Quarterly report pursuant to Section 13 or 15(d)

Related Party Transactions

v3.23.1
Related Party Transactions
 3 Months Ended
Mar. 31, 2023
Related Party Transactions [Abstract]  
Related Party Transactions

Note 4 — Related Party Transactions

 

Case Western Reserve University and Physician Inventors - Amended CWRU License Agreement

 

Case Western Reserve University (“CWRU”) and each of the three physician inventors (“Physician Inventors”) of the intellectual property licensed under the amended and restated patent license agreement with CWRU, dated August 23, 2021 (the “Amended CWRU License Agreement”), each hold a minority equity ownership interest in Lucid Diagnostics Inc. The expenses incurred with respect to the Amended CWRU License Agreement and the three Physician Inventors, as classified in the accompanying unaudited condensed consolidated statement of operations for the periods indicated are summarized as follows:

Schedule of Incurred Expenses of Minority Shareholders 

    2023     2022  
    Three Months Ended March 31,  
    2023     2022  
Cost of Revenue                
CWRU – Royalty Fees   $ 24     $ 9  
                 
General and Administrative Expense                
Stock-based compensation expense – Physician Inventors’ restricted stock awards     180       272  
                 
Research and Development Expense                
Amended CWRU – License Agreement - reimbursement of patent legal fees     389       —  
Fees - Physician Inventors’ consulting agreements     1       8  
Sponsored research agreement     —       3  
Stock-based compensation expense – Physician Inventors’ stock options     52       46  
Total Related Party Expenses   $ 646     $ 338  

 

Note 4 — Related Party Transactions - continued

 

PAVmed Inc. - Management Services Agreement

 

The Company’s daily operations are also managed in part by personnel employed by PAVmed, for which the Company incurs a service fee, referred to as the “MSA Fee”, according to the provisions of a Management Services Agreement (“MSA”) with PAVmed. The MSA does not have a termination date, but may be terminated by the Company’s board of directors. The MSA Fee is charged on a monthly basis and is subject-to periodic adjustment corresponding with changes in the services provided by PAVmed personnel to the Company, with any such change in the MSA Fee being subject to approval of the boards of directors of each of the Company and PAVmed. The respective companies’ boards of directors approved a seventh amendment to the MSA to increase the MSA Fee to $750 per month, effective January 1, 2023, which was entered into by PAVmed and the Company on May 9, 2023. During the three months ended March 31, 2022, MSA Fees were $390 per month.

 

 

Note 4 — Related Party Transactions - continued

 

The MSA Fee expense classification in the unaudited condensed consolidated statement of operations for the periods noted is as follows:

 Schedule of MSA Fee Expense Classification in Statements of Operations

    2023     2022  
    Three Months Ended March 31,  
    2023     2022  
Sales & Marketing     109       183  
General & Administrative     1,554       640  
Research & Development     587       347  
Total MSA Fee   $ 2,250     $ 1,170  

 

The classification of the MSA Fee as presented above is based on the PAVmed classification of employee salary expense and other operating expenses. In this regard, PAVmed classifies employee salary expense as sales and marketing expenses for employees performing sales, marketing, and reimbursement activities and functions, general and administrative, and research and development except for those employees who are engaged in product and services engineering development and design and /or clinical trials activities, for which such employee salary is classified as research and development expense.