Cardio Diagnostics Holdings, Inc.

Previous wording

Cardio launched its first clinical test, Epi+Gen CHD™, a three-year symptomatic CHD risk assessment clinical blood test targeting CHD events, including heart attacks, in 2021 during the Covid-19 pandemic. As a result, the initial strategy for commercialization involved launching the test via telemedicine and in smaller provider practices such as concierge medicine practices. The volume of tests through these channels were minimal, and as the circumstances around Covid-19 pandemic improved, management re-vamped the Company’s go-to-market strategy to include other healthcare verticals and stakeholders beyond patients and small providers, including larger provider organizations, group purchasing organizations, employers, payors and life insurers. This new approach allowed Cardio to expand the reach of our solutions beyond the initial focus areas. Beyond the launch of Epi+Gen CHD, in March 2023, we announced the launch of our second product, PrecisionCHD™, an integrated epigenetic-genetic clinical blood test for the detection of coronary heart disease. The Epi+Gen CHD™ and PrecisionCHD™ tests are coupled to Actionable Clinical Intelligence (“ACI”), a platform that offers new epigenetic and genetic insights to clinicians prescribing the to personalize patient management and help improve chronic care management. In May 2023, we launched CardioInnovate360™, a research-use-only (“RUO”) solution to support the discovery, development and validation of novel biopharmaceuticals for the assessment and management of cardiovascular diseases. In February 2024, we announced the launch of HeartRisk™, a cardiovascular disease risk intelligence platform. We believe that our Epi+Gen CHD™ and PrecisionCHD™ tests are categorized as laboratory-developed tests, or “LDTs.” The new go-to-market strategy is also being implemented for these products. Despite long partnership and sales cycles, in some instance as long as 14 months, Cardio was able to increase the reach of its solutions in 2024, generating revenue from provider organizations and has continued the development of a more robust sales and partnership pipeline. To further increase reach and potentially accelerate partnerships and sales cycles, more seasoned sales personnel in the provider and employer verticals were hired in late 2024. In Q1 2025, the focus of the Company remained in driving adoption of our clinical solutions, predominantly among providers, channel partners and employers. In addition, the Company participated and presented findings at the American College of Cardiology annual conference, and made progress in setting up our laboratory facility.

Current wording

Cardio launched its first clinical test, Epi+Gen CHD™, a three-year symptomatic CHD risk assessment clinical blood test targeting CHD events, including heart attacks, in 2021 during the Covid-19 pandemic. As a result, the initial strategy for commercialization involved launching the test via telemedicine and in smaller provider practices such as concierge medicine practices. The volume of tests through these channels were minimal, and as the circumstances around Covid-19 pandemic improved, management re-vamped the Company’s go-to-market strategy to include other healthcare verticals and stakeholders beyond patients and small providers, including larger provider organizations, group purchasing organizations, employers, payors and life insurers. This new approach allowed Cardio to expand the reach of our solutions beyond the initial focus areas. Beyond the launch of Epi+Gen CHD, in March 2023, we announced the launch of our second product, PrecisionCHD™, an integrated epigenetic-genetic clinical blood test for the detection of coronary heart disease. The Epi+Gen CHD™ and PrecisionCHD™ tests are coupled to Actionable Clinical Intelligence (“ACI”), a platform that offers new epigenetic and genetic insights to clinicians prescribing the to personalize patient management and help improve chronic care management. In May 2023, we launched CardioInnovate360™, a research-use-only (“RUO”) solution to support the discovery, development and validation of novel biopharmaceuticals for the assessment and management of cardiovascular diseases. In February 2024, we announced the launch of HeartRisk™, a cardiovascular disease risk intelligence platform. We believe that our Epi+Gen CHD™ and PrecisionCHD™ tests are categorized as laboratory-developed tests, or “LDTs.” The new go-to-market strategy is also being implemented for these products. Despite long partnership and sales cycles, in some instance as long as 14 months, Cardio was able to increase the reach of its solutions in 2024, generating revenue from provider organizations and has continued the development of a more robust sales and partnership pipeline. To further increase reach and potentially accelerate partnerships and sales cycles, more seasoned sales personnel in the provider and employer verticals were hired in late 2024. In Q1 and Q2 2025, the focus of the Company remained in driving adoption of our clinical solutions, predominantly among providers, channel partners and employers. In addition, the Company made progress in the Medicare reimbursement process where the Company received preliminary gapfill pricing from the Centers for Medicare and Medicaid for the Epi+Gen CHD and PrecisionCHD tests, onboarding a new employer client and in setting up our laboratory facility.

Previous wording

As of May 15, 2025, the Company sold 1,031,981 (30,959,434 prior to the Reverse Stock Split) shares of its Common Stock under the Sales Agreement resulting in proceeds to the Company of $14,681,556, net of offering costs. The Company has paid Craig-Hallum $376,450 in sales commissions. As of May 15, 2025, the Company has not sold any additional shares of Common Stock under the Additional Registration Statement.

Current wording

As of August 14, 2025, the Company sold 1,054,841 shares of its Common Stock on a Reverse Stock Split-adjusted basis under the Sales Agreement resulting in proceeds to the Company of $14,782,871, net of offering costs. The Company has paid Craig-Hallum $379,048 in sales commissions.

Previous wording

On March 31, 2025, a federal district court vacated the FDA final rule, thereby cancelling the rulemaking’s associated requirements. The court held that laboratory developed tests do not meet the definition of a medical device under the Federal Food, Drug, and Cosmetic (“FD&C”) Act and the FDA therefore lacks jurisdiction to regulate them. Laboratories no longer need to comply with the regulatory changes that were set to take effect on May 6, 2025, or with the rulemaking’s other requirements. The federal government did not seek a stay of the district court’s opinion and no appeal has been made to date.

Current wording

On March 31, 2025, a federal district court vacated the FDA final rule, thereby cancelling the rulemaking’s associated requirements. The court held that laboratory developed tests do not meet the definition of a medical device under the Federal Food, Drug, and Cosmetic (“FD&C”) Act and the FDA therefore lacks jurisdiction to regulate them. Laboratories no longer need to comply with the regulatory changes that were set to take effect on May 6, 2025, or with the rulemaking’s other requirements. The federal government did not seek a stay of the district court’s opinion and did not file an appeal of the ruling, which means the district court decision remains in effect. .

Previous wording

Cardio’s net loss for the three months ended March 31, 2025 was $1,635,064 as compared to $4,163,584 for the three months ended March 31, 2024, a decrease of $2,528,520. The decrease in net loss was primarily the result of a decrease in General and Administrative expenses, associated with stock compensation issued in 2024.

Current wording

Cardio’s net loss for the six months ended June 30, 2025 was $3,318,263 as compared to $5,451,579 for the six months ended June 30, 2024, a decrease of $2,133,316. The decrease in net loss was primarily the result of a decrease in General and Administrative expenses associated with stock compensation issued in 2024.

Previous wording

Cardio had $940 and $15,928 in revenue for the three months ended March 31, 2025 and 2024, respectively.

Current wording

Cardio had $7,475 and $7,870 in revenue for the three months ended June 30, 2025 and 2024, respectively.

Previous wording

Expenses related to sales and marketing for the three months ended March 31, 2025 were $41,820 as compared to $34,402 for the three months ended March 31, 2024, an increase of $7,418. The overall increase was due to an increase in sales and marketing efforts in the first quarter of 2025.

Current wording

Selling, General and Administrative Expenses for the three months ended June 30, 2025, were $1,686,174 as compared to $1,290,330 for the three months ended June 30, 2024, an increase of $395,844. The overall increase was primarily due to an increase in legal and professional expenses, payroll related expenses due to more personnel in 2025, research and development expenses and sales and marketing expenses.

Previous wording

General and administrative expenses for the three months ended March 31, 2025, were $1,542,042 as compared to $4,123,941 for the three months ended March 31, 2024, a decrease of $2,581,899. The overall decrease is primarily due to stock compensation expenses of $2,519,404 in the first quarter of 2024 as compared to $30,612 in the current period of 2025.

Current wording

Selling, General and Administrative Expenses for the six months ended June 30, 2025, were $3,317,674 as compared to $5,464,306 for the six months ended June 30, 2024, a decrease of $2,146,632. The overall decrease is primarily due to stock compensation expenses of $2,546,135 in the six months of 2024 as compared to $61,390 in the same period of 2025, offset by more payroll related expenses due to more personnel in 2025.

Previous wording

We expect our general corporate overhead to remain relatively flat. However, we expect an increase in payroll and related costs and other facility costs, including furnishing the facility, capital expenditure of laboratory equipment, and other laboratory materials, as we prepare to put a company laboratory into operation in 2025. Additionally, as a public company, we expect to have to comply with changing legal and exchange requirements, including as to regulations of the SEC and the continued listing requirements of the Nasdaq Capital Market. We incur additional annual expenses related to these matters and, among other things, additional directors’ and officers’ liability insurance, directors’ fees, reporting requirements of the SEC, transfer agent fees, increased auditing and legal fees and similar expenses.

Current wording

We expect our general corporate overhead to remain relatively flat. However, we expect an increase in payroll and related costs and other facility costs, including furnishing the laboratory facility, capital expenditure of laboratory equipment, and other laboratory materials, in order to put our company laboratory into operation in the second half of 2025. Additionally, as a public company, we expect to have to comply with changing legal and exchange requirements, including as to regulations of the SEC and the continued listing requirements of the Nasdaq Capital Market. We incur additional annual expenses related to these matters and, among other things, additional directors’ and officers’ liability insurance, directors’ fees, reporting requirements of the SEC, transfer agent fees, increased auditing and legal fees and similar expenses.

Previous wording

Total other expense for the three months ended March 31, 2025, was $(4,504) as compared to $(5,536) for the three months ended March 31, 2024. The total other expenses for the three months ended March 31, 2025, consists of interest expense of $4,691, net of interest income of $187. The total other expenses for the three months ended March 31, 2024, consists of interest expense of $5,817, net of interest income of $281.

Current wording

Total other expense for the three months ended June 30, 2025, was $(4,500) as compared to $(5,535) for the three months ended June 30, 2024. The total other expense for the three months ended June 30, 2025, consists of interest expense of $4,690, net of interest income of $190. The total other expense for the three months ended June 30, 2024, consists of interest expense of $5,817, net of interest income of $282.

Previous wording

On January 26, 2024, we entered into the Sales Agreement with Craig-Hallum. Pursuant to the Sales Agreement, we may sell, at our option, shares of our Common Stock through Craig-Hallum, as sales agent. Sales of our Common Stock were made pursuant to the Sales Agreement initially up to an aggregate of $17 million under the Initial Registration Statement and will be made pursuant to the Sales Agreement up to an aggregate of $9,476,508 under the Additional Registration Statement.

Current wording

On January 26, 2024, we entered into the Sales Agreement with Craig-Hallum. Pursuant to the Sales Agreement, we may sell, at our option, shares of our Common Stock through Craig-Hallum, as sales agent. Sales of our Common Stock were made pursuant to the Sales Agreement initially up to an aggregate of $17 million under a shelf registration statement declared effective in February 2024 (File No. 333-276725) and will continue to be made pursuant to the Sales Agreement up to an aggregate of $9,476,508 under a second shelf registration statement declared effective in February 2025 (File No. 333-284775).

Previous wording

As of May 15, 2025, we sold 1,031,981 (30,959,434 prior to the Reverse Stock Split) shares of our Common Stock under the Sales Agreement resulting in proceeds to us of $14,681,556, net of offering costs. The Company has paid Craig-Hallum $376,450 in sales commissions. As of May 15, 2025, the Company has not sold any additional shares of Common Stock under the Additional Registration Statement.

Current wording

As of August 14, 2025, we sold 1,054,841 shares of our Common Stock on a Reverse Stock Split-adjusted basis under the Sales Agreement resulting in proceeds to us of $14,782,871, net of offering costs. We have paid Craig-Hallum $379,048 in sales commissions.

Previous wording

We have had, and expect that we will continue to have, an ongoing need to raise additional cash from outside sources to fund our operations and grow our business. We expect that our primary cash needs in 2025 and for the foreseeable future will be for funding day-to-day operations and working capital requirements, funding our growth strategy, paying the setup expenses of our internal laboratory and paying expenses incurred in connection with our ongoing FDA submission activities. We explore our financing options on an ongoing basis. However, given recent stock prices and the extreme volatility of our stock, it continues to be challenging to balance cash that could be raised and the dilution that might be required to close a particular transaction. We expect that for the remainder of 2025, we will rely primarily on the ongoing ATM Offering, provided that market conditions are favorable.

Current wording

We have had, and expect that we will continue to have, an ongoing need to raise additional cash from outside sources to fund our operations and grow our business. We expect that our primary cash needs for the remainder of 2025 and for the foreseeable future will be for funding day-to-day operations and working capital requirements, funding our growth strategy, paying the setup expenses of our internal laboratory and paying expenses incurred in connection with our ongoing FDA submission activities. We explore our financing options on an ongoing basis. However, given recent stock prices and the extreme volatility of our stock, it continues to be challenging to balance cash that could be raised and the dilution that might be required to close a particular transaction. We expect that for the remainder of 2025, we will rely primarily on the ongoing ATM Offering, provided that market conditions are favorable.

Previous wording

The exercise prices of our currently outstanding warrants range from a high of $345 to a low of $53.40 (a high of $11.50 to a low of $1.78 before the Reverse Stock Split) (subject to adjustment) per share of Common Stock. The likelihood that warrant holders will exercise their warrants, and therefore the amount of cash proceeds that we might receive, is dependent upon the trading price of our Common Stock, the last reported sales price for which was $4.53 on May 14, 2025. If the trading price of our Common Stock is less than the respective exercise prices of our outstanding warrants, which has been the case for a substantial period of time, we believe holders of any of our warrants will be unlikely to exercise their warrants. There is no guarantee that the warrants will be in the money prior to their respective expiration dates, and as such, the warrants may expire worthless, and we may receive no proceeds from the exercise of warrants. Given the current differential between the trading price of our Common Stock and the Warrant exercise prices and the volatility of our stock price, we are not making strategic business decisions based on an expectation that we will receive any cash from the exercise of warrants. However, we will use any cash proceeds received from the exercise of warrants for general corporate and working capital purposes, which would increase our liquidity. We will continue to evaluate the probability of warrant exercises and the merit of including potential cash proceeds from the exercise of the warrants in our future liquidity projections.

Current wording

The exercise prices of our currently outstanding warrants range from a high of $345 to a low of $53.40 (a high of $11.50 to a low of $1.78 before the Reverse Stock Split) (subject to adjustment) per share of Common Stock. The likelihood that warrant holders will exercise their warrants, and therefore the amount of cash proceeds that we might receive, is dependent upon the trading price of our Common Stock, the last reported sales price for which was $3.82 on August 13, 2025. If the trading price of our Common Stock is less than the respective exercise prices of our outstanding warrants, which has been the case for a substantial period of time, we believe holders of any of our warrants will be unlikely to exercise their warrants. There is no guarantee that the warrants will be in the money prior to their respective expiration dates, and as such, the warrants may expire worthless, and we may receive no proceeds from the exercise of warrants. Given the current differential between the trading price of our Common Stock and the Warrant exercise prices and the volatility of our stock price, we are not making strategic business decisions based on an expectation that we will receive any cash from the exercise of warrants. However, we will use any cash proceeds received from the exercise of warrants for general corporate and working capital purposes, which would increase our liquidity. We will continue to evaluate the probability of warrant exercises and the merit of including potential cash proceeds from the exercise of the warrants in our future liquidity projections.

Previous wording

Cash at March 31, 2025 totaled $9,688,719 as compared to $7,827,487 at December 31, 2024, an increase of $1,861,232. The following table shows Cardio’s cash flows from operating activities, investing activities and financing activities for the stated periods.

Current wording

Cash at June 30, 2025 totaled $7,966,500 as compared to $7,827,487 at December 31, 2024, an increase of $139,013. The following table shows Cardio’s cash flows from operating activities, investing activities and financing activities for the stated periods.

Previous wording

Cash used in operating activities for the three months ended March 31, 2025 was $1,400,101 as compared to $1,233,050 for the three months ended March 31, 2024. The cash used in operations during the three months ended March 31, 2025 is a function of net loss of $1,635,064 adjusted for the following non-cash operating items: depreciation of $37,656, amortization of $87,664, $30,612 in stock-based compensation, a decrease of $9,060 in accounts receivable, a decrease of $107,461 in prepaid expenses and other current assets, an increase of $20,520 in accounts payable and accrued expenses and a decrease in lease liability of $58,010.

Current wording

Cash used in operating activities for the six months ended June 30, 2025 was $2,971,566 as compared to $2,443,450 for the six months ended June 30, 2024. The cash used in operations during the six months ended June 30, 2025 is a function of net loss of $3,318,263 adjusted for the following non-cash operating items: depreciation of $75,441, amortization of $139,022, $61,390 in stock-based compensation, a decrease of $5,685 in accounts receivable, a decrease of $220,762 in prepaid expenses and other current assets, a decrease of $38,937 in accounts payable and accrued expenses and a decrease in lease liability of $116,666.

Previous wording

The cash used in operations during the three months ended March 31, 2024 was a function of net loss of $4,163,584 adjusted for the following non-cash operating items: depreciation of $3,587, amortization of $24,750, $2,519,404 in stock-based compensation, an increase of $14,028 in accounts receivable, a decrease of $470,050 in prepaid expenses and other current assets, a decrease of $18,494 in accounts payable and accrued expenses and a decrease in lease liability of $54,735.

Current wording

The cash used in operations during the six months ended June 30, 2024 is a function of net loss of $5,451,579 adjusted for the following non-cash operating items: depreciation of $39,579, amortization of $69,877, $2,546,135 in stock-based compensation, an increase of $2,560 in accounts receivable, a decrease of $656,310 in prepaid expenses and other current assets, a decrease of $191,132 in accounts payable and accrued expenses and a decrease in lease liability of $110,080.

Previous wording

Cash used in investing activities for the three months ended March 31, 2025 was $47,415 compared to $69,941 for the three months ended March 31, 2024. The cash used in investing activities for the three months ended March 31, 2025 and March 31, 2024 was due to purchases of property and equipment and patent costs incurred.

Current wording

Cash used in investing activities for the six months ended June 30, 2025 was $83,132 compared to $271,010 for the six months ended June 30, 2024. The cash used in investing activities for the six months ended June 30, 2025 and 2024 was due to purchases of property and equipment and patent costs incurred.

Previous wording

Cash provided by financing activities for the three months ended March 31, 2025 was $3,308,748 as compared to $1,582,607 for the three months ended March 31, 2024. Cash provided by financing activities for the three months ended March 31, 2025 was due to $3,423,784 in net proceeds from the sale of common stock offset by $115,036 in payments of finance agreement. Cash provided by financing activities for the three months ended March 31, 2024 was due to $1,722,857 in net proceeds from the sale of common stock and warrants offset by $140,250 in payments pursuant to a finance agreement.

Current wording

Cash provided by financing activities for the six months ended June 30, 2025 was $3,193,711 as compared to $2,741,056 for the six months ended June 30, 2024. Cash provided by financing activities for the six months ended June 30, 2025 was due to $3,423,784 in net proceeds from the sale of common stock offset by $230,073 in payments of finance agreement. Cash provided by financing activities for the six months ended June 30, 2024 was due to $3,021,556 in net proceeds from the sale of common stock and warrants offset by $280,500 in payments pursuant to a finance agreement.

Previous wording

The Company has a worldwide exclusive license agreement with the University of Iowa Research Foundation (UIRF) relating to its patent and patent-pending technology (the “Exclusive License Agreement”). Under the terms of the Exclusive License Agreement, the Company will have to pay each of: (1) 1% of either the: (i) aggregate consideration (and trailing consideration, if any) for a liquidation event; or (ii) pre-money valuation for an initial public offering, (the “Equity Rights”) (2) 2% of annual net sales, and (3) 15% of non-royalty fees paid to licensee if it enters into one or more sublicensing agreements. Upon the Closing of the Business Combination, the Company issued 3,639 (109,170 prior to the Reverse Stock Split) Shares of Common Stock to UIRF in accordance with the Equity Rights under the Exclusive License Agreement. The Company has had minimal sales of $54,746 to date and has paid 2% or $1,294 in total royalty fees to UIRF under the exclusive license.

Current wording

The Company has a worldwide exclusive license agreement with the University of Iowa Research Foundation (UIRF) relating to its patent and patent-pending technology (the “Exclusive License Agreement”). Under the terms of the Exclusive License Agreement, the Company will have to pay each of: (1) 1% of either the: (i) aggregate consideration (and trailing consideration, if any) for a liquidation event; or (ii) pre-money valuation for an initial public offering, (the “Equity Rights”) (2) 2% of annual net sales, and (3) 15% of non-royalty fees paid to licensee if it enters into one or more sublicensing agreements. Upon the Closing of the Business Combination, the Company issued 3,639 (109,170 prior to the Reverse Stock Split) Shares of Common Stock to UIRF in accordance with the Equity Rights under the Exclusive License Agreement. The Company has had minimal sales of $62,221 to date and has paid 2% or approximately $1,300 in total royalty fees to UIRF under the exclusive license.

Previous wording

Our senior management has reviewed the critical accounting policies and estimates with the Audit Committee of our Board of Directors. For a description of the Company’s critical accounting policies and estimates, refer to “Part II—Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates” in our most recent Annual Report on Form 10-K for the year ended December 31, 2024, which was filed with the SEC on March 20, 2025. Critical accounting policies are those that are most important to the portrayal of our financial condition, results of operations and cash flows and require management’s most difficult, subjective and complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. If actual results were to differ significantly from estimates made, the reported results could be materially affected. There were no significant changes to our critical accounting policies and estimates during the three months ended March 31, 2025.

Current wording

Our senior management has reviewed the critical accounting policies and estimates with the Audit Committee of our Board of Directors. For a description of the Company’s critical accounting policies and estimates, refer to “Part II—Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates” in our most recent Annual Report on Form 10-K for the year ended December 31, 2024, which was filed with the SEC on March 20, 2025. Critical accounting policies are those that are most important to the portrayal of our financial condition, results of operations and cash flows and require management’s most difficult, subjective and complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. If actual results were to differ significantly from estimates made, the reported results could be materially affected. There were no significant changes to our critical accounting policies and estimates during the three and six months ended June 30, 2025.