Stock-Based Compensation | Note 9 — Stock-Based Compensation PAVmed Inc. 2014 Long-Term Incentive Equity Plan The PAVmed Inc. 2014 Long-Term Incentive Equity Plan (the “PAVmed Inc. 2014 Equity Plan”), provides for the granting, subject to approval by the compensation committee of the PAVmed Inc. board of directors, of stock options, stock appreciation rights, restricted stock, and other stock-based awards subject to limitations under applicable law. As of September 30, 2021, the PAVmed Inc. 2014 Equity Plan has 1,249,653 500,854 PAVmed Inc. 2014 Long-Term Incentive Equity Plan - Stock Options Stock options issued and outstanding under the PAVmed Inc. 2014 Equity Plan is as follows: Schedule of Summarizes Information About Stock Options Number Stock Options Weighted Average Exercise Price Remaining Contractual Term (Years) Intrinsic Value (2) Outstanding stock options - December 31, 2020 6,798,529 $ 2.55 7.3 Granted (1) 2,615,000 $ 4.86 Exercised (604,500 ) $ 1.58 Forfeited (161,247 ) $ 2.73 Outstanding stock options - September 30, 2021 8,647,782 $ 3.32 6.9 $ 45,267 Vested and exercisable stock options - September 30, 2021 5,919,023 $ 2.84 5.7 $ 33,031 (1) Stock options granted under the PAVmed Inc. 2014 Equity Plan generally vest ratably over twelve quarters, with the vesting commencing with the grant date quarter, 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 Inc. common stock on each of September 30, 2021 and December 31, 2020 and the exercise price of the underlying PAVmed Inc. stock options, to the extent such quoted price is greater than the exercise price. Note 9 — Stock-Based Compensation PAVmed Inc. 2014 Long-Term Incentive Equity Plan - Restricted Stock Awards On April 1, 2021, a total of 300,000 2014 Equity Plan, with such restricted stock awards having a single vesting date of April 1, 2024. 1,491 A total of 1,650,000 2,680 The vesting of the previously granted restricted stock awards is as follows: 233,334 vested on March 15, 2020; 466,666 vesting on March 15, 2022; 450,000 vesting ratably on an annual basis over a three year period with the initial annual vesting date on May 1, 2021; and 500,000 restricted stock awards having a single vesting date of May 1, 2023. Lucid Diagnostics Inc. 2018 Long-Term Incentive Equity Plan The Lucid Diagnostics Inc. 2018 Long-Term Incentive Equity Plan (the “Lucid Diagnostics Inc. 2018 Equity Plan”), provides for the granting, subject to approval by the Lucid Diagnostics Inc. board of directors, of stock options, stock appreciation rights, restricted stock, and other stock-based awards subject to limitations under applicable law. As of September 30, 2021, the Lucid Diagnostics Inc. 2018 Equity Plan has 2,850,220 shares of common stock of Lucid Diagnostics Inc. available-for-grant of stock-based awards. Lucid Diagnostics Inc. 2018 Long-Term Incentive Equity Plan - Stock Options Stock options issued and outstanding under the Lucid Diagnostics Inc. 2018 Equity Plan is as follows: Schedule of Summarizes Information About Stock Options Number Weighted Remaining Outstanding stock options at December 31, 2020 1,399,242 $ 0.61 8.0 Granted (1) — $ — Exercised — $ — Forfeited — $ — Outstanding stock options at September 30, 2021 1,399,242 $ 0.61 7.2 Vested and exercisable stock options at September 30, 2021 1,286,361 $ 0.59 7.2 (1) Stock options granted under the Lucid Diagnostics Inc. 2018 Equity Plan generally vest ratably over twelve quarters, with the vesting commencing with the grant date quarter, and have a ten-year contractual term from date-of-grant. Note 9 — Stock-Based Compensation Lucid Diagnostics Inc. 2018 Long-Term Incentive Equity Plan – Restricted Stock Awards As of September 30, 2021, a total of 1,813,135 A total of 1,467,440 vesting date of March 1, 2023 18.9 Related Party Transactions A total of 91,715 vesting date in April 2023 1.2 1.1 0.1 7,055 completed A total of 253,980 169,320 restricted stock awards having annual vesting dates on the grant date anniversary in each of September 2022 and 2023; and 84,660 restricted stock awards having a single vesting date in July 2023. 3.4 Subsequent to September 30, 2021, as of October 14, 2021, an additional 84,660 The estimated fair value of the restricted stock awards granted under the Lucid Diagnostics Inc. 2018 Equity Plan, as discussed above, was determined using a probability-weighted average expected return methodology (“PWERM”), which involves the determination of equity value under various exit scenarios and an estimation of the return to the common stockholders under each scenario. In this regard, the Lucid Diagnostics Inc. common stock grant-date estimated fair value was based upon an analysis of future values, assuming various outcomes, based upon the probability-weighted present value of expected future investment returns, considering each of the possible future outcomes available to Lucid Diagnostics Inc. The PWERM principally involved (i) the identification of scenarios and related probabilities; (ii) determine the equity value under each scenario; and (iii) determine the common stock shareholders’ return in each scenario. The two scenarios identified were an initial public offering (“IPO”) of Lucid Diagnostics Inc. common stock (“IPO scenario”); and, to continue on as a private company (“stay private scenario”). With respect to the IPO scenario, the valuation of the Lucid Diagnostics Inc. common stock was computed using assumptions, including dates of the IPO, to calculate an estimated pre-money valuation; and, with respect to the stay private scenario, an income approach was used, wherein a risk-adjusted discount rate is applied to projected future cash flows. For the awards during 2021, a relative weighting ranged from 75%-97.5% for to the IPO scenario and the relative weighting ranged from 25% - 2.5% for the stay private scenario. Note 9 — Stock-Based Compensation Consolidated Stock-Based Compensation Expense The consolidated stock-based compensation expense recognized by each of PAVmed Inc. and Lucid Diagnostics Inc. for both the PAVmed Inc. 2014 Equity Plan and the Lucid Diagnostics Inc. 2018 Equity Plan, with respect to stock options and restricted stock awards as discussed above, for the periods indicated, was as follows: Schedule of Stock-Based Compensation Awards Granted Three Months Ended Nine Months Ended 2021 2020 2021 2020 Commercial operations expenses $ 341 $ 85 $ 840 $ 183 General and administrative expenses 3,339 363 9,062 948 Research and development expenses 310 138 727 327 Total stock-based compensation expenses $ 3,990 $ 586 $ 10,629 $ 1,458 Stock-Based Compensation Expense Recognized by Lucid Diagnostics Inc. As noted, the consolidated stock-based compensation expense presented above is inclusive of stock-based compensation expense recognized by Lucid Diagnostics Inc., inclusive of each of: stock options granted under the PAVmed Inc. 2014 Equity Plan to the three physician inventors of the intellectual property underlying the CWRU License Agreement (“Physician Inventors”) (as discussed above in Note 4, Related Party Transactions The stock-based compensation expense recognized by Lucid Diagnostics Inc. for both the PAVmed Inc. 2014 Equity Plan and the Lucid Diagnostics Inc. 2018 Equity Plan, with respect to stock options and restricted stock awards as discussed above, for the periods indicated, was as follows: Schedule of Stock-Based Compensation Expense Classified in Research and Development Expenses Three Months Ended Nine Months Ended 2021 2020 2021 2020 Lucid Diagnostics Inc 2018 Equity Plan – general and administrative expense $ 2,695 $ — $ 5,988 $ — Lucid Diagnostics Inc 2018 Equity Plan – research and development expenses 21 13 57 39 PAVmed Inc 2014 Equity Plan - research and development expenses 56 3 111 10 Total stock-based compensation expense – $ 2,772 $ 16 $ 6,156 $ 49 Note 9 — Stock-Based Compensation Consolidated Stock-Based Compensation Expense - continued 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 Inc. 2014 Equity Plan and the Lucid Diagnostics Inc. 2018 Equity Plan, as discussed above, is as follows: Schedule of Unrecognized Compensation Expense Unrecognized Weighted Average Remaining Service Period PAVmed Inc. 2014 Equity Plan Stock Options $ 7,641 1.4 Restricted Stock Awards $ 2,368 1.4 Lucid Diagnostics Inc. 2018 Equity Plan Stock Options $ 15 0.3 Restricted Stock Awards $ 17,491 1.5 Stock-based compensation expense recognized with respect to stock options granted under the PAVmed Inc. 2014 Equity Plan was based on a weighted average estimated fair value of such stock options of $ 3.47 1.28 Schedule of Fair Values of Stock Options Granted Using Black-scholes Valuation Model Assumptions Nine Months Ended September 30, 2021 2020 Expected term of stock options (in years) 5.6 5.8 Expected stock price volatility 76 % 73 % Risk free interest rate 0.9 % 0.5 % Expected dividend yield 0 % 0 % PAVmed Inc. Employee Stock Purchase Plan (“ESPP”) The PAVmed Inc. Employee Stock Purchase Plan (“PAVmed Inc. ESPP”), adopted by the Company’s board of directors effective April 1, 2019, provides eligible employees the opportunity to purchase shares of PAVmed Inc. common stock through payroll deductions during six month periods, wherein the purchase price per share of common stock is the lower of 85% of the quoted closing price per share of PAVmed Inc. common stock at the beginning or end of each six month share purchase period. The PAVmed Inc. ESPP share purchase dates are March 31 and September 30. A total of 203,480 154,266 304 126 31,112 152,289 131 231 1,250,000 626,081 |