Lucid Diagnostics Inc PRE 14A, filed Apr 22, 2022

Lucid Diagnostics Inc. (LUCD)

PRE 14A 2022-04-22 For: 2022-04-22

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Added on October 16, 2026

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☒	Preliminary Proxy Statement

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☐	Definitive Proxy Statement

☐	Definitive Additional Materials

☐	Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12

☒	No fee required.

☐	Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

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☐	Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

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	1.	to elect two members of the Company’s board of directors (the “Board”) as Class A directors, to hold office until the third succeeding annual meeting and until their respective successors are duly elected and qualified (the “Director Election Proposal”);

	2.	to amend the Company’s 2018 Long-Term Incentive Equity Plan (the “2018 Plan”) (i) to increase total number of shares of the Company’s common stock available under the 2018 Plan by an additional 3,500,000 shares, from 5,644,000 shares to 9,144,000 shares, (ii) to add an “evergreen” provision to automatically increase the number of shares of the Company’s common stock available under the 2018 Plan on January 1^st of each year, by an amount equal to 6% of the Company’s outstanding common stock as of December 31^st of the preceding fiscal year, or such lesser amount as is approved by the Board, and (iii) to remove the limit on grants to any one participant in any one calendar year, except for non-employee directors (the “2018 Plan Proposal”);

	3.	to approve the Company’s Employee Stock Purchase Plan (the “ESPP”), which reserves 500,000 shares of the Company’s common stock for issuance pursuant to the terms of the ESPP and includes an “evergreen” provision to automatically increase the number of shares of the Company’s common stock available under the ESPP on January 1^st of each year, by an amount equal to the lesser of (a) 2% of the Company’s outstanding common stock as of December 31^st of the preceding fiscal year, and (b) 1,000,000 shares, or such lesser amount as is approved by the Board (the “ESPP Proposal”);

	4.	to approve, for the purposes of Listing Rule 5635 of The Nasdaq Stock Market LLC (“Nasdaq”), the issuance of shares of the Company’s common stock under the Common Stock Purchase Agreement (“Purchase Agreement”) with CF Principal Investments LLC (“Cantor”), an affiliate of Cantor Fitzgerald, which provides for a $50 million committed equity facility (the “Committed Equity Facility Proposal”);

	5.	to ratify the appointment of Marcum LLP as the Company’s independent registered certified public accounting firm for the year ending December 31, 2022 (the “Accountant Ratification Proposal”); and

	6.	to transact any other business as may properly come before the Annual Meeting or any adjournment or postponement thereof.

	●	vote via the Annual Meeting webcast; and

	●	submit questions or comments to the Company’s officers during the Annual Meeting via the Annual Meeting webcast.

	●	the amendment of the 2018 Plan (i) to increase total number of shares of the Company’s common stock available under the 2018 Plan by an additional 3,500,000 shares, from 5,644,000 shares to 9,144,000 shares, (ii) to add an “evergreen” provision to automatically increase the number of shares of the Company’s common stock available under the 2018 Plan on January 1^stof each year, by an amount equal to 6% of the Company’s outstanding common stock as of December 31^st of the preceding fiscal year, or such lesser amount as is approved by the Board, and (iii) to remove the limit on grants to any one participant in any one calendar year, except for non-employee directors (referred to herein as the “2018 Plan Proposal”);

	●	the approval of the ESPP, which reserves 500,000 shares of the Company’s common stock for issuance pursuant to the terms of the ESPP and includes an “evergreen” provision to automatically increase the number of shares of the Company’s common stock available under the ESPP on January 1^st of each year, by an amount equal to the lesser of (a) 2% of the Company’s outstanding common stock as of December 31^st of the preceding fiscal year, and (b) 1,000,000 shares, or such lesser amount as is approved by the Board (referred to herein as the “ESPP Proposal”);

	●	the approval, for the purposes of Listing Rule 5635 of Nasdaq, of the issuance of shares of the Company’s common stock under the Purchase Agreement with Cantor, which provides for a $50 million committed equity facility (referred to herein as the “Committed Equity Facility Proposal”); and

	●	the ratification of the appointment of Marcum LLP as the Company’s independent registered certified public accounting firm for the year ending December 31, 2022 (referred to herein as the “Accountant Ratification Proposal”).

	●	“FOR” the election of the management nominees in the Director Election Proposal;

	●	“FOR” the 2018 Plan Proposal;

	●	“FOR” the ESPP Proposal;

	●	“FOR” the Committed Equity Facility Proposal; and

	●	“FOR” the Accountant Ratification Proposal.

	●	By Attending the Annual Meeting. You may attend the Annual Meeting and vote via the Annual Meeting webcast.

	●	By Proxy via the Internet. You may vote by proxy via the Internet. Your Notice of Internet Availability or proxy card provides instructions for accessing the website through which you may submit a proxy via the Internet.

	●	By Proxy via the Telephone. You may vote by proxy via the telephone. Your Notice of Internet Availability or proxy card provides instructions for submitting a proxy by telephone.

	●	By Proxy via the Mail. If you requested printed copies of the proxy materials, you may vote by proxy via the mail by completing the included proxy card and returning it in the postage-paid return envelope.

	●	Within the U.S. and Canada: (888) 965-8995 (toll-free)

	●	Outside of the U.S. and Canada: (415) 655-0243 (standard rates apply)

	●	upon grant of the stock option, the participant will recognize no income provided that the exercise price was not less than the fair market value of Company common stock on the date of grant;

	●	upon exercise of the stock option, if the shares of common stock are not subject to a substantial risk of forfeiture, the participant will recognize ordinary compensation income in an amount equal to the excess, if any, of the fair market value of the shares on the date of exercise over the exercise price, and the Company will qualify for a deduction in the same amount, subject to the requirement that the compensation be reasonable; and

	●	the Company will be required to comply with applicable federal income tax withholding requirements with respect to the amount of ordinary compensation income recognized by the participant.

	Year Ended December 31,
	2021		2020
Marcum LLP
Audit Fees ⁽¹⁾	$	329,000	$	77,250
Audit-Related Fees ⁽²⁾		—		—
Tax Fees⁽³⁾		—		—
All Other Fees		—		—
Total Fees	$	329,000	$	77,250

	(1)	Audit fees consist of fees billed for professional services by the Company’s independent registered public accounting firm for audits and quarterly reviews of the Company’s consolidated financial statements during the year ended December 31, 2021 and for services that are normally provided by the accounting firm in connection with statutory and regulatory filings or engagements for those fiscal years, including the issuance of consents in connection with registration statement filings with the SEC and comfort letters in connection with securities offerings.

	(2)	Audit related fees represent the aggregate fees billed for assurance and related professional services rendered by the Company’s independent registered public accounting firm that are reasonably related to the performance of the audit or review of the Company’s financial statements and are not reported under “Audit Fees.”

	(3)	Tax fees represent the aggregate fees billed for professional services rendered by the Company’s independent registered public accounting firm for tax compliance, tax advice, and tax planning services.

Name	Age	Position
Lishan Aklog, M.D.	56	Chairman and Chief Executive Officer
Dennis M. McGrath	65	President, Chief Financial Officer and Corporate Secretary
Shaun M. O’Neil	40	Chief Operating Officer
Stanley N. Lapidus	73	Vice Chairman and Director
Aster Angagaw	59	Director
James L. Cox, M.D.	79	Director
Jacque J. Sokolov, M.D.	67	Director
Ronald M. Sparks	67	Director

	●	the Company renounces any interest or expectancy in, or being offered an opportunity to participate in, any business opportunities, that are presented to the Company’s officers, directors, employees or stockholders, or affiliates thereof, who are also officers, directors, employees or stockholders of PAVmed or affiliates thereof (each of whom is referred to herein as “PAVmed Party”) and in which a PAVmed Party may have an interest or expectancy (each of which opportunities is referred to herein as “PAVmed Opportunity”), except as may be prescribed by any written agreement between the Company and PAVmed approved by the Board; and

	●	no PAVmed Party will be liable to the Company or its stockholders for monetary damages for breach of any fiduciary duty by reason of a PAVmed Party pursuing or acquiring any PAVmed Opportunity.

	●	reviewing and discussing with management and the independent auditor the annual audit report and the annual financial statements and related notes, and recommending to the Board of Directors whether the audited financial statements should be included in our Form 10-K;

	●	discussing with management and the independent auditor significant financial reporting issues and judgments made in connection with the preparation of our financial statements;

	●	discussing with management and the independent auditor risk assessment and risk management policies;

	●	evaluating the qualifications, performance and independence of the independent auditor;

	●	verifying the rotation of the lead (or coordinating) audit partner having primary responsibility for the audit and the audit partner responsible for reviewing the audit as required by law;

	●	reviewing and approving all related-party transactions;

	●	inquiring and discussing with management our compliance with applicable laws and regulations;

	●	pre-approving all audit services and permitted non-audit services to be performed by our independent auditor, including the fees and terms of the services to be performed;

	●	selecting and retaining the independent auditor;

	●	setting the compensation of and overseeing the work of the independent auditor (including resolution of disagreements between management and the independent auditor regarding financial reporting); and

	●	establishing procedures for the confidential and anonymous submission, receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls or reports which raise material issues regarding our financial statements or accounting policies.

	●	reviewing and approving on an annual basis the corporate goals and objectives relevant to our Chief Executive Officer’s and other named executive officer’s compensation, evaluating our Chief Executive Officer’s and other named executive officer’s performance in light of such goals and objectives and determining and approving the compensation level of our Chief Executive Officer and other named executive officers based on such evaluation;

	●	determining the compensation of all of our other executive officers;

	●	reviewing our executive compensation philosophy and policies;

	●	administering or delegating the power to administer our incentive and equity-based compensation plans;

	●	overseeing shareholder communications relating to executive compensation and reviewing and making recommendations with respect to shareholder proposals related to compensation matters;

	●	if required, producing a report on executive compensation to be included in our annual proxy statement; and

	●	reviewing, evaluating, and recommending changes, if appropriate, to the compensation for directors.

	●	is accomplished in his or her field and has a reputation, both personal and professional, that is consistent with the image and reputation of the Company;

	●	has relevant experience and expertise and would be able to provide insights and practical wisdom based upon that experience and expertise, and has knowledge of the issues affecting us; and

	●	has high moral and ethical character and would be willing to apply sound, objective, and independent business judgment.

Board Diversity Matrix (As of April 14, 2022)
Total Number of Directors	6
		Males		Female		Non-Binary	Did Not Disclose Gender
Part I: Gender Identity
Directors			5		1
Part II: Demographic Background
African American or Black			1		1
Alaskan Native or Native American			1		0
Asian			0		0
Hispanic or Latinx			0		0
Native Hawaiian or Pacific Islander			0		0
White			3		0
Two or More Races or Ethnicities			0		0
LGBTQ+			0		0
Did Not Disclose Demographic Background			0		0

	Chair		Member
Audit Committee	$	27,500	$	15,000
Compensation Committee	$	18,000	$	12,500
Nominating Committee	$	12,500	$	7,500

	Director		Stock		Option		All Other
Name	Fees⁽¹⁾		Awards⁽²⁾		Awards⁽²⁾		Compensation			Totals
Stanley N. Lapidus	$	15,625	$	2,300,000	$	—	$	17,750	⁽³⁾	$	33,375
Aster Angagaw	$	23,125	$	1,110,000	$	—	$	—		$	23,125
James L. Cox, M.D.	$	18,875	$	2,184,000	$	—	$	—		$	18,875
Jacque J. Sokolov, M.D.	$	25,000	$	1,110,000	$	—	$	—		$	25,000
Ronald M. Sparks	$	24,375	$	995,000	$	—	$	—		$	24,375
Sanford Markowitz, M.D.⁽⁴⁾	$	—	$	910,000	$	—	$	14,535	⁽⁵⁾	$	21,868

	(1)	Represents annual director fees paid. The director fees paid to each person listed are consistent with the director fees described herein above, including annual retainer and as a member and/or chair of a committee of the Board.

	(2)	The amounts reported under “Stock Awards” and “Option Awards” are the estimated grant date fair value of restricted stock awards and stock options granted during the respective year, with such amount as determined under the ASC 718, with respect to accounting for stock-based compensation expense. Such estimated fair value amounts do not necessarily correspond to the potential actual value realized of such stock options. The assumptions made in computing the estimated fair value of such stock options are disclosed in the notes to the Company’s consolidated financial statements for the fiscal year ended December 31, 2021.

	(3)	Represents fees paid to Mr. Lapidus for advisory services under a consulting agreement with us that terminated upon the Company’s IPO on October 14, 2021.

	(4)	Dr. Markowitz resigned from the Board upon consummation of the Company’s initial public offering.

	(5)	Represents fees paid to Dr. Markowitz for advisory services under a consulting agreement with us.

	Stock Option Grants								Stock Awards
Name	Number of Securities Underlying Stock Options – Exercisable⁽¹⁾		Number of Securities Underlying Stock Options – Unexercisable⁽¹⁾		Stock Option Exercise Price		Stock Option Expiration Date		Number of Shares or Units of Stock That Have Not Vested⁽¹⁾		Market Value of Shares of Units of Stock That Have Not Vested
Stanley N. Lapidus										169,320	$	909,248
Aster Angagaw										84,660	$	454,624
James L. Cox, M.D.										169,320	$	909,248
Jacque J. Sokolov, M.D.										86,660	$	454,624
Ronald M. Sparks										84,660	$	454,624
Sanford Markowitz, M.D.		141,100		—	$	0.35		5/12/2028		70,550	$	378,854

Named Executive Officer/Principal Position	Year		Salary		Stock Awards⁽²⁾		Option Awards		Bonus		All Other Compensation		Total
Lishan Aklog, M.D.⁽¹⁾		2021	$	—	$	7,280,000	$	—	$	—	$	—	$	7,280,000
Chairman of the Board and Chief Executive Officer		2020	$	—	$	—	$	—	$	—	$	—	$	—
Dennis M. McGrath⁽¹⁾		2021	$	—	$	7,280,000	$	—	$	—	$	—	$	7,280,000
Chief Financial Officer and Corporate Secretary		2020	$	—	$	—	$	—	$	—	$	—	$	—

	(1)	See “Employment Agreements and Awards” below for a description of the employment arrangements with each named executive officer, including base salary and bonuses.

	(2)	The amounts reported under “Stock Awards” are the estimated grant date fair value of restricted stock granted during the respective year, as presented in “Outstanding Equity Awards at Fiscal Year End” below, with such amount as determined under the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) Topic 718 (“ASC 718”), with respect to accounting for stock-based compensation expense. Such estimated fair value amounts do not necessarily correspond to the potential actual value realized of such stock options. The assumptions made in computing the estimated fair value of such stock options are disclosed in the notes to the Company’s consolidated financial statements for the fiscal year ended December 31, 2021.

	(1)	See “Employment Agreements and Awards” below for a description of the equity awards held by the named executive officers, including the vesting schedules.

	(2)	On March 1, 2021, the board of directors granted restricted stock awards of 564,400 shares of common stock of the Company each to Dr. Aklog and Mr. McGrath. The restricted stock awards vest on February 19, 2023. The shares are subject to forfeiture if the requisite service period is not completed.

	●	On March 15, 2021, the Company granted to Dr. Aklog 564,400 shares of restricted stock award. The award vests on February 19, 2023, subject to acceleration in certain circumstances as discussed below.

	●	On January 7, 2022, in accordance with the employment agreement, the Company granted to Dr. Aklog a restricted stock award covering 60,000 shares of the Company’s common stock. The restricted stock award vests in a single installment three years after the date of grant, subject to acceleration in certain circumstances as discussed below.

	●	On February 18, 2022, the Company granted to Dr. Aklog a stock option to purchase 75,000 shares of common stock of the Company at an exercise price of $3.95 per share, which vests ratably on a quarterly basis over a three-year period with an initial vesting date of March 31, 2022 and a final vesting date of December 31, 2024.

	●	each person known by the Company to be the beneficial owner of more than 5% of the Company’s outstanding shares of common stock;

	●	each of the Company’s officers and directors; and

	●	all of the Company’s officers and directors as a group.

Name and Address of Beneficial Owner⁽¹⁾	Amount and Nature of Beneficial Ownership			Percent of Class
Directors and Officers:
Lishan Aklog, M.D.		630,650	⁽²⁾		1.7	%
Dennis M. McGrath		628,567	⁽²⁾		1.7	%
Shaun M. O’Neil		124,167	⁽⁴⁾		*
Stanley N. Lapidus		174,237	⁽⁵⁾		*
Aster Angagaw		89,577	⁽⁵⁾		*
James L. Cox, M.D.		174,237	⁽⁵⁾		*
Ronald M. Sparks		89,577	⁽⁵⁾		*
Jacque J. Sokolov, M.D.		89,577	⁽⁵⁾		*
All directors and executive officers as a group (nine individuals)		2,000,589			5.3	%
5% Stockholders:
PAVmed Inc.		27,927,190	⁽⁶⁾		73.6	%

	*	Represents less than one percent of class.

	(1)	Unless otherwise indicated, the business address of each of the individuals is One Grand Central Place, Suite 4600, New York, NY 10165. Includes persons known to us to be beneficial owners of 5% of more of our common stock, based solely on schedules and reports filed with the SEC with respect to such persons’ beneficial ownership of PAVmed common stock.

	(2)	On March 1, 2021, 564,400 restricted stock awards were granted under the 2018 Equity Plan to each of Dr. Aklog and Mr. McGrath with a single vesting date of February 19, 2023. Additionally, on January 7, 2022, the compensation committee granted each of Dr. Aklog and Mr. McGrath each 60,000 restricted stock awards with a single vesting on January 7, 2025. The restricted stock awards are subject to forfeiture if the requisite service period is not completed. The beneficial ownership amounts include 6,250 and 4,167 of exercisable options, respectively for Dr. Aklog and Mr. McGrath. Excluded from the beneficial ownership amount is 68,750 and 45,833 common stock options that will not become exercisable within 60 days for Dr. Aklog and Mr. McGrath, respectively.

	(3)	Dr. Wurtman’s beneficial ownership includes 705,500 shares subject to stock options granted under the 2018 Equity Plan, that are currently exercisable, or will become exercisable within 60 days.

	(4)	On January 7, 2022, the compensation committee granted restricted stock awards of 120,000 shares of common stock of the Company to Dr. Aklog. The restricted stock awards vest on January 7, 2025. Mr. O’Neil’s beneficial ownership includes 4,167 shares subject to stock options granted under the 2018 Equity Plan, that are currently exercisable, or will become exercisable within 60 days. Excluded from the beneficial ownership amount is 45,833 common stock options that will not become exercisable for 60 days.

	(5)	On April 21, 2021, 84,660 restricted stock awards were granted to Dr. Sokolov with a single vesting date of April 21, 2023; and on July 30, 2021, 84,660 restricted stock awards were granted to Ms. Aster Angagaw with a single vesting date of July 30, 2023; and on September 20, 2021, 169,320 restricted stock awards were granted to Mr. Lapidus, with 84,660 shares vesting on September 20, 2022 and 84,660 shares vesting on September 20, 2023. Each such grant was made under the 2018 Equity Plan. The restricted stock awards are subject to forfeiture if the requisite service period is not completed. The beneficial ownership amount for each of the above includes 4,917 shares subject to stock options granted under the 2018 Equity Plan, that are currently exercisable, or will become exercisable within 60 days. Excluded from the beneficial ownership amount is 54,083 common stock options that will not become exercisable for 60 days.

	(6)	The beneficial ownership of PAVmed includes approximately 15,803,200 shares issued to PAVmed upon conversion of $22.4 million face value principal of the Convertible Note and 571,428 shares purchased by PAVmed in the IPO. Dr. Aklog is Chairman and Chief Executive Officer of PAVmed. The beneficial ownership of Dr. Aklog excludes the shares of our common stock beneficially owned by PAVmed.

Plan category	Number of securities to be issued upon exercise of outstanding options, warrants and rights		Weighted- average exercise price of outstanding options, warrants and rights		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
	(a)		(b)		(c)
Equity compensation plans approved by security holders		1,419,242	$	0.60		3,252,615	⁽¹⁾
Equity compensation plans not approved by security holders⁽²⁾		473,300	$	0.31		—
Total		1,892,542				3,252,615	⁽³⁾

	(1)	Represents 2,752,615 shares of common stock available for issuance under the 2018 Plan and 500,000 shares of common stock available for issuance under the ESPP, each as of December 31, 2021.

	(2)	Represents 423,300 common stock options at a weighted average exercise price of $0.35 per share and 50,000 restricted stock awards granted to a consultant.

	(3)	Subsequent to December 31, 2021, through April 14, 2022, stock options to purchase 2,073,150 shares of common stock were granted to our non-employee directors and certain of our executive officers and non-executive employees (including newly hired employees) pursuant to the 2018 Plan.

	●	the amounts involved exceeded or will exceed the lesser of $120,000 or 1% of the average of the Company’s total assets at year-end for the last two completed fiscal years; and

	●	any of the Company’s directors, executive officers, or holders of more than 5% of the Company’s capital stock, or any member of the immediate family of the foregoing persons, had or will have a direct or indirect material interest.