CDIO 10-K & 10-Q changes, risk factors and insider trading

Investing in our securities involves risks. You should carefully consider the risks and uncertainties described below and the other information in this Annual Report on Form 10-K before making an investment in our Common Stock. Our business, financial condition, results of operations, or prospects could be materially and adversely affected if any of these risks occurs, and as a result, the market price of our Common Stock could decline and you could lose all or part of your investment. This Annual Report on Form 10-K also contains forward-looking statements that involve risks and uncertainties. See “Cautionary Statement Regarding Forward-Looking Statements.” Our actual results could differ materially and adversely from those anticipated in these forward-looking statements as a result of certain factors, including those set forth below. These disclosures reflect the Company’s beliefs and opinions as to factors that could materially and adversely affect the Company and its securities in the future. References to past events are provided by way of example only and are not intended to be a complete listing or a representation as to whether or not such factors have occurred in the past or their likelihood of occurring in the future.

We believe our long-term value as a company will be greater if we focus on growth, which has in the past, and may continue to negatively impact our results of operations in the near term.

Our business and the markets in which we operate are new and rapidly evolving, which makesmake it difficult to evaluate our future prospects and the risks and challenges we may encounter.

Our limited operating history makemakes it difficult to evaluate our future prospects and the risks and challenges we may encounter.

In addition, as a business with a limited operating operating history, we may encounter unforeseen expenses, difficulties, complications, delays and other known and unknown challenges. We are may not be successful at commercialization, sales and marketing and, as a result, our business may be adversely affected.

Further, although our revenues currently are only nominal, once we achieve traction, in any future period, our revenue growth could slow or our revenues could decline for a number of reasons, including slowing demand for our tests and services, increasing competition, a decrease in the growth of our overall market, or our failure, for any reason, to continue to capitalize on growth opportunities. In addition, our growth rate may slow in the future as our market penetration rates increase. As a result, our revenues, operating results and cash flows may fluctuate significantly on a quarterly basis and revenue growth rates may not be sustainable and may decline in the future, and we may not be able to achieve or sustain profitability in future periods, which could harm our business and cause the market price of our Common Stock to decline.

We expect to spend significant amounts to expand our existing operations, including expansion into new geographies, to make additional key hires, to expand our sales channels and constituencies and to develop new tests and services. Since 2024, our primary source of capital has been sales of our Common Stock under our at-the-market agreement with Craig-Hallum Capital Group, LLC (the “ATM Agreement”). If we are unable to raise additional capital,capital under the ATM Agreement or otherwise, we may need to delay the timing of, or scale back, certain aspects of our business plan and operations. The estimate and our expectation regarding the sufficiency of funds to continue our business plan and operations are based on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect. Until such time, if ever, as we can generate sufficient revenues, we mayexpect to finance our cash needs through a combination of equity offerings and debt financings or other sources. In addition, we may seek additional capital due toin the event of favorable market conditions or strategic considerations, even if we believe that we have sufficient funds for our current or future operating plans.

Our ML/AI powering our technology and products, there are known risks of with the use of ML/AI including accuracy, bias, toxicity, privacy, security and data provenance. Developing, Developing, testing and deploying ML/AI systems may also increase the cost of our offerings. Our failure to adequately address potential risks relating to the use of ML/AI in our technology and solutions could result in litigation regarding, among other things, intellectual property, privacy and other claims that could result in liability for our company. It may also result in new or increased governmental or regulatory scrutiny, which could result in regulatory action, legal liabilities, regulatory penalties, and damage to our reputation, potentially harming our business and financial condition. The use of our AI capabilities could raise ethical or social concerns and our failure to adequately address these concerns or the failure of our competitors, clients or other end users to do so could negatively impact our brand and reputation.

While we have implemented and is are continuing to implement procedures and safeguards that are designed to prevent security breaches and cyber attacks,cyberattacks, they may not be able to protect against all attempts to breach our systems, and we may not become aware in a timely manner of any such security breach. Unauthorized access to or security breaches of our platform, network or computer systems, or those of our technology service providers, could result in the loss of business, reputational damage, regulatory investigations and orders, litigation, indemnity obligations, damages for contract breach, civil and criminal penalties for violation of applicable laws, regulations or contractual obligations and significant costs, fees and other monetary payments for remediation. If customers believe that our platform does not provide adequate security for the storage of sensitive information or its transmission over the Internet, our business will be harmed. Customers’ concerns about security or privacy may deter them from using our solutions for activities that involve personal or other sensitive information.

Concerns over inflation, energy costs, geopolitical issues, including the ongoing conflict between Russian and Ukraine,Ukraine and the recent commencement of hostilities in Iran, unstable global credit markets and financial conditions, and volatile oil prices could lead to periods of significant economic instability, diminished liquidity and credit availability, declines in consumer confidence and discretionary spending, diminished expectations for the global economy and expectations of slower global economic growth going forward. For example, in March 2022, the U.S. Consumer Price Index (“CPI”), which measures a wide-ranging basket of goods and services, rose 8.5% from the same month a year ago, which represents the largest CPI increase since December of 1981. Our general business strategy may be adversely affected by any such inflationary fluctuations, economic downturns, volatile business environments and continued unstable or unpredictable economic and market conditions.

Compliance with changing regulation of corporate governance governance and public disclosure will result in significant additional expenses.

Changing laws, regulations, and and standards relating to corporate governance and public disclosure for public companies, including the Sarbanes-Oxley Act of 2002 and various various rules and regulations adopted by the SEC, are creating uncertainty for public companies. Our management will needneeds to invest significant time and financial resources to comply with both existing and evolving requirements for public companies, which will lead,leads, among other things, things, to significantly increased general and administrative expenses and a certain diversion of management time and attention from revenue generating generating activities to compliance activities.

We are highly dependent upon the talents and services of a number of key employees, specifically Meeshanthini Dogan, PhD andPhD, Robert Philibert, MD PhD and Timur Dogan, PhD, and other senior technical technical and management personnel, including our other executive officers, all of whom would be difficult to replace. In 2022, we entered into into multi-year employment agreements with each of our executive officers and a consulting agreement with our non-executive chairman. The loss of the services of one or more of these key employees would disrupt our business and harm its results of operations. As competition is is intense for the type of highly skilled scientific and medical professionals our business requires, we may not be able to successfully attract and retain senior leadership necessary to grow our business.

Currently, we have less than 16 15 full and two part-time employees. Our ability to manage our growth effectively will require us to continue to improve our operational, financial and management controls and information systems to accurately forecast sales demand, to manage our operating costs, manage our marketing programs in conjunction with an emerging market, and attract, train, motivate and manage our employees effectively. Our growth strategy will place significant demands on our management team and our financial, administrative and other resources. Operating results will depend substantially substantially on the ability of our officers and key employees to manage changing business conditions and to implement and improve its financial, administrative and other resources. If management fails to manage the expected growth, our results of operations, financial condition, business and prospects could be adversely affected. In addition, our growth strategy may depend on effectively integrating future entities, which requires cooperative efforts from the managers and employees of the respective business entities. If we are unable to respond to and manage changing business conditions, or the scale of our operations, then the quality of our products and services, our ability to retain key personnel, and our business could be harmed, which in turn, could adversely affect our results of operations, financial condition, business and prospects.

In order to provide our products, we currently use a variety of technologies including, for example, genotyping, digital methylation assessment and data processing technologies owned by third parties. The terms of these agreements, and any other “open source” software agreements we may rely upon in the future, are subject to change without notice and may increase our costs. Moreover, our failure to comply with the terms of one or more of these agreements could expose us to business disruption because the license may be terminated automatically due to non- compliance.non-compliance.

To enforce compliance with the federal laws, the U.S. Department of Justice and the Office of the Inspector General (“OIG”) have recently increased their scrutiny of healthcare providers, providers, which has led to a number of investigations, prosecutions, convictions and settlements in the healthcare industry. Dealing with investigations can be time- and resource-consuming and can divert management’s attention from the business. Any such investigation or settlement could increase our costs or otherwise have an adverse effect on our business. In addition, because of the potential for large monetary exposure under the federal False Claims Act, which provides for treble damages and mandatory minimum penalties of $5,500 to $11,000 per false claim or statement, healthcare providers often resolve allegations without admissions of liability for significant and material amounts to avoid the uncertainty of treble damages that may be awarded in litigation proceedings. Such settlements often contain additional compliance and reporting requirements as part of a consent decree, settlement agreement or corporate integrity agreement. Given the significant size of actual and potential settlements, it is expected that the government will continue to devote substantial resources to investigating healthcare providers’ compliance with the healthcare reimbursement rules and fraud and abuse laws.

We currently do not have broad-based coverage and reimbursement for the Epi+Gen CHD™ and PrecisionCHD™ tests. However, our strategy is to expand access to our tests by pursuing coverage and reimbursement by third-party payors, including government payors. Coverage and reimbursement by third-party payors, including managed care organizations, private health insurers, and government healthcare programs, such as Medicare and Medicaid in the United States and similar programs in other countries, for the types of risk assessment and detection tests we perform can be limited and uncertain. Healthcare providers may not order our products unless third-party payors cover and provide adequate reimbursement for a substantial portion of the price of the products. If we are not able to obtain adequate coverage and an acceptable level of reimbursement for our products from third-party payors, there could be a greater co-insurance or co- paymentco-payment obligation for any individual for whom a test is ordered. The individual may be forced to pay the entire cost of a test out-of-pocket, which could dissuade physicians from ordering our products and, if ordered, could result in delay in or decreased likelihood of collection of payment.

If eligible for reimbursement, laboratory tests such as ours generally are classified for reimbursement purposes under CMS’s Healthcare Common Procedure Coding System (“HCPCS”) and the American Medical Association’s (“AMA”) Current Procedural Terminology (“CPT”) coding systems. We and payors must use those coding systems to bill and pay for our diagnostic tests, respectively. These HCPCS and CPT codes are associated with the particular product or service that is provided to the individual. Accordingly, without a HCPCS or CPT code applicable to our products, the submission of claims could be a significant challenge. Once CMS creates an HCPCS code or the AMA establishes a CPT code, CMS establishes payment rates and coverage rules under traditional Medicare, and private payors establish rates and coverage rules independently. Under Medicare, payment for laboratory tests is generally made under the Clinical Laboratory Fee Schedule (“CLFS”) with payment amounts assigned to specific HCPCS and CPT codes. In addition, effective January 1, 2018, a new Medicare payment methodology went into effect for clinical laboratory tests, under which laboratory-reported private payor rates are used to establish Medicare payment rates for tests reimbursed via the CLFS. The newThis methodology implements Section 216 of the Protecting Access to Medicare Act of 2014 (“PAMA”) and requires laboratories that meet certain requirements related to volume and type of Medicare revenues to report to CMS their private payor payment rates for each test they perform, the volume of tests paid at each rate, and the HCPCS code associated with the test. CMS uses the reported information to set the Medicare payment rate for each test at the weighted median private payor rate. The full impact of the PAMA rate-setting methodology and its applicability to our products remains uncertain at this time.

In addition, U.S. states are adopting new laws or amending existing laws and regulations, requiring attention to frequently changing regulatory requirements applicable to data related to individuals. For example, California has enacted the California Consumer Privacy Act (“CCPA”). The CCPA gives California residents expanded rights to access and delete their personal information, opt out of certain personal information sharing and receive detailed information about how their personal information is used by requiring covered companies to provide new disclosures to California consumers (as that term is broadly defined and which can include any of our current or future employees who may be California residents residents or any other California residents whose data we collect or process) and provide such residents new ways to opt out of certain sales of personal information. The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches that that is expected to increase data breach litigation. As we expand our operations and customer base, the CCPA may increase our compliance costs costs and potential liability. Additionally, the California Privacy Rights Act (“CPRA”), which was approved by California voters voters in the election in November 2020, created obligations relating to consumer data with implementing regulations that, although delayed, did take effect during 2024. The CPRA modifies the CCPA significantly, potentially resulting in further uncertainty and requiring us to incur additional costs and expenses in an effort to comply. Additionally, otherabout 20 U.S. states continuehave to propose, and in certain cases adopt,adopted, privacy-focused legislation such as Colorado, Virginia, Utah and Connecticut. Aspects of these state laws remain unclear, resulting in further uncertainty and potentially requiring us to modify our data practices and policies and to incur substantial additional costs and expenses in an effort to comply.

We are an “emerging growth company” as defined in Section 2(a)(19) of the Securities Act, as modified by the Jumpstart our Business Startups Act (the “JOBS Act. Act”). As such, we are eligible for and intend to take advantage of certain exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies for as long as we continue to be an emerging growth company, including, but not limited to, (a) not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act,Act of 2002 (“Sarbanes-Oxley”), (b) reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and (c) exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. As a result, our stockholders may not have access to certain information they may deem important. We will remain an emerging growth company until the earliest of (i) the last day of the fiscal year in which the market value of shares of Common Stock that are held by non-affiliates exceeds $700 million as of June 30 of that fiscal year, (ii) the last day of the fiscal year in which we have total annual gross revenue of $1.07 billion or more during such fiscal year (as indexed for inflation), (iii) the date on which we have issued more than $1 billion in non-convertible debt in the prior three-year period or (iv) December 31, 2026, which is the last day of the fiscal year following the fifth anniversary of the date of the first sale of Common Stock in Mana’s initial public offering. We cannot predict whether investors have found or will continue to find our securities less attractive because it will rely on these exemptions. If some investors find our securities less attractive as a result of our reliance on these exemptions, the trading prices of our securities may be lower than they otherwise would be, there may be a less active trading market for our securities and the trading prices of our securities may be more volatile.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non- emergingnon-emerging growth companies but any such election to opt out is irrevocable. We have elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our financial statements with another public company that is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. However, once we lose emerging growth company status on December 31, 2026, we will lose this exemption and will be required to adopt revised or new accounting standards on the time schedule applicable to non-emerging growth companies.

Additionally, we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K.S-K and a non-accelerated filer. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements.statements and reduced executive compensation disclosure. In addition, as a non-accelerated filer and smaller reporting company, we will continue to be exempt from complying with the auditor attestation requirements of Section 404 of Sarbanes-Oxley. We expect that we will remain a smaller reporting company until the last day of any fiscal year for so long as either (a) the market value of our Common Stock held by non-affiliates does not equal or exceed $250 million as of the prior June 30th, or (b) our annual revenues did not equal or exceed $100 million during such completed fiscal year and the market value of our Common Stock held by non-affiliates did not equal or exceed $700 million as of the prior June 30th. To the extent we take advantage of such reduced disclosure obligations, it may also make comparison of our financial statements with other public companies difficult or impossible.

The stock market hasgenerally, as well as our Common Stock in particular, have recently experienced extreme price and volume fluctuations. The market prices of securities of companies have experienced fluctuations that often have been unrelated or disproportionate to their operating results. In the past, stockholders have sometimes instituted securities class action litigation against companies following periods of volatility in the market price of their securities. Any similar litigation against us could result in substantial costs, divert management’s attention and resources, and harm its business, financial condition, and results of operations.

We have listed our Common Stock and Warrants on Nasdaq under the symbols “CDIO” and “CDIOW,” respectively. We cannot assure you that an active trading market for itsour Common Stock willcan be created or sustained. Accordingly, we cannot assure you of the liquidity of any trading market, your ability to sell your shares of our Common Stock when desired or the prices that you may obtain for your shares.

We have filed, and the SEC has declared effective, registration statements covering (i) the resale of Common Stock underlying Public Warrants issued in the Company’s Company’s initial public offering and a substantial number of shares of Common Stock and shares underlying warrants issued in private placements placements we completed prior to our Business Combination; (ii) up to $17 million in securities on a shelf registration statement that was used for an at-the-market offering of up to $17 million; (iii) up to $9,476,508 in securities on a shelf registration statement that we are currently using for an at-the-market offering of up to $9,476,508; and (iii) a registration statement on Form S-8 covering our 2022 Equity Incentive Plan. Public sales of securities can continue to be made under these registration statements.statements, Weand also plan to file(iv) a registration statement statement covering the resale of Common Stock and shares underlying warrants that we recentlywere sold in a private placement.placement effected in February 2024. In addition, all of the shares we issued in the Business Combination to holders of Legacy Cardio securities are available for resale under Rule 144 without restriction, subject to certain limitations that apply to our affiliates.

Delaware law and provisions in our Charter and Bylaws could make a merger, tender offer, or proxy contest difficult, thereby depressing the trading price of itsour Common Stock.

We currently intend to retain any future earnings to finance the operation and expansion of itsour business and we do not expect to declare or pay any dividends in the foreseeable future.

On January 26, 2024, the Company entered into an At-the-Market Issuance Sales Agreement (the “Sales Agreement”) with Craig-Hallum Capital Group LLC (“Craig-Hallum”). Sales of our Common Stock pursuant to the Sales Agreement were made under the Company’s Registration Statement on Form S-3 filed on January 26, 2024 (File No. 333-276725) declared effective by the SEC on February 1, 2024 and will have been, and may continue to be made made, under the Company’s Registration Statement on Form S-3 filed on February 7, 2025 (File No. 333-284775) declared effective by the SEC on February 14, 2025. As of March 20,13, 2025,2026, we have sold 30,959,4342,251,181 shares of our Common Stock under the Sales Agreement and may sell up to $9,476,508another $5,298,889 of our Common Stock through Craig-Hallum under the Sales Agreement.

We have the ability to redeem outstanding Public Warrants and Sponsor Warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the last reported sales price of our Common Stock equals or exceeds $18.00$540.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 trading-day period ending on the third trading day prior to the date on which we give proper notice of such redemption and provided certain other conditions are met. Trading prices of our Common Stock have not historically exceeded the $18.00$540.00 per share redemption threshold. If and when the Public Warrants and Sponsor Warrants become redeemable, we may not exercise our redemption right unless there is a current registration statement in effect with respect to the shares of Common Stock underlying the Warrants. While we have registered the Common Stock issuable upon the exercise of the Public Warrants and Sponsor Warrants on a separate registration statementstatement, onmost Formrecently S-1updated thatby wasPost-Effective Amendment No. 3, which the SEC declared effective by the SEC on JanuarySeptember 24,9, 2023,2025, it must remain current and effective by future filings. There can be no assurance that the registration statement will still be effective at the time that we would like to exercise our redemption rights.

As a publicly traded company, we will incur significant additional legal, accounting and other expenses that we did not incur as a privately company. The obligations of being a public company in the United States require significant expenditures and will place significant demands on our management and other personnel, including costs resulting from public company reporting obligations under the Exchange Act and the rules and regulations regarding corporate governance practices, including those under the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”)Sarbanes-Oxley, the Dodd-Frank Wall Street Reform and Consumer Protection Act,Act (“Dodd Frank”), and the Nasdaq listing requirementsrequirements. of the stock exchange on which our securities are listed. These rules require the establishment and maintenance of effective disclosure and financial controls and procedures, internal control over financial reporting and changes in corporate governance practices, among many other complex rules that are often difficult to implement, monitor and maintain compliance with. Moreover, despite recent reforms made possible by the JOBS Act, the reporting requirements, rules, and regulations will make some activities more time-consuming and costly, particularly after we are no longer an “emerging growth company.” In addition, we expect these rules and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance. Our management and other personnel will need to devote a substantial amount of time to ensure that we comply with all of these requirements and to keep pace with new regulations, otherwise we may fall out of compliance and risk becoming subject to litigation or being delisted, among other potential problems.

There can be no assurance that we will be able to comply with the continued listing standards of Nasdaq.Nasdaq, and delisting of our securities could become more likely if a proposed Nasdaq rule currently being considered is adopted, as expected .

As a result of the closing of the Business Combination, which was accounted for as a reverse recapitalization in accordance with U.S. GAAP as discussed in Note 2 – Merger Agreement and Reverse Recapitalization,GAAP, the consolidated financial statements of Cardio Diagnostics, Inc., a Delaware corporation and our wholly owned subsidiary, are now the financial statements of the Company. You should read the following discussion and analysis of our financial condition and results of operations together with our audited consolidated financial statements as of December 31, 2024 2025 and 20232024 and for each of the two years in the period ended December 31, 20242025 and the related notes included in Part II, Item 8 of this Annual Report.

Cardio was formed to further develop and commercialize a series of products for major types of cardiovascular disease and associated co-morbidities, including coronary heart disease (“CHD”), stroke, heart failure and diabetes, by leveraging our Artificial Intelligence (“AI”)-driven Integrated Genetic-EpigeneticMulti-Omics Engine™. As a company, we aspire to give every American adult insight into their unique risk for various cardiovascular diseases. Cardio aims to become one of the leading medical technology companies for enabling improved prevention, early detection and treatment of cardiovascular disease. Cardio is transforming the approach to cardiovascular disease from reactive to proactive and hope to accelerate the adoption of Precision Medicine for all. We believe that incorporating Cardio’s solutions into routine practice in primary care and prevention efforts can help alter the trajectory that nearly one in two Americans is expected to develop some form of cardiovascular disease by 2035.

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 COVID-19 pandemic. As a result, the initial strategy for commercialization involved launching the test via telemedicine and in smaller provider provider practices such as concierge medicine practices. The volume of tests through these channels were minimal, and as the circumstances around around Covid-19COVID-19 pandemic improved, management re-vamped the Company’s go-to-market strategy to include other healthcare verticals and 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 areis 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 1424 months, Cardio washas been able to increase the reachnumber of its solutions in 2024, generating revenue from provider organizations offering its tests and has continued the development of a more robust sales and partnership pipeline. ToIn furtherthe increasefiscal reachyear ended December 31, 2025, the focus of the Company remained in driving adoption of our andclinical potentiallysolutions, acceleratepredominantly partnershipsamong providers, channel partners and salesemployers. cycles,In moreaddition, seasonedthe salesCompany personnelmade progress in theits providerongoing expansion to additional markets domestically and employerinternationally verticalswith werethe hired. Infirst additioninternational expansion to increasedIndia, revenuepartnering with channel partners such as YMCA of East Tennessee and numberSouthdale ofYMCA teststo offer testing to its members and community, and in 2024setting comparedup toour 2023,CLIA other key developments in 2024 and recently, include:laboratory facility.

Cardio expects that sales and partnership cycles will continue to be long.long, especially with the current economic uncertainty. Our ongoing strategy for expanding our business operations and increasing revenue generation include the following:

On January 26, 2024, the Company entered into the Sales Agreement with Craig-Hallum. Pursuant to the Sales Agreement, the Company may sell, at its option, shares of its Common Stock through Craig-Hallum, as sales agent. Sales of the Common Stock were made pursuant to the Sales Agreement initially up to an aggregate of $17 million under the Company’s Registration Statement on Form S-3 filed on January 26, 2024 (File No. 333-276725), and declared effective by the SEC on February 1, 2024 (the “Initial Registration Statement”),. Additional sales have been, and willmay continue to be made made, pursuant to the Sales Agreement up to an aggregate of $9,476,508 under the Company’s Registration Statement on Form S-3 filed on February 7, 2025 (File No. 333-284775), declared effective by the SEC on February 14, 2025 (the “Additional Registration Statement”). and its accompanying Prospectus Supplement dated February 14, 2025. Subject to the terms and conditions of the Sales Agreement, Craig-Hallum may sell the shares, if any, only by methods deemed to be an “at the market” offering as defined in Rule 415 promulgated under the Securities Act. The Company has agreed to pay Craig-Hallum a sales commission of 2.5% of the gross proceeds for sales under the Sales Agreement and to provide Craig-Hallum with customary indemnification and contribution rights, including for liabilities under the Securities Act. In addition, the Company is required to reimburse Craig-Hallum for certain specified expenses in connection with entering into the Sales Agreement.

Recent Regulatory and Judicial Developments Regarding LDTs

On May 6, 2024, FDA published a final rule amending the definition of an in vitro diagnostic (“IVD”) device to include tests manufactured by a clinical laboratory. Pursuant to the rule, laboratory developed tests (“LDTs”), i.e., tests designed, manufactured, and used within a single CLIA-certified high complexity laboratory, are medical devices subject to FDA regulation under the Federal Food, Drug, and Cosmetic Act. The final rule also announced FDA’s intention to apply its medical device requirements to LDTs. Under the final rule, all LDTs, unless subject to a specific exemption, willwould be subject to premarket authorization requirements (510(k), de novo classification, or PMA) for each LDT performed by the laboratory, and to postmarket registration and listing, medical device reporting, correction, removal, and recall, complaint handling, labeling, investigational device, and quality system requirements. FDA intends to phase in these requirements beginning May 6, 2025. The final rule statesstated that certain categories of LDTs willwould be subject to enforcement discretion with respect to some or all of these requirements. For example, FDA willwould apply enforcement discretion to currently marketed LDTs that were first offered prior to May 6, 2024, with respect to most quality system requirements and the requirement for premarket authorization if they are not modified or modified in only limited ways. Laboratories performing these tests are subject to other requirements, including the requirement to submit the labeling for the LDT to FDA for review. FDA willwould similarly exercise enforcement discretion with respect to premarket authorization for LDTs approved by the New York State Clinical Laboratory Evaluation Program (“NYS-CLEP”).

Cardio’s net loss for the year ended December 31, 2025 was $6,498,167 as compared to $8,383,453 for the year ended December 31, 2024, wasa $8,383,453decrease as compared to $8,376,834 for the year ended December 31, 2023, an increase of $6,619$1,885,286 primarily as a result of ana increasedecrease in General and Administrative expenses.expenses associated with stock compensation issued in 2024.

Cardio has earned only nominal revenue since inception. Revenue for the year ended December 31, 2024,2025 was $34,890 $14,825 compared to $17,065$34,890 for the year ended December 31, 2024. The decrease in revenue is a result 2023.of the conclusion of the Family Medicine Specialists’ Heart Attack Prevention testing initiative.

Expenses related to sales and marketing for the year ended December 31, 2025 were $766,888 as compared to $1,231,969 for the year ended December 31, 2024, werea $182,446 as compared to $158,514 for the year ended December 31, 2023, an increasedecrease of $23,932.$465,081. The overall increasedecrease was primarily due to ana increaserestructuring in sales and marketing activity personnel in 2024 due to tradeshow attendance.2025.

Research and development expense for the year ended December 31, 2025 was $641,212 as compared to $227,966 for the year ended December 31, 2024, an increase of $413,246. The overall increase was $29,125 as compareddue to $145,182an for the year ended December 31, 2023, a decrease of $116,057. The decrease was attributable to the decreaseincrease in laboratoryresearch runsand performeddevelopment personnel in 2024 on new product offerings in the pipeline as compared to laboratory runs performed in 2023.2025.

General and Administrative Expenses for the year administrativeended expensesDecember 31, 2025 were $5,025,570 as compared to $6,921,094 for the year ended December 31, 2024, werea $8,169,458 as compared to $ $6,936,646 for the year ended December 31, 2023, an increasedecrease of $1,232,812.$1,895,524. The overall increasedecrease is primarily due to ana increasedecrease in stock compensation expenses (mainly as a result of new stock options issued in the first quarter of 2024), offsetcoupled by the decrease in D&Odirector and officer insurance expense.

AmortizationThe total amortization expense for the year ended December 31, 2024, was $19,738, as compared to $19,182 for the year ended December 31, 2023.2025 was $65,233, consisting of amortization of intangible assets of $5,333 and patent costs of $59,900. The total amortization expense for the year ended December 31, 2024 includesis the$19,738, amortizationconsisting of intangible assets of $16,000 and patent costs of $3,738, respectively, as compared to $16,000 for intangible assets and $3,182 for patent costs for the year ended December 31, 2023.$3,738.

Total other expenses expense for the year ended December 31, 2024,2025 was $(17,57614,089) as compared to $(1,134,37517,576) for the year ended December 31, 2023.2024. The total other expenses expense for the year ended December 31, 2025 consists of interest expense of $14,801, net of interest income of $712. The total other expense for the year ended December 31, 2024 consists of interest expense of $18,640$18,640, net of interest income of $1,064. The total other expenses for the year ended December 31, 2023 consists of interest expense of $6,735,013 offset by gain on extinguishment of debt of $193,350, change in fair value of derivative liability of $5,406,220 and interest income of $1,068.

Liquidity describes the ability of a company to generate sufficient cash flows in the short- and long-term to meet the cash requirements of its business operations, including working capital needs, debt service, acquisitions and investments,investments and other commitments and contractual obligations. We consider liquidity in terms of cash flows from operations and other sources, and their sufficiency to fund our operatingoperations. Historically, our principal sources andof investingliquidity activities.have been proceeds from the issuance of equity.

On January 26, 2024, we entered into the Sales Agreement with Craig-Hallum.Craig-Hallum (the “ATM Offering”). Pursuant to the Sales Agreement,Agreement and ATM Offering, 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 thea Initialshelf Registrationregistration Statement,statement declared effective in February 2024 (File No. 333-276725) and have willbeen, and may continue to be made pursuant to the Sales Agreement up to an aggregate of an additional $9,476,508 under thea Additionalsecond Registrationshelf registration Statement.statement declared effective in February 2025 (File No. 333-284775).

As of March 20, 2025,13, 2026, we sold 30,959,434an aggregate 2,251,181 shares of our Common Stock on a Reverse Stock Split-adjusted basis under the Sales Agreement resulting in proceeds to usthe Company of $14,681,556, $18,754,735, net of offering costs. The Company has paid Craig-Hallum $376,450$480,890 in sales commissions. As of March 20, 2025, the Company has not sold any additional shares of Common Stock under the Additional Registration Statement.

On February 2, 2024 2024,(pre-dating wethe closed1-for-30 areverse privatestock placementsplit effected in May 2025), in accordance with executed subscription agreements with seven accredited investors investors,(the whereby“Subscription Agreements”), we issuedclosed aon totalthe sale of 561,793 units ("the “Units”), with each Unit consisting of (i) one share of ourthe Company’s common stock, $0.00001 par value (the “Common Stock”) and (ii) one six-yearsix year Common Stock purchase warrant having(the “Warrants”), which warrants are exercisable until February 2, 2030 at an exercise price of $1.78 ($53.40 on a post-reverse stock split basis) per share, subject to adjustment (for stock splits, reverse stock splits and other similar events of recapitalization, including the "Private1-for-30 Placement”).reverse stock split we effected on May 12, 2025. The PrivateUnits Placementwere resultedsold to the investors in thea issuanceprivate to investorsplacement ofat 561,793a shares of Common Stock and 561,793 warrants in an unregistered offering of securities. The purchasesale price of the securities$1.78 was($53.40 $1.78on a post-reverse stock split basis) per Unit,Unit (the “Private Placement”), resulting in gross proceeds to the Company of $1,000,000, before deducting placement agent fees (10% or $100,000) and other offering expenses. We used the net proceeds from the Private Placement for working capital and general corporate purposes. On a post-reverse stock split basis, the Company issued 18,727 shares and warrants that are exercisable for 18,727 shares, all at an exercise price of $53.40 per share. We have subsequently registered the Private Placement Common Stock and the Common Stock issuable upon the exercise of the Private Placement Warrants on a registration statement on Form S-1 that was declared effective by the SEC on December 3, 2024.2024 and subsequently on September 19, 2025.

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.business, given the nominal amount of revenue we have generated since inception, coupled with substantial expenses both for ongoing business operations and to fund expenses incurred as a public company. We expect that our primary cash needs infor 2025the remainder of 2026 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 2025,2026, we will rely primarily on the ongoing ATM Offering, provided that market conditions are favorable.

Working capital requirements are expected to increase in line with the growth of the business. We have no lines of credit or other bank financing arrangements. We anticipate anticipate that our principal sources of liquidity, including existing funds and issuancesthe ofATM equity and/or debt,offering will be sufficient to fund our activities over the next 12 months. In order to have sufficient cash to fund our operations beyond the next 12 months and grow our business, we will need to raise additional funds through the issuance of equity and/or debt. We cannot provide any assurance that we will be successful in doing so.

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,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 $0.4630$4.76 on March 17,11, 2025.2026. If the trading price of our Common Stock is less than the respective exercise prices of our outstanding Warrants, warrants, which has been the case for a substantial period of time, we believe holders of any of our Warrantswarrants will be unlikely to exercise their Warrants.warrants. There is no guarantee that the Warrants warrants will be in the money prior to their respective expiration dates, and as such, the Warrantswarrants may expire worthless, and we may receive no proceeds from the exercise of Warrants.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.warrants. However, we will use any cash proceeds received from the exercise of Warrantswarrants for general corporate and working capital purposes, which would increase our liquidity. We will continue to evaluate the probability of Warrant warrant exercises and the merit of including potential cash proceeds from the exercise of the Warrantswarrants in our future liquidity projections.

Cash at December 31, 2024 2025 totaled $7,827,487$5,110,630 as compared to $1,283,523$7,827,487 at December 31, 2023,2024, ana increase decrease of $6,543,964. $2,716,857. The following table shows our cash flows from operating activities, investing activities and financing activities for the stated periods:

Cash used in operating activities for the year ended activitiesDecember 31, 2025 was $5,726,833, as compared to $4,993,104 for the year ended December 31, 2024, was $4,993,104, as compared to $5,672,175 for the year ended December 31, 2023.2024. The cash used in operations during the year ended December 31, 2024,2025 is a function of net loss of $8,383,453,$6,498,167, adjusted for the following non-cash operating items: depreciation of $113,777,$160,063, amortization of $162,568,$238,065 and stock basedstock-based compensation of $2,591,168.$110,235. Operating assets and liabilities fluctuated as follows: a an increasedecrease in accounts receivable of $13,652,$10,486, a decrease of $915,969$479,974 in prepaid expenses and other current assets, aan decreaseincrease of $155,552 $9,781 in accounts payable and accrued expenses and a decrease in lease liability of $223,929.$237,270.

The cash used in operations during the year ended December 31, 2023,2024 is a function of net loss of $8,376,834,$8,383,453, adjusted for the following non-cash operating items: depreciation of $3,790, $113,777, amortization of $107,830,$162,568, stockand basedstock-based compensation of $1,279,273, and non-cash interest expense of $6,704,522, offset by a change in fair value of derivative liability of $5,406,220, and a gain on extinguishment of debt of $193,350.$2,591,168. Operating assets and liabilities fluctuated as follows: an increase in accounts receivable of $4,960,$13,652, a decrease of $758,669$915,969 in prepaid expenses and other current assets, an increase in deposits of $7,900, a decrease of $781,500$155,552 in accounts payable and accrued expenses and ana increasedecrease in lease liability of $244,505.$223,929.

Cash used in investing activities for the year ended activitiesDecember 31, 2025 was $419,310 compared to $404,190 for the year ended December 31, 2024,2024. wasThe $404,190cash comparedused toin $794,291investing activities for the year ended December 31, 2023.2025 was due to $187,317 for purchase of property and equipment and $231,993 in patent costs incurred. The cash used used in investing activities for the year ended December 31, 2024,2024 was due to $214,765 for purchase of property and equipment and $189,425 in patent costs incurred. The cash used in investing activities for the year ended December 31, 2023, was due to $575,663 for purchase of property and equipment, $21,352 payments for right of use asset and $197,276 in patent and trademark costs incurred.

Cash provided by financing activities for the year ended December 31, 2025 was $3,429,286 as compared to $11,941,258 for the year ended December 31, 2024, was $11,941,258 as compared to $3,632,468 for the year ended December 31, 2023.2024. This change was due to $12,546,949 $3,803,498 in proceeds from the sale of commonCommon stockStock, andnet warrants of issuance costs, offset by $450,691$374,212 in payments pursuant to a finance agreement, and $155,000 in payments of placement agent feesagreement during the year ended December 31, 2024.2025. Cash provided by financing activities for the year ended December 31, 2023 2024 was due to $4,500,000 in proceeds from convertible notes payable, net of original issue discount of $500,000, $390,000$12,391,949 in proceeds from exercisethe sale of Common Stock and warrants, net of issuance costs, offset by $942,532 in payments of finance agreement and $315,000$450,691 in payments of placement agent fees duringpursuant to the yearSales endedAgreement Decemberfor 31,the 2023.ATM Offering.

Boustead Securities responded to the termination of the Placement Agent Agreement by disputing Legacy Cardio’s contention that it had not performed under the Placement Agent Agreement because, among other things, Boustead Securities had never sought out prospective investors. In its response, Boustead Securities included a list of funds that they had supposedly contacted on Legacy Cardio’s behalf. While Boustead Securities’ contention appears to contradict earlier communications from Boustead Securities in which they indicated that they had not made any such contacts or introductions, Boustead Securities is currently contendingcontended that they are due success fees for two years following the termination of the Placement Agent Agreement on any transaction with any person on the list of supposed contacts or introductions. Legacy Cardio strongly disputes this position. Notwithstanding the foregoing, the Company has not consummated any transaction, as defined, with any potential party that purportedly was a contact of Boustead Securities in connection with the Placement Agent Agreement and has no plans to do so at any time during the tail period. No legal proceedings have been instigated by either party, and Cardio believes that the final outcome will not have a material adverse impact on its financial condition.party.

As noted in Note 1, theThe Company completed a business combination with Mana on October 25, 2022. In connection with the proposed business combination, by agreement dated May 13, 2022, Mana engaged The Benchmark Company, LLC (“Benchmark”) as its M&A advisor. Upon closing of the business combination, Legacy Cardio assumed the contractual engagement entered into by Mana. On November 14, 2022, Cardio and Benchmark entered into Amendment No. 1 Engagement Letter (the “Amendment Engagement”). Pursuant to the Amendment Engagement, Benchmark has been granted a right of first refusal to act as lead or joint-lead investment banker, lead or joint-lead book-runner and/or lead or joint-lead placement agent for all future public and private equity and debt offerings through October 25, 2023. Based on the right of first refusal, Benchmark alleges that it is owed damages because the Company entered into the Yorkville Convertible Debenture Transaction (see Note 11 to Notes to Consolidated Financial Statements) without first offering Benchmark the right to serve as the lead or joint-lead placement agent for the transaction. The Company is evaluating the claim. No legal proceedings have been instigated.

On June 25, 2022, a plaintiffs’ securities law firm sent a demand letter to the Company alleging that the Company’s Registration Statement on Form S-4 filed (the “S-4 Registration Statement”) with the Securities and Exchange Commission (“SEC”) on May 31, 2022 omitted material information with respect to the Business Combination and demanding that the Company and its Board of Directors immediately provide corrective disclosures in an amendment or supplement to the Registration Statement. Subsequent thereto, the Company filed amendments to the S-S-4 4 Registration Statement on July 27, 2022, August 23, 2022, September 15, 2022, October 4, 2022 and October 5, 2022 in which it responded to various comments of the SEC staff and otherwise updated its disclosure. In October 2022, the SEC completed its review and declared the S-4 registration statement effective on October 6, 2022. On February 23, 2023 and February 27, 2023, plaintiffs’ securities securities law firm contacted the Company’s counsel asking who will be negotiating a mootness fee relating to the purported claims set forth in the June 25, 2022 demand letter. The Company vigorously denies that the S-4 Registration Statement, as amended and declared effective, effective, is deficient in any respect and believes that no additional supplemental disclosures are material or required. The Company believes that the claims asserted in the Demand Letter are without merit and that no further disclosure is required to supplement the S-4 Registration Statement under applicable laws. As of the date of filing of this Annual Report on Form 10-K, no lawsuit has been filed against the Company by that firm. The firm has indicated its willingness to litigate the matter if a mutually satisfactory resolution cannot be agreed upon; however, Cardio believes that the final outcome will not have a material adverse impact on its financial condition.

In January 2024, following the Company’s termination of its agreement with Yorkville and in connection with the Company’s recent at the market offering and/or its February 2024 private placement, a managing director of Northland Securities, Inc. (“Northland”) contacted the Company claiming the right to be paid a fee of approximately $150,000 pursuant to the agreement of March 1, 2023 between the Company and Northland regarding the Yorkville financing. Subsequently, the Company has been advised by another representative of Northland that Northland would not proceed with any such claim. The Company does not believe that it owes Northland any sum based on the termination of the Yorkville Securities Purchase Agreementclaim and theno subsequentlegal financingproceedings transactions.have been instigated.

There have been no material changes to the risk factors previously described in Item 1A of Part I of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.2025 except as set forth below. These risk factors, collectively, describe some of the assumptions, risks, uncertainties and other factors that could adversely affect our business or that could otherwise result in changes that differ materially from our expectations. We may disclose changes to such risk factors or disclose additional risk factors from time to time in our future filings with the SEC, including as set forth below. Additional risks and uncertainties not currently currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or future results.

The following discussion and analysis provide information that Cardio’s management believes is relevant to an assessment and understanding of Cardio’s results of operations and financial condition. You should read the following discussion and analysis of Cardio’s results of operations and financial condition together with its unaudited condensed consolidated financial statements and related notes to those statements included elsewhere in this Quarterly Report on Form 10-Q, and its audited consolidated financial statements and related notes to those statements included in the Company’s 2025 Annual Report on Form 10-K that was filed on March 13, 2026 (the “2025 Form 10-K”). In addition to historical financial information, this discussion contains forward-looking statements based upon Cardio’s current expectations that involve risks and uncertainties, including those described in the section titled, “Special Note About Forward-Looking Statements,” above. Cardio’s actual results could differ materially from such forward-looking statements as a result of various factors, including those set forth under “Risk Factors” in the 2025 Form 10-K (Item 1A therein)., as well as in Item 1A of Part II of this Quarterly Report on Form 10-Q. Our historical results are not necessarily indicative of the results that may be expected for any period in the future.

Cardio believes that it is the first company to develop and commercialize epigenetics-based clinical tests for cardiovascular disease that have clear value propositions for multiple stakeholders including (1) patients, (2) clinicians, (3) hospitals/health systems, (4) employersemployers, and (5) payors. According to the CDC, epigenetics is the study of of how a person’s behaviors and environment can cause changes that affect the way a person’s genes work. Unlike genetic changes, epigenetic changes are reversible and do not change one’s DNA sequence, but they can change how a person’s body reads a DNA sequence.

As of MayAugust 15,7, 2026, we have sold an aggregate 2,251,181 shares of our our Common Stock under the Sales Agreement and may sell up to another $5,298,889 of our Common Stock through Craig-Hallum under the Sales Agreement.

Comparisons for the three months ended MarchJune 31,30, 2026 and 2025:

Cardio’s net loss for the three months ended MarchJune 31,30, 2026 was $1,788,158$1,501,468 as compared to $1,635,064$1,683,199 for the three months ended MarchJune 31,30, 2025, ana increasedecrease of $153,094.$181,731. The increasedecrease in net loss was primarily the result of ana increasedecrease in R&D, Selling, General and Administrative expenses in mostly related to annual franchise taxes.2026.

Cardio had $2,680$5,360 and $940$7,475 in in revenue for the three months ended MarchJune 31,30, 2026 and 2025, respectively. The increasedecrease in revenue iswas noted in Q1 as a result of new providers onboardingthe and additional usageconclusion of ourthe testsFamily byMedicine currentSpecialists’ providerHeart andAttack employerPrevention clients.testing initiative. Additional providers have been and organizations are continuing to be onboarded. However,onboarded thereas isnoted aby oneQ2 to three quarter period from onboarding to ramping up usage of tests.revenue.

Expenses related to sales and marketing for the three months ended MarchJune 31,30, 2026, were $196,712$190,183 as compared to $188,977$202,850 for the three months ended MarchJune 31,30, 2025, ana increase decrease of $7,735.$12,667. The overall increasedecrease was due to ana increasedecrease in sales and marketing personnel and efforts in the firstsecond quarter of 2026. We expect our sales and marketing costs to increase with the ongoing implementation in India.

Research and development expense for the three months ended March 31, 2026 was $129,776 as compared to $118,784 for the three months ended MarchJune 31,30, 2026 was $162,929 as compared to $178,536 for the three months ended June 30, 2025, ana increase decrease of $10,992. The overall increase was$15,607 due to ana increasedecrease in researchlab and development personnel in 2026. We expect our research and development costs to increase with ongoing and planned studies to generate additional clinical and economic evidence, and to support reimbursement conversations with payers.processing.

General and administrative expenses for the three months ended MarchJune 31, 30, 2026, were $1,455,497$1,144,802 as compared to $1,278,301$1,296,303 for the three months ended MarchJune 31,30, 2025, ana increasedecrease of $177,196. $151,501. The overall increase decrease is primarily due to ana increasedecrease in softwarelegal and web computing fees, investor relationsprofessional expense, annual franchise taxes expensesconsulting and corporatecontracting expense, and insurance overhead expenses in 2026.

General and Administrativeadministrative expense for the three months ended March 31,June 30, 2026 included payroll and related costs of $353,955,$354,712, rent and other facility costs of $85,557,$93,727, legal and professional fees of $229,255, $114,551, consulting and contractor fees of $144,835,$111,534, insurance expense of $146,354,$141,614, filing fees of $17,250,$15,425, transfer agent fees of $10,110, $6,115, software and web computing expenses of $90,025,$145,584, board compensation of $49,733,$49,351, investor relations expense of $38,092, franchise tax of $178,467 and general corporate overhead expenses of $111,864.$112,189.

General and Administrativeadministrative expense for the three months ended March 31,June 30, 2025 included payroll and related costs of $345,497 (including stock compensation expenses of $30,612),$345,031, rent and other facility costs of $66,393,$89,461, legal and professional fees of $301,520,$209,744, consulting and contractor fees of $160,802,$165,905, insurance expense of $156,567,$158,263, filing fees of $20,131,$22,159, transfer agent fees of $6,382, $5,554, software and web computing expenses of $78,591,$101,723, board compensation of $49,612,$49,778, investor relations expense of $3,750, franchise tax of $225 and general corporate overhead expenses of $88,831.$144,935.

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 However,facility, capital expenditure of laboratory equipment, and other laboratory materials, and costs associated with securing a new office lease. Additionally, as a public company, we expect to have to comply with changing legal and exchange requirements, including as to regulations of 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.

Patents are amortized over their estimated useful lives of approximately 14 and 15 years, respectively. Amortization expense related to patents charged to operations was $5,532$5,593 and $41,438 $7,152 for the three months ended MarchJune 31,30, 2026 and 2025, respectively and $11,125 and $48,590 for the six months ended June 30, 2026 and 2025, respectively. The amortization for the three and six months ended MarchJune 31,30, 2025 also included $4,000$1,333 and $5,333 respectively amortization for intangible assets, which has been fully amortized during 2025.

Total other expense for the three months ended MarchJune 31,30, 2026, was $(3,321) as compared to $(4,5044,500) for the three months ended MarchJune 31,30, 2025. The total other expensesexpense for the three months ended March 31,June 30, 2026, consists of interest expense of $3,439,$3,440, net of interest income of $118.$119. The total other expensesexpense for the three months ended March 31,June 30, 2025, consists of interest expense of $4,691,$4,690, net of interest income of $187.$190.

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 thea Initialshelf Registrationregistration statement Statementdeclared 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 thea Additionalsecond Registrationshelf Statement.registration statement declared effective in February 2025 (File No. 333-284775).

As of MayAugust 15,7, 2026, we sold an aggregate 2,251,181 shares of our Common Common Stock on a Reverse Stock Split-adjusted basis under the Sales Agreement resulting in proceeds to the Company of $18,754,735, net of offering costs. The Company has paid Craig-Hallum $480,890 in sales commissions.

On February 2, 2024 (pre-dating the 1-for-30 reverse stock split effected in May 2025), in accordance with executed subscription agreements with seven accredited investors (the “Subscription Agreements”), we closed on the sale of 561,793 units (the “Units”), with each Unit consisting of (i) one share of the Company’s common stock, $0.00001 par value (the “Common Stock”) and (ii) one six year Common Stock purchase warrant (the “Warrants”), which warrants are exercisable until February 2, 2030 at an exercise price of $1.78 ($53.40 on a post-reverse stock split basis) per share, subject to adjustment for stock splits, reverse stock splits and other similar events of recapitalization, including the 1-for-30 reverse stock split we effected on May 12, 2025. The Units were sold to the investors in a private placement at a sale price of $1.78 ($53.40 on a post-reverse stock split basis) per Unit (the “Private Placement”), resulting in gross proceeds to the Company of $1,000,000, before deducting placement agent fees (10% or $100,000) and other offering expenses. We used the net proceeds from the Private Placement for working capital and general corporate purposes. On a post-reverse stock split basis, the Company issued 18,727 shares and warrants that are exercisable for 18,727 shares, all at an exercise price of $53.40 per share. We have subsequently registered the Private Placement Common Stock and the Common Stock issuable upon the exercise of the Private Placement Warrants on a registration statement on Form S-1 that was declared effective by the SEC on December 3, 2024 and subsequently on September 19, 2025.2025 by way of a post-effective amendment.

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, given the nominal amount of revenue we have generated since inception, coupled with substantial expenses both for ongoing business operations and to fund expenses incurred as a public company. We expect that our primary cash needs for the remainder of 2026 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 laboratorystrategy 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 2026, we will rely primarily on the ongoing ATM Offering, provided that market conditions are favorable. If our securities are favorable.delisted from Nasdaq, raising capital through the sale of securities, by way of the ATM Offering or otherwise, will become much more challenging going forward.

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 $1.68$1.66 on MayAugust 14,6, 2026. 2026. If the trading price of our Common Stock is less than the respective exercise prices of our outstanding warrants, which has been the the case for a substantial period of time, we believe holders of any of our warrants will be unlikely to exercise their warrants. ThereIt is is no guaranteeunlikely that the warrants will be in the money prior to their respective expiration dates, and as such, the warrants may expire worthless, 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.

Cash at MarchJune 31,30, 2026 totaled $7,077,021$5,586,697 as compared to $5,110,630 at December 31, 2025, an increase of $1,966,391.$476,067. The following table shows Cardio’s cash flows from operating activities, investing activities and financing activities for the stated periods.

Cash used in operating activities for the threesix months ended MarchJune 30, 31, 2026 was $1,562,212$2,904,576 as compared to $1,400,101$2,971,566 for the threesix months ended MarchJune 31,30, 2025. The cash used in operations during the threesix months months ended MarchJune 31,30, 2026 is a function of net loss of $1,788,158$3,289,626 adjusted for the following non-cash operating items: depreciation of $44,240, $88,523, amortization of $50,412,$101,570, $24,733$49,085 in stock-based compensation, a decrease of $3,852$4,221 in accounts receivable, a decrease of $138,627$232,590 in in prepaid expenses and other current assets, an increase of $25,528$32,640 in accounts payable and accrued expenses and a decrease in lease liability liability of $61,446.$123,579.

The cash used in operations during the threesix months ended MarchJune 31,30, 2025 2025 is a function of net loss of $1,635,064$3,318,263 adjusted for the following non-cash operating items: depreciation of $37,656,$75,441, amortization of of$139,022, $87,664, $30,612$61,390 in stock-based compensation, a decrease of $9,060$5,685 in accounts receivable, a decrease of $107,461$220,762 in prepaid expenses and other current assets, ana increasedecrease of $20,520$38,937 in accounts payable and accrued expenses and a decrease in lease liability of $58,010.$116,666.

Cash used in investing activities for the threesix months ended MarchJune 30, 31, 2026 was $63,696$110,485 compared to $47,415$83,132 for the threesix months ended MarchJune 31,30, 2025. The cash used in investing activities for the threesix months months ended MarchJune 31,30, 2026 and March 31, 2025 was due to purchases of property and equipment and patent costs incurred.

Cash provided by financing activities for the threesix months ended MarchJune 30, 31, 2026 was $3,592,299$3,491,128 as compared to $3,308,748$3,193,711 for the threesix months ended MarchJune 31,30, 2025. Cash provided by financing activities for the three six months ended MarchJune 31,30, 2026 was due to $3,693,470 in net proceeds from the sale of common stock offset by $101,171$202,342 in payments of finance agreement. Cash provided by financing activities for the threesix months ended MarchJune 31,30, 2025 was due to $3,423,784 in net proceeds from the sale of common stock offset by $115,036$230,073 in payments of finance agreementagreement.

We did not have any off-balance sheet arrangements as of MarchJune 31,30, 2026.

As of MarchJune 31,30, 2026, we do not have any ongoing contractual obligations that would have a negative impact on liquidity and cash flows. However, if one or more of the following potential claims that arise from contracts we have entered into were pursued against us, there is the potential that we could see a negative impact on liquidity and cash flows, depending on the outcome.

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, 2025, which was filed with the SEC on March 13, 2026. 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 MarchJune 31,30, 2026.