Issuer		Lucid Diagnostics Inc.

Common stock to be offered by the selling stockholder		25,688,308 shares issuable upon conversion of the March 2023 Note⁽¹⁾

Common stock outstanding prior to this offering		43,725,703 shares⁽²⁾⁽³⁾

Common stock outstanding after giving effect to the issuance of the shares offered hereby		69,414,011 shares^(1)(2)(3)

Use of proceeds		We are not selling any securities under this prospectus and will not receive any of the proceeds from the sale of shares of our common stock by the selling stockholder.

Risk factors		See “Risk Factors” beginning on page 8 of this prospectus and the other information included in or incorporated by reference into this prospectus for a discussion of the factors you should consider before making an investment decision.

Market for our common stock		Our common stock is currently traded on the Nasdaq Global Market under the symbol “LUCD.”

	(1)	This amount includes 25,688,308 shares of our common stock issuable under the March 2023 Note, representing a good faith estimate of the maximum number of shares issuable thereunder. See “Selling Stockholder” for more information. The number of shares of our common stock to be issued under the March 2023 Note may be substantially greater or less than this amount, if we make the amortization payments of principal and interest in shares of our common stock (or upon conversion of the principal and interest in certain other circumstances as described elsewhere in this prospectus), 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 the Floor Price (as defined in “The March 2023 Note Offering” below)). 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 Note. In addition, the number of shares issued under the March 2023 Note may be substantially greater if we voluntarily lower the conversion price, which we are permitted to do pursuant to the terms thereof.

	(2)	Based on 43,725,703 shares of our common stock outstanding as of May 15, 2023 (inclusive of shares of common stock underlying unvested restricted stock awards).

	(3)	This amount does not include, as of May 15, 2023:

	●	5,052,458 shares of our common stock issuable upon exercise of our outstanding stock options, at a weighted average exercise price of $2.19 per share; and

	●	9,774,032 shares of our common stock issuable upon conversion of the Series A Convertible Preferred Stock, assuming the shares of Series A Preferred Stock were converted in full on such date at the current conversion price of $1.394 per share. The number of shares of common stock to be issued under the Series A Preferred Stock may be significantly greater than this amount, because dividends on the Series A Preferred Stock will be paid in shares of the Company’s common stock.

	●	continue our research and development including existing and new clinical trials;

	●	pursue additional regulatory clearances and approvals for our products;

	●	protect our intellectual property rights or defend, in litigation or otherwise, any claims that we infringe third-party patents or other intellectual property rights;

	●	fund our operations;

	●	manufacture and distribute our products; and

	●	promote market acceptance of our products.

	●	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.

	●	require 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.

	●	During the period through and including the 90^th day after the Maturity Date (as defined below), or such later date as is agreed between the parties, we may not issue any securities that would cause a breach of the March 2023 Note, file a registration statement under the Securities Act relating to any securities other than the shares underlying the March 2023 Note or the Series A Preferred Stock, or issue, offer, sell, grant any option or right to purchase, or otherwise dispose of any equity or equity-linked or related security, any debt, any preferred stock (other than up to $6,375,000 shares of the Series A Preferred Stock) or any purchase rights, subject to certain exceptions, including issuances at a price greater than $5.00 per share.

	●	So long as the March 2023 Note remains outstanding, we will not effect or enter an agreement to effect any variable rate transaction.

	●	We will hold a stockholder meeting, by no later than July 31, 2023, to approve resolutions (the “Stockholder Resolutions”) authorizing (i) an increase in the authorized shares of our common stock from 100 million to 200 million shares, and (ii) the issuance of shares of our common stock under the March 2023 Note for the purposes of compliance with the stockholder approval rules of Nasdaq. (In accordance with this requirement, the Stockholder Resolutions will be presented for approval at our annual meeting of stockholders scheduled to be held on June 21, 2023.) We will be obligated to continue to seek stockholder approval quarterly until such approval is obtained.

	(1)	Applicable percentage ownership is based on 43,725,703 shares of our common stock outstanding as of May 15, 2023, and based on 69,414,011 shares of our common stock outstanding after the offering.

	(2)	Ayrton Capital LLC, the investment manager to Alto Opportunity Master Fund, SPC - Segregated Master Portfolio B, has discretionary authority to vote and dispose of the shares held by Alto Opportunity Master Fund, SPC - Segregated Master Portfolio B and may be deemed to be the beneficial owner of these shares. Waqas Khatri, in his capacity as Managing Member of Ayrton Capital LLC, may also be deemed to have investment discretion and voting power over the shares held by Alto Opportunity Master Fund, SPC - Segregated Master Portfolio B. Ayrton Capital LLC and Mr. Khatri each disclaim any beneficial ownership of these shares. The address of Ayrton Capital LLC is 55 Post Rd West, 2nd Floor, Westport, CT 06880.

	(3)	This column lists the number of shares of our common stock beneficially owned by this selling stockholder as of May 15, 2023 calculated at a fixed conversion price of $5.00 per share. Without regard to the Maximum Percentage, as of May 15, 2023, this selling stockholder would beneficially own an aggregate of 25,688,308 shares of our common stock, consisting of 250% of the number of shares of common stock underlying the outstanding March 2023 Note held by this selling stockholder, assuming for the purposes of this calculation that the March 2023 Note was converted at an alternate conversion price of $1.15, all of which shares are being registered for resale under this prospectus.

	(4)	For the purposes of the calculations of common stock to be sold pursuant to the prospectus we are assuming (i) an alternate conversion date as of the date of filing of the registration statement of which this prospectus forms a part, (ii) interest on the March 2023 Note has accrued through the maturity date of March 21, 2025, and (iii) that the Note is converted in full at the alternate conversion price of $1.15 per share (without regard to any limitations on conversion set forth therein).

	(5)	Represents the amount of shares that will be held by the selling stockholder after completion of this offering based on the assumptions that (a) all shares of common stock underlying March 2023 Note registered for sale by the registration statement of which this prospectus is part of will be sold, and (b) no other shares of common stock are acquired or sold by the selling stockholder prior to completion of this offering. However, the selling stockholder is not obligated to sell all or any portion of the shares of our common stock offered pursuant to this prospectus.

	●	on any national securities exchange or quotation service on which the securities may be listed or quoted at the time of sale;

	●	in the over-the-counter market;

	●	in transactions otherwise than on these exchanges or systems or in the over-the-counter market;

	●	through the writing or settlement of options, whether such options are listed on an options exchange or otherwise;

	●	ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;

	●	block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;

	●	purchases by a broker-dealer as principal and resale by the broker-dealer for its account;

	●	an exchange distribution in accordance with the rules of the applicable exchange;

	●	privately negotiated transactions;

	●	short sales made after the date the Registration Statement is declared effective by the SEC;

	●	broker-dealers may agree with a selling security holder to sell a specified number of such shares at a stipulated price per share;

	●	a combination of any such methods of sale; and

	●	any other method permitted pursuant to applicable law.

	●	Annual Report on Form 10-K for the fiscal year ended December 31, 2022 (filed on March 14, 2023).

	●	Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2023 (filed on May 15, 2023).

	●	Current Reports on Form 8-K filed on January 18, 2023, February 17, 2023, March 13, 2023, March 14, 2023, and March 24, 2023.

	●	Form 8-A filed on October 12, 2021 registering our common stock under Section 12(b) of the Exchange Act.

SEC registration fee	$	5,000
Accounting fees and expenses	$	25,000
Legal fees and expenses	$	30,000
Transfer agent fees and expenses	$	—
Miscellaneous expenses	$	5,000
Total	$	65,000

	LUCID DIAGNOSTICS INC.

	By:	/s/ Lishan Aklog, M.D.
	Name:	Lishan Aklog, M.D.
	Title:	Chairman of the Board and Chief Executive Officer

Signatures		Title	Date

By:	/s/ Lishan Aklog, M.D.	Chairman of the Board and Chief Executive Officer	May 22, 2023
	Lishan Aklog, M.D.	(Principal Executive Officer)

By:	/s/ Dennis M. McGrath	Chief Financial Officer (Principal Financial Officer	May 22, 2023
	Dennis M. McGrath	and Principal Accounting Officer)

By:	/s/ Stanley N. Lapidus	Vice Chairman and Director	May 22, 2023
	Stanley N. Lapidus

By:	/s/ James L. Cox, M.D.	Director	May 22, 2023
	James L. Cox, M.D.

By:	/s/ Jacque J. Sokolov, M.D.	Director	May 22, 2023
	Jacque J. Sokolov, M.D.

By:	/s/ Ronald M. Sparks	Director	May 22, 2023
	Ronal M. Sparks

By:	/s/ Debra J. White	Director	May 22, 2023
	Debra J. White

		Incorporation by Reference
Exhibit No.	Description	Form	Exhibit No.	Date
3.1	Amended and Restated Certificate of Incorporation.	S-1/A	3.1	10/7/21
3.2	Amended and Restated Bylaws.	S-1/A	3.1	10/7/21
4.1	Specimen Common Stock Certificate.	S-1/A	4.1	10/7/21
4.2*	Form of Senior Secured Convertible Note.	8-K	4.1	3/14/23
5.1	Opinion of Graubard Miller.	+
10.1*	Form of Securities Purchase Agreement.	8-K	10.1	3/14/23
10.2*	Form of Security Agreement.	8-K	10.2	3/14/23
10.3*	Form of Guaranty.	8-K	10.3	3/14/23
10.4*	Form of Registration Rights Agreement.	8-K	10.1	3/24/23
10.5*	Form of Voting Agreement.	8-K	10.2	3/24/23
23.1	Consent of Marcum LLP.	+
23.2	Consent of Graubard Miller (included in its opinion filed as Exhibit 5.1).	+
24.1	Power of Attorney (set forth on signature page).	+
107	Filing Fee Table.	+

*	Schedule and exhibits to this exhibit omitted pursuant to Regulation S-K Item 601(b)(2). The Company agrees to furnish supplementally a copy of any omitted schedule or exhibit to the SEC upon request.
+	Filed herewith.