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Debt
 12 Months Ended
Dec. 31, 2024
Debt Disclosure [Abstract]  
Debt

Note 12 — Debt

 

The fair value and face value principal outstanding of the 2024 Convertible Notes as of the dates indicated are as follows:

 

   Contractual Maturity Date  Stated Interest Rate   Conversion Price per Share   Face Value Principal Outstanding   Fair Value 
2024 Convertible Notes  November 22, 2029   12.000%  $1.00   $21,975   $18,600 
Balance as of December 31, 2024               $21,975   $18,600 

 

The fair value and face value principal outstanding of the March 2023 Senior Convertible Note (redeemed on November 22, 2024) as of December 31, 2023:

 

   Contractual Maturity Date  Stated Interest Rate   Conversion Price per Share   Face Value Principal Outstanding   Fair Value 
March 2023 Senior Convertible Note  March 21, 2025   7.875%  $5.00   $11,019   $13,950 
Balance as of December 31, 2023               $11,019   $13,950 

 

 

Note 12 — Debt - continued

 

The changes in the fair value of debt during the year ended December 31, 2024 is as follows:

 

   March 2023 Senior Convertible Note   2024 Convertible Notes   Sum of Balance Sheet Fair Value Components   Other Income (expense) 
Fair Value - December 31, 2023  $13,950   $—   $13,950   $— 
Face value principal – issue date   —    21,975    21,975   $— 
Installment repayments – common stock   (8,365)   —    (8,365)   — 
Non-installment payments – common stock   (912)   —    (912)   — 
Change in fair value   (2,019)   (3,375)   (5,394)   5,394 
Principal repayments - cash   (2,654)   —    (2,654)   — 
Fair Value at December 31, 2024  $—   $18,600   $18,600    — 
Other Income (Expense) - Change in fair value – year ended December 31, 2024                 $5,394 

 

The changes in the fair value of debt during the year ended December 31, 2023 is as follows:

  

   March 2023 Senior Convertible Note   Other Income (expense) 
Fair Value - December 31, 2022  $—   $— 
Face value principal – issue date   11,111   $— 
Fair value adjustment – issue date   789    (789)
Installment repayments – common stock   (92)   — 
Non-installment payments – common stock   (49)   — 
Change in fair value   2,191    (2,191)
Fair Value at December 31, 2023  $13,950    — 
Other Income (Expense) - Change in fair value – year ended December 31, 2023       $(2,980)

 

 

Note 12 — Debt - continued

 

March 2023 Senior Secured Convertible Note

 

Lucid Diagnostics entered into a Securities Purchase Agreement (“SPA”) dated March 13, 2023, with an accredited institutional investor (“Investor”, “Lender”, and /or “Holder”), wherein Lucid agreed to sell, and the Investor agreed to purchase, an aggregate of $11.1 million face value principal of debt.

 

Under the SPA, Lucid issued in a registered direct offering under its effective shelf registration statement a Senior Secured Convertible Note dated March 21, 2023, referred to herein as the “March 2023 Senior Convertible Note”, with such note having a $11.1 million face value principal, a 7.875% annual stated interest rate, a contractual conversion price of $5.00 per share of the Company’s common stock (subject to standard adjustments in the event of any stock split, stock dividend, stock combination, recapitalization or other similar transaction), and a contractual maturity date of March 21, 2025. The March 2023 Senior Convertible Note may be converted into shares of common stock of the Company at the Holder’s election.

 

The March 2023 Senior Convertible Note proceeds were $9.925 million after deducting a $1.186 million lender fee and offering costs. The lender fee and offering costs were recognized as of the March 21, 2023 issue date as a current period expense in other income (expense) in the Company’s consolidated statement of operations.

 

During the period from March 21, 2023 to September 20, 2023, the Company was required to pay interest expense only (on the $11.1 million face value principal), at 7.875% per annum, computed on a 360 day year. The Company paid cash interest expense of $391 for the year ended December 31, 2023. Commencing September 21, 2023, and then on each of the successive first and tenth trading day of each month thereafter through to and including March 14, 2025 (each referred to as an “Installment Date”); and on the March 21, 2025 maturity date, the Company will be required to make a principal repayment of $292 together with accrued interest thereon, with such 38 payments referred to herein as the “Installment Amount”, settled in shares of common stock of the Company, subject to customary equity conditions, including minimum share price and volume thresholds, or at the election of the Company, in cash, in whole or in part.

 

In addition to the Installment Amount repayments, the Holder was able to elect to accelerate the conversion of future Installment Amount repayments, and interest thereon, subject to certain restrictions, as defined, utilizing the then current conversion price of the most recent Installment Date conversion price.

 

The payment of all amounts due and payable under this senior convertible note was guaranteed by all of Lucid Diagnostics’ subsidiaries; and the obligations under this senior convertible note were secured by all of the assets of Lucid Diagnostics and its subsidiaries.

 

Lucid was subject to certain customary affirmative and negative covenants regarding the rank of the note, along with the incurrence of further indebtedness, the existence of liens, the repayment of indebtedness and the making of investments, the payment of cash in respect of dividends, distributions or redemptions, the transfer of assets, the maturity of other indebtedness, and transactions with affiliates, among other customary matters.

 

Lucid was subject to financial covenants requiring: (i) a minimum of $5.0 million of available cash at all times; (ii) the ratio of (a) the outstanding principal amount of the total senior convertible notes outstanding, accrued and unpaid interest thereon and accrued and unpaid late charges to (b) the Company’s average market capitalization over the prior ten trading days, as of the last day of any fiscal quarter commencing with September 30, 2023, to not exceed 30%; and (iii) the Company’s market capitalization to at no time be less than $30 million.

 

The March 2023 Senior Convertible Note installment payments were payable in shares of Lucid Diagnostics common stock at a conversion price that was the lower of the contractual conversion price and 82.5% of the two lowest VWAPs during the last 10 trading days preceding the date of conversion, subject to a conversion price floor of $0.30. The notes are also subject to certain provisions that may require redemption upon the occurrence of an event of default, a change of control, or certain equity issuances.

 

In the year ended December 31, 2024, approximately $8,365 of principal repayments along with approximately $912 of interest expense thereon, were settled through the issuance of 13,866,867 shares of common stock of the Company, with such shares having a fair value of approximately $13,482 (with such fair value measured as the respective conversion date quoted closing price of the common stock of the Company). The conversions resulted in debt extinguishment losses of $4,205 in the year ended December 31, 2024. In addition to principal payments through conversions, the Company redeemed the March 2023 Senior Convertible Note for $3,616, which included an additional $962 of debt extinguishment loss in the year ended December 31, 2024.

 

November 2024 Senior Convertible Note

 

On November 22, 2024, the Company closed on the sale of $21.975 million in principal amount of Senior Secured Convertible Notes (collectively, the “2024 Convertible Notes”), in a private placement, to certain accredited investors (the “2024 Note Investors”). The sale of the 2024 Convertible Notes was completed pursuant to the terms of that certain Securities Purchase Agreement, dated as of November 12, 2024 (the “2024 SPA”), between the Company and the 2024 Note Investors. The Company realized gross proceeds of $21.975 million and, after giving effect to the repayment in full of the March 2023 Senior Convertible Note, net proceeds of $18.3 million from the sale of the 2024 Convertible Notes. As of December 31, 2024 there was approximately $0.4 million of subscription receivable currently included in prepaid expenses, deposits, and other current assets on the Company’s consolidated balance sheets. Subsequent to December 31, 2024, the Company received the entire $0.4 million of subscription receivable.

 

The material terms of the 2024 Convertible Notes, upon issuance, are as follows:

 

Each 2024 Convertible Note has a 12.0% annual stated interest rate, a contractual maturity date of five years from the date of issuance, and a contractual conversion price of $1.00 per share of the Company’s common stock (subject to (i) in the event of certain issuances of additional securities by the Company at a price per share less than the then applicable conversion price, adjustment to such lower price per share, and (ii) customary proportionate adjustment upon any stock split, stock dividend, stock combination, recapitalization or other similar transaction). The Company will hold a stockholder meeting no later than June 30, 2025 to solicit the stockholder approval of the issuance of the conversion shares (and payment in kind of interest on the Notes).

 

The principal of the 2024 Convertible Notes does not amortize in installments over the term of the notes. The entire principal amount of the notes is due on the maturity date. The accrued interest on the 2024 Convertible Notes is paid quarterly in cash or, at the election of the holder, shares of the Company’s common stock, at a price based on the then current market price.

 

 

Note 12 — Debt - continued

 

Each 2024 Convertible Note is convertible into shares of the Company’s common stock at the holder’s election at any time and from time to time after the 6-month anniversary of issuance. In addition, each 2024 Convertible Note converts into shares of the Company’s common stock, subject to customary beneficial ownership and primary market limitations, (i) at the election of the holder upon the consummation by the Company of certain fundamental transactions (in which case all interest that would have accrued through maturity would also convert into shares of the Company’s common stock), or (ii) at the Company’s election at any time after the six-month anniversary of the issuance of such note, upon written notice given to the holder thereof, if the VWAP of the Company’s common stock has been at least $10.00 per share (subject to adjustment in the event of stock splits, stock dividends, and similar transactions) on 20 out of any 30 consecutive trading days. The Company is not permitted to voluntarily repurchase, redeem or prepay any 2024 Convertible Note, other than during the last 6 months prior to maturity thereof.

 

The 2024 Convertible Notes are secured by a lien on all the Company’s present and future tangible and intangible property and assets.

 

The 2024 Convertible Notes are subject to acceleration upon consummation of a fundamental transaction, upon default of the Case Western Reserve University Amended and Restated License Agreement, upon failure to obtain a positive Medicare coverage decision with respect to its EsoGuard product by the 18-month anniversary of issuance, and upon certain other customary events of default. Upon default the interest rate would increase to 18%.

 

Under the 2024 Convertible Notes, the Company is subject to certain customary affirmative and negative covenants regarding the incurrence of indebtedness, the existence of liens, the repayment of indebtedness and the making of investments, the payment of cash in respect of dividends, distributions or redemptions, the transfer of assets, the maturity of other indebtedness, transactions with affiliates, and the consummation of fundamental transactions where the aggregate consideration payable in respect thereof, as determined on a per share of the Company’s common stock basis, has a fair market value that is less than $1.50, among other customary matters. Under the 2024 Convertible Notes, the Company is subject to a financial covenant requiring that the amount of its available cash equal or exceed $5.0 million at all times that at least 25% of the principal amount of 2024 Convertible Notes issued are outstanding. The Company was in compliance with all covenants as of December 31, 2024.

 

Certain of the investors in the purchase and sale of the 2024 Convertible Notes have the collective right to designate one individual to be appointed to the Company’s board of directors, subject to certain limitations and subject to the policies and procedures of the Company’s nominating and corporate governance committee.

 

The Company agreed that it will, within 120 days following the closing of the offering of the 2024 Convertible Notes, file with the SEC a resale registration statement on Form S-3 covering the resale of all shares of the Company’s common stock issuable upon conversion of the 2024 Convertible Notes. Subsequent to December 31, 2024, on March 14, 2025, a majority-in-interest of the holders of the 2024 Convertible Notes agreed to extend this filing deadline to 180 days following such closing.

 

The holders of the 2024 Convertible Notes have the right, based on their ownership interest in the Company assuming the conversion of all such notes, to participate in subsequent equity or debt financings or issuances by the Company (subject to customary exceptions).