Is PAVmed (NASDAQ:PAVM) Using Debt Sensibly?

Warren Buffett famously said, 'Volatility is far from synonymous with risk.' When we think about how risky a company is, we always like to look at its use of debt, since debt overload can lead to ruin. We note that PAVmed Inc. (NASDAQ:PAVM) does have debt on its balance sheet. But the more important question is: how much risk is that debt creating?

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Why Does Debt Bring Risk?

Debt is a tool to help businesses grow, but if a business is incapable of paying off its lenders, then it exists at their mercy. If things get really bad, the lenders can take control of the business. While that is not too common, we often do see indebted companies permanently diluting shareholders because lenders force them to raise capital at a distressed price. Of course, plenty of companies use debt to fund growth, without any negative consequences. When we examine debt levels, we first consider both cash and debt levels, together.

What Is PAVmed's Debt?

The image below, which you can click on for greater detail, shows that PAVmed had debt of US$6.90m at the end of September 2025, a reduction from US$32.1m over a year. On the flip side, it has US$3.10m in cash leading to net debt of about US$3.80m.

A Look At PAVmed's Liabilities

According to the last reported balance sheet, PAVmed had liabilities of US$10.5m due within 12 months, and liabilities of US$1.82m due beyond 12 months. Offsetting this, it had US$3.10m in cash and US$3.0k in receivables that were due within 12 months. So it has liabilities totalling US$9.18m more than its cash and near-term receivables, combined.

When you consider that this deficiency exceeds the company's US$8.84m market capitalization, you might well be inclined to review the balance sheet intently. Hypothetically, extremely heavy dilution would be required if the company were forced to pay down its liabilities by raising capital at the current share price. There's no doubt that we learn most about debt from the balance sheet. But it is future earnings, more than anything, that will determine PAVmed's ability to maintain a healthy balance sheet going forward. So if you want to see what the professionals think, you might find this free report on analyst profit forecasts to be interesting.

See our latest analysis for PAVmed

Given its lack of meaningful operating revenue, PAVmed shareholders no doubt hope it can fund itself until it can sell some of its new medical technology.

Caveat Emptor

Not only did PAVmed's revenue slip over the last twelve months, but it also produced negative earnings before interest and tax (EBIT). Indeed, it lost a very considerable US$20m at the EBIT level. Considering that alongside the liabilities mentioned above make us nervous about the company. It would need to improve its operations quickly for us to be interested in it. Not least because it had negative free cash flow of US$3.6m over the last twelve months. So suffice it to say we consider the stock to be risky. There's no doubt that we learn most about debt from the balance sheet. But ultimately, every company can contain risks that exist outside of the balance sheet. We've identified 7 warning signs with PAVmed (at least 5 which make us uncomfortable) , and understanding them should be part of your investment process.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.