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The Company and Basis of Presentation
9 Months Ended
Sep. 30, 2016
Organization And Plan Of Business Operations [Abstract]  
The Company and Basis of Presentation

Note 1 — The Company and Basis of Presentation

 

PAVmed Inc. (“PAVmed” or the “Company”) was organized under the laws of the State of Delaware on June 26, 2014 originally under the name of PAXmed Inc. On April 19, 2015, the Company changed its name to PAVmed Inc. The Company operates in one segment as a medical device company organized to advance a broad pipeline of innovative medical technologies from concept to commercialization using a business model focused on capital and time efficiency.

 

Initial Public Offering

 

On April 28, 2016, under a registration statement on Form S-1 declared effective January 29, 2016, the Company’s initial public offering (IPO) was consummated with the issuance of 1,060,000 units at an offering price of $5.00 per unit, with each unit consisting of one share of common stock and one warrant. The IPO resulted in gross cash proceeds of $5.3 million and $4.2 million of net cash proceeds, after deducting cash selling agent discounts and commissions and offering expenses. The warrants issued in the IPO became exercisable on October 28, 2016 and expire on January 29, 2022 or earlier upon redemption by the Company under certain conditions (see Note 9, Stockholders Equity). Each warrant has an exercise price of $5.00. Upon consummation of the IPO, the Company’s 9,560,295 previously outstanding warrants converted into identical warrants issued in the IPO.

 

In connection with the consummation of the IPO, the units were approved for listing on the Nasdaq Capital Market (“Nasdaq”)under the symbol “PAVMU”. Subsequently, the common stock and warrants comprising the units began separate trading on Nasdaq on July 27, 2016 under the symbols “PAVM” and “PAVMW”, respectively, and the unit and symbol PAVMU ceased to be quoted and traded on Nasdaq.

 

Basis of Presentation

 

The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. As permitted under those rules, certain footnotes or other financial information normally required by U.S. GAAP have been condensed or omitted, and accordingly the balance sheet as of December 31, 2015 has been derived from audited consolidated financial statements at that date but does not include all of the information required by U.S. GAAP for complete financial statements. These condensed consolidated financial statements have been prepared on the same basis as the Company’s annual financial statements and in the opinion of management, reflect all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of the Company’s financial information. The accompanying unaudited condensed consolidated financial statements and related financial information should be read in conjunction with the audited financial statements and related notes thereto as of and for the year ended December 31, 2015 included in the Company’s Annual Report on Form 10-K filed with the SEC.

 

The results of operations for the three and nine months ended September 30, 2016 are not necessarily indicative of the results to be expected for the year ending December 31, 2016 or for any other interim period or for any other future year.

 

Liquidity and Going Concern

 

The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.

 

The Company’s ability to continue to meet its obligations and to achieve its business objectives is dependent upon, among other things, raising sufficient additional capital, obtaining regulatory clearance for its products, commercializing its products, generating sufficient revenue, and its ability to continue to control expenses, to meet its obligations as they become due for the foreseeable future. A failure to raise sufficient capital, obtain regulatory clearance for its products, commercialize its products, or manage expenditures, among other factors, may adversely impact the Company’s ability to achieve its intended business objectives and raise substantial doubt of the Company’s ability to continue as a going concern.

 

Since inception, the Company has incurred losses and negative cash flows from operating activities. During the three and nine month periods ended September 30, 2016, the Company incurred net losses of $1,928,722 and $3,940,337, respectively, and had net cash used in operating activities of $3,251,887 for the nine months ended September 30, 2016. At September 30, 2016, the Company had an accumulated deficit of $5,991,321, working capital of $1,124,232, and cash of $1,788,650. The Company anticipates incurring losses for the next several years as it completes the development of its products and seeks requested regulatory clearances to market such products.

 

The Company does not expect to experience positive cash flows in the near future. To date, the Company has financed its operations with $2.1 million of net proceeds from private placements of equity securities and $4.2 million of net cash proceeds from its IPO. The Company estimates its existing cash-on-hand, absent any additional sources of cash, is sufficient to fund its operations into early 2017. Accordingly, the Company will need to raise additional funds to support its operating and capital needs beyond early 2017. The Company has engaged financial advisory firms to assist with its financing efforts, however, there is no assurance the financial advisory firms will be successful in these efforts.

 

The Company may seek to issue additional equity and /or incur indebtedness. The issuance of additional equity and /or debt securities by the Company may result in additional dilution to its stockholders. If the additional funds result from the issue of debt securities and /or preferred stock, these securities could have rights senior to those of the Company’s common stock and could contain covenants which may restrict the Company’s operations. The Company may also seek funding through collaborations or other similar arrangements with third parties, including larger medical device companies. However, the Company may not be able to secure such financing in a timely manner or on terms it deems favorable, if at all. If the Company is unable to raise sufficient additional capital funding, it may need to substantially curtail its planned operations.

 

The condensed consolidated financial statements have been prepared on the assumption the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities and commitments in the normal course of business. The Company depends upon its ability, and will continue to attempt, to secure additional equity and /or debt financing, however, the Company may not be successful in these efforts, and without sufficient capital funding, there is substantial doubt of the Company’s ability to continue as a going concern. The condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities resulting from the outcome of this uncertainty.

 

Stock Split Effected in the Form of a Stock Dividend

 

On September 21, 2015, the Company’s Board of Directors declared a 2.7872582-for-1 stock split to be effected in the form of a stock dividend. All basic and diluted earnings per share, average shares outstanding information and all applicable footnotes have been adjusted for the stock split. The number of authorized shares of common stock and preferred stock were not affected by the stock split and remain at 50,000,000 shares and 20,000,000 shares, respectively.