Note 10 — 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”), adopted by the Company’s board of directors and stockholders in November 2014, is designed to enable the Company to offer employees, officers, directors, and consultants, as defined, an opportunity to acquire a proprietary interest in the Company. The types of awards that may be granted under the PAVmed Inc. 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 compensation committee of the Company’s board of directors.

A total of 7,951,081 shares of common stock of PAVmed Inc. are reserved for issuance under the PAVmed Inc. 2014 Equity Plan, with 2,548,406 shares available for grant as of December 31, 2019, exclusive of 500,854 PAVmed Inc. stock options previously granted outside the PAVmed Inc. 2014 Equity Plan.

PAVmed Inc 2014 Equity Plan - Stock Options

The aggregate intrinsic value of stock options granted under the PAVmed Inc. 2014 Equity as of December 31, 2019 was $393,500 with respect to such stock options outstanding and $126,375 with respect to such stock options vested and exercisable. The intrinsic value as of December 31, 2018 was $0 with respect to such stock options outstanding and vested and exercisable. The intrinsic value is computed as the difference between the quoted price of the PAVmed Inc. common stock on each of December 31, 2019 and 2018 and the exercise price of the underlying PAVmed Inc. stock options, to the extent such quoted price is greater than the exercise price.

PAVmed Inc 2014 Equity Plan - Restricted Stock Awards

On March 15, 2019, a total of 700,000 restricted stock awards were granted to employees under the PAVmed Inc. 2014 Equity Plan, representing a corresponding number of shares of common stock of the Company, which vest ratably on an annual basis commencing March 15, 2020 and ending March 15, 2022. The restricted stock awards are subject to forfeiture if the requisite service period is not completed. As of December 31, 2019, no restricted stock awards had vested. Subsequent to December 31, 2019, on March 15, 2020, a total of 233,334 restricted stock awards had vested.

PAVmed Inc. Employee Stock Purchase Plan

The PAVmed Inc. Employee Stock Purchase Plan (“ESPP”), adopted by the Company’s board of directors effective April 1, 2019, with an initial reservation of 250,000 shares of PAVmed Inc. common stock, which was subsequently increased to 750,000 shares in March 2020, 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” 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, with an initial six month payroll deduction period of April 1, 2019 to September 30, 2019. On September 30 2019 82,772 shares of PAVmed Inc. common stock were issued for cash proceeds of $67,436 under the ESPP. Subsequent to December 31, 2019, on March 31, 2020 154,266 shares of PAVmed Inc. common stock were issued for cash proceeds of $125,683. The ESPP liability for payroll deductions as of December 31, 2019 are included in accrued expense and other current liabilities, as discussed in Note 5, Accrued Expense and Other Current Liabilities.

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”) became effective on May 12, 2018 and is separate from the PAVmed Inc. 2014 Equity Plan discussed above. The Lucid Diagnostics Inc. 2018 Equity Plan is designed to enable Lucid Diagnostics Inc. to offer employees, officers, directors, and consultants, as defined, an opportunity to acquire shares of common stock of Lucid Diagnostics Inc. The types of awards that may be granted under the Lucid Diagnostics Inc. 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 Inc. board of directors.

A total of 2,000,000 shares of common stock of Lucid Diagnostics Inc. are reserved for issuance under the Lucid Diagnostics Inc. 2018 Equity Plan, with 1,230,000 shares available for grant as of December 31, 2019, exclusive of 300,000 Lucid Diagnostics Inc. stock options previously granted outside the Lucid Diagnostics Inc. 2018 Equity Plan.

Lucid Diagnostics Inc. 2018 Equity Play – Stock Options

Stock-Based Compensation Expense

Consolidated stock-based compensation expense recognized 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, for the periods indicated, was as follows:

The consolidated stock-based compensation expense classified in research and development expenses, as presented above, includes $173,945 and $53,233 in the year ended December 31, 2019 and 2018, respectively, recognized by Lucid Diagnostics Inc., with stock-based compensation expense recognized by Lucid Diagnostics Inc. inclusive of stock options granted under the Lucid Diagnostics Inc. 2018 Equity Plan to employees of PAVmed Inc. and to non-employees each providing services to Lucid Diagnostics Inc.; and stock options granted under the PAVmed Inc. 2014 Equity Plan to non-employees providing services to Lucid Diagnostics Inc., summarized as follows for the periods noted:

As of December 31, 2019, under the PAVmed Inc. 2014 Equity Plan, total unrecognized stock-based compensation expense of approximately $1.2 million is expected to be recognized over the weighted average remaining requisite service period of 1.1 years; and, under the Lucid Diagnostics Inc. 2018 Equity Plan, total unrecognized stock-based compensation expense of approximately $0.1 million is expected to be recognized over the weighted average remaining requisite service period of 1.8 years.

The Company uses the Black-Scholes valuation model to estimate the fair value of stock options granted under both the Lucid Diagnostics Inc. 2018 Equity Plan and the PAVmed Inc. 2014 Equity Plan, which requires the Company to make certain estimates and assumptions, with the weighted-average valuation assumptions for stock-based awards, as follows:

The price per share of PAVmed Inc. common stock used in the computation of estimated fair value of stock options granted under the PAVmed Inc. 2014 Equity Plan is its quoted closing price per share. The price per share of Lucid Diagnostics Inc. common stock used in the computation of estimated fair value of stock options granted under the Lucid Diagnostics Inc. 2018 Equity Plan was estimated using a discounted cash flow method applied to a multi-year forecast of its future cash flows.

Stock-based compensation expense recognized for stock options granted to employees and members of the board of directors under the PAVmed Inc. 2014 Equity Plan was based on a weighted average fair value of $0.92 per share and $1.21 per share, during the year ended December 31, 2019 and 2018, respectively, calculated using the following weighted average Black-Scholes valuation model assumptions:

Stock-based compensation expense recognized for stock options granted to non-employees under the PAVmed Inc. 2014 Equity Plan was based on a weighted average fair value of $1.97 per share and $1.97 per share, during the year ended December 31, 2019 and 2018, respectively, calculated using the following weighted average Black-Scholes valuation model assumptions:

Stock-based compensation expense recognized for stock options granted to employees under the Lucid Diagnostics Inc. 2018 Equity Plan was based on a weighted average fair value of $0.32 per share during the year ended December 31, 2019, calculated using the following weighted average Black-Scholes valuation model assumptions:

There were no stock options granted under the Lucid Diagnostics Inc. 2018 Equity Plan to employees during the prior year ended December 31, 2018.

Stock-based compensation expense recognized for stock options granted to non-employees under the Lucid Diagnostics Inc. 2018 Equity Plan was based on a weighted average fair value of $0.29 and $0.51 per share during the years ended December 31, 2019 and 2018, respectively, calculated using the following weighted average Black-Scholes valuation model assumptions: