As filed with the U.S. Securities and ExchangeCommission on November 22, 2024.

Registration No. 333-         

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

____________________________

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

____________________________

CARDIO DIAGNOSTICS HOLDINGS, INC.
(Exact name of registrant as specified in its charter)

Delaware		6770		87-0925574
(State or other jurisdiction of incorporation or organization)		(Primary Standard Industrial Classification Code Number)		(I.R.S. Employer Identification No.)

311 West Superior Street, Suite 444
Chicago, IL 60654
Telephone: (855) 226-9991
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

____________________________

Meeshanthini V. Dogan, Ph.D.
Chief Executive Officer
Cardio Diagnostics Holdings, Inc.
311 West Superior Street, Suite 444
Chicago, IL 60654
Telephone: (855) 226-9991
(Name, address, including zip code, and telephone number, including area code, of agent for service)

____________________________

Copies to:

P. Rupert Russell, Esq.
Shartsis Friese LLP
425 Market Street, 11th Floor
San Francisco, CA 94105
(415) 421-6500

Approximate date of commencement of proposed saleto the public: As soon as practicable after this Registration Statement is declared effective.

If any of the securities being registered on thisForm are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ☒

If this Form is filed to register additional securitiesfor an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registrationstatement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendmentfiled pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement numberof the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendmentfiled pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement numberof the earlier effective registration statement for the same offering. ☐

Indicate by check mark whether the registrant isa large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company.See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,”and “emerging growth company” in Rule 12b-2 of the Exchange Act.

		Large accelerated filer		☐		Accelerated filer		☐
		Non- accelerated filer		☒		Smaller reporting company		☒
						Emerging growth company		☒

If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accountingstandards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

The registrant hereby amends this registrationstatement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment whichspecifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the SecuritiesAct of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section8(a), may determine.

 

The information in this preliminaryprospectus is not complete and may be changed. The selling stockholders may not sell these securities until the registration statementfiled with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities, and the sellingstockholders are not soliciting offers to buy these securities, in any jurisdiction where the offer or sale of these securities is notpermitted.

SUBJECTTO COMPLETION, DATED NOVEMBER 22, 2024

PRELIMINARY PROSPECTUS

CARDIO DIAGNOSTICS HOLDINGS, INC.

Up to 1,235,939 Shares of Common Stock

This prospectus relates to the resale from timeto time by the selling stockholders (which term, as used in this prospectus, includes pledgees, donees, transferees or other successors-in-interest)of up to an aggregate of 1,235,939 shares of common stock, $0.00001 par value (the “common stock” or the “shares”),including (i) 561,793 shares sold in the private placement described below and (ii) 674,146 shares issuable upon exercise of common stockpurchase warrants also issued in the private placement (the “warrants”), 112,353 of which were issued to the placement agentas partial compensation for services rendered.

On February 2, 2024, in accordance with executedsubscription agreements with seven accredited investors, we closed on the sale of 561,793 units (the “units”), each unit consistingof one share of Common stock and one warrant, which warrants are exercisable until February 2, 2030 at an exercise price of $1.78, subjectto adjustment for stock splits, reverse stock splits and other similar events of recapitalization. The units were sold to the investorsin a private placement at a sale price of $1.78 per unit (the “private placement”).

We are not selling any securitiesunder this prospectus, and we will not receive any proceeds from the sale of the shares. 

We have agreed to bear all of the expenses incurredin connection with the registration of these shares. The selling stockholders will pay or assume discounts, commissions,fees of underwriters, selling brokers or dealer managers and similar expenses, if any, incurred for the sale of the shares. 

The selling stockholders mayoffer the shares from time to time through public or private transactions at prevailing market prices, at prices related to prevailingmarket prices or at privately negotiated prices. For additional information on the methods of sale that may be used by the sellingstockholders, see the section entitled “Plan of Distribution” on page 111. For a list of the selling stockholders,see the section entitled “Selling Stockholders” on page 103. 

We may amend or supplement this prospectusfrom time to time by filing amendments or supplements as required. You should read the entire prospectus and any amendments or supplementscarefully before you make your investment decision. 

Our common stock and our publicly-traded warrants(the “public warrants”) are listed on The Nasdaq Capital Market under the symbols “CDIO” and “CDIOW,”respectively. On November 20, 2024, the closing price of our common stock was $0.2442 and the closing price of our public warrants was$0.0276.

You should carefully read this prospectus andany prospectus supplement, together with additional information described under the heading “Where You Can Find More Information”on page 120 before you invest in any of our securities. 

The sale of some or all of the shares beingoffered in this prospectus could have adverse effects on the market for our common stock, including increasing volatility, limiting theavailability of an active market and/or resulting in a significant decline in the public trading price.

We are an “emerginggrowth company,” as defined under the federal securities laws, and, as such, may elect to comply with certain reduced public companyreporting requirements for this prospectus and for future filings.

Investing in our securities involves a highdegree of risk. Before buying any securities, you should carefully read the discussion of the risks of investing in our securities in“Risk Factors” beginning of page 6 of this prospectus.

You should rely only on the information containedin this prospectus or any prospectus supplement or amendment hereto. We have not authorized anyone to provide you with different information.

Neither the Securities and Exchange Commissionnor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete.Any representation to the contrary is a criminal offense.

The date of this prospectus is [·],2024.

 

 

TABLE OF CONTENTS

		Page
ABOUT THIS PROSPECTUS		ii
MARKET, RANKING AND OTHER INDUSTRY DATA		ii
TRADEMARKS		iii
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS		iii
PROSPECTUS SUMMARY		1
THE OFFERING		4
RISK FACTORS		6
USE OF PROCEEDS		43
DETERMINATION OF OFFERING PRICE		43
MARKET, PRICE, TICKER SYMBOLS AND DIVIDEND INFORMATION		43
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		44
BUSINESS		55
MANAGEMENT		84
EXECUTIVE AND DIRECTOR COMPENSATION		92
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS		98
PRINCIPAL STOCKHOLDERS		101
SELLING STOCKHOLDERS		103
DESCRIPTION OF SECURITIES		105
PLAN OF DISTRIBUTION		111
CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS		114
LEGAL MATTERS		120
EXPERTS		120
WHERE YOU CAN FIND MORE INFORMATION		120
INDEX TO FINANCIAL STATEMENTS		F-1

You should rely only on the information providedin this prospectus, as well as the information incorporated by reference into this prospectus and any applicable prospectus supplement.Neither we nor the selling stockholders have authorized anyone to provide you with different information. Neither we nor the selling stockholdersare making an offer of these securities in any jurisdiction where the offer is not permitted. You should not assume that the informationin this prospectus, any applicable prospectus supplement or any documents incorporated by reference is accurate as of any date other thanthe date of the applicable document. Since the date of this prospectus and the documents incorporated by reference into this prospectus,our business, financial condition, results of operations and prospects may have changed.

ABOUT THIS PROSPECTUS

This prospectus is part of a registration statementon Form S-1 that we filed with the Securities and Exchange Commission (the “SEC”) using the “shelf”registration process. Under this shelf registration process, the selling stockholders may, from time to time, sell the securities offeredby it described in this prospectus. We will not receive any proceeds from the sale by such selling stockholders of the securities offeredby it described in this prospectus.

Neither we nor the selling stockholders haveauthorized anyone to provide any information or to make any representations other than those contained in this prospectus and any accompanyingprospectus supplement. We and the selling stockholders take no responsibility for, and can provide no assurance as to the reliabilityof, any other information that others may give you. This prospectus is an offer to sell only the securities offered hereby and only undercircumstances and in jurisdictions where it is lawful to do so. No dealer, salesperson or other person is authorized to give any informationor to represent anything not contained in this prospectus or any applicable prospectus supplement. This prospectus is not an offer tosell securities, and it is not soliciting an offer to buy securities, in any jurisdiction where the offer or sale is not permitted. Youshould assume that the information appearing in this prospectus or any prospectus supplement is accurate only as of the date on the frontof those documents, regardless of the time of delivery of this prospectus or any applicable prospectus supplement, or any sale of a security.Our business, financial condition, results of operations and prospects may have changed since those dates.

We may also provide a prospectus supplementor post-effective amendment to the registration statement to add information to, or update or change information contained in, this prospectus.You should read both this prospectus and any applicable prospectus supplement or post-effective amendment to the registration statementtogether with the additional information to which we refer you in the section of this prospectus entitled “Where You Can Find More Information.”

For investors outside the United States: neitherwe nor the selling stockholders have done anything that would permit this offering or possession or distribution of this prospectus inany jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who comeinto possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of our securitiesand the distribution of this prospectus outside the United States.

This prospectus contains summaries of certainprovisions contained in some of the documents described herein, but reference is made to the actual documents for complete information.All of the summaries are qualified in their entirety by the actual documents. Copies of some of the documents referred to herein havebeen filed, will be filed or will be incorporated by reference as exhibits to the registration statement of which this prospectus is apart, and you may obtain copies of those documents as described below under “Where You Can Find More Information.”

As usedin this prospectus, unless otherwise indicated or the context otherwise requires, references to “we,” “us,” “our,”the “Company,” and “Cardio” refer to the consolidated operations of Cardio Diagnostics Holdings, Inc., a Delawarecorporation, and its consolidated subsidiary, Cardio Diagnostics, Inc. References to “Mana” refer to the Company prior tothe consummation of the October 25, 2022 business combination (the “Business Combination”), and references to “LegacyCardio” refer to Cardio Diagnostics, Inc. prior to the consummation of the Business Combination.

MARKET, RANKINGAND OTHER INDUSTRY DATA 

This prospectus contains, and any additionalpost-effective amendment or any prospectus supplement may contain, market data and industry statistics and forecasts that are based onindependent industry publications and other publicly available information. Although we believe these sources are reliable, we do notguarantee the accuracy or completeness of this information, and we have not independently verified this information. In addition, themarket and industry data and forecasts that may be included in this prospectus, any post-effective amendment or any prospectus supplementmay involve estimates, assumptions and other risks and uncertainties and are subject to change based on various factors, including thosediscussed under the heading “Risk Factors” contained in this prospectus, any post-effective amendment and the applicable prospectussupplement. Accordingly, investors should not place undue reliance on this information.

Certain information contained in this prospectusrelates to or is based on our own internal estimates and research. While we believe our own internal research is reliable, such researchhas not been verified by any independent source. These estimates involve risks and uncertainties and are subject to change based on variousfactors, including those discussed under the heading “Management’s Discussion and Analysis of Financial Condition and Resultsof Operations” in this prospectus.

TRADEMARKS

We own or haverights to trademarks, trade names and service marks that we use in connection with the operation of our business. In addition, our name,logos and website name and address are our trademarks or service marks. Solely for convenience, in some cases, the trademarks, trade namesand service marks referred to in this prospectus are listed without the applicable ^®,™ and ^SM symbols, but we will assert,to the fullest extent under applicable law, our rights to these trademarks, trade names and service marks. Other trademarks, trade namesand service marks appearing in this prospectus are the property of their respective owners. We do not intend our use or display of othercompanies’ trade names, trademarks, or service marks to imply a relationship with, or endorsement or sponsorship of us by, any othercompanies.

CAUTIONARY NOTE REGARDING FORWARD-LOOKINGSTATEMENTS

Thisprospectus contains “forward-looking statements” regarding, among other things, our plans, strategies and prospects,both business and financial. These statements are based on the beliefs and assumptions of our management. Although we believe that ourplans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, we cannot provideassurance that we will achieve or realize these plans, intentions or expectations. Forward-looking statements are inherently subjectto risks, uncertainties and assumptions. Generally, statements that are not historical facts, including statements concerning possibleor assumed future actions, business strategies, events or results of operations, are forward-looking statements. The words “anticipates,”“believe,” “continue,” “could,” “estimate,” “expect,” “intends,”“may,” “might,” “plan,” “possible,” “potential,” “predicts,” “project,”“should,” “would” and similar expressions may identify forward-looking statements, but the absence of thesewords does not mean that a statement is not forward-looking. Investors should read statements that contain these words carefully becausethey:

	·	discuss future expectations;
	·	contain projections of future results of operations or financial condition; or;
	·	state other “forward-looking” information.

We believeit is important to communicate our expectations to our securityholders. However, there may be events in the future that management isnot able to predict accurately or over which we have no control. The risk factors and cautionary language contained in this prospectusprovide examples of risks, uncertainties and events that may cause actual results to differ materially from the expectations describedin such forward-looking statements, including among other things:

	·	the possibility that we may be adversely impacted by economic, business, and/or competitive factors;
	·	our limited operating history makes it difficult to evaluate our business and prospects;
	·	the success, cost and timing of our product development and commercialization activities, including the degree to which Epi+Gen CHD™, our initial clinical test, PrecisionCHD™, our second clinical test, or HeartRisk™, our recently introduced software product, are accepted and adopted by patients, healthcare professionals and other participants in other key channels may not meet our current expectations;
	·	changes in applicable laws or regulations could negatively our current business plans;

 

 

	·	we may be unable to obtain and maintain regulatory clearance or approval for our tests, and any related restrictions and limitations of any cleared or approved product could negatively impact our financial condition;
	·	the pricing of our products and services and reimbursement for medical tests conducted using our products and services may not be sufficient to achieve our financial goals;
	·	we may be unable to successfully compete with other companies currently marketing or engaged in the development of products and services that could serve the same or similar functions as our products and services;
	·	the size and growth potential of the markets for our products and services, and our ability to serve those markets, either alone or in partnership with others may not meet our current expectations;
	·	we may be unable to maintain our existing or future licenses, or manufacturing, supply and distribution agreements;
	·	we may be unable to identify, in-license or acquire additional technology needed to develop new products or services;
	·	our estimates regarding expenses, future revenue, capital requirements and needs for additional financing may not be accurate;
	·	we may be unable to raise needed financing in the future on acceptable terms, if at all;
	·	we may be unable to maintain our listing on The Nasdaq Stock Market;
	·	although highly uncertain, our operational and financial performance could be negatively impacted by the potential short and long-term impact of a re-emergence of COVID-19 variants or any other pandemic, epidemic or infectious disease outbreak, the extent of which will depend on future developments, including the duration and spread of the outbreak, the willingness of doctors and patients to use our tests during such times and the impact on our supply chain and the financial markets, all of which are highly uncertain and cannot be predicted; and
	·	there are other risks and uncertainties indicated in this prospectus, including those under “Risk Factors” herein, and other filings that have been made or will be made with the SEC by us that could materially alter our current expectations.

These forward-looking statements are based oninformation available as of the date of this prospectus, and our management’s current expectations, forecasts and assumptions, andinvolve a number of judgments, risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representingour views as of any subsequent date, and you should not place undue reliance on these forward-looking statements. Wedo not undertake any obligation to update, add or to otherwise correct any forward-looking statements contained herein to reflect eventsor circumstances after the date they were made, whether as a result of new information, future events, inaccuracies that become apparentafter the date hereof or otherwise, except as may be required under applicable securities laws.

All forward-looking statements attributableto us or persons acting on our behalf are expressly qualified in their entirety by the foregoing cautionary statements. We undertake noobligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise,except as required by law.

In addition, statements of belief and similarstatements reflect the beliefs and opinions of the Company on the relevant subject. These statements are based upon information availableto us as of the date of this prospectus, and while we believe such information forms a reasonable basis for such statements, such informationmay be limited or incomplete, and statements should not be read to indicate that we have conducted an exhaustive inquiry into, or reviewof, all potentially available relevant information. These statements are inherently uncertain and you are cautioned not to unduly relyupon these statements.

Beforeyou invest in our securities, you should be aware that the occurrence of one or more of the events described in the “Risk Factors”section and elsewhere in this prospectus may adverselyaffect us.

 

 

 

 

 

 

RISK FACTORS

Investing in our securities involves risks.You should carefully consider the risks and uncertainties described below and the other information in this prospectus before making aninvestment in our common stock. Our business, financial condition, results of operations, or prospects could be materially and adverselyaffected 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 partof your investment. This prospectus also contains forward-looking statements that involve risks and uncertainties. See “CautionaryStatement Regarding Forward-Looking Statements.” Our actual results could differ materially and adversely from those anticipatedin these forward-looking statements as a result of certain factors, including those set forth below.

Risks Related to Our Limited Operating History, Financial Conditionand Early Stage of Growth

We are a medical diagnostic testing company with a limited operatinghistory and have not yet generated significant revenue from product sales. We have incurred operating losses since our inception and maynever achieve or maintain profitability. 

We generated only nominal revenue in 2022 and2023, including $950 in revenue generated in 2022 and $17,065 in revenue generated in 2023. Our net losses totaled $4,660,985 and $8,376,834for the years ended December 31, 2022 and 2023, respectively, and we had an accumulated deficit of $14,368,380 at December 31, 2023. Revenue,net loss and accumulated deficit as of and at September 30, 2024 totaled $30,378, $6,864,145 and $21,232,525, respectively. We expectlosses to continue as a result of our ongoing activities to increase the adoption of our products, to gain market recognition and acceptanceof our products, to expand our marketing channels, to prepare our newly-acquired laboratory for operation and otherwise position ourselvesto grow our revenue opportunities, all of which will require hiring additional employees as well as other significant expenses. We areunable to predict when we will become profitable, and it is possible that we may never become profitable. We may encounter unforeseenexpenses, difficulties, complications, delays, and other unknown factors that may adversely affect our business. The size of our futurenet losses will depend, in part, on the rate of future growth of our expenses, which we expect to increase substantially, especially ifnew FDA regulations of LTDs go into effect in May 2025, and on our ability to generate revenue. Even if we achieve profitability in thefuture, we may not be able to sustain profitability in subsequent periods. If additional capital is not available when required, if atall, or is not available on acceptable terms, we could be forced to modify or abandon our current business plan.

Although our financial statements have been prepared on a goingconcern basis, we must raise additional capital to fund our operations in order to continue as a going concern. 

Prager Metis, CPA’s LLC, our independentregistered public accounting firm, included an explanatory paragraph in their April 1, 2024 opinion that accompanied our audited consolidatedfinancial statements as of and for the year ended December 31, 2023 (the “2023 Audited Financial Statements”), indicatingthat our current liquidity position raises substantial doubt about our abilityto continue as a going concern. The unaudited consolidated financial statements as of and for the nine months ended September30, 2024 (the “September 30, 2024 Unaudited Financial Statements”) also include similar going concern disclosure. If we areunable to improve our liquidity position, we may not be able to continue as a going concern. The 2023 Audited Financial Statements andthe September 30, 2024 Unaudited Financial Statements do not include any adjustments that might result if we are unable to continue asa going concern and, therefore, be required to realize our assets and discharge our liabilities other than in the normal course of businesswhich could cause investors to suffer the loss of all or a substantial portion of their investment. We anticipate that our principalsources of liquidity will only be sufficient to fund our activities over the next 12 months. In order to have sufficient cash to fundour operations beyond the next 12 months, we will need to raise additional equity over the next 12 months in order to continue as a goingconcern. We cannot provide any assurance that we will be successful in doing so.

We believe our long-term value as a company will be greater ifwe focus on growth, which may negatively impact our results of operations in the near term. 

We believe our long-term value as a companywill be greater if we focus on longer-term growth over short-term results. As a result, our results of operations may be negatively impactedin the near term relative to a strategy focused on maximizing short-term profitability. Significant expenditures on marketing efforts,potential acquisitions and other expansion efforts may not ultimately grow our business or lead to expected long-term results. 

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

Our business and the markets in which we operateare new and rapidly evolving, which make it difficult to evaluate and assess the success of our business to date, our future prospectsand the risks and challenges that we may encounter. These risks and challenges include our ability to:

	·	attract new customers for our tests through patient awareness, sales and marketing campaigns, as well as through key channel partners;
	·	gain market acceptance of our current and future tests, other products and services with key constituencies and maintain and expand such relationships;
	·	comply with existing and new laws and regulations applicable to our business and in our industry;
	·	anticipate and respond to changes in payor reimbursement rates and the markets in which we operate;
	·	react to challenges from existing and new competitors;
	·	maintain and enhance our reputation and brand;
	·	effectively manage our growth and business operations, including new geographies;
	·	accurately forecast our revenue and budget for, and manage, our expenses, including capital expenditures; and
	·	hire and retain talented individuals at all levels of our organization;

If we fail to understand fully or adequatelyaddress the challenges that we are currently encountering or that we may encounter in the future, including those challenges describedhere, elsewhere in this “Risk Factors” section and in future filings we may make with the SEC, our business, financial conditionand results of operations could be adversely affected. If the risks and uncertainties that we plan for when operating our business areincorrect or change, or if we fail to manage these risks successfully, our results of operations could differ materially from our expectationsand our business, financial condition and results of operations could be adversely affected.

Our limited operating history makes it difficult to evaluateour future prospects and the risks and challenges we may encounter.

We were established in 2017, and we are continuingto grow our marketing and management capabilities. Consequently, predictions about our future success or viability may not be as accurateas they could be if we had a longer operating history. The evolving nature ofthe medical diagnostics industry increases these uncertainties. If our growth strategy is not successful, we may not be able tocontinue to grow our revenue or operations. Our limited operating history, evolving business and growth make it difficult to evaluateour future prospects and the risks and challenges we may encounter.

In addition, as a business with a limited operatinghistory, we may encounter unforeseen expenses, difficulties, complications, delays and other known and unknown challenges. We are notbe successful at commercialization, sales and marketing and, as a result, our business may be adversely affected.

Our quarterly results may fluctuate significantly and may notfully reflect the underlying performance of our business.

Our results of operations and key metrics discussedelsewhere in this prospectus may vary significantly in the future and period-to-period comparisons of our operating results and key metricsmay not provide a full picture of our performance. Accordingly, the results of any one quarter or year should not be relied upon as anindication of future performance. Our quarterly financial results and metrics may fluctuate as a result of a variety of factors, manyof which are outside of our control, and as a result they may not fully reflect the underlying performance of our business. These quarterlyfluctuations may negatively affect the value of our securities. Factors that may cause these fluctuations include, without limitation:

	•	the level of demand for our tests, other products and services, which may vary significantly from period to period;
	•	our ability to attract new customers, whether patients or strategic channel partners or other customers;
	•	the timing of recognition of revenues;
	•	the amount and timing of operating expenses;
	•	general economic, industry and market conditions, both domestically and internationally, including any economic downturns and adverse impacts resulting from the COVID-19 pandemic and/or the military conflict between Russia and Ukraine;
	•	the timing of our billing and collections;
	•	adoption rates by participants in our key channels;
	•	increases or decreases in the number of patients, providers and organizations that use our tests or pricing changes upon any signing and renewals of agreements with healthcare sub-vertical channel partners;
	•	changes in our pricing policies or those of our competitors;
	•	the timing and success of new offerings by us or our competitors or any other change in the competitive dynamics of our industry, including consolidation among competitors, practitioners, clinics or outsourcing facilities;
	•	extraordinary expenses such as litigation or other dispute-related expenses or settlement payments;
	•	sales tax and other tax determinations by authorities in the jurisdictions in which we conduct business;
	•	the impact of new accounting pronouncements and the adoption thereof;
	•	fluctuations in stock-based compensation expenses;
	•	expenses in connection with mergers, acquisitions or other strategic transactions;
	•	changes in regulatory and licensing requirements;
	•	the amount and timing of expenses related to our expansion to markets outside the United States; and
	•	the timing of expenses related to the development or acquisition of technologies or businesses and potential future charges for impairment of goodwill or intangibles from acquired companies.

Further, in any future period, our revenue growthcould slow or our revenues could decline for a number of reasons, including slowing demand for our tests, other products and services,increasing competition, a decrease in the growth of our overall market, or our failure, for any reason, to continue to capitalize on growthopportunities. 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 andmay decline in the future, and we may not be able to achieve or sustain profitability in future periods, which could harm our businessand cause the market price of our common stock to decline.

We will need to raise additional capital to fund our existingoperations or develop and commercialize new tests or other products or expand our operations.

We expect to spend significant amounts to expandour existing operations, including expansion into new geographies, to make additional key hires, to expand our sales channels and constituenciesand to develop new tests, other products and services. If we are unable to raise additional capital, 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 fundsto continue our business plan and operations are based on assumptions that may prove to be wrong, and we could use our available capitalresources sooner than we currently expect. Until such time, if ever, as we can generate sufficient revenues, we may finance our cash needsthrough a combination of equity offerings and debt financings or other sources. In addition, we may seek additional capital due to favorablemarket conditions or strategic considerations, even if we believe that we have sufficient funds for our current or future operating plans.

Our present and future funding requirementswill depend on many factors, including:

	•	our ability to achieve revenue growth;
	•	our ability to effectively manage our expenses and burn;
	•	the cost of expanding our operations, including our geographic scope, and our offerings, including our marketing efforts;
	•	our rate of progress in launching, commercializing and establishing adoption of our tests, other products and services; and
	•	the effect of competing technological and market developments.

To the extent that we raise additional capitalthrough the sale of equity or convertible debt securities, your ownership interest will be diluted, and the terms of these securitiesmay include liquidation or other preferences that adversely affect your rights as a securityholder. In addition, debt financing and preferredequity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions,such as incurring additional debt, making capital expenditures or declaring dividends. If we raise additional funds through collaborations,strategic alliances or marketing, distribution or licensing arrangements with third parties, we may be required to relinquish valuablerights to our technologies, intellectual property, or future revenue streams or grant licenses on terms that may not be favorable to us.Furthermore, any capital raising efforts may divert our management from their day-to-day activities, which may adversely affect our abilityto advance development activities. If we need additional capital and cannot raise it on acceptable terms, or at all, we may not be ableto, among other things: 

	•	invest in our business and continue to grow our brand and expand our customer and patient bases;
	•	hire and retain employees, including scientists and medical professionals, operations personnel, financial and accounting staff, and sales and marketing staff;
	•	respond to competitive pressures or unanticipated working capital requirements; or
	•	pursue opportunities for acquisitions of, investments in, or strategic alliances and joint ventures with complementary businesses.

We may invest in or acquire other businesses, and our businessmay suffer if we are unable to successfully integrate an acquired business into our company or otherwise manage the growth associatedwith multiple acquisitions.

From time to time, we may acquire, make investmentsin, or enter into strategic alliances and joint ventures with, complementary businesses. These transactions may involve significant risksand uncertainties, including:

In the case of an acquisition:

	•	The potential for the acquired business to underperform relative to our expectations and the acquisition price;
	•	The potential for the acquired business to cause our financial results to differ from expectations in any given period, or over the longer-term;
	•	Unexpected tax consequences from the acquisition, or the tax treatment of the acquired business’s operations going forward, giving rise to incremental tax liabilities that are difficult to predict;
	•	Difficulty in integrating the acquired business, its operations, and its employees in an efficient and effective manner;
	•	Any unknown liabilities or internal control deficiencies assumed as part of the acquisition; and
	•	The potential loss of key employees of the acquired businesses.

In the case of an investment, alliance, jointventure, or other partnership:

	•	Our ability to cooperate with our co-venturer;
	•	Our co-venturer having economic, business, or legal interests or goals that are inconsistent with ours; and
	•	The potential that our co-venturer may be unable to meet its economic or other obligations, which may require us to fulfill those obligations alone or find a suitable replacement.

Any such transaction may involve the risk thatour senior management’s attention will be excessively diverted from our other operations, the risk that our industry does not evolveas anticipate, and that any intellectual property or personnel skills acquired do not prove to be those needed for our future success,and the risk that our strategic objectives, cost savings or other anticipate benefits are otherwise not achieved. 

We may experience difficulties in managing our growth and expandingour operations.

We expect to experience significant growth inthe scope of our operations. Our ability to manage our operations and future growth will require us to continue to improve our operational,financial and management controls, compliance programs and reporting systems. We may not be able to implement improvements in an efficientor timely manner and may discover deficiencies in existing controls, programs, systems and procedures, which could have an adverse effecton our business, reputation and financial results. Additionally, rapid growth in our business may place a strain on our human and capitalresources.

Risks Related to our Business and Industry

We have an unproven business model with no assurance of significantrevenues or operating profit.

Ourcurrent business model is unproven and the profit potential, if any, is unknown at this time. We are subject to all ofthe risks inherent in the creation of a new business. Our ability to achieve profitability is dependent, among other things, on our initialmarketing and accompanying product acceptance to generate sufficient operating cash flow to fund current operations and future expansion.There can be no assurance that our results of operations or business strategy will achieve significant revenue or profitability.

The market for epigenetic tests is fairly new and unproven, andit may decline or experience limited growth, which would adversely affect our ability to fully realize the potential of our platform.

Epigenetics is at the heart of our technology,products and services. According to the CDC, epigenetics is the study of how a person’s behaviors and environment can cause changesthat affect the way a person’s genes work. Unlike genetic changes, epigenetic changes are reversible and do not change one’sDNA sequence, but they can change how a person’s body reads a DNA sequence. The market for epigenetic tests is relatively new andevaluating the size and scope of the market is subject to a number of risks and uncertainties. We believe that our future success willdepend in large part on the growth of this market. The utilization of our solution is still relatively new, and customers may not recognizethe need for, or benefits of, our tests, other products and services, which may prompt them to cease use of our tests, other productsand services or decide to adopt alternative products and services to satisfy their healthcare requirements. In order to expand our businessand extend our market position, we intend to focus our marketing and sales efforts on educating customers about the benefits and technologicalcapabilities of our tests, other products and services and the application of our tests, other products and services to specific needsof customers in different market verticals. Our ability to access and expand the market that our tests, other products and services aredesigned to address depends upon a number of factors, including the cost, performance and perceived value of the tests, other productsand services. Market opportunity estimates are subject to significant uncertainty and are based on assumptions and estimates. Assessingthe market for our solutions in each of the vertical markets we are competing in, or planning to compete in, is particularly difficultdue to a number of factors, including limited available information and rapid evolution of the market. The market for our tests, otherproducts and services may fail to grow significantly or be unable to meet the level of growth we expect. As a result, we may experiencelower-than-expected demand for our products and services due to lack of customer acceptance, technological challenges, competing productsand services, decreases in expenditures by current and prospective customers, weakening economic conditions and other causes. If our marketshare does not experience significant growth, or if demand for our solution does not increase, then our business, results of operationsand financial condition will be adversely affected.

The estimates of market opportunity and forecasts of market growthincluded in this prospectus may prove to be inaccurate, and even if the market in which we compete achieves the forecasted growth, ourbusiness could fail to grow at similar rates, if at all.

Market opportunity estimates and growth forecastsare subject to significant uncertainty and are based on assumptions and estimates that may not prove to be accurate. The estimates andforecasts in this prospectus relating to the size and expected growth of the cardiovascular diagnostics market may prove to be inaccurate.Even if the market in which we compete meets our size estimates and forecasted growth, our business could fail to grow at similar rates,if at all.

If we are not able to enhance or introduce new products thatachieve market acceptance and keep pace with technological developments, our business, results of operations and financial condition couldbe harmed.

Our ability to attract new customers and increaserevenue from existing customers depends in part on our ability to enhance and improve our solutions, increase adoption and usage of ourproducts and introduce new products and features. The success of any enhancements or new products depends on several factors, includingtimely completion, adequate quality testing, actual performance quality, market-accepted pricing levels and overall market acceptanceand demand. Enhancements and new products that we develop may not be introduced in a timely or cost-effective manner, may contain defects,may have interoperability difficulties with our solutions, or may not achieve the market acceptance necessary to generate significantor any revenue. If we are unable to successfully enhance our existing solutions and capabilities to meet evolving customer requirements,increase adoption and usage of our solutions, develop new products, or if our efforts to increase the usage of our products are more expensivethan we expect, then our business, results of operations and financial condition could be harmed.

The success of our business depends on our ability to expandinto new vertical markets and attract new customers in a cost-effective manner. 

Inorder to grow our business, we plan to drive greater awareness and adoption of our tests, other products and services from customersacross new vertical markets. We intend to increase our investment in sales and marketing, as well as in technological development, tomeet evolving customer needs in these and other markets. There is no guarantee, however, that we will be successful in gaining new customersfrom existing and new markets. We have limited experience in marketing and selling our products and services generally, and in particularin new markets, which may present unique and unexpected challenges and difficulties. Furthermore, we may incur additional costs to modifyour current solutions to conform to the customer’s requirements, and we may not be able to generate sufficient revenue to offsetthese costs. We may also be required to comply with certain regulations required by government customers, which will require us to incurcosts, devote management time and modify our current solutions and operations. If we are unable to comply with those regulations effectivelyand in a cost-effective manner, our financial results could be adversely affected. 

Ifthe costs of the new marketing channels we use or plan to pursue increase dramatically, then we may choose to use alternative andless expensive channels, which may not be as effective as the channels we currently use or have plans to use. As we add to or change themix of our marketing strategies, we may need to expand into more expensive channels than those we are currently in, which could adverselyaffect our business, results of operations and financial condition. In addition, we have limited experience marketing our products andservices and we may not be successful in selecting the marketing channels that will provide us with exposure to customers in a cost-effectivemanner. As part of our strategy to penetrate the new vertical markets, we expect to incur marketing expenses before we are able to recognizeany revenue in such markets, and these expenses may not result in increased revenue or brand awareness. We expect to make significantexpenditures and investments in new marketing activities, and these investments may not lead to the cost-effective acquisition of additionalcustomers. If we are unable to maintain effective sales and marketing programs, then our ability to attract new customers or enter intonew vertical markets could be adversely affected. 

Consolidation in the health care industry could have a materialadverse effect on our business, financial condition and results of operations. 

Many health care industry participants andpayers are consolidating to create larger and more integrated health care delivery systems with greater market power. We expect regulatoryand economic conditions to result in additional consolidation in the health care industry in the future. As consolidation accelerates,the economies of scale of our customers’ organizations may grow. If a customer experiences sizable growth following consolidation,that customer may determine that it no longer needs to rely on us and may reduce its demand for our products and services. In addition,as health care providers consolidate to create larger and more integrated health care delivery systems with greater market power, theseproviders may try to use their market power to negotiate price reductions for our products and services. Finally, consolidation may alsoresult in the acquisition or future development by our customers of products and services that compete with our products and services.Any of these potential results of consolidation could have a material adverse effect on our business, financial condition and resultsof operations.

If we are not able to compete effectively, our business and operatingresults will be harmed. 

The market for our tests, other products andservices is increasingly competitive, rapidly evolving and fragmented, and is subject to changing technology and shifting customer needs.Although we believe that the solutions that we offer are unique, many companies develop and market products and services that competeto varying extents with our offerings, and we expect competition in our market to continue to intensify. Moreover, industry consolidationmay increase competition.

Whilethe clinical epigenetics market is still fairly new, we face competition from various sources, including large, well-capitalized technologycompanies such as Cleerly Health and Prevencio, Inc. These competitors may have better brand name recognition, greater financial and engineeringresources and larger sales teams than we have. As a result, our competitors may be able to develop and introduce competing solutions andtechnologies that may have greater capabilities than our solutions or that are able to achieve greater customer acceptance, and they maybe able to respond more quickly and effectively than we can to new or changing opportunities, technologies, standards or customer requirements.In addition, we may also compete with smaller companies, who may develop their own platforms that perform similar services as our platform.We expect that competition will increase and intensify as we continue to expand our serviceable markets and improve our tests, other productsand services. If we are unable to provide our tests, other products and services on terms attractive to the customer, the prospectivecustomer may be unwilling to utilize our solutions. If our competitors’ products, services or technologies become more acceptedthan our solutions, if they are successful in bringing their products or services to market earlier than we do, or if their products orservices are more technologically capable than ours, then our revenue could be adversely affected. In addition, increasedcompetition may result in pricing pressures and require us to incur additional sales and marketing expenses, which could negatively impactour sales, profitability and market share.

Our business depends on customers increasing their use of oursolutions, and we may experience loss of customers or decline in their use of our solutions.

Ourability to grow and generate revenue depends, in part, on our ability to maintain and grow our relationships with existing customers andconvince them to increase their usage of our tests, other products and services. If our customers do not increase their use of our tests,other products and services, then our revenue may not grow, and our resultsof operations may be harmed. It is difficult to accurately predict customers’ usage levels and the loss of customers or reductionsin their usage levels may have a negative impact on our business, results of operations and financial condition. If a significant numberof customers cease using, or reduce their usage of our tests, other products and services, then we may be required to expend significantlymore on sales and marketing than we currently plan to expend in order to maintain or increase revenue from customers. These additionalexpenditures could adversely affect our business, results of operations and financial condition.

Interruptions or performance problems associated with our technologyand infrastructure may adversely affect our business and operating results. 

Ourcontinued growth depends in part on the ability of customers to access its tests, other products and services at any time and within anacceptable amount of time. We may in the future experience disruptions, outages and other performance problems due to a variety of factors,including challenges with suppliers, infrastructure changes, introductions of new applications and functionality, software errors anddefects, capacity constraints due to an increasing number of customers or security related incidents. In addition, from time-to-time,we or our vendors may experience limited periods of equipment downtime, server downtime due to server failure or other technical difficulties(as well as maintenance requirements). It may become increasingly difficult to maintain and improve our performance, especially duringhigh volume times and as our solution becomes more complex and our customerdemand and traffic increases. If our solution is unavailable or if our customers are unable to access our solutions within a reasonableamount of time or at all, our business would be adversely affected, and its brand could be harmed. In the event of any of the factorsdescribed above, or certain other failures of our infrastructure, customer or patient data may be permanently lost. To the extent thatwe do not effectively address capacity constraints, upgrade our systems, as needed, and continually develop our technology and networkarchitecture to accommodate actual and anticipated changes in technology, customers may cease to use our solutions and our business andoperating results may be adversely affected.

We rely on a limited number of suppliers, contract manufacturers,and logistics providers, and our test is performed by a single contract high complexity Clinical Laboratory Improvement Amendments (“CLIA”)laboratory.

Forour Epi+Gen CHD™ and PrecisionCHD™ tests, we and our vendors rely on a limited number of suppliers for laboratory reagentsand sampling kit supplies, contract manufacturers, and logistics providers. For example, certain proprietary reagents are manufacturedunder Good Manufacturing Practice (“GMP”) by a single contract manufacturer located in Michigan; the blood collection tubesincluded in the sample collection kits are manufactured by a single manufacturer; and the tests are performed in one high complexity CLIAlaboratory located in Missouri. The reliance on a limited number of suppliersand a sole contract manufacturer and laboratory present various risks. These include the risk that in the event of an interruption fromany part of our supply chain for any reason, such as a natural catastrophe, labor dispute, or system interruption. We may not be ableto develop an alternate source without incurring material additional costs and substantial delays. For example, during 2021, the Coronaviruspandemic impacted the ability to conduct in-person training of personnel at the laboratory, which delayed the launch of Epi+Gen CHD™by approximately two and a half months. As a public company, the delay of a product launch by a nearly a fiscal quarter could cause ourreported results of operations to fail to meet market expectations, which, in turn, and could negatively impact our stock price.

The security of our solutions, networks or computer systems maybe breached, and any unauthorized access to our customer data will have an adverse effect on our business and reputation.

The use of our solutions involves the storage,transmission and processing of our customers’ private data, and this data may contain confidential and proprietary information ofour customers or their customers, patients, employees, business partners or other persons (“customer personnel”) or otherpersonal or identifying information regarding our customers and customer personnel. Individuals or entities may attempt to penetrate ournetwork or platform security, or that of our third-party hosting and storage providers, and could gain access to our customer and customerpersonnel private data, which could result in the destruction, disclosure or misappropriation of proprietary or confidential informationof our customers and customer personnel. If any of our customers’ or customer personnel’s private data is leaked, obtainedby others or destroyed without authorization, it could harm our reputation, we could be exposed to civil and criminal liability, and wemay lose our ability to access private data, which will adversely affect the quality and performance of our solutions.

In addition, our platform and services may besubject to computer malware, viruses and computer hacking, fraudulent use attempts and phishing attacks, all of which have become moreprevalent in our industry. Though it is difficult to determine what, if any, harm may directly result from any specific interruption orattack, they may include the theft or destruction of data owned by us or our customers or customer personnel, and/or damage to our platform.Any failure to maintain the performance, reliability, security and availability of our products and technical infrastructure to the satisfactionof our customers may harm our reputation and our ability to retain existing customers and attract new customers.

Whilewe have implemented and is continuing to implement procedures and safeguards that are designed to prevent security breaches and 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 suchsecurity breach. Unauthorized access to or security breaches of our platform, network or computer systems, or those of our technologyservice providers, could result in the loss of business, reputational damage, regulatory investigations and orders, litigation, indemnityobligations, 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 adequatesecurity for the storage of sensitive information or its transmission over theInternet, our business will be harmed. Customers’ concerns about security or privacy may deter them from using our solutions foractivities that involve personal or other sensitive information.

We maintain cybersecurity coverage; however,this coverage may not continue to be available on acceptable terms, may not be available in sufficient amounts to cover one or more largeclaims against us, and may include larger self-insured retentions or certain exclusions. In addition, the insurer might disclaim coverageas to any future claim. A successful claim not fully covered by our insurance could have a material adverse impact on our liquidity, financialcondition, and results of operations.

Any failure to offer high-quality customer support may adverselyaffect our relationships with our customers. 

Ourability to retain existing customers and attract new customers depends in part on our ability to maintain a consistently high level ofcustomer service and technical support. Our current and future customers depend on our customer support teamto assist them in utilizing our tests, other products and services effectively and to help them to resolve issues quickly and to provideongoing support. If we are unable to hire and train sufficient support resources or are otherwise unsuccessful in assisting our customerseffectively, it could adversely affect our ability to retain existing customers and could prevent prospective customers from adoptingour solutions. We may be unable to respond quickly enough to accommodate short-term increases in demand for customer support. We alsomay be unable to modify the nature, scope and delivery of our customer support to compete with changes in the support services providedby our competitors. Increased demand for customer support, without corresponding revenue, could increase our costs and adversely affectour business, results of operations and financial condition. Our sales are and will be highly dependent on our business reputation andon positive recommendations from customers. Any failure to maintain high-quality customer support, or a market perception that we do notmaintain high-quality customer support, could adversely affect our reputation, business, results of operations and financial condition.

The information that we provide to our customers could be inaccurateor incomplete, which could harm our business reputation, financial condition, and results of operations.

Weaggregate, process, and analyze customers’/patients’ healthcare-related data and information for use by our customers. Becausedata in the healthcare industry is fragmented in origin, inconsistent in format, and often incomplete, the overall quality of data receivedor accessed in the healthcare industry is often poor, the degree or amount of data which isknowingly or unknowingly absent or omitted can be material. If the test results that we provide to our customers are based on incorrector incomplete data or if we make mistakes in the capture, input, or analysis of these data, our reputation may suffer, and our abilityto attract and retain customers may be materially harmed.

Inaddition, in the future, we may assist our customers with the management and submission of data to governmental entities, including CMS.These processes and submissions are governed by complex data processing and validation policies and regulations. If we fail to abide bysuch policies or submits incorrect or incomplete data, we may be exposed to liability to a client, court, or government agencythat concludes that its storage, handling, submission, delivery, or display of health information or other data was wrongful or erroneous.

Our proprietary applications may not operate properly, whichcould damage our reputation, give rise to a variety of claims against us, or divert our resources from other purposes, any of which couldharm our business and operating results.

Proprietary software, product and applicationdevelopment is time-consuming, expensive, and complex, and may involve unforeseen difficulties. We may encounter technical obstacles,and it is possible that we discover additional problems that prevent our proprietary solutions from operating properly. If our solutionsand services do not function reliably or fail to achieve customer expectations in terms of performance, customers could assert liabilityclaims against us and attempt to cancel their contracts with us. Moreover, material performance problems, defects, or errors in our existingor new solutions may arise in the future and may result from, among other things, the lack of interoperability of our applications withsystems and data that we did not develop and the function of which is outside of our control or undetected in our testing. Defects orerrors in our solutions might discourage existing or potential customers from purchasing products and services from us. Correction ofdefects or errors could prove to be time consuming, costly, impossible, or impracticable. The existence of errors or defects in our solutionsand the correction of such errors could divert our resources from other matters relating to its business, damage our reputation, increaseour costs, and have a material adverse effect on our business, financial condition, and results of operations.

If we do not keep pace with technological changes, our solutionsmay become less competitive, and our business may suffer.

The clinical epigenetic testing, artificial intelligence/machinelearning-based solutions and the cardiovascular diagnostics markets are undergoing rapid technological change, frequent product and serviceinnovation and evolving industry standards. If we are unable to provide enhancements and new features for our existing tests, other productsand services or additional tests, other products and services that achieve market acceptance or that keep pace with these technologicaldevelopments, our business could be adversely affected. The success of enhancements, new tests, other products and services depends onseveral factors, including the timely completion, introduction and market acceptance of the innovations. Failure in this regard may significantlyimpair our revenue growth. In addition, because our solutions are designed to operate on existing cloud software and technologies, wewill need to continuously modify and enhance our solutions to keep pace with changes in internet-related hardware, software, communication,browser and database technologies, alongside changes in laboratory technologies. We may not be successful in either developing these modificationsand enhancements or in bringing them to market in a timely fashion. Furthermore, uncertainties about the timing and nature of new diagnostictests, network platforms or technologies, including laboratory technologies, or modifications to existing tests, platforms or technologies,could increase our research and development expenses. Any failure of our solutions to keep pace with technological changes or operateeffectively with future network platforms and technologies, including laboratory technologies, could reduce the demand for our solutions,result in customer dissatisfaction and adversely affect our business.

Our growth strategy may not prove viable and expected growthand value may not be realized.

While our overall sales and marketing initiativeswill span the gamut across traditional, print and digital mediums, our primary salesand marketing strategy consists of the branding, collaboration, co-marketing, and co-sales opportunities involved in strategic channelpartnerships. By prioritizing strategic channel partnerships, we believe we can accelerate our market penetration into the key healthcaresub-verticals we intend to prioritize for our growth. The key to our efforts is a well-defined and executed channel partnership integrationstrategy that we believe will serve to accelerate the sales cycle. Although there is no assurance, we believe such strategic channel partnershipswill generate revenue in a myriad of ways, including larger contracts for our Epi+Gen CHD^TM and PrecisionCHD^TM tests,our HeartRisk platform, and bundling our solutions alongside other synergistic technologies, services, and products. There can be no assurancethat we will be successful in acquiring customers through these and other strategies.

Market and economic conditions may negatively impact our business,financial condition and stock price.

Concerns over inflation, energy costs, geopoliticalissues, including the ongoing conflict between Russian and Ukraine, unstable global credit markets and financial conditions, and volatileoil prices could lead to periods of significant economic instability, diminished liquidity and credit availability, declines in consumerconfidence and discretionary spending, diminished expectations for the global economy and expectations of slower global economic growthgoing forward. For example, in March 2022, the U.S. Consumer Price Index (“CPI”), which measures a wide-ranging basket ofgoods and services, rose 8.5% from the same month a year ago, which represents the largest CPI increase since December of 1981. Our generalbusiness strategy may be adversely affected by any such inflationary fluctuations, economic downturns, volatile business environmentsand continued unstable or unpredictable economic and market conditions. Additionally, rising costs of goods and services purchased byus, including raw materials used in manufacturing our tests, may have an adverse effect on our gross margins and profitability in futureperiods. If economic and market conditions continue to deteriorate or do not improve, it may make any necessary debt or equity financingmore difficult to complete, more costly and more dilutive to our stockholders. Failure to secure any necessary financing in a timely manneror on favorable terms could have a material adverse effect on our financial performance and stock price or could require us to delay orabandon development other business plans. In addition, there is a risk that one or more of our current and future service providers, manufacturers,suppliers, other partners could be negatively affected by such difficult economic factors, which could adversely affect our ability toattain our operating goals on schedule and on budget or meet our business and financial objectives.

Our success depends upon our ability to adapt to a changing marketand our continued development of additional tests, other products and services.

Although we believe that we will provide a competitiverange of tests, other products and services, there can be no assurance of acceptance by the marketplace. The procurement of new contractsby us may be dependent upon the continuing results achieved with current and future customers, upon pricing and operational considerations,as well as the potential need for continuing improvement to existing products and services. Moreover, the markets for such services maynot develop as expected nor can there be any assurance that we will be successful in our marketing of any such products and services.

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

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

Risks Related to our Business Operations

We could experience losses or liability not covered by insurance.

Our business exposes us to risks that are inherentin the provision of testing services that assist clinical decision-making. If customers or customer personnel assert liability claimsagainst us, any ensuing litigation, regardless of outcome, could result in a substantial cost to the Company, divert management’sattention from operations, and decrease market acceptance of our solutions. The limitations of liability set forth in any contracts wemay enter into now or in the future may not be enforceable or may not otherwise protect us from liability for damages. Additionally, wemay be subject to claims that are not explicitly covered by a contract. We also maintain general liability coverage; however, this coveragemay not continue to be available on acceptable terms, may not be available in sufficient amounts to cover one or more large claims againstus, and may include larger self-insured retentions or exclusions for certain products. In addition, the insurer might disclaim coverageas to any future claim. A successful claim not fully covered by our insurance could have a material adverse impact on our liquidity, financialcondition, and results of operations.

Our future growth could be harmed if we lose the services ofour key personnel.

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

If we are unable to hire, retain and motivate qualified personnel,our business will suffer.

Our future success depends, in part, on ourability to continue to attract and retain highly skilled personnel. we believe that there is, and will continue to be, intense competitionfor highly skilled management, medical, engineering, data science, sales and other personnel with experience in our industry. We mustprovide competitive compensation packages and a high-quality work environment to hire, retain and motivate employees. If weare unable to retain and motivate our existing employees and attract qualified personnel to fill key positions, we may be unableto manage our business effectively, including the development, marketing and sale of our products, which could adversely affect our business,results of operations and financial condition. To the extent we hire personnel from competitors, we also may be subject to allegationsthat they have been improperly solicited or that they have divulged proprietary or other confidential information. If we are unable toretain our employees, our business, results of operations and financial condition could be adversely affected.

If we cannot maintain our corporate culture as it grows, we couldlose the innovation, teamwork, passion and focus on execution that it believes contribute to its success, and its business may be harmed. 

We believe that our corporate culture is a criticalcomponent to our success. We have and will continue to invest substantial timeand resources in building our team. As we grow and develop the infrastructure of a public company, we may find it difficult to maintainour corporate culture. Any failure to preserve our culture could negatively affect our future success, including our ability toretain and recruit personnel and effectively focus on and pursue our corporate objectives. 

We will need to grow the size of our organization and may experiencedifficulties in managing this growth.

As our expansion plans and strategies develop,we expect we will need additional managerial, operational, sales, marketing, financial and other personnel. Future growth would imposesignificant added responsibilities on members of management, including:

	•	identifying, recruiting, compensating, integrating, maintaining and motivating additional employees;
	•	coping with demands on management related to the increased size of its business;
	•	assimilating different corporate cultures and business practices;
	•	converting other entities’ books and records and conforming their practices to ours;
	•	integrating operating, accounting and information technology systems of other entities with ours and in maintaining uniform procedures, policies and standards, such as internal accounting controls; and
	•	improving our operational, financial and management controls, reporting systems and procedures.

Our future financial performance and our abilityto expand our business will depend, in part, on our ability to effectively manage any future growth, and our management may also haveto divert a disproportionate amount of its attention away from day-to-day activities in order to devote a substantial amount of time tomanaging these growth activities.

If we are not able to effectively expand ourorganization by hiring new employees and expanding our groups of consultants and contractors, we may not be able to successfully implementthe tasks necessary to further develop and commercialize our product candidates and, accordingly, may not achieve our research, developmentand commercialization goals.

We may acquire other companies or technologies, which could divertour management’s attention, result in dilution to our stockholders and otherwise disrupt our operations and adversely affect ouroperating results.

We may in the future seek to acquire or investin businesses, applications and services or technologies that we believe could complement or expand our services, enhance our technicalcapabilities or otherwise offer growth opportunities. The pursuit of potential acquisitions may divert the attention of management andcause us to incur various expenses in identifying, investigating and pursuing suitable acquisitions, whether or not they are consummated.

In addition, we do not have significant experiencein acquiring other businesses. If we acquire additional businesses, we may not be able to integrate the acquired personnel, operationsand technologies successfully, or effectively manage the combined business following the acquisition. We also may not achieve the anticipatedbenefits from the acquired business due to a number of factors, including:

•		inability to integrate or benefit from acquired technologies or services in a profitable manner;
•		unanticipated costs or liabilities associated with the acquisition;
•		difficulty integrating the accounting systems, operations, and personnel of the acquired
•		difficulties and additional expenses associated with supporting legacy products and hosting infrastructure of the acquired business;
•		difficulty converting the customers of the acquired business onto the Platform and contract terms, including disparities in the revenue, licensing, support, or professional services model of the acquired company;
•		diversion of management’s attention from other business concerns;
•		adverse effects to our existing business relationships with business partners and customers as a result of the acquisition;
•		the potential loss of key employees;
•		use of resources that are needed in other parts of our business; and
•		use of substantial portions of our available cash to consummate the acquisition.

In addition, a significant portion of the purchaseprice of companies we acquire may be allocated to acquired goodwill and other intangible assets, which must be assessed for impairmentat least annually. In the future, if our acquisitions do not yield expected returns, we may be required to take charges to our operatingresults based on this impairment assessment process, which could adversely affect our results of operations.

Acquisitions could also result in dilutiveissuances of equity securities or the incurrence of debt, which could adversely affect our operating results. In addition, if an acquiredbusiness fails to meet our expectations, our operating results, business and financial position may suffer.

Our Board of Directors may change our strategies, policies, andprocedures without stockholder approval, and we may become highly leveraged, which may increase our risk of default under our existingor future obligations.

Our investment, financing, leverage, and dividendpolicies, and our policies with respect to all other activities, including growth, capitalization, and operations, are determined exclusivelyby our board of directors, and may be amended or revised at any time byour board of directors without notice to or a vote of our stockholders. This could result in the Company conducting operational matters,making investments, or pursuing different business or growth strategies than those contemplated in this prospectus. Further, our charterand bylaws do not limit the amount or percentage of indebtedness, funded or otherwise, that we may incur. High leverage also increasesthe risk of default on our obligations. In addition, a change in our investment policies, including the manner in which we allocate ourresources across our portfolio or the types of assets in which we seek to invest, may increase our exposure to interest rate risk andliquidity risk. Changes to our policies with regards to the foregoing could materially adversely affect our financial condition, resultsof operations, and cash flow.

Our business is subject to the risks of earthquakes, fire, floods,pandemics and other natural catastrophic events, and to interruption by man-made problems, such as power disruptions, computer viruses,data security breaches or terrorism.

A significant natural disaster, such as a tornado,hurricane or a flood, occurring at our headquarters or where a business partner is located could adversely affect our business, resultsof operations and financial condition. Further, if a natural disaster or man-made problem were to affect our network serviceproviders or Internet service providers, this could adversely affect the ability of our customers to use our products and platform. Inaddition, health epidemics or pandemics, natural disasters and acts of terrorism could cause disruptions in our business, or the businessesof our customers or service providers. We also rely, and will continue to rely, on our network and third-party infrastructure and enterpriseapplications and internal technology systems for our engineering, sales and marketing and operations activities. In the event of a majordisruption caused by a health epidemic or pandemic, natural disaster or man-made problem, we may be unable to continue our operationsand may endure system interruptions, reputational harm, delays in our development activities, lengthy interruptions in service, breachesof data security and loss of critical data, any of which could adversely affect our business, results of operations and financial condition.

We may need to seek alternative business opportunities and changethe nature of our business.

As a company in the early stages of its development,we continuously reevaluate our business, the market in which we operate and potential new opportunities. We may seek other alternativeswithin the healthcare field in order to grow our business and increase revenues. Such alternatives may include, but not be limited to,combinations or strategic partnerships with laboratory companies or with medical practices such as hospitalists or behavioral health.Pursuing alternative business opportunities could increase our expenses, may require us to obtain additional financing, which may notbe available on favorable terms or at all, and result in potentially dilutive issuances of our equity securities or the incurrence ofdebt that may be burdensome to service, any of which could have a material adverse effect on our business and operations. In addition,pursuing alternative business opportunities may never be successful and may divert significant management time and attention. Moreover,accomplishing and integrating any business opportunity that is pursued by us may disrupt the existing business and may be a complex, riskyand costly endeavor and could have a material adverse effect on our business, results of operations, financial condition and prospects.

Any legal proceedings or claims against us could be costly andtime-consuming to defend and could harm our reputation regardless of the outcome.

We may in the future become subject to legalproceedings and claims that arise in the ordinary course of business, including intellectual property, collaboration, licensing agreement,product liability, employment, class action, whistleblower and other litigation claims, and governmental and other regulatory investigationsand proceedings. Such matters can be time-consuming, divert management’sattention and resources, cause us to incur significant expenses or liability, or require us to change our business practices. In addition,the expense of litigation and the timing of this expense from period to period are difficult to estimate, subject to change, and couldadversely affect our financial condition and results of operations. Because of the potential risks, expenses, and uncertainties of litigation,we may, from time to time, settle disputes, even where we have meritorious claims or defenses, by agreeing to settlement agreements. Anyof the foregoing could adversely affect our business, financial condition, and results of operations.

RisksRelated to our Intellectual Property

Our license agreement with the University of Iowa Research Foundationincludes a non-exclusive license of “technical information” that potentially could grant unaffiliated third parties accessto materials and information considered derivative work made by us, which could be used by such licensees to develop competitive products.

The University of Iowa Research Foundation, orUIRF, license agreement grants to us a worldwide, exclusive, non-transferable license under the Patent Rights, as defined in the agreement,to make, have made, use, sell, offer for sale and import the Licensed Products(s) and/or Licensed Processes, as defined in the agreement,in the field of research tools and clinical diagnostics for cardiovascular disease, stroke, congestive heart failure and diabetes in humans.However, the agreement also confers a non-exclusive license as to Technical Information. Technical Information is defined as certain researchand development information, materials, confidential information, technical data, unpatented inventions, know-how and supportive informationowned and controlled by the licensor that was not in the public domain as of May 2, 2017 and that describes the Invention, as definedin the agreement, its manufacture and/or use and selected by the licensor to provide to us for use in or with the development, manufactureor use of the Licensed Products and/or Licensed Processes. Technical Information further includes materials, all progeny and derivativesof the materials made by us or our sublicensees, as well as software or other copyrightable work, all derivatives of such software andother copyrightable work made by us and our sublicensees. The ability of UIRF to grant non-exclusive licenses to third parties in andto this broad definition of Technical Information raises the possibility that unaffiliated third parties could use such Technical Information,including Technical Information developed by the Company, to make, use, sell, offer to sell and import products and/or processes thatcompete with the Company’s exclusively-licensed products and/or processes or are positioned in markets that the Company may enterin the future. Increased competition could result in reduced demand for the Company’s products and/or processes, slow its growthand materially adversely affect its business, operating results and financial condition.

We could incur substantial costs in protecting or defending ourintellectual property rights, and any failure to protect or defend our intellectual property could adversely affect our business, resultsof operations and financial condition. 

Our success depends, in part, on our abilityto protect our brand and the proprietary methods and technologies that we develop under patent and other intellectual property laws ofthe United States and foreign jurisdictions so that we can prevent others from using our inventions and proprietary information. Any patentsthat have been issued or that may be issued in the future may not provide significant protection for our intellectual property. If wefail to protect our intellectual property rights adequately, our competitors might gain access to our technology and our business, resultsof operations and financial condition may be adversely affected.

The particular forms of intellectual propertyprotection that we seek, or our business decisions about when to file patent applications and trademark applications, may not be adequateto protect our business. We could be required to expend significant resources to monitor and protect our intellectual property rights.Litigation may be necessary in the future to enforce our intellectual property rights, determine the validity and scope of our proprietaryrights or those of others, or defend against claims of infringement or invalidity. Such litigation could be costly, time-consuming anddistracting to management, result in a diversion of significant resources, lead to the narrowing or invalidation of portions of our intellectualproperty and have an adverse effect on our business, results of operations and financial condition. Our efforts to enforce our intellectualproperty rights may be met with defenses, counterclaims and countersuits attacking the validity and enforceability of our intellectualproperty rights or alleging that we infringe the counterclaimant’s own intellectual property. Any of our patents, copyrights, trademarksor other intellectual property rights could be challenged by others or invalidated through administrative process or litigation.

We also rely, in part, on confidentiality agreementswith our business partners, employees, consultants, advisors, customers and others in our efforts to protect our proprietary technology,processes and methods. These agreements may not effectively prevent disclosure of our confidential information, and it may be possiblefor unauthorized parties to copy our software or other proprietary technology or information, or to develop similar technology independentlywithout our having an adequate remedy for unauthorized use or disclosure of our confidential information. In addition, others may independentlydiscover our trade secrets and proprietary information, and in these cases, we would not be able to assert any trade secret rights againstthose parties. Costly and time-consuming litigation could be necessary to enforce and determine the scope of our proprietary rights, andthe failure to obtain or maintain trade secret protection could adversely affect our competitive business position.

In addition, the laws of some countries do notprotect intellectual property and other proprietary rights to the same extent as the laws of the United States. To the extent we expandinto international activities, our exposure to unauthorized copying, transfer and use of our proprietary technology or information mayincrease.

Our means of protecting our intellectual propertyand proprietary rights may not be adequate or our competitors could independently develop similar technology. If we fail to meaningfullyprotect our intellectual property and proprietary rights, our business, results of operations and financial condition could be adverselyaffected.

Assertions by third parties of infringement or other violationsby us of its intellectual property rights could result in significant costs and harm our business and operating results.

Oursuccess depends upon our ability to refrain from infringing upon the intellectual property rights of others. Some companies, includingsome of our competitors, own large numbers of patents, copyrights and trademarks, which they may use to assert claims against us. As wegrow and enter new markets, we will face a growing number of competitors. As the number of competitors in our industry grows and the functionalityof products in different industry segments overlaps, we expect that software and other solutions in our industry may be subject to suchclaims by third parties. Third parties may in the future assert claims of infringement, misappropriation or other violations of intellectualproperty rights against us. We cannot assure investors that infringement claims will not be asserted against us in the future, or that,if asserted, any infringement claim will be successfully defended. A successful claim against us could require that we pay substantialdamages or ongoing royalty payments, prevent us from offering our products and services, or require that we comply with other unfavorableterms. We may also be obligated to indemnify our customers or business partners or pay substantial settlement costs, including royaltypayments, in connection with any such claim or litigation and to obtain licenses, modify applications or refund fees, which could be costly.Even if we were to prevail in such a dispute, any litigation regarding our intellectual property could be costly and time-consuming anddivert the attention of our management and key personnel from our business operations.

Certain of our core technology is licensed, and that licensemay be terminated if we were to breach our obligations under the license.

The initial work on our core technology is derivedfrom work done by our founders while at the University of Iowa, around which there is currently a family of patent applications, the rightsof which are owned by the University of Iowa Research Foundation (“UIRF”) and exclusively licensed to us. In addition, follow-onwork on our core technology also is derived from work done by our founders while at the University of Iowa but was furthered by our founders.Therefore, the follow-on work is co-owned by UIRF and us, and exclusively licensed to us under the license agreement with UIRF. That licenseagreement and those licenses granted under the license agreement terminate on the expiration of the patent rights licensed under the licenseagreement, unless certain proprietary, non-patented technical information is still being used by us, in which case the license agreementwill not terminate until the date of termination of such use. The licenses under the license agreement could terminate prior to the expirationof the licensed patent rights if we materially breach our obligations under the license agreement, including failing to pay the applicablelicense fees and any interest on such fees, and if we fail to fully remedy such breach within the period specified in the license agreement,or if we enter liquidation, have a receiver or administrator appointed over any assets related to the license agreement, or cease to carryon business, or file for bankruptcy or if an involuntary bankruptcy petitionis filed against us. The license agreement can also be terminated by UIRF as a result of our failure to timely achieve certain performancegoals, including minimum requirements for commercial sales of our cardiac test, provided that UIRF first provides written notice to usof such failure and if such failure is not remedied within 90 days following any such notice.

Some of our technologies incorporate “open-source”software or other similar licensed technologies, which could become unavailable or subject us to increased costs, delays in productionor assessment or litigation.

In order to provide our products, we currentlyuse a variety of technologies including, for example, genotyping, digital methylation assessment and data processing technologies ownedby third parties. The terms of these agreements, and any other “opensource” 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 maybe terminated automatically due to non-compliance.

The use and distribution of open-source softwaremay also entail greater risks than the use of third-party commercial software,as open-source licensors generally do not provide warranties or other contractual protections regarding infringement claims or the qualityof the code. Many of the risks associated with use of open-source software cannot be eliminated and could negatively affect our business.

Inaddition, the wide availability of open-source code used in our current and future products could expose us to security vulnerabilities.From time to time, we may face claims from third parties asserting ownership of, or demanding release of, the open-source software orderivative works that we developed using such software (which could include our proprietary source code), or otherwise seekingto enforce the terms of the applicable open-source license. These claims could result in litigation that could be costly to defend, havea negative effect on our operating results and financial condition or require us to devote additional research and development resourcesto change our existing or future proprietary source code. Responding to any infringement or noncompliance claim by an open-source vendor,regardless of its validity, discovering certain open-source software code in our products, or a finding that we have breached the termsof an open-source software license, could harm our business, results of operations and financial condition. In each case, we would berequired to either seek licenses to software or services from other parties and redesign our products to function with such other parties’software or services or develop these components internally, which would result in increased costs and could result in delays to productlaunches. Furthermore, we might be forced to limit the features available in our current or future solutions. If these delays and featurelimitations occur, our business, results of operations and financial condition could be adversely affected.

Risks Related to Government Regulation

We conduct business in a heavily regulated industry, and if wefail to comply with these laws and government regulations, we could incur penalties or be required to make significant changes to ouroperations or experience adverse publicity, which could have a material adverse effect on our business, financial condition, and resultsof operations.

The healthcare industry is heavily regulatedand closely scrutinized by federal, state and local governments. Comprehensive statutes and regulations govern the manner in which weprovide and bill for our products services and collect reimbursement from governmental programs and private payors, our contractual relationshipswith providers, vendors and customers, our marketing activities and other aspects of our operations. Of particular importance are:

	•	the federal physician self-referral law, commonly referred to as the Stark Law;
	•	the federal Anti-Kickback Act;
	•	the criminal healthcare fraud provisions of HIPAA;
	•	the federal False Claims Act;
	•	reassignment of payment rules that prohibit certain types of billing and collection;
	•	similar state law provisions pertaining to anti-kickback, self-referral and false claims issues;
	•	state laws that prohibit general business corporations, such as us, from practicing medicine; and
	•	laws that regulate debt collection practices as applied to our debt collection practices.

 

Because of the breadth of these laws and thenarrowness of the statutory exceptions and safe harbors available, it is possible that some of our business activities could be subjectto challenge under one or more of such laws. Achieving and sustaining compliance with these laws may prove costly. Failure to comply withthese laws and other laws can result in civil and criminal penalties such as fines, damages, overpayment recoupment loss of enrollmentstatus and exclusion from the Medicare and Medicaid programs. The risk of us being found in violation of these laws and regulations isincreased by the fact that many of them have not been fully interpreted by the regulatory authorities or the courts, and their provisionsare sometimes open to a variety of interpretations. Our failure to accurately anticipate the application of these laws and regulationsto our business or any other failure to comply with regulatory requirements could create liability for us and negatively affect our business.Any action against us for violation of these laws or regulations, even if we successfully defend against it, could cause us to incur significantlegal expenses, divert management’s attention from the operation of our business and result in loss of customers and adverse publicity.

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,which has led to a number of investigations, prosecutions, convictions and settlements in the healthcare industry. Dealing with investigationscan be time- and resource-consuming and can divert management’s attention from the business. Any such investigation or settlementcould increase our costs or otherwise have an adverse effect on our business. In addition, because of the potential for large monetaryexposure under the federal False Claims Act, which provides for treble damages and mandatory minimum penalties of $5,500 to $11,000 perfalse claim or statement, healthcare providers often resolve allegations without admissions of liability for significant and materialamounts to avoid the uncertainty of treble damages that may be awarded in litigation proceedings. Such settlements often contain additionalcompliance and reporting requirements as part of a consent decree, settlement agreement or corporate integrity agreement. Given the significantsize of actual and potential settlements, it is expected that the government will continue to devote substantial resources to investigatinghealthcare providers’ compliance with the healthcare reimbursement rules and fraud and abuse laws.

Thelaws, regulations and standards governing the provision of healthcare services may change significantly in the future. We cannot assureinvestors that any new or changed healthcare laws, regulations or standards will not materially adversely affect our business. We cannotassure investors that a review of our business by judicial, law enforcement, regulatory or accreditation authorities will not result ina determination that could adversely affect our operations.

The U.S. Food and Drug Administration’s (“FDA’s”)newly-issued rule for laboratory developed tests (“LDTs”), which will be phased in over a period of four years, will significantlychange the regulatory landscape for LDTs. Unless the rule is overturned by a court or Congress, our currently marketed LDTs and thosewe develop in the future will be subject to new requirements which may include, for some tests, premarket clearance, de novo authorizationor premarket approval. We will incur substantial costs and delays associated with complying with the new rule.

We believe our Epi+Gen CHD™ and PrecisionCHD™tests are LDTs. The FDA generally considers an LDT to be a test that is designed, manufactured,and used within a single laboratory that is certified under CLIA and meets the regulatory requirements under CLIA to perform high complexitytesting

The FDA has historically taken the positionthat it has the authority to regulate LDTs as in-vitro diagnostics (“IVDs”) under the Federal Food, Drug, and Cosmetic Act(“FDC Act”), although it has generally exercised enforcement discretion with regard to LDTs. This means that even though theFDA believes it can impose regulatory requirements on LDTs, such as requirementsto obtain premarket approval, de novo authorization or clearance of LDTs, it has generally chosen not to enforce those requirements.

OnMay 6, 2024, the FDA published a final rule amending the definition of an IVD device to include IVDs manufactured by a clinical laboratory.The final rule also announced the FDA’s intention to phase out its general enforcement discretion policy. On May 29, 2024,the American Clinical Laboratory Association filed a lawsuit against FDA in the Eastern District of Texas challenging the FDA’sagency authority to regulate LDTs. On August 19, 2024, the Association for Molecular Pathology filed a separate lawsuit in challengingFDA’s authority the Southern District of Texas. These lawsuits have been consolidated and briefing is expected to be completed bythe end of 2024.The ultimate success of these lawsuits, or any future lawsuits that may be brought against the FDA challenging the LDTrule, is uncertain. It is also unclear whether a court would delay the implementation of the final rule while the litigation is ongoing,which means we may need to initiate steps to comply with the final rule even if it is ultimately overturned. Unless the rule is overturnedby a court or Congress, the medical device requirements for most LDTs will be phased in beginning on May 6, 2025.

The requirements established in the Final Ruleinclude premarket authorization for some LDTs (510(k) clearance, de novo authorization or premarket approval) performed by a laboratory,and postmarket registration and listing, medical device reporting, correction, removal, and recall, complaint handling, labeling, investigationaldevice, and quality system requirements. Certain categories of LDTs will be subject to enforcement discretion with respect to some orall of these requirements. For example, FDA will apply enforcement discretion to currently marketed LDTs that were first offered priorto May 6, 2024, with respect to most quality system requirements and the requirement for premarket authorization if they are not modifiedor modified in only limited ways. Laboratories performing these tests are subject to other requirements, including the requirement tosubmit the labeling for the LDT to FDA for review, which could be burdensome and expensive. FDA will similarly exercise enforcement discretionwith respect to premarket clearance, de novo classification, or premarket approval requirements for LDTs approved by the New York StateClinical Laboratory Evaluation Program.

Compliance with these additional regulatory requirementswill be time-consuming and expensive. If we are required to obtain premarket notification, de novo authorization or premarket approvalfor our existing tests, or for any future tests we may develop, we may be required to successfully complete analytical, pre-clinical and/orclinical studies beyond the studies we have already performed or planned to perform for our LDTs. These studies may be extensive and costlyand may take a substantial period of time to complete. Any such studies may fail to generate data that meet the FDA’s requirements.The studies may also not be conducted in a manner that meets the FDA’s requirements, and therefore may not support the marketingapplication. There can be no assurance that the submission of such an application will result in a timely response by the FDA or a favorableoutcome that will allow the test to be marketed. In addition, we may be forced to stop selling our tests or we may be required to modifyclaims for or make other changes to our tests while we work to obtain FDA clearance approval or de novo authorization. Our business maybe adversely affected while such review is ongoing and if we are ultimately unable to obtain premarket clearance. de novo authorizationor premarket approval.

Variousbills have been introduced in Congress seeking to substantially revamp the regulation of both LDTs and IVDs, but no legislationhas been enacted thus far.

If the FDA were to begin actively regulating our tests, we couldincur substantial costs and delays associated with trying to obtain premarket clearance or approval and incur costs associated with complyingwith post-market controls.

Wecannot assure investors that any of our tests for which we decide to pursue or are required to obtain premarket clearance, approval orde novo authorization by the FDA will be cleared, approved or authorized on a timely basis, if at all. In addition, if a test has beencleared, approved or authorized, certain kinds of changes that we may make, e.g., to improve the test, or because of issues withsuppliers of the components of the test or modification by a supplier to a component upon which our test approval relies, may result inthe need for the test to obtain new clearance, approval or authorization from the FDA before we can implement them, which couldincrease the time and expense involved in implementing such changes commercially. Ongoing compliance with FDA regulations, such as theQuality System Regulation, labeling requirements, Medical Device Reports, and recall reporting, would increase the cost of conductingour business and subject us to heightened regulation by the FDA. We will be subject to periodic inspection by the FDA to ascertain whetherour facility does comply with applicable requirements. The penalties for failure to comply with these and other requirements may includeWarning Letters, product seizure, injunctions, civil penalties, criminal penalties, mandatory customer notification, and recalls, anyof which may adversely impact our business and results of operations.

Furthermore, the FDA or the Federal Trade Commission(“FTC”), as well as state consumer protection agencies and competitors, may object to the materials and methods we use topromote the use of our current tests or other LDTs we may develop in thefuture, including with respect to the product claims in our promotional materials, and may initiate enforcement actions against us. Enforcementactions by these agencies may include, among others, injunctions, civil penalties, and equitable monetary relief.

If our products do not receive adequate coverage and reimbursementfrom third-party payors, our ability to expand access to our tests beyond the initial sales channels will be limited and our overall commercialsuccess will be limited.

We currently do not have broad-based coverageand reimbursement for the Epi+Gen CHD™ and PrecisionCHD™ tests. However, our strategy is to expand access to our tests bypursuing 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 theUnited States and similar programs in other countries, for the types of risk assessment and detection tests we perform can be limitedand uncertain. Healthcare providers may not order our products unless third-partypayors cover and provide adequate reimbursement for a substantial portion of the price of the products. If we are not able to obtain adequatecoverage and an acceptable level of reimbursement for our products from third-party payors, there could be a greater co-insurance or co-paymentobligation 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 collectionof payment.

Medicare is the single largest U.S. payor anda particularly important payor for many cardiac-related laboratory services, given the demographics of the Medicare population. Generally,traditional Medicare fee-for-service will not cover screening tests that are performed in the absence of signs, symptoms, complaints,personal history of disease, or injury except when there is a statutory provision that explicitly covers the test. Epi+Gen CHD™could be considered a screening test under Medicare and, accordingly, may not be eligible for traditional Medicare fee-for-service coverageand reimbursement unless we pursue substantial additional measures, which would require significant investments, and may ultimately beunsuccessful or may take several years to achieve.

If eligible for reimbursement, laboratory testssuch 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. Weand payors must use those coding systems to bill and pay for our diagnostictests, 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 CMScreates 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 underthe 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-reportedprivate payor rates are used to establish Medicare payment rates for tests reimbursed via the CLFS. The new methodology implements Section216 of the Protecting Access to Medicare Act of 2014 (“PAMA”) and requires laboratories that meet certain requirements relatedto volume and type of Medicare revenues to report to CMS their private payor payment rates for each test they perform, the volume of testspaid at each rate, and the HCPCS code associated with the test. CMS uses the reported information to set the Medicare payment rate foreach test at the weighted median private payor rate. The full impact of the PAMA rate-setting methodology and its applicability to ourproducts remains uncertain at this time.

Coverage and reimbursement by a third-partypayor may depend on a number of factors, including a payor’s determination that a product is appropriate, medically necessary, andcost-effective. Each payor will make its own decision as to whether to establisha policy or enter into a contract to cover our products and the amount it will reimburse for such products. Obtaining approvals from third-partypayors to cover our products and establishing adequate coding recognition and reimbursement levels is an unpredictable, challenging, time-consuming,and costly process, and we may never be successful. If third-party payors do not provide adequate coverage and reimbursement for our products,our ability to succeed commercially will be limited.

Evenif we establish relationships with payors to provide our products at negotiated rates, such agreements would not obligate any healthcareproviders to order our products or guarantee that we would receive reimbursement for our products from these or any other payors at adequatelevels. Thus, these payor relationships, or any similar relationships, may not result in acceptable levels of coverage and reimbursementfor our products or meaningful increases in the number of billable tests we sell to healthcare providers. We believe it may take at leastseveral years to achieve coverage and adequate reimbursement with a majority of third-party payors, including with those payors offeringnegotiated rates. In addition, we cannot predict whether, under what circumstances, or at what payment levels payors will cover and reimbursefor our products. We do not expect Epi+Gen CHD™ or PrecisionCHD™ to have Medicare or other third-party coverage or reimbursementin the near term. However, if we fail to establish and maintain broad-based coverage and reimbursement for our products, our ability toexpand access to our products, generate increased revenue, and grow our test volume and customer base will be limited, and our overallcommercial success will be limited.

Our products may fail to achieve the degree of market acceptancenecessary for commercial success.

The failure of our products, once introduced,to be listed in physician guidelines or of our studies to produce favorable results or to be published in peer-reviewed journals couldlimit the adoption of our products. In addition, healthcare providers and third-party payors, including Medicare, may rely on physicianguidelines issued by industry groups, medical societies, and other key organizations, before utilizing or reimbursing the cost of anydiagnostic or screening test. Although we have published a study showingthe Epi+Gen CHD™ and PrecisionCHD™ tests are associated with cost saving, it is not yet, and may never be, listed in any suchguidelines.

Further, if our products or the technology underlyingthem do not receive sufficient favorable exposure in peer-reviewed publications, the rate of physician and market acceptance of our productsand positive reimbursement coverage decisions for our products could be negatively affected. The publication of clinical data in peer-reviewedjournals is an important step in commercializing and obtaining reimbursementfor products, such as Epi+Gen CHD™ and PrecisionCHD™, and our inability to control when, if ever, results are publishedmay delay or limit our ability to derive sufficient revenues from any product that is developed using data from a clinical study.

Failure to achieve broad market acceptance ofour products, including Epi+Gen CHD™ and PrecisionCHD™, would materially harm our business,financial condition, and results of operations.

Risks Related to Customer Privacy, Cybersecurity and Data

Our use and disclosure of personally identifiable information,including health information, is subject to federal and state privacy and security regulations, and our failure to comply with those regulationsor to adequately secure the information we hold could result in significant liability or reputational harm and, in turn, a material adverseeffect on our customer base and revenue.

Numerous state and federal laws and regulationsgovern the collection, dissemination, use, privacy, confidentiality, security, availability and integrity of Personally Identifiable Information(“PII”), including protected health information. These laws and regulations include the Health Insurance Portability and AccountabilityAct of 1996 (“HIPAA”). HIPAA establishes a set of basic national privacy and security standards for the protection of protectedhealth information, (“PHI”), by health plans, healthcare clearinghouses and certain healthcare providers, referred to as coveredentities, and the business associates with whom such covered entities contract for services, which includes Cardio.

HIPAA requires healthcare providers like Cardioto develop and maintain policies and procedures with respect to PHI that is used or disclosed, including the adoption of administrative,physical and technical safeguards to protect such information. HIPAA also implemented the use of standard transaction code sets and standardidentifiers that covered entities must use when submitting or receiving certain electronic healthcare transactions, including activitiesassociated with the billing and collection of healthcare claims.

HIPAA imposes mandatory penalties for certainviolations. Penalties for violations of HIPAA and its implementing regulations start at $100 per violation and are not to exceed $50,000per violation, subject to a cap of $1.5 million for violations of the same standard in a single calendar year. However, a singlebreach incident can result in violations of multiple standards. HIPAA also authorizes state attorneys general to file suit on behalf oftheir residents. Courts will be able to award damages, costs and attorneys’ fees related to violations of HIPAA in such cases. WhileHIPAA does not create a private right of action allowing individuals to sue us in civil court for violations of HIPAA, its standards havebeen used as the basis for duty of care in state civil suits such as those for negligence or recklessness in the misuse or breach of PHI.

In addition, HIPAA mandates that the Secretaryof Health and Human Services, or HHS, conduct periodic compliance audits of HIPAA-covered entities or business associates for compliancewith the HIPAA Privacy and Security Standards. It also tasks HHS with establishing a methodology whereby harmed individuals who were thevictims of breaches of unsecured PHI may receive a percentage of the Civil Monetary Penalty fine paid by the violator.

HIPAA further requires that patients be notifiedof any unauthorized acquisition, access, use or disclosure of their unsecured PHI that compromises the privacy or security of such information,with certain exceptions related to unintentional or inadvertent use or disclosure by employees or authorized individuals. HIPAA specifiesthat such notifications must be made “without unreasonable delay and in no case later than 60 calendar days after discovery of thebreach.” If a breach affects 500 patients or more, it must be reported to HHS without unreasonable delay, and HHS will post thename of the breaching entity on its public web site. Breaches affecting 500 patients or more in the same state or jurisdiction must alsobe reported to the local media. If a breach involves fewer than 500 people, the covered entity must record it in a log and notify HHSat least annually.

Numerous other federal and state laws protectthe confidentiality, privacy, availability, integrity and security of personally identifiable information, or PII, including PHI. Theselaws in many cases are more restrictive than, and may not be preempted by, the HIPAA rules and may be subject to varying interpretationsby courts and government agencies, creating complex compliance issues for us, and our customers and potentially exposing us to additionalexpense, adverse publicity and liability.

Newhealth information standards, whether implemented pursuant to HIPAA, congressional action or otherwise, could have a significant effecton the manner in which we must handle healthcare related data, and the cost of complying with standards could be significant. Ifwe do not comply with existing or new laws and regulations related to PHI, it could be subject to criminal or civil sanctions.

Because of the extreme sensitivity of the PIIthat we store and transmit, the security features of our technology platform are very important. If our security measures, some of whichare managed by third parties, are breached or fail, unauthorized persons may be able to obtain access to sensitive customer and patientdata, including HIPAA-regulated PHI. As a result, our reputation could be severely damaged, adversely affecting customer and patient confidence.Customers may curtail their use of or stop using our services or our customer base could decrease, which would cause our business to suffer.In addition, we could face litigation, damages for contract breach, penalties and regulatory actions for violation of HIPAA and otherapplicable laws or regulations and significant costs for remediation, notification to individuals and for measures to prevent future occurrences.Any potential security breach could also result in increased costs associated with liability for stolen assets or information, repairingsystem damage that may have been caused by such breaches, incentives offered tocustomers or other business partners in an effort to maintain our business relationships after a breach and implementing measures to preventfuture occurrences, including organizational changes, deploying additional personnel and protection technologies, training employees andengaging third-party experts and consultants. While we maintain insurance covering certain security and privacy damages and claims expenses,we may not carry insurance or maintain coverage sufficient to compensate for all liability and in any event, insurance coverage wouldnot address the reputational damage that could result from a security incident.

Weoutsource important aspects of the storage and transmission of customer and customer personnel information, and thus rely on thirdparties to manage functions that have material cyber-security risks. We attempt to address these risks by requiring outsourcing subcontractorswho handle customer and customer personnel information to sign business associate agreements contractually requiring those subcontractorsto adequately safeguard personal health data to the same extent that applies to us and in some cases by requiring such outsourcing subcontractorsto undergo third-party security examinations. In addition, we periodically hire third-party security experts to assess and test our securityposture. However, we cannot assure investors that these contractual measures and other safeguards will adequately protect us from therisks associated with the storage and transmission of client and patient’s proprietary and protected health information.

In addition, U.S. states are adopting new lawsor amending existing laws and regulations, requiring attention to frequently changing regulatory requirements applicable to data relatedto individuals. For example, California has enacted the California Consumer Privacy Act (“CCPA”). The CCPA gives Californiaresidents expanded rights to access and delete their personal information, opt out of certain personal information sharing and receivedetailed information about how their personal information is used by requiring covered companies to provide new disclosures to Californiaconsumers (as that term is broadly defined and which can include any of our current or future employees who may be California residentsor any other California residents whose data we collect or process) and provide such residents new ways to opt out of certain sales ofpersonal information. The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches thatis expected to increase data breach litigation. As we expand our operations and customer base, the CCPA may increase our compliance costsand potential liability. Additionally, a new privacy law, the California Privacy Rights Act (“CPRA”), was approved by Californiavoters in the election in November 2020. The CPRA created obligations relating to consumer data beginning on January 1, 2022, withimplementing regulations originally required to be adopted by July 1, 2022, but which remain in proposed format as of December 6,2022. Enforcement is to begin July 1, 2023, unless that deadline is extended due to the delay in the adoption of the final regulations.The CPRA modifies the CCPA significantly, potentially resulting in further uncertainty and requiring us to incur additional costs andexpenses in an effort to comply. Additionally, other U.S. states continue to propose, and in certain cases adopt, privacy-focused legislationsuch as Colorado, Virginia, Utah and Connecticut. Aspects of these state laws remain unclear, resulting in further uncertainty and potentiallyrequiring us to modify our data practices and policies and to incur substantial additional costs and expenses in an effort to comply. 

Privacy and data security laws and regulations could requireus to make changes to our business, impose additional costs on us and reduce the demand for our tests, other products and services.

Our business model contemplates that we willstore, process and transmit both public data and our customers’ and customer personnel’s private data. Our customers may storeand/or transmit a significant amount of personal or identifying information through our platform. Privacy and data security have becomesignificant issues in the United States and in other jurisdictions wherewe may offer our solutions. The regulatory framework relating to privacy and data security issues worldwide is evolving rapidly and islikely to remain uncertain for the foreseeable future. Federal, state and foreign government bodies and agencies have in the past adopted,or may in the future adopt, laws and regulations regarding the collection, use, processing, storage and disclosure of personal or identifyinginformation obtained from customers and other individuals. In addition to government regulation, privacy advocates and industry groupsmay propose various self-regulatory standards that may legally or contractually apply to our business. Because the interpretation andapplication of many privacy and data security laws, regulations and applicable industry standards are uncertain, it is possible that theselaws, regulations and standards may be interpreted and applied in a manner inconsistent with our existing privacy and data managementpractices. As we expand into new jurisdictions or verticals, we will need to understand and comply with various new requirements applicablein those jurisdictions or verticals.

To the extent applicable to our business orthe businesses of our customers, these laws, regulations and industry standards could have negative effects on our business, includingby increasing our costs and operating expenses, and delaying or impeding our deployment of new core functionality and products. Compliancewith these laws, regulations and industry standards requires significant management time and attention, and failure to comply could resultin negative publicity, subject us to fines or penalties or result in demands that we modify or cease existingbusiness practices. In addition, the costs of compliance with, and other burdens imposed by, such laws, regulations and industry standardsmay adversely affect our customers’ ability or desire to collect, use, process and store personal information using our solutions,which could reduce overall demand for them. Even the perception of privacy and data security concerns, whether or not valid, may inhibitmarket acceptance of our solutions in certain verticals. Furthermore, privacy and data security concerns may cause our customers’customers, vendors, employees and other industry participants to resist providing the personal information necessary to allow our customersto use our applications effectively. Any of these outcomes could adversely affect our business and operating results.

Risks Related to Our Securities

Our stock price may be volatile and may decline regardless ofour operating performance.

The market price of our common stock may fluctuatesignificantly in response to numerous factors and may continue to fluctuate for these and other reasons, many of which are beyond ourcontrol, including:

	•	actual or anticipated fluctuations in our revenue and results of operations;
	•	failure of securities analysts to maintain coverage of the Company, changes in financial estimates or ratings by any securities analysts who follow us or our failure to meet these estimates or the expectations of investors;
	•	announcements by us or our competitors of significant technical innovations, acquisitions, strategic partnerships, joint ventures, results of operations or capital commitments;
	•	changes in operating performance and stock market valuations of other healthcare-related companies generally, or those in the medical diagnostics industry in particular;
	•	price and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole;
	•	trading volume of our common stock;
	•	the inclusion, exclusion or removal of our common stock from any indices;
	•	changes in the Board or management;
	•	transactions in our common stock by directors, officers, affiliates and other major investors;
	•	lawsuits threatened or filed against us;
	•	changes in laws or regulations applicable to our business;
	•	changes in our capital structure, such as future issuances of debt or equity securities;
	•	short sales, hedging and other derivative transactions involving our capital stock;
	•	general economic conditions in the United States;
	•	pandemics or other public health crises, including, but not limited to, the COVID-19 pandemic (including additional variants such as the Omicron variant);
	•	other events or factors, including those resulting from war, incidents of terrorism or responses to these events; and
	•	the other factors described in this “Risk Factors” section.

From time to time, the stock market experiencesperiods of extreme price and volume fluctuations. The market prices of securities of companies may experience fluctuations that oftenare unrelated or disproportionate to their operating results. In the past, stockholders have sometimes instituted securities class actionlitigation against companies following periods of volatility in the market price of their securities. Any similar litigation against uscould result in substantial costs, divert management’s attention and resources, and harm its business, financial condition, andresults of operations.

An active trading market for our common stock may not be createdor sustained.

We have listed our common stock and public warrantson The Nasdaq Capital Market under the symbols “CDIO” and “CDIOW,” respectively. We cannot assure you that anactive trading market for its common stock will be created or sustained. Accordingly, we cannot assure you of the liquidity of any tradingmarket, your ability to sell your shares of our common stock when desired or the prices that you may obtain for your shares.

Future sales of common stock in the public market could causeour share price to decline significantly, even if our business is doing well.

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 initial publicoffering and a substantial number of shares of common stock and shares underlying warrants issued in private placements we completed priorto our Business Combination; (ii) up to $17 million in securities on a shelf registration statement that we are currently using for anat-the-market offering of up to $17 million; and (iii) registration statements on Form S-8 covering our 2022 Equity Incentive Plan. Publicsales of securities can continue to be made under these registration statements. In addition, all of the shares we issued in the BusinessCombination to holders of Legacy Cardio securities, as well as shares sold in a private placement in February 2024 are available for resaleunder Rule 144 without restriction, subject to certain limitations that apply to our affiliates.

The total number of shares available for resaleunder these registration statements and/or under Rule 144 represents substantially all of our outstanding shares. The resale, or expectedor potential resale, of a substantial number of our shares of common stock in the public market could adversely affect the market pricefor our shares of common stock and make it more difficult for investors to sell their shares of common stock at times and prices thatthey feel are appropriate. In particular, we expect that, because there are a substantial number of shares registered pursuant to variousregistration statements, the applicable selling securityholders can continue to offer such covered securities for a significant periodof time, the precise duration of which cannot be predicted. Accordingly, the adverse market and price pressures resulting from an offeringpursuant to a registration statement or Rule 144 may continue for an extended period of time.

Sales of common stock pursuant to these registrationstatements or pursuant to Rule 144 may make it more difficult for us to sell equity securities in the future at a time and at a pricethat we deem appropriate. These sales also could cause the trading price of our common stock to fall and make it more difficult for investorsto sell shares of our common stock at a time and price that they deem appropriate.

A significant number of shares of our common stock are subjectto issuance upon exercise of outstanding warrants and options, which upon such exercise, may result in dilution to our security holders.

We have outstanding:

	•	3,868,970 options, exercisable at prices between $0.22 and $3.90 per share, subject to adjustment for stock splits, reverse stock splits and other similar events of recapitalization; and
	•	8,528,766 public and private warrants, exercisable at prices ranging from $1.78 and $11.50 per share, subject to adjustment for stock splits, reverse stock splits and other similar events of recapitalization.

Other than recently-granted options, the outstandingoptions and warrants are significantly out of the money, and we would not expect that holders would exercise those securities. However,none of these securities expires in the near future, including the options, all of which have 10-year terms, expiring no earlier thanMay 2032. Therefore, if the trading price of our common stock increases substantially during the respective terms of these securities,holders of our common stock could experience significant dilution.

We may issue additional shares of our common stock or other equitysecurities without your approval, which would dilute your ownership interests and may depress the market price of our common stock.

Generally, our Board of Directors has discretionto sell securities without stockholder approval, subject to certain limitations imposed on it by Nasdaq, which has rules requiring stockholderapproval under certain circumstances. Our Board of Directors currently has several ways in which it may issue additional equity securitieswithout stockholder approval.

We may issue additional shares of our commonstock or other equity securities of equal or senior rank in the future in connection with, among other things, future acquisitions orinvestments without stockholder approval, in a number of circumstances. The number of shares of our common stock issued in connectionwith an investment or acquisition could constitute a material portion of our then-outstanding shares common stock, provided the amountdoes not exceed Nasdaq restrictions triggering stockholder approval.

At our 2023 annual meeting of stockholders,our stockholders gave us approval to issue up to $10.0 million (up to 50.0 million shares, subject to adjustment) of common stock ina transaction or series of transactions not involving a public offering. That authorization expired, but our Board of Directors soughtstockholder approval at our 2024 annual meeting for a new three-month period together with the potential to obtain Nasdaq’s consent,which we cannot guarantee, for an additional three-month period thereafter, resulting in a possible six-month period to conduct a financingwithin the parameters of the stockholder authority, if granted. That approval was obtained. While we do not have current specific plansin this regard, depending on our then-current stock price and the size of any such investment or acquisition, our stockholders couldexperience additional substantial dilution.

The 2022 Equity Incentive Plan providesfor annual automatic increases in the number of shares reserved for future grants and awards thereunder. Pursuant to this“evergreen” provision, our Board of Directors may increase the size of the 2022 Equity Incentive Plan in an amount equalto the lesser of (i) 7% of the total number of shares of common stock outstanding on the December 31st immediately preceding theapplicable evergreen date and (ii) such lesser number of shares of common stock as determined to be appropriate by the CompensationCommittee in its sole discretion. In January 2024, the Board increased the size of the 2022 Equity Incentive Plan by 1,060,458shares. As of November 13, 2024, an aggregate of 78,437 shares of common stock are available for future grants and awardsunder the 2022 Equity Incentive Plan, and the Board may increase the size of the Plan in January 2025 and subsequent yearsthereafter without further stockholder approval. If shares of common stock are issued under the 2022 Equity Incentive Plan, ourstockholders may experience additional dilution, which could cause the price of our common stock to fall.

The issuance of additional shares of commonstock or other equity securities of equal or senior rank would have the following effects:

	•	our existing stockholders’ proportionate ownership interest in the Company will decrease;
	•	the amount of cash available per share, including for payment of dividends (if any) in the future, may decrease;
	•	the relative voting strength of each previously outstanding share of common stock may be diminished; and
	•	the market price of our shares of common stock may decline.

There can be no assurance that we will be able to comply withthe continued listing standards of Nasdaq. 

Our common stock is listed on The Nasdaq CapitalMarket ("Nasdaq”). In order to maintain that listing, we must satisfy minimum financial and other requirements including, withoutlimitation, a requirement that the closing bid price of our common stock be at least $1.00 per share. On June 3, 2024, we received a letterfrom Nasdaq indicating that, for the previous 30 consecutive business days, the bid price for our common stock had closed below the minimum$1.00 per share requirement for continued listing on Nasdaq under Nasdaq Listing Rule 5550(a)(2). As reported on our Current Report onForm 8-K dated June 7, 2024, we have an initial period of 180 calendar days, or until December 2, 2024 to regain compliance. Under certaincircumstances, we may be granted an additional 180 days, or until May 29, 2025, to regain compliance. We anticipate seeking Nasdaq’sgrant of the additional 180-day extension of the compliance deadline before December 2, 2024. If we fail to regain compliance with theminimum bid requirement within the cure period (or extended cure period, if made available) or if we fail to continue to meet all applicablecontinued listing requirements for Nasdaq in the future, Nasdaq could delist our securities.

If Nasdaq delists our shares of common stockand public warrants for failure to meet the listing standards, we and our securityholders couldface significant material adverse consequences including: 

·

a limited availability of market quotations for our securities;

 

·

reduced liquidity for our securities;

 

 

 

·

a determination that our common stock is a “penny stock,” which will require brokers trading in our common stock to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for shares of our common stock;

 

·

a limited amount of analyst coverage; and

 

·

a decreased ability to issue additional securities or obtain additional financing in the future.

Because there are no current plans to pay cash dividends on ourcommon stock for the foreseeable future, you may not receive any return on investment unless you sell your common stock at a price greaterthan what you paid for it.

We intend to retain future earnings, if any,for future operations, expansion, and product development, and there are no current plans to pay any cash dividends for the foreseeablefuture. The declaration, amount and payment of any future dividends on shares of our common stock will be at the sole discretion of ourBoard. Our Board may take into account general and economic conditions, our financial condition and results of operations, our availablecash and current and anticipated cash needs, capital requirements, contractual, legal, tax and regulatory restrictions, implications ofthe payment of dividends by us to our stockholders and to us, and such other factors as the Board may deem relevant. As a result, youmay not receive any return on an investment in our common stock unless you sell your common stock for a price greater than that whichyou paid for it.

Exercise of our warrants is dependent upon the trading priceof our common stock. Because of the disparity between the current stock price and the respective warrant exercise prices, the warrantsmay never be in the money and may expire worthless.

The exercise prices of our currently outstandingwarrants range from a high of $11.50 to a low of $1.78 per share. We believe the likelihood that warrant holders will exercise the warrants,and therefore, the amount of cash proceeds that we would receive, is dependent upon the trading price of our common stock, the last reportedsales price for which was $0.2442 per share on November 20, 2024. If the trading price for our common stock is less than the applicableexercise price of our warrants, we believe holders of those warrants will be unlikely to exercise their warrants. There is no guaranteethat the warrants will be in the money prior to their expiration, and, as such, the warrants may expire worthless, and we may receiveno proceeds from the exercise of the warrants.

You may only be able to exercise your public warrants or sponsorwarrants on a “cashless basis” under certain circumstances, and if you do so, you will receive fewer common stock from suchexercise than if you were to exercise such warrants for cash.

The warrant agreement provides that in the followingcircumstances holders of public warrants and sponsor warrants who seek to exercise their warrants will not be permitted to do so for cashand will, instead, be required to do so on a cashless basis in accordance with Section 3(a)(9) of the Securities Act if the common stockissuable upon exercise of the warrants are not registered under the Securities Act in accordance with the terms of the warrant agreement.If you exercise your public warrants or sponsor warrants on a cashless basis, you would pay the warrant exercise price by surrenderingall of the warrants for that number of common stock equal to the quotient obtained by dividing (x) the product of the number of commonstock underlying the warrants, multiplied by the excess of the “fair market value” of our common stock (as defined in thenext sentence) over the exercise price of the warrants by (y) the fair market value. The “fair market value” is the averagereported last sale price of the common stock for the five trading days ending on the day prior to the date of exercise. If an exemptionfrom registration is not available, holders will not be able to exercise their public warrants or the sponsor warrants on a cashless basis.In the event of a cashless exercise, you would receive fewer shares of common stock from such exercise than if you were to exercise suchwarrants for cash.

We may redeem the public warrants and the sponsor warrants priorto their exercise at a time that is disadvantageous to you, as a warrant holder, thereby making the public warrants or sponsor warrantsworthless.

We have the ability to redeem outstanding publicwarrants 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 per share (as adjusted for stock splits, stockdividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 trading-day period ending on thethird trading day prior to the date on which we give proper notice of such redemption and provided certain other conditions are met. Tradingprices of our common stock have not historically exceeded the $18.00 per share redemption threshold. If and when the public warrants andsponsor warrants become redeemable, we may not exercise our redemption right unless there is a current registration statement in effectwith respect to the shares of common stock underlying the Warrants. While we registered the common stock issuable upon the exercise ofthe public warrants and sponsor warrants on a registration statement that was first declared effective in January 2023 and was broughtcurrent most recently by a post-effective amendment that was declared effective in September 2024, it must remain current and effectiveby future filings. There can be no assurance that that registration statement will still be effective at the time that we would like toexercise our redemption rights.

In the event we have determined to redeem thepublic warrants and the sponsor warrants, holders would be notified of such redemption as described in the Warrant Agreement. Specifically,we would be required to fix a date for the redemption (the “Redemption Date”). Notice of redemption would be mailed by firstclass mail, postage prepaid, by the Company not less than 30 days prior to the Redemption Date to the registered holders of the publicwarrants and the sponsor warrants to be redeemed at their last addresses as they appear on the registration books. In addition, beneficialowners of the redeemable public warrants and the sponsor warrants will be notified of such redemption via the Company’s postingof the redemption notice to DTC. Redemption of the public warrants and the sponsor warrants could force you (i) to exercise yourpublic warrants and the sponsor warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so,(ii) to sell your public warrants and the sponsor warrants at the then-current market price when you might otherwise wish tohold your public warrants and the sponsor warrants or (iii) to accept the nominal redemption price which, at the time the outstandingpublic warrants and the sponsor warrants are called for redemption, is likely to be substantially less than the market value of your publicwarrants and the sponsor warrants. No private placement warrants are redeemable.

The Warrant Agreement designates the courts of the State of NewYork or the United States District Court for the Southern District of New York as the sole and exclusive forum for certain types of actionsand proceedings that may be initiated by holders of the Warrants, which could limit the ability of warrant holders to obtain a favorablejudicial forum for disputes with our Company.

The Warrant Agreement provides that, subjectto applicable law, (i) any action, proceeding or claim against us arising out of or relating in any way to the Warrant Agreement,including under the Securities Act, will be brought and enforced in the courts of the State of New York or the United States DistrictCourt for the Southern District of New York, and (ii) that we irrevocably submit to such jurisdiction, which jurisdiction shall bethe exclusive forum for any such action, proceeding or claim. We will waive any objection to such exclusive jurisdiction and that suchcourts represent an inconvenient forum. Notwithstanding the foregoing, these provisions of the Warrant Agreement will not apply to suitsbrought to enforce any liability or duty created by the Exchange Act or any other claim for which the federal district courts of the UnitedStates of America are the sole and exclusive forum. 

Any person or entity purchasing or otherwiseacquiring any interest in warrants shall be deemed to have notice of and to have consented to the forum provisions in the Warrant Agreement.If any action, the subject matter of which is within the scope the forum provisions of the Warrant Agreement, is filed in a court otherthan a court of the State of New York or the United States District Court for the Southern District of New York (a “foreign action”)in the name of any holder of warrants, such holder shall be deemed to have consented to: (x) the personal jurisdiction of the stateand federal courts located in the State of New York in connection with any action brought in any such court to enforce the forum provisions(an “enforcement action”), and (y) having service of process made upon such warrant holder in any such enforcement actionby service upon such warrant holder’s counsel in the foreign action as agent for such warrant holder.

This choice-of-forum provision may limita warrant holder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us, which may discouragesuch lawsuits. Alternatively, if a court were to find this provision of the Warrant Agreement inapplicable or unenforceable with respectto one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such mattersin other jurisdictions, which could materially and adversely affect our business, financial condition and results of operations and resultin a diversion of the time and resources of our management and board of directors. 

If securities or industry analysts either do not publish researchabout us or publish inaccurate or unfavorable research about us, our business, or our market, or if they change their recommendationsregarding our common stock adversely, the trading price or trading volume of our common stock could decline.

The trading market for our common stock is influencedin part by the research and reports that securities or industry analysts may publish about us, our business, our market, or our competitors.If one or more of the analysts initiate research with an unfavorable rating or downgrade our common stock, provide a more favorable recommendationabout our competitors, or publish inaccurate or unfavorable research about our business, the trading price of our common stock would likelydecline. In addition, we currently expect that securities research analysts will establish and publish their own periodic projectionsfor our business. These projections may vary widely and may not accurately predict the results we actually achieve. Our stock price maydecline if our actual results do not match the projections of these securities research analysts. Furthermore, if no analysts commencecoverage of our Company, the trading price and volume for our common stock could be adversely affected. If any analyst who may cover uswere to cease coverage of the Company or fail to regularly publish reports on us, we could lose visibility in the financial markets, whichin turn could cause the trading price or trading volume of our common stock to decline.

Risks Related to Being a Public Company

Because we became a publicly traded company by means other thana traditional underwritten initial public offering, our stockholders may face additional risks and uncertainties.

Because we became a publicly traded companyby means of consummating the Business Combination rather than by means of a traditional underwritten initial public offering, there isno independent third-party underwriter selling the shares of our common stock, and, accordingly, our stockholders do not have the benefitof independent review and investigation of the type normally performed by an unaffiliated, independent underwriter in a public securitiesoffering. Due diligence reviews typically include an independent investigation of the background of the company, any advisors and theirrespective affiliates, review of the offering documents and independent analysis of the plan of business and any underlying financialassumptions. Although Mana performed a due diligence review and investigation of Legacy Cardio in connection with the Business Combination,the lack of an independent due diligence review and investigation increases the risk of investment in us because Mana’s due diligencereview and investigation may not have uncovered facts that would be important to a potential investor.

In addition, because we did not become a publiclytraded company by means of an traditional underwritten initial public offering, security or industry analysts may not provide, or be lesslikely to provide, coverage of us. Investment banks may also be less likely to agree to underwrite secondary offerings on behalf of usthan they might otherwise be if we became a publicly traded company by means of a traditional underwritten initial public offering becausethey may be less familiar with us as a result of more limited coverage by analysts and the media. The failure to receive research coverageor support in the market for our common stock could have an adverse effect on our ability to develop a liquid market for our common stock.

Financial reporting obligations of being a public company inthe United States are expensive and time-consuming, and our management will be required to devote substantial time to compliance matters.

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

If we fail to comply with the rules under Sarbanes-Oxley relatedto accounting controls and procedures in the future, or, if we discover material weaknesses and other deficiencies in our internal controland accounting procedures, our stock price could decline significantly and raising capital could be more difficult.

Section 404 of Sarbanes-Oxley requires annualmanagement assessments of the effectiveness of our internal control over financial reporting. If we fail to comply with the rules underSarbanes-Oxley related to disclosure controls and procedures in the future, or, if we discover material weaknesses and other deficienciesin our internal control and accounting procedures, our stock price could decline significantly and raising capital could be more difficult.If material weaknesses or significant deficiencies are discovered or if we otherwise fail to achieve and maintain the adequacy of ourinternal control, we may not be able to ensure that we can conclude on an ongoing basis that we have effective internal controls overfinancial reporting in accordance with Section 404 of Sarbanes-Oxley. Moreover, effective internal controls are necessary for us to producereliable financial reports and are important to helping prevent financial fraud. If we cannot provide reliable financial reports or preventfraud, our business and operating results could be harmed, investors could lose confidence in our reported financial information, andthe trading price of our common stock could drop significantly.

We haveincurred and will continue to incur additional costs to remediate material weaknesses in our internal control over financial reporting,as described in Item 9A. “Controls and Procedures.” The additional reporting and other obligations imposed by these rulesand regulations will increase legal and financial compliance costs and the costs of related legal, accounting and administrative activities.These increased costs will require us to divert a significant amount of money that could otherwise be used to expand the business andachieve strategic objectives.

We are an “emerging growth company,” and we cannotbe certain that the reduced disclosure requirements applicable to “emerging growth companies” will not make our common stockless attractive to investors.

We are an “emerging growth company,”as defined under the JOBS Act and will continue to be after the Business Combination is completed. For so long as we are an emerging growthcompany, we intend to take advantage of certain exemptions from reporting requirements that are applicable to other public companies thatare not emerging growth companies, including, but not limited to, compliance with the auditor attestation requirements of Section 404of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements,and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any goldenparachute payments not previously approved.

We could be an emerging growth company for upto five years from the end of our most recently completed fiscal year, although we may lose such status earlier, depending on the occurrenceof certain events, including when we have generated total annual gross revenue of at least $1.07 billion or when we are deemed to be a“large accelerated filer” under the Exchange Act, which means that the market value of our common stock that is held by non-affiliatesexceeds $700 million as of December 31st of the prior year, or when we have issued more than $1.0 billion in nonconvertible debt securitiesduring the prior three-year period.

We cannot predict if investors will not findour common stock less attractive or our company less comparable to certain other public companies because we rely on these exemptions.If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock,and our stock price may be more volatile.

Under the JOBS Act, emerging growth companiescan delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standardsapply to private companies. We have irrevocably elected not to avail ourselves of this exemption from new or revised accounting standardsand, therefore, will be subject to the same new or revised accounting standards as other public companies that are not emerging growthcompanies.

As a “smaller reporting company” we are permittedto provide less disclosure than larger public companies which may make our common stock less attractive to investors.

We are currently a “smaller reporting company,”as defined by Rule 12b-2 of the Exchange Act. As a smaller reporting company, we are eligible to take advantage of certain exemptionsfrom various reporting requirements applicable to other public companies. Consequently, it may be more challenging for investors to analyzeour results of operations and financial prospects which may result in less investor confidence. Investors may find our common stock lessattractive as a result of our smaller reporting company status. If some investors find our common stock less attractive, there may bea less active trading market for our common stock and our stock price may be more volatile.

Our management will be required to devote substantial time tomaintaining and improving its internal controls over financial reporting and the requirements of being a public company which may, amongother things, strain our resources, divert management’s attention and affect our ability to accurately report our financial resultsand prevent fraud.

As a privately held company, Legacy Cardio wasnot required to comply with certain corporate governance and financial reporting practices and policies required of a publicly tradedcompany. As a publicly traded company, we incur significant legal, accounting and other expenses that we were not required to incur inthe recent past, particularly after we are no longer an “emerging growth company” as defined under the JOBS Act. Weare subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act and the rules of the Nasdaq Stock Market. The Sarbanes-OxleyAct requires, among other things, that a company maintain effective disclosure controls and procedures (“DCP”) and internalcontrols over financial reporting (“ICFR”). Our management and other personnel have limited experience operating as a publiccompany, which may result in operational inefficiencies or errors, or a failure to improve or maintain effective ICFR and DCP necessaryto ensure timely and accurate reporting of operational and financial results. Our existing management team will need to devote a substantialamount of time to these compliance initiatives and may need to add personnel in areas such as accounting, financial reporting, investorrelations and legal in connection with operations as a public company. Ensuring that we have adequate internal financial and accountingcontrols and procedures in place is a costly and time-consuming effort that needs to be re-evaluated frequently. Our compliance with existingand evolving regulatory requirements will result in increased administrative expenses and a diversion of management’s time and attention.

Pursuantto Sections 302 and 404 of the Sarbanes-Oxley Act (“Section 404”), we are required to furnish certain certificationsand reports by management on our ICFR, which, after we are no longer an emerging growth company and if we become an accelerated or largeaccelerated filer under SEC rules, must be accompanied by an attestation report on ICFR issued by our independent registered public accountingfirm. To achieve compliance with Section 404 within the prescribedperiod, we will be required to document and evaluate our ICFR, which is both costly and challenging. Implementing any appropriate changesto our internal controls may require specific compliance training for our directors, officers and employees, entail substantial coststo modify our existing accounting systems, and take a significant period of time to complete. Such changes may not, however, be effectivein maintaining the adequacy of our ICFR, and any failure to maintain that adequacy, or consequent inability to produce accurate financialstatements on a timely basis, could increase our operating costs and could materially impair our ability to operate our business. Moreover,effective internal controls are necessary for us to produce reliable and timely financial reports and are important to help prevent fraud.Any failure by us to file our periodic reports in a timely manner may cause investors to lose confidence in our reported financial informationand may lead to a decline in the price of our common stock.

In accordance with The Nasdaq Stock Market rules,the majority of the directors of a company that has securities quoted on Nasdaq must be directors that are “independent” underthose rules. The various rules and regulations applicable to public companies make it more difficult and more expensive to maintain directors’and officers’ liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to maintaincoverage. If we are unable to maintain adequate directors’ and officers’ insurance, our ability to recruit and retain qualifiedofficers and directors will be significantly curtailed.

GeneralRisks Affecting Our Company

A pandemic, epidemic or outbreak of an infectious disease inthe United States or worldwide, including the outbreak of the novel strain of coronavirus disease, COVID-19, could adversely affectour business.

If a pandemic, epidemic or outbreak of an infectiousdisease occurs in the United States or worldwide, our business may be adversely affected. If the COVID-19 virus and its potentiallymore contagious variants cause an additional resurgence of infection of COVID-19, or if new variants continue to develop resistance togovernment approved COVID-19 vaccinations, or if an influenza or other pandemic were to occur, our business, results of operations, financialcondition and liquidity could be negatively impacted.

As a result of public health emergencies, weexperienced, and in the future could experience, supply chain disruptions, including shortages, delays and work stoppages among some vendorsand suppliers, travel restrictions and cancellation of events, among other effects, thereby significantly and negatively impacting ouroperations. In addition, our results and financial condition may be adversely affected by future federal or state laws, regulations, orders,or other governmental or regulatory actions addressing public health emergencies such as a COVID-19 or the U.S. health care system, which,if adopted, could result in direct or indirect restrictions to its business, financial condition, results of operations and cash flow.

Changes in accounting standards and subjective assumptions, estimatesand judgments by management related to complex accounting matters could significantly affect our financial results or financial condition.

Generally accepted accounting principles andrelated accounting pronouncements, implementation guidelines and interpretations with regard to a wide range of matters that are relevantto our business, including but not limited to revenue recognition, allowancefor doubtful accounts, content asset amortization policy, valuation of our common stock, stock-based compensation expense and income taxes,are highly complex and involve many subjective assumptions, estimates and judgments. Changes in these rules or their interpretation orchanges in underlying assumptions, estimates or judgments could significantly change or increase volatility of our reported or expectedfinancial performance or financial condition. Refer to Note 3, “Summary of Significant Accounting Policies” to the AuditedFinancial Statements included elsewhere in this prospectus for a description of recent accounting pronouncements.

Delaware law and provisions in our Charter and Bylaws could makea merger, tender offer, or proxy contest difficult, thereby depressing the trading price of its common stock.

Our Charter and Bylaws contain provisions thatcould depress the trading price of our common stock by acting to discourage, delay, or prevent a change of control of the Company or changesin our management that our stockholders may deem advantageous. These provisions include the following:

	•	the right of the board of directors to establish the number of directors and fill any vacancies and newly created directorships;
	•	director removal solely for cause;
	•	“blank check” preferred stock that the Board could use to implement a stockholder rights plan;

 

 

	•	the right of the Board to issue our authorized but unissued common stock and preferred stock without stockholder approval;
	•	no ability of our stockholders to call special meetings of stockholders;
	•	no right of our stockholders to act by written consent, which requires all stockholder actions to be taken at a meeting of our stockholders;
	•	limitations on the liability of, and the provision of indemnification to, our director and officers;
	•	the right of the board of directors to make, alter, or repeal the Bylaws; and
	•	advance notice requirements for nominations for election to the Board or for proposing matters that can be acted upon by stockholders at annual stockholder meetings.

Any provision of the Charter or Bylaws thathas the effect of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium fortheir shares of our common stock, and could also affect the price that some investors are willing to pay for our common stock.

Our Bylaws provide that the Court of Chancery of the State ofDelaware will be the exclusive forum for substantially all disputes between the Company and our stockholders, which could limit our stockholders’ability to obtain a favorable judicial forum for disputes with the Company or our directors, officers or employees.

The Bylaws provide that the Court of Chanceryof the State of Delaware is the exclusive forum for any derivative action or proceeding brought on our behalf, any action asserting abreach of fiduciary duty, any action asserting a claim against us arising pursuant to the DGCL, the Charter or Bylaws or any action assertinga claim against us that is governed by the internal affairs doctrine. These choice of forum provisions may limit a stockholder’sability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employeesand may discourage these types of lawsuits. This provision would not apply to claims brought to enforce a duty or liability created bythe Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. The Bylaws provide further that, tothe fullest extent permitted by law, the federal district courts of the United States will be the exclusive forum for resolving anycomplaint asserting a cause of action arising under the Securities Act. However, Section 22 of the Securities Act providesthat federal and state courts have concurrent jurisdiction over lawsuits brought under the Securities Act or the rules and regulationsthereunder. To the extent the exclusive forum provision restricts the courts in which claims arising under the Securities Act maybe brought, there is uncertainty as to whether a court would enforce such a provision. We note that investors cannot waive compliancewith the federal securities laws and the rules and regulations thereunder. Furthermore, the enforceability of similar choice of forumprovisions in other companies’ certificates of incorporation has been challenged in legal proceedings, and it is possible that acourt could find these types of provisions to be inapplicable or unenforceable. While the Delaware courts have determined that such choiceof forum provisions are facially valid, a stockholder may nevertheless seek to bring a claim in a venue other than those designated inthe exclusive forum provisions, and there can be no assurance that such provisions will be enforced by a court in those other jurisdictions.If a court were to find the exclusive-forum provision contained in the Bylaws to be inapplicable or unenforceable in an action, wemay incur additional costs associated with resolving such action in other jurisdictions, which could harm our business.

Claims for indemnification by our directors and officers mayreduce our available funds to satisfy successful third-party claims against us and may reduce the amount of money available to us.

The organizational documents provide that weindemnify our directors and officers, in each case to the fullest extent permitted by Delaware law. In addition, as permitted by Section145 of the DGCL, the amended and restated bylaws and its indemnification agreements that we have entered into with our directors and officersprovide that:

•

we indemnify our directors and officers for serving us in those capacities or for serving other business enterprises at our request, to the fullest extent permitted by Delaware law. Delaware law provides that a corporation may indemnify such person if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the registrant and, with respect to any criminal proceeding, had no reasonable cause to believe such person’s conduct was unlawful;

 

 

 

	•	we may, in our discretion, indemnify employees and agents in those circumstances where indemnification is permitted by applicable law;
	•	we are required to advance expenses, as incurred, to our directors and officers in connection with defending a proceeding, except that such directors or officers shall undertake to repay such advances if it is ultimately determined that such person is not entitled to indemnification;
	•	we are not obligated pursuant to our bylaws to indemnify a person with respect to proceedings initiated by that person against us or our other indemnities, except with respect to proceedings authorized by our board of directors or brought to enforce a right to indemnification;
	•	the rights conferred in our bylaws are not exclusive, and we are authorized to enter into indemnification agreements with our directors, officers, employees and agents and to obtain insurance to indemnify such persons; and
	•	we may not retroactively amend our bylaw provisions to reduce our indemnification obligations to directors, officers, employees and agents.

We have broad discretion in the use of our existing cash andcash equivalents and may not use them effectively.

Our management will have broad discretion inthe application of our existing cash and cash equivalents, if any, and you will not have the opportunity as part of your investment decisionto assess whether such proceeds are being used appropriately. Because of the number and variability of factors that will determine ouruse of our existing cash and cash equivalents, their ultimate use may vary substantially from their currently intended use. Our Managementmight not apply our cash resources in ways that ultimately increase the value of your investment. The failure by our management to applythese funds effectively could harm our business. Pending their use, we may invest our cash resources in short-term, investment-grade,interest-bearing securities. These investments may not yield a favorable return to our stockholders.

Our Third Amended and Restated Certificate of Incorporation designatesthe Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may beinitiated by the Company’s stockholders, which could limit the Company’s stockholders’ ability to obtain a favorablejudicial forum for disputes with the Company or our directors, officers and employees.

Our Third Amended and Restated Certificate ofIncorporation will require, unless we consent in writing to the selection of an alternative forum, that (i) any derivative action or proceedingbrought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employeeto us or our stockholders, (iii) any action asserting a claim against us, our directors, officers or employees arising pursuant to anyprovision of the DGCL or our Third Amended and Restated Certificate of Incorporation or bylaws, or (iv) any action asserting a claim againstus, our directors, officers or employees governed by the internal affairs doctrine may be brought only in the Court of Chancery in theState of Delaware, except any claim (A) as to which the Court of Chancery of the State of Delaware determines that there is an indispensableparty not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdictionof the Court of Chancery within ten days following such determination), (B) which is vested in the exclusive jurisdiction of a court orforum other than the Court of Chancery, (C) for which the Court of Chancery does not have subject matter jurisdiction, or (D) any actionarising under the Securities Act of 1933 or the Securities Exchange Act of 1934. This choice of forum provision may limit a stockholder’sability to bring a claim in a judicial forum that it finds favorable for disputes with the Company or its directors, officers or otheremployees, which may discourage such lawsuits against the Company and its directors, officers and employees. Alternatively, if a courtwere to find these provisions of the Second Amended and Restated Certificate of Incorporation inapplicable to, or unenforceable in respectof, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such mattersin other jurisdictions, which could materially and adversely affect our business, financial condition and results of operations and resultin a diversion of the time and resources of our management and board of directors.

This provision would not apply to any actionbrought to enforce a duty or liability created by the Exchange Act and inclusive of rules and regulations thereunder. Section 22 of theSecurities Act establishes concurrent jurisdiction for federal and state courts over Securities Act claims. Accordingly, both state andfederal courts have jurisdiction to hear such claims.

Any person or entity purchasing or otherwiseacquiring or holding or owning (or continuing to hold or own) any interest in any of the Company’s securities shall be deemed tohave notice of and consented to the foregoing bylaw provisions. Although we believe these exclusive forum provisions benefit the Companyby providing increased consistency in the application of Delaware law and federal securities laws in the types of lawsuits to which eachapplies, the exclusive forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum of its choosing fordisputes with the Company or the Company’s current or former directors, officers, stockholders or other employees, which may discouragesuch lawsuits against the Company and its current and former directors, officers, stockholders and other employees. In addition, a stockholderthat is unable to bring a claim in the judicial forum of its choosing may be required to incur additional costs in the pursuit of actionswhich are subject to the exclusive forum provisions described above. The Company’s stockholders will not be deemed to have waivedits compliance with the federal securities laws and the rules and regulations thereunder as a result of the Company’s exclusiveforum provisions. 

Further, the enforceability of similar exclusiveforum provisions in other companies’ organizational documents has been challenged in legal proceedings and it is possible that acourt of law could rule that these types of provisions are inapplicable or unenforceable if they are challenged in a proceeding or otherwise.If a court were to find either exclusive forum provision contained in the Company’s bylaws to be inapplicable or unenforceable inan action, the Company may incur significant additional costs associated with resolving such action in other jurisdictions, all of whichcould harm the Company’s results of operations. 

The Company’s anti-takeover provisions could prevent ordelay a change in control of the company, even if such change in control would be beneficial to its stockholders.

Provisions of the Company’s Third Amendedand Restated Certificate of Incorporation and Bylaws, as well as provisions of Delaware law could discourage, delay or prevent a merger,acquisition or other change in control of the Company, even if such change in control would be beneficial to its stockholders. These provisionsinclude:

	•	the authority to issue “blank check” preferred stock that could be issued by the Board of Directors to increase the number of outstanding shares and thwart a takeover attempt;
	•	prohibiting the use of cumulative voting for the election of directors;
	•	requiring all stockholder actions to be taken at a meeting of its stockholders; and
	•	advance notice requirements for nominations for election to the Board of Directors or for proposing matters that can be acted upon by stockholders at stockholder meetings.

These provisions could also discourage proxycontests and make it more difficult for you and other stockholders to elect directors of your choosing and cause the Company to take othercorporate actions you desire. In addition, because the Board of Directors is responsible for appointing the members of our managementteam, these provisions could in turn affect any attempt by our stockholders to replace current members of our management team.

In addition, the Delaware General CorporationLaw (the “DGCL”), to which the post-combination Company is subject, prohibits it, except under specified circumstances, fromengaging in any mergers, significant sales of stock or assets or business combinations with any stockholder or group of stockholders whoowns at least 15% of its common stock.

We may acquire other companies or technologies, which could divertour management’s attention, result in dilution to our stockholders and otherwise disrupt our operations and adversely affect ouroperating results.

We may in the future seek to acquire or investin businesses, applications and services or technologies that we believe could complement or expand our services, enhance our technicalcapabilities or otherwise offer growth opportunities. The pursuit of potential acquisitions may divert the attention of management andcause us to incur various expenses in identifying, investigating and pursuing suitable acquisitions, whether or not they are consummated.

In addition, we do not have any experiencein acquiring other businesses. If we acquire additional businesses, we may not be able to integrate the acquired personnel, operationsand technologies successfully, or effectively manage the combined business following the acquisition. We also may not achieve the anticipatedbenefits from the acquired business due to a number of factors, including:

	•	inability to integrate or benefit from acquired technologies or services in a profitable manner;
	•	unanticipated costs or liabilities associated with the acquisition;
	•	difficulty integrating the accounting systems, operations, and personnel of the acquired
	•	difficulties and additional expenses associated with supporting legacy products and hosting infrastructure of the acquired business;
	•	difficulty converting the customers of the acquired business onto the Platform and contract terms, including disparities in the revenue, licensing, support, or professional services model of the acquired company;
	•	diversion of management’s attention from other business concerns;
	•	adverse effects to our existing business relationships with business partners and customers as a result of the acquisition;
	•	the potential loss of key employees;
	•	use of resources that are needed in other parts of our business; and
	•	use of substantial portions of our available cash to consummate the acquisition.

In addition, a significant portion of the purchaseprice of companies we acquire may be allocated to acquired goodwill and other intangible assets, which must be assessed for impairmentat least annually. In the future, if our acquisitions do not yield expected returns, we may be required to take charges to our operatingresults based on this impairment assessment process, which could adversely affect our results of operations.

Acquisitions could also result in dilutiveissuances of equity securities or the incurrence of debt, which could adversely affect our operating results. In addition, if an acquiredbusiness fails to meet our expectations, our operating results, business and financial position may suffer.

Delaware law and provisions in our Charter and Bylaws could makea merger, tender offer, or proxy contest difficult, thereby depressing the trading price of its common stock.

Our Charter and Bylaws contain provisions thatcould depress the trading price of our common stock by acting to discourage, delay, or prevent a change of control of the Company or changesin our management that our stockholders may deem advantageous. These provisions include the following:

	•	the right of the board of directors to establish the number of directors and fill any vacancies and newly created directorships;
	•	director removal solely for cause;

 

 

 

	•	“blank check” preferred stock that the Board could use to implement a stockholder rights plan;
	•	the right of the Board to issue our authorized but unissued common stock and preferred stock without stockholder approval;
	•	no ability of our stockholders to call special meetings of stockholders;
	•	no right of our stockholders to act by written consent, which requires all stockholder actions to be taken at a meeting of our stockholders;
	•	limitations on the liability of, and the provision of indemnification to, our director and officers;
	•	the right of the board of directors to make, alter, or repeal the Bylaws; and
	•	advance notice requirements for nominations for election to the Board or for proposing matters that can be acted upon by stockholders at annual stockholder meetings.

Any provision of the Charter or Bylaws thathas the effect of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium fortheir shares of our common stock, and could also affect the price that some investors are willing to pay for our common stock.

Our Bylaws provide that the Court of Chancery of the State ofDelaware will be the exclusive forum for substantially all disputes between the Company and our stockholders, which could limit our stockholders’ability to obtain a favorable judicial forum for disputes with the Company or our directors, officers or employees.

The Bylaws provide that the Court of Chanceryof the State of Delaware is the exclusive forum for any derivative action or proceeding brought on our behalf, any action asserting abreach of fiduciary duty, any action asserting a claim against us arising pursuant to the DGCL, the Charter or Bylaws or any action assertinga claim against us that is governed by the internal affairs doctrine. These choice of forum provisions may limit a stockholder’sability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employeesand may discourage these types of lawsuits. This provision would not apply to claims brought to enforce a duty or liability created bythe Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. The Bylaws provide further that, tothe fullest extent permitted by law, the federal district courts of the United States will be the exclusive forum for resolving anycomplaint asserting a cause of action arising under the Securities Act. However, Section 22 of the Securities Act providesthat federal and state courts have concurrent jurisdiction over lawsuits brought under the Securities Act or the rules and regulationsthereunder. To the extent the exclusive forum provision restricts the courts in which claims arising under the Securities Act maybe brought, there is uncertainty as to whether a court would enforce such a provision. We note that investors cannot waive compliancewith the federal securities laws and the rules and regulations thereunder. Furthermore, the enforceability of similar choice of forumprovisions in other companies’ certificates of incorporation has been challenged in legal proceedings, and it is possible that acourt could find these types of provisions to be inapplicable or unenforceable. While the Delaware courts have determined that such choiceof forum provisions are facially valid, a stockholder may nevertheless seek to bring a claim in a venue other than those designated inthe exclusive forum provisions, and there can be no assurance that such provisions will be enforced by a court in those other jurisdictions.If a court were to find the exclusive-forum provision contained in the Bylaws to be inapplicable or unenforceable in an action, wemay incur additional costs associated with resolving such action in other jurisdictions, which could harm our business.

USEOF PROCEEDS

All of the shares of common stock being offeredhereby are being sold by the selling stockholders identified in this prospectus or their permitted transferees. We will not receive anyof the proceeds from these sales. We will bear the out-of-pocket costs, expenses and fees incurred in connection with the registrationof the shares to be sold by the selling stockholders, including registration, listing fees, printers and accounting fees and fees anddisbursements of counsel (collectively, the “Registration Expenses”). Other than Registration Expenses, the selling stockholderswill bear any selling discounts, commissions, placement agent fees, fees or expenses of outside counsel of the selling stockholders orother similar expenses payable with respect to sale of the shares.

DETERMINATIONOF OFFERING PRICE 

We cannot currently determine the price or pricesat which shares of our common stock may be sold by the selling stockholders under this prospectus.

MARKETPRICE, TICKER SYMBOLS AND DIVIDEND INFORMATION

Ticker Symbols

Ourcommon stock and public warrants are currently traded on The Nasdaq Capital Market under the symbols “CDIO” and “CDIOW,”respectively.

Market Information

OnNovember 20, 2024, the last reported sales prices of our common stock and our public warrants were $0.2442 per share and $0.0276 perPublic Warrant, respectively.

Holders of our securities should obtain currentmarket quotations for their securities. The market price of our securities could vary at any time.

Holders

As of November13, 2024, there were 113holders of record of our common stock and 15 holdersof record of our public warrants and sponsor warrants. In addition, we have 76holders of private placement warrants.

The number of record holders of our common stockand public warrants was determined from the records of our transfer agent and does not include beneficial owners of any of our securitieswhose securities are held in the names of various security brokers, dealers, and registered clearing agencies.

Dividend Policy

The Company has not paid any cash dividendson the common stock to date and does not intend to pay cash dividends for the foreseeable future. The payment of cash dividends in thefuture will be dependent upon the Company’s revenues and earnings (if any), capital requirements and general financial condition.The payment of any cash dividends will be within the discretion of our board of directors at such time.

 

MANAGEMENT’S DISCUSSION AND ANALYSIS
AND RESULTS OF OPERATIONS

As a result of the closing of the Business Combination, whichwas accounted for as a reverse recapitalization in accordance with U.S. GAAP as discussed in Note 2 – Merger Agreement and ReverseRecapitalization, the consolidated financial statements of Cardio Diagnostics, Inc., a Delaware corporation and our wholly owned subsidiary,are now the financial statements of the Company.

The following discussion and analysis provide information thatour management believes is relevant to an assessment and understanding of our results of operations and financial condition. You shouldread the following discussion and analysis of our results of operations and financial condition together with our audited consolidatedfinancial statements for the year ended December 31, 2023 and related notes to those statements and the unaudited consolidatedfinancial statements for the nine month period ended September 30, 2024, both of which are included elsewhere in this prospectus. In additionto historical financial information, this discussion contains forward-looking statements based upon our current expectations that involverisks and uncertainties, including those described in the section titled, “Special Note About Forward-Looking Statements,”above. Our actual results could differ materially from such forward-looking statements as a result of various factors, including thoseset forth under “Risk Factors,” included elsewhere in this prospectus. Our historical results are not necessarily indicativeof the results that may be expected for any period in the future.

Unless the contextrequires otherwise, references to “Cardio,” the “Company,” “we,” “us” and “our” referto Cardio Diagnostics Holdings, Inc., a Delaware corporation, together with its consolidated subsidiary.

Overview

Cardio was formed to further develop and commercializea 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-Epigenetic Engine™.As a company, we aspire to give every American adult insight into their unique risk for various cardiovascular diseases. Cardio aims tobecome one of the leading medical technology companies for enabling improved prevention, early detection and treatment of cardiovasculardisease. Cardio is transforming the approach to cardiovascular disease from reactive to proactive and hope to accelerate the adoptionof Precision Medicine for all. We believe that incorporating Cardio’s solutions into routine practice in primary care and preventionefforts can help alter the trajectory that nearly one in two Americans is expected to develop some form of cardiovascular disease by 2035.

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

Cardio launched its first clinical test, Epi+GenCHD™, a three-year symptomatic CHD risk assessment clinical blood test targeting CHD events, including heart attacks, in 2021 duringthe Covid-19 pandemic. As a result, the initial strategy for commercialization involved launching the test via telemedicine and in smallerprovider practices such as concierge medicine practices. The volume of tests through these channels were minimal, and as the circumstancesaround Covid-19 pandemic improved, management re-vamped the Company’s go-to-market strategy to include other healthcare verticalsand 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. Beyondthe launch of Epi+Gen CHD, in March 2023, we announced the launch of our second product, PrecisionCHD™, an integrated epigenetic-geneticclinical blood test for the detection of coronary heart disease. The Epi+Gen CHD™ and PrecisionCHD™ tests are coupled to ActionableClinical Intelligence (“ACI”), a platform that offers new epigenetic and genetic insights to clinicians prescribing the tohelp improve chronic care management. In May 2023, we launched CardioInnovate360™, a research-use-only (“RUO”) solutionto support the discovery, development and validation of novel biopharmaceuticals for the assessment and management of cardiovascular diseases.In February 2024, we announce the launch of HeartRisk™, a cardiovascular risk intelligence platform. We believe that our Epi+GenCHD™ and PrecisionCHD™ tests are categorized as laboratory-developed tests, or “LDTs.” The new go-to-market strategyis also being implemented for these products.

Despite long partnership and sales cycles, insome instance as long as 14 months, in 2023 Cardio generated revenue from patient(s), small provider(s), larger provider(s) and employer(s)for the first time and has developed a more robust sales and partnership pipeline. Key developments since the 2023 Form 10-K filing include:

	·	Increased revenue in the first nine months of 2024;
	·	Recommended pricing for our two Current Procedural Terminology (“CPT”) Proprietary Laboratory Analysis (“PLA”) codes from the American Medical Association, 0440U for PrecisionCHD™ and 0439U for Epi+Gen CHD™, at the Centers for Medicare and Medicaid Services’ (“CMS”) Clinical Laboratory Fee Schedule (CLFS) annual meeting; and
	·	Expanded the availability of our Epi+Gen CHD™  test to Family Medicine Specialists’ retail clinical location at Meijer Supercenter; and
		Received preliminary Medicare pricing from Centers for Medicare and Medicaid Services (CMS) for PrecisionCHD™ and Epi+Gen CHD™.

  

Cardio expects that sales and partnership cycleswill continue to be long. Our ongoing strategy for expanding our business operations and increasing revenue generation include the following:

	·	Develop additional products, including clinical tests for stroke, congestive heart failure and diabetes;
	·	Expand clinical and health economics evidence portfolio to continue to demonstrate value of products and increase reach;
	·	Leverage our newly-awarded CPT PLA codes;
	·	Expand the adoption of our products across key channels, including health systems and self-insured employers, including for HeartRisk, Cardio’s new SaaS product;
	·	Scale our internal operations capabilities with a focus on improving efficiency and reducing our cost of goods sold; and
	·	Pursue potential strategic partnership(s) and acquisition(s) of one or more synergistic companies.

Recent Developments 

Food and Drug Administration Final Rule

On May 6, 2024, FDA published a final ruleamending 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-certifiedhigh complexity laboratory, are medical devices subject to FDA regulation under the Federal Food, Drug, and Cosmetic Act. The final rulealso announced FDA’s intention to apply its medical device requirements to LDTs. Under the final rule, all LDTs, unless subjectto a specific exemption, will be subject to premarket authorization requirements (510(k), de novo classification, or PMA) for each LDTperformed by the laboratory, and to postmarket registration and listing, medical device reporting, correction, removal, and recall, complainthandling, labeling, investigational device, and quality system requirements. FDA intends to phase in these requirements beginning May6, 2025. The final rule states that certain categories of LDTs will be subject to enforcement discretion with respect to some or allof these requirements. For example, FDA will apply enforcement discretion to currently marketed LDTs that were first offered prior toMay 6, 2024, with respect to most quality system requirements and the requirement for premarket authorization if they are not modifiedor modified in only limited ways. Laboratories performing these tests are subject to other requirements, including the requirement tosubmit the labeling for the LDT to FDA for review. FDA will similarly exercise enforcement discretion with respect to premarket authorizationfor LDTs approved by the New York State Clinical Laboratory Evaluation Program (“NYS-CLEP”). 

Unless overturned by a court or Congress, thefinal rule will substantially increase costs and regulatory burdens for many clinical laboratories in ways that may adversely affect theirability to develop, perform, and offer LDTs. Two lawsuits challenging FDA’s authority to regulate LDTs have been filed in federalcourt: the American Clinical Laboratory Association filed a lawsuit against FDA on May 29, 2024 in the Eastern District of Texas, whilethe Association for Molecular Pathology filed a lawsuit on August 19, 2024 in the Southern District of Texas. The lawsuits have been consolidatedand briefing is expected to be completed by the end of 2024. The ultimate success of these lawsuits, or any future lawsuits that may bebrought against the FDA challenging the LDT rule, is uncertain. It is also unclear whether a court would delay the implementation of thefinal rule while the litigation is ongoing, which means we may need to initiate steps to comply with the final rule even if it is ultimatelyoverturned.

Legislative proposals addressing the FDA’soversight of LDTs have been previously introduced. In June 2021, Congress introduced the VALID Act, which would have established a newrisk-based regulatory framework for in vitro clinical tests (“IVCTs”), a category which would have included IVDs, LDTs, collectiondevices and instruments used with such tests. This legislation was not enacted during that session of Congress but was reintroduced in2023. FDA’s new LDT final rule may renew attention to the VALID Act and may lead to the introduction of new proposals to limit theFDA’s regulatory authority. On July 12, 2024, the House Appropriations Committee issued a Report accompanying a FY 2025 appropriationsbill in which it directed the FDA to suspend efforts to implement the LDT final rule and to continue working with Congress to modernizethe regulatory approach for LDTs. This directive is not binding on the FDA.

Results of Operations

The results of operations presented below shouldbe reviewed in conjunction with the unaudited consolidated financial statements and accompanying notes for the nine months ended September30, 2024 and 2023 and the audited consolidated financial statements and accompanying notes for the fiscal years ended December 31, 2023and 2022, which financial statements are included in this prospectus beginning on page F-1.

Comparisons for the Nine Months EndedSeptember 30, 2024 and 2023:

The following table presents a summary of consolidatedoperating results for the nine-month periods indicated:

		Nine Months Ended September 30,
		2024				2023
Revenue
Revenue		$	30,378			$	11,755
Operating Expenses
Sales and marketing			144,240				115,226
Research and development			23,367				137,690
General and administrative expenses			6,697,857				5,444,920
Amortization			14,389				14,380
Total operating expenses			(6,879,853	)			(5,712,216	)
Other (expense) income			(14,670	)			(1,287,444	)
Net (loss)		$	(6,864,145	)		$	(6,987,905	)

Net Loss

Cardio’snet loss for the nine months ended September 30, 2024 was $6,864,145 as compared to $6,987,905 for the nine months ended September 30,2023, a decrease of $123,760. The decrease in net loss was primarily the result of a decrease in interest expense related to the saleand issuance of convertible debentures in 2023, offset by an increase in operating expenses and a decrease in other income resulting fromthe change in fair value of derivative liability.

Revenue

Cardiohad $30,378 and $11,755 in revenue for the nine months ended September 30, 2024 and 2023, respectively.

Sales and Marketing

Expensesrelated to sales and marketing for the nine months ended September 30, 2024 were $144,240 as compared to $115,226for the nine months ended September 30, 2023, an increase of $29,014. The overall increase was due to an increase in sales and marketingactivity in the second and third quarters of 2024 due to tradeshow attendance.

Research and Development

Researchand development expenses for the nine months ended September 30, 2024 were $23,367 as compared to $137,690 for the nine months ended September30, 2023, a decrease of $114,323. The decrease was attributable to the decrease in laboratory runs performed in the 2024 period on newproduct offerings in the pipeline as compared to laboratory runs performed in the same period in 2023.

General and Administrative Expenses

Generaland administrative expenses for the nine months ended September 30, 2024 were $6,697,857 as compared to $5,444,920 for the nine monthsended September 30, 2023, an increase of $1,252,937. The overall increase is primarily due to an increase in stock compensationexpenses of $1,351,480 (mainly as a result of new stock options issued in the first quarter of 2024), offset by the decrease in D&Oinsurance expense.

Amortization

Amortizationexpense for the nine months ended September 30, 2024 was $14,389 as compared to $14,380 for the nine months ended September 30, 2023.The total amortization expense for the nine months ended September 30, 2024 is for intangible assets of $12,000 and patent costsof $2,389, respectively, as compared to $12,000 for intangible assets and $2,380 for patent costsfor the nine months ended September 30, 2023.

Other income (expenses)

Totalother expenses for the nine months ended September 30, 2024, was $(14,670) as compared to $(1,287,444) for the nine months ended September30, 2023. The total other expenses for the nine months ended September 30, 2024 consists of interest expense of $15,513 net ofinterest income of $843. The total other expenses for the nine months ended September 30, 2023 consists of interest expense of $6,638,912and loss on extinguishment of debt of $251,351 offset by change in fair value of derivative liability of $5,602,052 and interest incomeof $767.

Comparisons for the Years Ended December 31, 2023 and 2022:

The following table sets forth our results ofoperations data for the periods presented:

		Years Ended December 31,
		2023				2022
Revenue
Revenue		$	17,065			$	950
Operating Expenses
Sales and marketing			158,514				92,700
Research and development			145,182				40,448
General and administrative expenses			6,936,646				4,400,253
Amortization			19,182				16,000
Total operating expenses			(7,259,524	)			(4,549,401	)
Other (expense) income			(1,134,375	)			(112,534	)
Net (loss)		$	(8,376,834	)		$	(4,660,985	)

Net Loss

Cardio’s net lossfor the year ended December 31, 2023, was $8,376,834 as compared to $4,660,985 for the year ended December 31,2022, an increase of $3,715,849 primarily as a result of an increase in General and Administrative expenses. 

Revenue

Cardiohas earned only nominal revenue since inception. Revenue for the year ended December 31, 2023, was $17,065 compared to$950 for the year ended December 31, 2022. Revenue was generated through multiple revenue channels, including, telemedicineplatform, provider organizations, and employers.

Sales and Marketing

Expenses related to sales and marketing forthe year ended December 31, 2023, were $158,514 as compared to $92,700for the year ended December 31, 2022,an increase of $65,814. The overall increase was due to an increase in sales and marketing campaign efforts in 2023.

Research and Development

Researchand development expense for the year ended December 31, 2023, was $145,182 as compared to $40,448 for year ended December31, 2022, an increase of $104,734. The increase was attributable to increased laboratory runs performed in the 2023, as compared to laboratoryruns performed in 2022.

General and Administrative Expenses

Generaland administrative expenses for the year ended December 31, 2023, were $6,936,646 as compared to $4,400,253 for theyear ended December 31, 2022, an increase of $2,536,393. The overall increase is primarily due to a stock compensation of$1,035,273, an increase in rent, personnel, and office and software expenses related to new offices and the new internal lab setup. 

Amortization

Amortization expense for the year ended December31, 2023, was $19,182, as compared to $16,000 for the year ended December 31, 2022. The total amortization expense for the year endedDecember 31, 2023 includes the amortization of intangible assets of $16,000 and patent costs of $3,182, respectively.

Liquidity and Capital Resources

Liquidity describes the ability of a companyto generate sufficient cash flows in the short- and long-term to meet the cash requirements of its business operations, including workingcapital needs, debt service, acquisitions and investments, and other commitmentsand contractual obligations. We consider liquidity in terms of cash flows from operations and other sources, and their sufficiency tofund our operating and investing activities.

Historically,our principal sources of liquidity have been proceeds from the issuance of equity. We entered into an At-the Market Sales Agreement withCraig-Hallum Capital Group LLC (“Craig-Hallum”) on January 26, 2024 (the “Sales Agreement”) under the termsof which we are able to sell up to $17.0 million of our Common Stock (the “ATM Offering”) from time to time and at our discretion.As of November 13, 2024, we have received an aggregate of $6,774,902 in gross proceeds from the ATM sales of 19,262,588 shares of CommonStock, and we have available up to $10,225,098 in future sales of our Common Stock that we may elect to make under the Sales Agreement.We have paid Craig-Hallum $169,373 in sales commissions as of November 13, 2024.

On February 2, 2024, we closed a private placementwith seven accredited investors, whereby we issued a total of 561,793 units ("Units”), with each Unit consisting of (i) oneshare of our Common Stock and (ii) one six-year Common Stock purchase warrant having an exercise price of $1.78 per share, subject toadjustment (the "Private Placement”). The Private Placement resulted in the issuance to investors of 561,793 shares of CommonStock and 561,793 warrants in an unregistered offering of securities. The purchase price of the securities was $1.78 per Unit, resultingin 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.

We have had, and expect that we will continueto have, an ongoing need to raise additional cash from outside sources to fund our operations and grow our business. We expect that ourprimary cash needs in 2024 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 ourongoing FDA submission activities. We explore our financing options on an ongoing basis. However, given recent stock prices and the extremevolatility of our stock, it continues to be challenging to balance cash that could be raised and the dilution that might be requiredto close a particular transaction. We expect that for the remainder of 2024, we will rely primarily on the ongoing ATM Offering, providedthat market conditions are favorable.

At our annual stockholders meeting in November2024, we obtained stockholder approval to offer and sell up to $10,000,000 in securities (up to 50,000,000 shares of Common Stock, subjectto adjustment for stock splits, reverse stock splits and other similar recapitalization events) in a transaction or series of transactionsnot involving a public offering. We currently have no specific plans for such future offering but believe having that option availableprovides our Board of Directors with added flexibility in meeting the Company’s liquidity needs.

Our long-term future capital requirementswill depend on many factors, including revenue growth rate, the timing and the amount of cash received from customers, the expansionof sales and marketing activities, the timing and extent of spending to support investments, including research and development efforts,and the continuing market adoption of our products. In each fiscal year since our inception, we have incurred losses from operationsand generated negative cash flows from operating activities. We expect this trend to continue in future periods for the foreseeable future.

Unless we are able to generate significant cashflows from operations, which we do not foresee happening in the near term, we will need to finance our operations through the issuanceof additional equity and/or convertible debt securities. Looking forward, we expect we will need to raise additional capital and generaterevenues to meet long-term operating requirements. If we raise additional funds through the issuance of equity or convertible debt securities,the percentage ownership of our equity holders could be significantly diluted, particularly at current stock price levels, and these newly-issuedsecurities may have rights, preferences or privileges senior to those of existing equity holders. If we raise additional funds by obtainingloans from third parties, the terms of those financing arrangements may include negative covenants or other restrictions on our businessthat could impair our operating flexibility and also require us to incur interest expense.

Workingcapital requirements are expected to increase in line with the growth of the business. We have no lines of credit or other bank financingarrangements. We anticipate that our principal sources of liquidity, including existing funds and issuances of equity and/or debt securities,will only be sufficient to fund our activities over the next 12 months. In order to have sufficient cash to fund our operations beyondthe next 12 months and grow our business, we will need to raise additional funds through the issuance of equity or convertible debt. Wecannot provide any assurance that we will be successful in doing so.

If we are unable to raise additional capitalwhen desired, our business, financial condition and results of operations would be harmed. Successfultransition to attaining profitable operations depends upon achieving a level of revenue adequate to support our business plan, balancedagainst ongoing expenses. There is no assurance that we will be successful in reaching and sustaining profitability.

The exercise prices of our currently outstandingwarrants range from a high of $11.50 to a low of $1.78 (subject to adjustment) per share of Common Stock. The likelihood that warrantholders will exercise their Warrants, and therefore the amount of cash proceeds that we might receive, is dependent upon the tradingprice of our Common Stock, the last reported sales price for which was $0.2442 on November 20, 2024. If the trading price of our CommonStock 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 bein the money prior to their respective expiration dates, and as such, the Warrants may expire worthless, and we may receive no proceedsfrom the exercise of Warrants. Given the current differential between the trading price of our Common Stock and the Warrant exerciseprices and the volatility of our stock price, we are not making strategic business decisions based on an expectation that we will receiveany cash from the exercise of Warrants. However, we will use any cash proceeds received from the exercise of Warrants for general corporateand working capital purposes, which would increase our liquidity. We will continue to evaluate the probability of Warrant exercises andthe merit of including potential cash proceeds from the exercise of the Warrants in our future liquidity projections.

Cash at September 30, 2024 totaled $1,982,590 as compared to $1,283,523 at December 31, 2023,an increase of $699,067. The following table shows Cardio’s cash flows from operating activities,investing activities and financing activities for the stated periods:

		Nine Months ended September 30,
		2024				2023
Net cash used in operating activities		$	3,600,809			$	3,986,498
Net cash used in investing activities			349,577				227,343
Net cash provided by financing activities			4,649,453				3,725,968

CashUsed in Operating Activities

Cash used in operating activities for the ninemonths ended September 30, 2024 was $3,600,809 as compared to $3,986,498 for the nine months ended September 30, 2023. The cash used inoperations during the nine months ended September 30, 2024 is a function of net loss of $6,864,145 adjusted for the following non-cashoperating items: depreciation of $76,341, amortization of $115,632, $2,568,753in stock-based compensation, an increase of $9,140 in accounts receivable, a decrease of $846,715 in prepaid expenses and other currentassets, a decrease of $168,405 in accounts payable and accrued expenses and a decrease in lease liability of $166,560.

Thecash used in operations during the nine months ended September 30, 2023 is a function of net loss of $6,987,905 adjusted for the followingnon-cash operating items: depreciation of $1,377, amortization of $48,426, $1,217,273 in stock based compensation, $6,612,298 in non-cashinterest expense, and $251,351 for loss on extinguishment of debt offset by $5,602,052 in change in fair value of derivative liability,an increase of $350 in accounts receivable, a decrease of $876,066 in prepaid expenses and other current assets, an increase in depositsof $7,900, a decrease of $401,638 in accounts payable and accrued expenses and an increase in lease liability $6,556.

Cash Used in Investing Activities

Cash usedin investing activities for the nine months ended September 30, 2024 was $349,577 compared to $227,343 for the nine months ended September30, 2023. The cash used in investing activities for the nine months ended September 30, 2024 was due to purchases of property and equipmentof $211,127 and patent costs incurred of $138,450. The cash usedin investing activities for the nine months ended September 30, 2023 was due to purchases of propertyand equipment of $38,610, payments for right of use asset of $21,352 and patent costs incurred of $167,381.

Cash Provided by Financing Activities

Cash provided by financing activities for thenine months ended September 30, 2024 was $4,649,453 as compared to $3,725,968 for the nine months ended September 30, 2023. This changewas due to $5,178,453 in proceeds from the sale of common stock and warrants offset by $374,000 in payments pursuant to a finance agreementand $155,000 in payments of placement agent fees, all of which occurred during the nine months ended September 30, 2024. Cash providedby financing activities for the nine months ended September 30, 2023 was due to $4,500,000 in proceeds from convertible notes payable,net of original issue discount of $500,000, $390,000 in proceeds from exercise of warrants, offset by $849,032 payments of finance agreementand $315,000 in payments of placement agent fees during the nine months ended September 30, 2023.

Going Concern

The accompanying consolidated financial statementshave been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normalcourse of business. The Company has generated only nominal revenue since inception. The Company had a net loss of $6,864,145 for the ninemonths ended September 30, 2024 and an accumulated deficit of $21,232,525at September 30, 2024. These factors, among others, raise substantial doubt about the ability of the Company to continue as a going concernfor a reasonable period of time. The Company’s continuation as a going concern is dependent upon its ability to obtain necessaryequity financing and ultimately from generating revenues to continue operations. The Company expects that working capital requirementswill continue to be funded through a combination of its existing funds and further issuances of securities. Existing working capital,further advances and debt instruments, and anticipated cash flow are expected to be adequate to fund operations over the next twelve months.The Company has no lines of credit or other bank financing arrangements. Additional issuances of equity or convertible debt securitieswill result in dilution to current stockholders. Further, such securities might have rights, preferences or privileges senior to the Company’sCommon Stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are notavailable on acceptable terms, the Company may not be able to take advantage of prospective new business endeavors or opportunities, whichcould significantly and materially restrict business operations.

The consolidated financial statements do notinclude any adjustments that might result from the outcome of this uncertainty relating to the recoverability and classification of recordedasset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a goingconcern.

 Off-BalanceSheet Financing Arrangements

We did not haveany off-balance sheet arrangements as of September 30, 2024.   

Contractual Obligations

As of September 30, 2024, we do not haveany ongoing contractual obligations that would have a negative impact on liquidity and cash flows. However, if one or more of the followingpotential claims that arise from contracts we have entered into were pursued against us, there is the potential that we could see a negativeimpact on liquidity and cash flows, depending on the outcome.

Prior Relationships of Cardio with Boustead Securities, LLC

At thecommencement of efforts to pursue what ultimately ended in the terminated business acquisition, Legacy Cardio entered into a PlacementAgent and Advisory Services Agreement (the "Placement Agent Agreement”), dated April 12, 2021,with Boustead Securities, LLC ("Boustead Securities”). This agreement was terminated in April 2022, when Legacy Cardio terminatedthe underlying agreement and plan of merger and the accompanying escrow agreement relating to that proposed business acquisition afterefforts to complete the transaction failed, despite several extensions of the closing deadline.

Under the terminated Placement Agent Agreement,Legacy Cardio agreed to certain future rights in favor of Boustead Securities, including (i) a two-year tail period during which BousteadSecurities would be entitled to compensation if Cardio were to close on a transaction (as defined in the Placement Agent Agreement) withany party that was introduced to Legacy Cardio by Boustead Securities; and (ii) a right of first refusal to act as the Company’sexclusive placement agent for 24-months from the end of the term of the PlacementAgent Agreement (the "right of first refusal”). Cardio has taken the position that due to Boustead Securities’ failureto perform as contemplated by the Placement Agent Agreement, these provisions purporting to provide future rights are null and void.

BousteadSecurities responded to the termination of the Placement Agent Agreement by disputing Legacy Cardio’s contention that it had notperformed 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. WhileBoustead Securities’ contention appears to contradict earlier communications from Boustead Securities in which they indicated thatthey had not made any such contacts or introductions, Boustead Securities is currently contending that they are due success fees for twoyears following the termination of the Placement Agent Agreement on any transaction with any person on the list of supposed contacts orintroductions. 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 AgentAgreement and has no plans to do so at any time during the tail period. No legal proceedings have been instigated by either party, andCardio believes that the final outcome will not have a material adverse impact on its financial condition.

The Benchmark Company, LLC Right of First Refusal

As noted in Note 1, the Company completed abusiness 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, Cardioassumed 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 AmendmentEngagement, Benchmark has been granted a right of first refusal to act as lead or joint-lead investment banker, lead or joint-lead book-runnerand/or lead or joint-lead placement agent for all future public and private equity and debt offerings through October 25, 2023. Basedon the right of first refusal, Benchmark alleges that it is owed damages because the Company entered into the Yorkville Convertible DebentureTransaction (see Note 11 to Notes to Consolidated Financial Statements) without first offering Benchmark the right to serve as the leador joint-lead placement agent for the transaction. The Company continues to evaluate the claim. No legal proceedings have been instigated.

Demand Letter and Potential Mootness Fee Claim

On June 25, 2022,a plaintiffs’ securities law firm sent a demand letter to the Company alleging that the Company’s Registration Statement onForm 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 immediatelyprovide corrective disclosures in an amendment or supplement to the Registration Statement. Subsequent thereto, the Company filed amendmentsto the S-4 Registration Statement on July 27, 2022, August 23, 2022, September 15, 2022, October 4, 2022 and October 5, 2022 in whichit responded to various comments of the SEC staff and otherwise updated its disclosure. In October 2022, the SEC completed its reviewand declared the S-4 registration statement effective on October 6, 2022. On February 23, 2023 and February 27, 2023, plaintiffs’securities law firm contacted the Company’s counsel asking who will be negotiating a mootness fee relating to the purported claimsset forth in the June 25, 2022 demand letter. The Company vigorously denies that the S-4 RegistrationStatement, as amended and declared effective, is deficient in any respect and believes thatno additional supplemental disclosures are material or required. The Company believes that the claims asserted in the Demand Letter arewithout merit and that no further disclosure is required to supplement the S-4 Registration Statement under applicable laws. Asof the date of filing of this Quarterly Report on Form 10-Q, no lawsuit has been filed against the Company by that firm. The firm hasindicated its willingness to litigate the matter if a mutually satisfactory resolution cannot be agreed upon; however, Cardio believesthat the final outcome will not have a material adverse impact on its financial condition. 

Northland Securities, Inc.

In January 2024, following the Company’stermination of its agreement with Yorkville and in connection with the Company’s recent at the market offering and/or its February2024 private placement, a managing director of Northland Securities, Inc. ("Northland”) contacted the Company claiming theright to be paid a fee of approximately $150,000 pursuant to the agreement of March 1, 2023 between the Company and Northland regardingthe Yorkville financing. Subsequently, the Company has been advised by another representative of Northland that Northland would not proceedwith any such claim. The Company does not believe that it owes Northland any sum based on the termination of the Yorkville SecuritiesPurchase Agreement and the subsequent financing transactions.

The Company cannot preclude the possibilitythat claims or lawsuits brought relating to any alleged securities law violations or breaches of fiduciary duty could potentially requiresignificant time and resources to defend and/or settle and distract its management and board of directors from focusing on its business.

Directors and Officers Insurance

In connection with theCompany’s various contractual obligations arising in the ordinary course of business, the Company is required to maintain insurancecoverage for claims against its directors and officers.

Notice of Non-Compliance with Nasdaq Listing Requirements

On June 3, 2024, the Company received a letterfrom Nasdaq indicating that, for the previous 30 consecutive business days, the bid price for the Company’s common stock had closedbelow the minimum $1.00 per share requirement for continued listing on Nasdaq under Nasdaq Listing Rule 5550(a)(2). As reported on ourCurrent Report on Form 8-K dated June 7, 2024, we have an initial period of 180 calendar days, or until December 2, 2024 to regain compliance. Under certain circumstances, the Company may be granted an additional 180 days, or until May 29, 2025, to regain compliance. If we failto regain compliance with the minimum bid requirement within the cure period (or extended cure period, if made available) or if we failto continue to meet all applicable continued listing requirements for Nasdaq in the future, Nasdaq could delist our securities.

Critical Accounting Policies and Significant Judgments and Estimates

Cardio’s consolidated financial statementsare prepared in accordance with GAAP in the United States. The preparation of its consolidated financial statements andrelated disclosures requires it to make estimates and judgments that affectthe reported amounts of assets, liabilities, revenue, costs and expenses, and the disclosure of contingent assets and liabilities in Cardio’sfinancial statements. Cardio bases its estimates on historical experience, known trends and events and various other factors that it believesare reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets andliabilities that are not readily apparent from other sources. Cardio evaluates its estimates and assumptions on an ongoing basis. Cardio’sactual results may differ from these estimates under different assumptions or conditions.

While Cardio’s significant accountingpolicies are described in more detail in Note 3 to its consolidated financial statements, Cardio believesthat the following accounting policies are those most critical to the judgments and estimates used in the preparation of itsconsolidated financial statements.

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformitywith generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts ofassets and liabilities and disclosure of contingent assets and liabilities atthe date of the consolidated financial statements and the reported amounts of revenues and expenses during the period. Actual resultscould differ from those estimates.

Fair Value Measurements

The Company adopted the provisions of ASC Topic820, Fair Value Measurements and Disclosures, which defines fair value as used in numerous accounting pronouncements,establishes a framework for measuring fair value and expands disclosure of fairvalue measurements.

The estimated fair value of certain financialinstruments, including cash and cash equivalents, accounts payable and accrued expenses are carried at historical cost basis, which approximatestheir fair values because of the short-term nature of these instruments. The carryingamounts of our short- and long-term credit obligations approximate fair value because the effective yields on these obligations,which include contractual interest rates taken together with other features such as concurrent issuances of warrants and/or embedded conversionoptions, are comparable to rates of returns for instruments of similar credit risk. 

ASC820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in theprincipal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurementdate. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimizethe use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value:

Level 1 – quoted prices in active markets foridentical assets or liabilities

Level 2 – quoted prices for similar assetsand liabilities in active markets or inputs that are observable

Level 3 –inputs that are unobservable (for example cash flow modeling inputs based on assumptions)  

Stock-Based Compensation

Cardio accountsfor its stock-based awards granted under its employee compensation plan in accordance with ASC Topic No. 718-20, Awards Classifiedas Equity, which requires the measurement of compensation expense for all share-based compensation granted to employeesand non-employee directors at fair value on the date of grant and recognition of compensation expense over the related service periodfor awards expected to vest. The Company uses the Black-Scholes option pricing model to estimate the fair value of its stock optionsand warrants. The Black-Scholes option pricing model requires the input of highly subjective assumptions including the expected stockprice volatility of the Company’s common stock, the risk-free interest rate at the date of grant, the expected vesting term of thegrant, expected dividends, and an assumption related to forfeitures of such grants. Changes in these subjective input assumptions canmaterially affect the fair value estimate of the Company’s stock options and warrants. 

BUSINESS

References in this prospectus to “Cardio,”“we,” “us” or the “Company” refer to Cardio Diagnostics Holdings, Inc. References to our “management”or our “management team” refer to the officers and directors of Cardio Diagnostics Holdings, Inc. 

Our Company 

Cardio Diagnostics, Inc. (“Legacy Cardio”)was founded in 2017 in Coralville, Iowa by Meeshanthini (Meesha) Dogan, PhD, and Robert (Rob) Philibert, MD PhD. It was formed in January2017 as an Iowa LLC and was subsequently incorporated as a Delaware C Corp in September 2019.

Cardio was formed to further develop and commercializea 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-EpigeneticEngine™. 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, detection, treatment and managementof cardiovascular disease and associated co-morbidities. Cardio is transforming the approach to cardiovascular medicine from reactiveto proactive and hopes to accelerate the adoption of Precision Medicine for all. We believe that incorporating our solutions into routineclinical practice in and prevention efforts can help alter the trajectory that nearly one in two Americans is expected to develop someform of cardiovascular disease by 2035.

According to the CDC, epigenetics is the studyof 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 DNAsequence. We believe that we are the first company to develop and commercialize epigenetics-based clinical tests for cardiovascular diseasethat have clear value propositions for multiple stakeholders including (i) patients, (ii) clinicians, (iii) hospitals/health systems,(iv) employers and (v) payors.

An estimated 80% of cardiovascular disease (“CVD”)is preventable, yet, it is responsible for one in every four deaths and remains the number one killer in the United States for both menand women. Coronary heart disease is the most common type of CVD and the major cause of heart attacks. The enormous number of unnecessaryheart attacks and deaths associated with CHD is attributable to the failure of current primary prevention approaches in clinical practiceto effectively detect, reduce and monitor risk for CHD prior to life altering and costly health complications. Several reasons for thisfailure include (i) the current in-person risk screening approach is incompatible with busy everyday life; (ii) even if the current riskscreening tests are taken, they only identify 44% and 32% of men and women at high risk, respectively; and (iii) the lack of patient careplan personalization. We believe that a highly accessible, personalized and precise solution for CHD prevention is not currently available.

Furthermore, in the aftermath of the COVID-19pandemic and the ongoing possibility of a potential re-emergence of COVID variants or other public crises, preventable illnesses suchas CHD are expected to spike. Therefore, now more than ever, there is an urgent need for a highly sensitive, scalable, at-home risk screeningtool that can help physicians better direct care and allow patients to receive the help they need sooner.

Our first test, Epi+Gen CHD™, which wasintroduced for market testing in 2021, is a three-year symptomatic CHD risk assessment clinical blood test targeting CHD events, includingheart attacks. In June 2023, we announced the nationwide launch of our second product, PrecisionCHD™, an integratedepigenetic-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 insightsto clinicians prescribing the to help improve chronic care management. In May 2023, we launched CardioInnovate360^TM, a research-use-only(“RUO”) solution to support the discovery, development and validation of novel biopharmaceuticals for the assessment and managementof cardiovascular diseases. In February 2024, we announced the launch of HeartRisk™, a cardiovascular risk intelligence platform.The Company earned only $950 and $17,065 in revenue for the years ended December 31, 2022 and 2023, respectively. We are continuing tofocus our efforts on establishing relationships with larger organizations and channel partners to increase adoption of our solutions.However, this process can take many months and up to as much as a year or more to finalize, depending on the sales channel. For example,hospitals routinely take a year or longer to make purchasing decisions. While these relationships take considerable time to establish,we believe that our strategy to pursue larger organizations can provide far greater revenue potential for our existing and future tests,other products and services. We have begun to see results from this recent shift in marketing focus: In October 2023, we announced thatwe have secured an Innovative Technology Contract from Vizient, Inc., the nation’s largest provider-driven healthcare performanceimprovement company, with a customer base encompassing over 60% of hospitals and 97% of academic medical centers in the United States.In November 2023, we announced that Family Medicine Specialists (FMS), a leading Illinois primary care provider with eight locations,is implementing our heart attack risk assessment test, Epi+Gen CHD™, covering at least 1,200 BlueCross BlueShield Medicare, Medicaid,HMO and PPO health plan and other health plan patients with CHD risk factors. In addition to providers and provider organizations, weare also expanding to offer our solutions through employers and benefit brokers. We have grown our provider and employer pipelines significantlywith a major focus on advancing them to close. Beyond the U.S. market, we also have an arrangement with one of India’s leading healthcareand medical instrumentation companies to lay the pre-marketing groundwork via its extensive healthcare network to introduce our solutionsin India. In addition to growing the adoption of our solutions, we have also secured Current Procedural Terminology (“CPT”)Proprietary Laboratory Analysis (“PLA”) codes from the American Medical Association for Epi+Gen CHD™ (0439U) and PrecisionCHD™(0440U), which is a key step in securing payor coverage.

We believe that our Epi+Gen CHD™ and PrecisionCHD™tests are categorized as laboratory-developed tests, or “LDTs.” Under current FDA enforcement discretion policy, an LDT doesnot require FDA premarket authorization, or other FDA clearance or approval. As such, we believe that the Epi+Gen CHD™ and PrecisionCHD™tests do not require FDA premarket evaluation of our performance claims or marketing authorization, and such premarket authorization hasnot been obtained. However, in May 2024, the FDA published a final rule amending the definition of an in vitro diagnostic (“IVD”)device to include IVDs manufactured by a clinical laboratory. The final rule also announced the FDA’s intention to phase out itsgeneral enforcement discretion policy. Unless the rule is overturned by a court or Congress, the medical device requirements for mostLDTs will be phased in beginning on May 6, 2025. These requirements include premarket clearance, de novo authorization or premarket approvalfor each LDT performed by a laboratory, and postmarket registration and listing, medical device reporting, correction, removal, and recall,complaint handling, labeling, investigational device, and quality system requirements. This new rulemaking could have a material impacton our business operations and financial condition. See “— Government Regulation” for further discussion.

Although submissions that are pending beforethe FDA or that have been denied are not publicly available, to the best of our knowledge, no epigenetic-based clinical test for cardiovasculardisease has, to date, been cleared or approved by the FDA.

As a company in the early stages of its development,we continuously reevaluate our business, the market in which we operate and potential new opportunities. We may seek other alternativeswithin the healthcare field in order to grow our business and increase revenues. Such alternatives may include, but not be limited to,combinations or strategic partnerships with other laboratory companies or with medical practices such as hospitalists or behavioral health.

Industry Background

According to the American Heart Association(“AHA”), even though an estimated 80% of cardiovascular disease (“CVD”) is preventable, it remains the leadingcause of death in the United States and globally. The AHA also reported that over 650,000 deaths in the United States each year are attributableto heart disease, which amounts to one in every four deaths. The Centers for Disease Control and Prevention (“CDC”) estimatesthat in the United States, one person dies every 36 seconds from CVD. Unfortunately, the incidence of CVD is expected to continue to risewith the AHA projecting that by 2035, nearly half of Americans will have some form of CVD.

CVD represents conditions that affect the heartand blood vessels such as coronary heart disease (“CHD”), stroke, and congestive heart failure (“CHF”). CHD isthe most common type of heart disease and according to the CDC, was responsible for nearly 370,000 deaths in 2019. The National Centerfor Health Statistics reported that the prevalence of CHD is approximately 6.7%, and according to the AHA, over 20 million adults aged20 or older in the United States have CHD. CHD is also the major cause of heart attacks. According to the AHA, every 40 seconds, someonein the United States has a heart attack, with over 800,000 Americans having a heart attack each year. The CDC reported that in 2020, strokewas responsible for one in six CVD-related deaths. The AHA estimates that every year, nearly 800,000 Americans have a stroke which isthe leading cause of major long-term disability, with a stroke-related death occurring every 3.5 minutes. According to the AHA, over sixmillion adults have heart failure and nearly 380,000 deaths in 2018 were attributable to heart failure. There are numerous risk factorsthat could increase an individual’s risk for CVD. Several key risk factors include diabetes, high blood cholesterol, and high bloodpressure. For example, according to the CDC, over 34 million adults have diabetes and according to Johns Hopkins Medicine, those withdiabetes are two to four times more likely to develop CVD. Alongside genetics, age, sex, and ethnicity, lifestyle factors such as smoking,unhealthy diet, physical inactivity, and being overweight can also increase the risk for CVD.

In addition to the enormous morbidity and mortalityassociated with CVD, the economic burden of CVD is also staggering as depicted in the figure below from the Cardiovascular Disease: ACostly Burden For America, Projections Through 2035 report by the AHA. CVD is the costliest disease in the United States and the economicburden associated with CVD is expected to continue to soar. According to the CDC Foundation, every year, one in six United States healthcaredollars is expended on CVD.

 

The AHA reports that in 2016, the cost of CVDwas $555 billion and is expected to rise to over $1 trillion by 2035. Of the $555 billion, $318 billion was associated with medical costs,and the remaining $237 billion with indirect costs such as lost productivity. By 2035, the medical costs associated with CVD are expectedto increase 135% to $749 billion, while the indirect costs are expected to rise by 55% to $368 billion. Currently, among the various typesof CVD, the medical costs of CHD are the highest at $89 billion and are expected to rise to $215 billion by 2035 as depicted in the figurebelow from the Cardiovascular Disease: A Costly Burden For America, Projections Through 2035 report by the AHA.

To address this expected significant rise inhuman health and economic burdens, the United States healthcare market is seeking more efficient and effective methods to better preventCVD. This same trend is playing out across developed nations around the globe as the burden of CVD continues to grow due to a rise inmajor risk factors such as obesity, poor diet and Type 2 diabetes. This is consistent with the cardiovascular diagnostic testing markettrends reported by Research and Markets in their Outlook on the Cardiovascular Diagnostic Testing Global Market to 2027 - Increasing Numberof Insurance Providers Presents Opportunities press release published on July 4, 2022. They estimate that the Global Cardiovascular DiagnosticTesting Market is estimated to grow from $8.47 billion in 2022 to $12.41 billion by 2027, with a CAGR of 7.94%.

There are several healthcare tailwinds thatare driving this expected growth and are expected to support the large-scale adoption of our solutions:

	·	The aging population:  According to the Population Reference Bureau, by 2060, the number of Americans aged 65 and over is projected to more than double from 46 million to over 98 million. This demographic shift will result in increased demand for healthcare services in general and for CVD specifically because the risk for CVD increases with age. According to the AHA, the risk for CVD at age 24 is about 20% and more than doubles to 50% by age 45, with 90% of those over the age of 80 having some form of CVD.
	·	The rise of chronic diseases:  Chronic diseases such as heart disease, cancer, and diabetes are rising in the United States. The rise of these conditions is further driven by less-than-ideal lifestyle choices such as smoking, an unhealthy diet, and sedentary behavior. As a result, better predictive and diagnostic tools are needed to get ahead of these conditions alongside the need for improved treatment and management of these conditions.
	·	The shift to value-based care:  The shift to value-based care drives healthcare providers to focus on quality rather than quantity of care. The shift to value-based care is a crucial driver of growth for Cardio because it incentivizes health care providers to focus on providing quality care rather than simply providing more care. Cardio believes providers can tackle the costliest and deadliest disease category with its solutions while reducing costs.
	·	The growth of telemedicine:  Driven largely by the COVID-19 pandemic, telemedicine is a growing trend in healthcare, as it allows patients to receive care from providers remotely. Remote, telemedicine-based preventative programs and tests can serve those who are already undergoing routine screening, but more importantly, expand reach to most Americans who currently are not receiving preventative healthcare, including rural and underserved populations. our evidence-based solutions can be deployed remotely, which is expected to further drive adoption by patients and clinicians.
	·	The adoption of Artificial Intelligence (AI):  AI is increasingly incorporated into many aspects of healthcare, including administrative tasks, diagnosis and treatment. AI has the potential to improve the quality of care while reducing costs. Machine learning, which is a type of AI, is instrumental to our cutting-edge solutions, powering their clinical performance and differentiating them from other technologies for CVD.
	·	The rise of patient engagement:  Thanks to technology, patients are becoming more engaged in their healthcare. They use online tools to research their conditions and treatments and are more likely to participate in their care. This includes demanding cutting-edge clinical tests that can help them better prevent chronic diseases such as CVD while improving the length and quality of life. As a result, healthcare providers and organizations that offer such services including our solutions are likely to have an edge over those who do not.

 

Our Strategy

	·	Building compelling evidence.  Our AI-driven Integrated Genetic-Epigenetic Engine™ enables rapid design, development, and launch of diagnostic solutions resulting from a decade of research studies. Our solutions that result from this technology, including our Epi+Gen CHD™ test for coronary heart disease risk assessment and PrecisionCHD™ for the early detection of coronary heart disease, were developed through rigorous studies that are peer-reviewed and published and others that are being prepared for peer-reviewed publication in collaboration with leading healthcare and research institutions. In addition to the superior sensitivity of the Epi+Gen CHD™ and PrecisionCHD™ tests, the evidence bases for the Epi+Gen CHD™ test also include an economic case to drive a more holistic and compelling argument for adoption. We plan to continue such studies including similar health economic studies for the PrecisionCHD™ test.
	·	Engaging experts and key stakeholders. At Cardio, we understand that engaging experts and key healthcare stakeholders is critical to realizing our solutions’ full potential and ensuring that these solutions reach as many people as possible.
	·	Prioritizing and executing strategic acquisitions. Our expertise at several intersections across biology, machine learning, lab assay development, and cardiovascular disease, provide an array of strategic acquisition opportunities to better serve the cardiovascular disease market by horizontally and vertically integrating the cardiac care continuum.
	·	Prioritizing payor coverage. We believe that to continue to grow the market traction of our solutions, it would require pursuing additional payor coverage. We are engaging the appropriate experts, building necessary evidence, and have a roadmap in place for this. As part of this priority, we are pursuing pilots and strategic collaborations. We expect that it will take six to twelve months to engage additional payors.
	·	Evaluating FDA pathway. Cardio is evaluating an FDA regulatory pathway to enable broader access to our tests.
	·	Targeting multiple revenue channels. To ensure that our revenue stream is diversified, Cardio has and will continue to target multiple revenue channels for which our solutions have compelling value propositions. This strategy includes, but is not limited to providers, health systems, and employers.
	·	Launching synergistic products. To more fully address cardiovascular health, Cardio is leveraging our AI-driven Integrated Genetic-Epigenetic Engine™ to develop a series of clinical tests for major types of cardiovascular disease and associated co-morbidities, including coronary heart disease, stroke, congestive heart failure and diabetes. We have also started to develop additional synergistic products other than new clinical blood tests. Our first such product, HeartRisk™, is a cardiovascular risk intelligence platform, designed to augment our clinical blood tests.

Our Technology

At the core of Cardio is our proprietary AI-drivenIntegrated Genetic-Epigenetic Engine™, an engine invented and built by three key employees/officers over the past decade. Our technologyenables rapid design, development and launch of new diagnostic solutions through the identification of robust integrated genetic-epigeneticbiomarkers and their translation into clinical tests for cardiovascular disease. This engine consists of multiple layers. It begins withgenome-wide genetic (single nucleotide polymorphisms or SNPs), genome-wide epigenetic (DNA methylation) and clinical data points. Usinghigh-performance computing, ML/AI techniques and deep domain expertise in medicine, molecular biology and engineering, a panel of SNP-DNAmethylation biomarkers and mined, modeled and translated into standalone laboratory assays.

Asa result, our products, which are clinical tests, consist of two components. The first is a laboratory component, which involves epigeneticDNA biomarkers. Genetic biomarkers (“SNPs”) represent an individual’s inherited risk for the disease, have been reported todrive less than 20% of the risk for cardiovascular disease (Hou, K et al, Aug 2019, Nature Genetics) and do not change with intervention(i.e., static). Epigenetic biomarkers (DNA methylation) represent anindividual’s acquired risk for the disease that is influenced by lifestyle and environment which is a larger driver for cardiovascularrisk compared to genetics, is largely confounded by genetics and has been shown to change over time with intervention or changes in one’slifestyle and environment (i.e., dynamic). The second is an analytical component, which involves applyinga proprietary interpretive predictive machine learning model to predict risk and provide personalized insights to assist physicians intailoring a prevention and care plan. The combination of biomarkers and predictive machine learning model is unique to each clinical testwe develop.

 

Our Products and Services

We have and will continue to leverage our AI-drivenIntegrated Genetic-Epigenetic Engine™ to develop a series of clinical tests for cardiovascular disease. As of November 2024, we haveleveraged this Engine to develop two clinical products: Epi+Gen CHD™ and PrecisionCHD™.

We believe thatour first product, Epi+Gen CHD™, is the first epigenetics-based clinical blood test capable of assessing near-term (three-year)risk for coronary heart disease (“CHD”) and our second product, PrecisionCHD™, is the first epigenetics-based clinicalblood test for the detection of CHD. 

Both Epi+Gen CHD™ and PrecisionCHD™are accompanied by our provider-only Actionable Clinical Intelligence™ platform, which maps a patient’s unique biomarker profileand other information onto modifiable factors such as diabetes, hypertension, hypercholesterolemia and smoking, known to be critical driversof coronary heart disease.

CardioInnovate360™ is a research use only(“RUO”) solution we launched to support the discovery, development and validation of novel biopharmaceuticals for the assessmentand management of cardiovascular diseases.

Recently, we launched our first software product,HeartRisk™. HeartRisk™ is a cardiovascular risk intelligence platform that combines insights from HIPAA-compliant anonymizedand aggregated clinical cardiovascular data obtained through our Epi+Gen CHD™ and PrecisionCHD™ clinical blood tests, withindustry and geographic data to enable real-time population-level cardiovascular disease (“CVD”) risk insights. These insightsare customized for the stakeholder implementing our clinical solutions.

Clinicians’ Current Approach to Cardiovascular Disease

Currently, a patient’s risk for CVD isgenerally assessed using two common lipid-based clinical tests known as Framingham Risk Score (“FRS”) and ASCVD Pooled CohortEquation (“PCE”). FRS and PCE are 10-year CVD risk calculators that aggregate common clinical variables such as cholesteroland diabetes, demographics and subjective, self-reported information such as smoking status. For the early detection of CHD, tests thatare routinely used in a provider setting include stress echocardiograms. These tests have several limitations and are less effective forseveral reasons:

	·	In a peer-reviewed published study by Cardio in collaboration with Intermountain Healthcare (Dogan, Meeshanthini & Knight, Stacey & Dogan, Timur & Knowlton, Kirk & Philibert, Robert. (2021). External validation of integrated genetic-epigenetic biomarkers for predicting incident coronary heart disease. Epigenomics. 13. 10.2217/epi-2021-0123), we found that for three-year coronary heart disease risk assessment, the average sensitivity of FRS and PCE was 44% in men and 32% in women. This means that for every 100 men and 100 women deemed “at-risk” for a coronary heart disease event, the test only correctly identifies 44 men and 32 women. Similar study was performed for PrecisionCHD that demonstrates its high sensitivity and is undergoing the process to be peer-reviewed and published.
	·	In a peer-reviewed published study by Cardio in collaboration with Intermountain Healthcare and University of Iowa Hospitals and Clinics (Philibert, Robert & Dogan, Timur & Knight, Stacey & Ahmad, Ferhaan & Lau, Stanley & Miles, George & Knowlton, Kirk & Dogan, Meeshanthini. (2023). Validation of integrated genetic-epigenetic test for the assessment of coronary heart disease. Journal of American Heart Association. 12:e030934. DOI: 10.1161/JAHA.123.030934), we found that the overall average area under the curve, sensitivity, and specificity in three independent test cohorts for detecting coronary heart disease were 82%, 79%, and 76%, respectively.
	·	The fasting requirement for current tests could be cumbersome for patients to comply, and the lack of fasting could affect test results.
	·	The patient care plan that results from these tests generally lack personalization.
	·	Lipid-based risk assessment tests depend on self-reported, subjective information such as smoking status from patients, and inaccurate information could affect the accuracy of test results.
	·	Undergoing these tests requires an in-person clinic visit to collect blood samples and other necessary data points such as blood pressure, which may delay or prevent access to primary prevention, e.g., for those who are unable to make time for the visit, have transportation issues or live in rural areas are likely to delay primary prevention altogether. Similarly, to undergo a stress echocardiogram for instance, an in-person visit is required, and such a visit can take weeks to schedule that could delay care for patients especially if they are experiencing symptoms such as chest pain.
	·	Risk assessment tests were also developed predominantly using data from men and therefore, may be less effective for women.

 

Epi+Gen CHD™ is the Only Epigenetics-based Clinical Testfor Coronary Heart Disease Risk Assessment

Epi+Gen CHD™ is a scientifically backedclinical blood test that is based on an individual’s objective genetic and epigenetic DNA biomarkers for assessing the three-yearrisk for a coronary heart disease such as a heart attack. In a peer-reviewed study done in collaboration with Intermountain Healthcare(Dogan, Meeshanthini & Knight, Stacey & Dogan, Timur & Knowlton, Kirk & Philibert, Robert. (2021). External validationof integrated genetic-epigenetic biomarkers for predicting incident coronary heart disease. Epigenomics. 13. 10.2217/epi-2021-0123), thistest demonstrated a 76% and 78% sensitivity for men and women, respectively, for three-year CHD risk. This means that for every 100 menand 100 women deemed “at-risk” for a coronary heart disease event, the test correctly identifies 76 men and 78 women. In comparison,the average sensitivity of the Framingham Risk Score and the ASCVD Pooled Cohort Equation was found to be 44% and 32% for men and women,respectively. The performance of the test in this study was evaluated across two cohorts that were independent of each other. One cohortwas used for the development of this test and the other was used to independently validate the performance of the test, showing Epi+GenCHD™ to be approximately 1.7 times and 2.4 times more sensitive than the current lipid-based clinical risk estimators in men andwomen, respectively. In another peer-reviewed study focusing on the cost utility of Epi+Gen CHD™ (Jung, Younsoo & Frisvold,David & Dogan, Timur & Dogan, Meeshanthini & Philibert, Robert. (2021). Cost-utility analysis of an integrated genetic/epigenetictest for assessing risk for coronary heart disease. Epigenomics. 13. 10.2217/epi-2021-0021), this test was associated with up to $42,000in cost savings per quality adjusted life year and improved survival compared to the ASCVD Pooled Cohort Equation. In another peer-reviewedstudy, (Philibert, Willem & Andersen, Allan & Hoffman, Eric & Philibert, Robert & Dogan, Meeshanthini. (2021). The reversionof DNA methylation at coronary heart disease risk loci in response to prevention therapy. Processes. 9, 699. https://doi.org/10.3390/pr9040699),DNA methylation of this test was shown to change within 90 days of intervention in the form of smoking cessation, demonstrating that thistest could potentially also be leveraged to evaluate the effectiveness of interventions.

The blood-based version of this test was introducedfor market testing in 2021 The pricing of the test varies based on factors such as organization type and test volume. The price of thetest and revenue streams could change in the future depending on market forces and payor requirements, as well as on the customerand the region in which the test is being sold. We are building additional clinical and health economics evidence to pursue payor coverage.A key first step in expanding critical payor coverage is to have this test be assigned a CPT PLA code, and recently, the American MedicalAssociation awarded the Epi+Gen CHD™ a CPT PLA code, 0439U. These codes went effective on April 1, 2024.

We believe that the Epi+Gen CHD™ testcan benefit numerous healthcare stakeholders. For instance, we believe that this test will enable clinicians to identify patients at-riskin the near-term for CHD-related events, including a heart attack and utilize actionable insights from this test to provide more personalizedcare for their patients to help prevent the event and improve outcomes. These actionable insights are conveyed via our provider-only ActionableClinical Intelligence™ platform, which maps a patient’s unique biomarker profile and other information onto modifiable factorssuch as diabetes, hypertension, hypercholesterolemia and smoking, known to be critical drivers of coronary heart disease. In additionto clinicians, we believe that this test can enable healthcare organizations and payors to reduce the cost of care, and employers to understandand manage business risks including healthcare costs. Insights for these stakeholders upon leveraging the Epi+Gen CHD™ test areprovided via our new software product, HeartRisk™, which is a cardiovascular risk intelligence platform. The pricing for this platformwill be customized based on the organization type and size.

PrecisionCHD™ is the Only Epigenetics-based Clinical Testfor the Early Detection of Coronary Heart Disease

PrecisionCHD™ is a scientifically backedclinical blood test that is based on an individual’s objective genetic and epigenetic DNA biomarkers for the detection of coronaryheart disease. In a peer-reviewed published study by Cardio in collaboration with Intermountain Healthcare and University of Iowa Hospitalsand Clinics (Philibert, Robert & Dogan, Timur & Knight, Stacey & Ahmad, Ferhaan & Lau, Stanley & Miles, George &Knowlton, Kirk & Dogan, Meeshanthini. (2023). Validation of integrated genetic-epigenetic test for the assessment of coronary heartdisease. Journal of American Heart Association. 12:e030934. DOI: 10.1161/JAHA.123.030934), this test demonstrated an overall average areaunder the curve, sensitivity, and specificity in three independent test cohorts for detecting coronary heart disease of 82%, 79%, and76%, respectively. The average sensitivity for men and women were 80% and 76%, respectively. This means that for every 100 men and 100women deemed “to have” coronary heart disease, the test correctly identifies 80 men and 76 women. In comparison, the mostcommonly used and least invasive test for detecting coronary heart disease, exercise ECG, has a sensitivity of only 58%. The performanceof the test in this study was evaluated across three cohorts that were independent of each other. One cohort was used for the developmentof this test and the other two were used to independently validate the performance of the test, showing PrecisionCHD™ to be approximately1.4 times and 1.3 times more sensitive than an exercise ECG in men and women, respectively, for detecting coronary heart disease. In anotherpeer-reviewed study, (Broyles, Damon & Philibert, Robert. (2023). Precision epigenetics provides a scalable pathway for improvingcoronary heart disease care globally. Epigenomics. 10.2217/epi-2023-0233), the global scalability of PrecisionCHD was outlined in comparisonto commonly used coronary heart disease tests such as exercise ECG and CCTA. Similar to the Epi+Gen CHD™ test, a peer-reviewed studywas conducted to evaluate if the DNA methylation biomarkers of PrecisionCHD could be potentially leveraged to evaluate the effectivenessof interventions. In this peer-reviewed study, (Philibert, Robert & Moody, Joanna & Philibert, Willem & Dogan, Meeshanthini& Hoffman, Eric. (2023). The reversion of epigenetic signature of coronary heart disease in response to smoking cessation. Genes.14, 1233. https://doi.org/10.3390/genes14061233), DNA methylation of this test was shown to change within 90 days of intervention in theform of smoking cessation.

The blood-based version of this test was introducedfor market testing in 2023. The pricing of the test varies based on factors such as organization type and test volume. Recently, the AmericanMedical Association awarded the PrecisionCHD™ a CPT PLA code, 0440U. The price of the test and revenue streams could change in the futuredepending on market forces and payor requirements, as well as on the customer and the region in which the test is being sold. We are continuingto build clinical and health economics evidence to pursue payor coverage.

We believe that the PrecisionCHD™ testcan benefit numerous healthcare stakeholders. For instance, we believe that this test will enable clinicians to identify patients withCHD with a simple blood test and utilize actionable insights from this test to provide more personalized care for their patients to helpimprove outcomes. These actionable insights are conveyed via our provider-only Actionable Clinical Intelligence™ platform, whichmaps a patient’s unique biomarker profile and other information onto modifiable factors such as diabetes, hypertension, hypercholesterolemia,and smoking, known to be critical drivers of coronary heart disease. In addition to clinicians, we believe that this test can enable healthcareorganizations and payors to reduce the cost of care, and employers to understand and manage business risks including healthcare cost.Insights for these stakeholders upon leveraging the PrecisionCHD™ test are provided via our new software product, HeartRisk™,which is a cardiovascular risk intelligence platform. The pricing for this platform will be customized based on the organization typeand size.

Cardio intends to accelerate the adoption ofEpi+Gen CHD™ and PrecisionCHD™ by:

	·	developing strategic clinical partnerships to reach as many patients as possible;
	·	leveraging industry organizations to engage and educate providers;
	·	launching a piloting program to for innovative providers and key strategic partners;
	·	developing strategic partnerships with other healthcare stakeholders such as payors and employers; and
	·	developing a customized customer portal to reduce transaction friction.

Cardio foresees potential opportunities toincrease the gross margin of the Epi+Gen CHD™ and PrecisionCHD™ by:

	·	establishing a laboratory to potentially reduce cost associated with processing samples;
	·	processing patient samples in the laboratory in larger batches;
	·	shipping sample collection kits in larger batches; and
	··	increasing the level of automation to reduce manual processing.

FDA Pathway

We have completed a pre-submission with theFDA pertaining to our PrecisionCHD product and have received feedback from the FDA on that submission. We may complete additional pre-submissionsto the FDA as we continue to evaluate FDA’s feedback and further develop our regulatory strategy. We have engaged outside expertisefor this process.

Product Pipeline 

We have several other tests in our product pipelineat various stages of development for congestive heart failure, stroke and diabetes. However, as a company in the early stages of its development,we continuously reevaluate our business, the market in which we operate and potential new opportunities. We may modify our product pipeline,seek other alternatives within the healthcare field in order to grow the Company’s business and increase revenues. Such alternativesmay include, but not be limited to, combinations or strategic partnerships with other laboratory companies or with medical practices suchas hospitalists or behavioral health.

Our Market Opportunity

Cardiovascular disease (“CVD”) isthe leading cause of death in the United States, accounting for one in four deaths. Despite being largely preventable, the American HeartAssociation projects that by 2035, nearly 45% of Americans will have some form of CVD. One of the key ways to address the prevalence ofCVD is to shift the approach for CVD from reactive treatment to proactive prevention and earlier detection. As such, technologies thatcan more precisely assess the risk for and detect CVD before symptoms emerge or a catastrophic cardiac event occurs becomes even morecritical.

According to Research and Markets in their Outlookon the Cardiovascular Diagnostic Testing Global Market to 2027 - Increasing Number of Insurance Providers Presents Opportunities pressrelease published on July 4, 2022, the Global Cardiovascular Diagnostic Testing Market is estimated to grow from $8.47 billion in 2022to $12.41 billion by 2027, with a CAGR of 7.94%. The increasing prevalence of cardiovascular diseases, technological advancements in cardiovasculardisease diagnostics, and the growing number of initiatives to promote cardiovascular disease testing are the major factors driving thegrowth of this market.

Our principal mission is to enable better detectionof the presence and risk of major cardiovascular diseases through a series of clinical tests developed by leveraging our proprietary AI-drivenIntegrated Genetic-Epigenetic Engine™. Our initial product, Epi+Gen CHD™, is a highly sensitive and accessible clinical testfor three-year coronary heart disease (“CHD”) risk assessment. Our second product, PrecisionCHD™, is a highly sensitiveand accessible clinical test for the detection of CHD.

Using data from the US Census Bureau, Cardioestimates that 146 million adults would potentially benefit from our Epi+Gen CHD™ test, 157 million adults for our PrecisionCHDtest, 152 million adults for the congestive heart failure test, 153 million adults for the stroke test and 140 million adults for thediabetes test. The pricing of each of our tests may vary, but the US addressable market equates to $51 billion for Epi+Gen CHD™,assuming a pricing of $350/test, $134 billion for PrecisionCHD™, assuming a price of $850/test, $53 billion for congestive heartfailure, assuming a pricing of $350/test, $53 billion for stroke, assuming a pricing of $350/test and $49 billion for diabetes, assuminga pricing of $350/test for a total US addressable market of $340 billion. This total addressable market evaluation also assumes that onepatient could be tested with multiple tests, and each test is administered to each patient a single time in a year although some patientsmay benefit from being re-tested in less than a year.

Go-To-Market Strategy for Epi+Gen CHD™ and PrecisionCHD™

Our current go-to-market (“GTM”)strategy is predominantly a product-led innovation growth strategy that emphasizes enterprise-wide adoption across key healthcare sub-verticalswith a particular emphasis on deeply centralized key opinion and health trend leaders like innovative providers, health systems, and employers.This strategy is augmented with a bottom-up consumer-led sales focused on directly acquiring and retaining savvy and health-consciousconsumers interested in using the latest technologies to address their cardiovascular disease risk concerns.

Healthcare Sub-Vertical Priorities for Epi+Gen CHD™ andPrecisionCHD™

By assessing the risk for CHD early and/or detectingCHD early to potentially avert a heart attack, we believe that the clinical and economic utility of the Epi+Gen CHD™ and PrecisionCHD™tests will support their commercial adoption. We believe that Epi+Gen CHD™ and PrecisionCHD™ can address a significant addressablemarket opportunity even before these tests are covered and reimbursed by payors. While we believe that such coverage and reimbursementwould be necessary to gain widespread adoption, obtaining such coverage and reimbursement from federal and private payors may take severalyears, if it is obtained at all. We intend to focus on the following key channels as part of our GTM strategy:

	·	Innovative Health Systems

 

As innovative health systems diversify theirbusiness models and care delivery pathways, there is a renewed emphasis on using precision medical technologies to better manage expensiveand chronic conditions, including CHD. By assessing the risk for CHD before a cardiac event, Epi+Gen CHD™ has the potential to improvepopulation health. We believe that the improved performance of our test compared to other risk calculators, coupled with evidence of costsavings and enhanced survival, will drive the adoption of Epi+Gen CHD™ by health systems to continue improving the health of theirpatients. Similarly, with PrecisionCHD™, innovative health systems are able to help test their patients detect CHD earlier witha simple blood test, potentially leading to better patient outcomes.

	·	Physician-Directed Channels, Including Concierge Practices

Early adoption is driven by practices committedto innovation in medicine for patients who are more focused on preventive health and wellness and have the financial means to pay out-of-pocketfor concierge subscription services. There is a convergence in innovative providers, health-conscious consumers, and best-in-class testsand technologies in concierge medicine practices to provide on-demand elite personalized and readily accessible healthcare. With an estimated2,000 to 5,000 concierge practices in the United States, there is robust growth in high-end healthcare services with an equal demand forinnovative diagnostic tools. Additionally, concierge practices are not price-sensitive, so reimbursement is not a top priority.

	·	Employers

Early adoption in the employer space is likelyto be driven by self-insured employers and employers looking to provide employee perks relevant to health. Self-insured employers areconsistently seeking solutions to help manage their biggest cost centers such as heart disease. In a post-pandemic world, the health andwellbeing of employees are also top-of-mind for many employers to ensure that their employees are healthy and productive. Employers viewhealthcare investments as another investment in the business. Employers leveraging innovative diagnostic solutions can connect betterhealth for employees to drive overall business objectives and have a competitive advantage in managing business risks while attractingand retaining talent.

	·	Telemedicine and Marketplaces

Many Americans are concerned about being proactivewith their health needs. Understanding their personalized risk with tests at the forefront of medicine is crucial for those with financialresources. According to the U.S. Census Bureau based on the 2020 census, there are nearly 44 million households that earn $100,000 ormore annually. We expect high-earning Americans who are proactive about their health to constitute the initial attainable market.

Sales and Marketing for Epi+Gen CHD™ and PrecisionCHD™with a Focus on Strategic Channel Partnerships

While our overall sales and marketing initiativeswill span the gamut across traditional, print, and digital media, our primary sales and marketing strategy consists of the branding, collaboration,co-marketing, and co-sales opportunities involved in strategic channel partnerships. By prioritizing strategic channel partnerships, webelieve we can accelerate our market penetration into the key healthcare sub-verticals we intend to prioritize for our growth. The keyto our efforts is a well-defined and executed channel partnership integration strategy that will serve to accelerate the sales cyclesfor each of our distribution channels. The sales cycles are generally defined as the period in which such distribution channel will turnover its inventory of our tests, which may vary for each distribution channel. Utilizing and developing such strategic channel partnerships,we believe, will generate revenue in a myriad of ways including larger contracts for our Epi+Gen CHD™ and PrecisionCHD™clinical blood tests, and bundling our solutions alongside other synergistic technologies, services, and products.

Strategic channel partnerships are key for thegrowth of our solutions. There are several key revenue and strategy benefits to developing a robust channel partnership strategy, including:

·

Defensibility and Displacement

Strategic channel partners may have exclusivityagreements for Epi+Gen CHD™ and PrecisionCHD™, which forecloses distribution channels to potential competitors.

·

Distribution and Network Effects

 

Channel partners under consideration for Epi+GenCHD™ and PrecisionCHD™ strategic partnerships have large, related healthcare and life science networks that we expect to leverageas part of the relationship.

·

Bi-Directional Value

The cardiovascular disease space is of paramountconcern to stakeholders across the healthcare continuum; the scale of the disease across the population and the associated costs ensuresthat addressing cardiovascular disease from a payment, cost, patient outcome, and prevention standpoint for stakeholders across the spectrum.

·

Pricing Differentiation

The economics of each channel partnership canbe crafted independently to offer each strategic partner a per-unit cost relevant to the size of their network.

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Complementary Goods

Bundling Epi+Gen CHD™, PrecisionCHD™,HeartRisk™ and future Cardio solutions alongside complementary clinical, analytics, treatment pathways, and services-consultingfor primary prevention optimization with key partners expands the ROI of the investment in our solutions.

Hiring and Talent to Accelerate Growth

Our growth strategy will require investmentin internal and external healthcare enterprise sales, marketing and deep customer insights. By combining best-in-class revenue operationstechnologies with seasoned healthcare sales and marketing experts, we believe we can quickly scale the selling approaches we have outlinedand validated to transform the cardiovascular healthcare experience, driving revenue and increased margins. New hires will be targetingthe entire continuum of revenue needs, including opportunity identification, campaign design, and execution.

Manufacture/Supply Chain

The content of the sample collections kits forboth Epi+Gen CHD™ and PrecisionCHD™ are identical, and we rely on third-party suppliers for kit contents required to collectand transport a blood sample to the lab for processing. These are commonly used supplies that are and can be sourced from multiple distributors.Upon sourcing these contents, they are assembled into lancet-based and vacutainer-based sample collection kits internally and fulfilled.We intend to maintain an inventory of fully assembled kits to meet expected demand for at least six months. However, since there are noparticular or unique assembly protocols and assembly is handled internally, the lead time to assemble additional sample collection kitswould be minimal after the contents are sourced.

Proprietary genetic and DNA methylation componentsare sourced from large manufacturers and manufactured under good manufacturing practices (“cGMP”). There are alternative manufacturersfor each of these components, and no additional lead time is expected. Laboratory assays that are manufactured under cGMP to specificationsare expected to be available to meet anticipated demand for at least six months.

Both the Epi+Gen CHD™ and PrecisionCHD™clinical blood tests currently are offered as LDTs through an experienced laboratory with the appropriate Clinical Laboratory ImprovementAmendments of 1988 (“CLIA”) certification and state licensure. However, we are currently setting up an internal operationalhub that includes a CLIA laboratory. We anticipate completing this process in 2024. However, we are moving at a measured pace in orderto preserve resources, so the timing of completion of the internal CLIA laboratory could be delayed until 2025. We will continue to usethe services of our outside laboratory without interruption until our laboratory is operational.

Our CompetitiveStrengths

Innovationis the key to success. In the rapidly moving cardiac diagnostics space, we believe that we have the team, differentiated technology, anddeep technical and business expertise to deliver a market differentiating suite of products for our customers to address unmetclinical needs in the cardiovascular space and help us dominate our market.

The pillar of our strategy has been innovation,from the onset with our technology development and intellectual property that account for future growth, to our commercialization andpartnership efforts that bring together key healthcare stakeholders.

We believe that,among other reasons, the future belongs to Cardio based on the following competitive strengths:

·

Technology and products are strongly backed by science.

Our technologyand products stem from over a decade of rigorous scientific research by the Founders in collaboration with other clinical and researchexperts from leading organizations. Our founders are experts in machine learning approaches in healthcare and in epigenetics with highly-citedpeer-reviewed publications. The technology and products are developed and validated with extensive clinical data. The key findings havebeen published after undergoing stringent independent third-party peer review.

·

Broad intellectual property portfolio protects our current and future products and their applications.

Asof March 2024, our patent portfolio includes five patent families, which encompasses issued patents in the U.S., United Kingdom, France,Germany, Italy, Switzerland, Ireland, Hong Kong, Australia, China, and India, one allowed U.S. patent application, two pending PCT Internationalapplications, and more than thirty patent applications pending worldwide, and which aregenerally directed to methods and compositions for detecting biomarkers associatedwith cardiovascular disease and diabetes for diagnosis and other applications. In addition, we have extensive trade secrets and know-how,including algorithms and assay designs, that that are critical for the continued development and improvement of our current and futureproducts. 

·

Big data and artificial intelligence (machine learning) expertise drive future product development.

Our expertise inprocessing billions of clinical genotypic, epigenetic and phenotypic data points to generate critical insights allows us to continue todevelop innovative products.

·

Proprietary cutting-edge AI-driven Integrated Genetic-Epigenetic Engine™ accelerates product development.

We havebuilt a proprietary AI-driven Integrated Genetic-Epigenetic Engine™ that is made up of layers of big data, our algorithms informedby biology and its expert domain knowledge that was designed and built over the past decade and can be leveraged to enablerapid design, development and launch of new diagnostic solutions.

·

Multiple potential product offerings with strong value propositions for key healthcare stakeholders.

We havebuilt a robust product pipeline for various types of cardiovascular disease and other indications that leverage our AI-driven IntegratedGenetic-Epigenetic Engine™ to continue to build market traction. We believe that our current and future products havestrong value propositions for various key stakeholders in healthcare. As a result, we believe that our customers will adopt and championour products.

·

Products that can potentially drive value in multiple ways.

We believethat our tests are the first epigenetics-based clinical tests for heart disease. Unlike genetic biomarkers that are static, the DNA methylation(epigenetic) biomarkers included in our products are generally dynamic. Therefore, DNA methylation biomarkers can change over time andas a result, in addition to initial assessment, our products could potentially be usedto personalize interventions and help monitor the effectiveness of these interventions.

 

·

Commercial processes that are inherently scalable to meet demand.

Our commercialpipeline is inherently scalable. Laboratory testing kits consist of easy to synthesize oligonucleotide products, readily available PCRreagents, and can be kitted months in advance. Our lancet and vacutainer-based sampling kits incorporate readily available componentsthat can be sourced from several vendors. Our propriety algorithms can be scaled and automated to process data from thousands of samples.In addition, the laboratory processes can be automated and scaled by adding existing commercial equipment.

·

A leadership team of seasoned healthcare professionals and executives that is led by a visionary founder.

Cardio is led by a management team with experiencein inventing innovative technologies, developing and commercializing clinical products, and building high growth companies.

Competition

Even though we believe that our solutions providesignificant advantages over solutions that are currently available from other sources, we expect continued intense competition. This includescompanies that are entering the cardiovascular diagnostics market or existing companies that are looking to capitalize on the same orsimilar opportunities as Cardio is in the clinical and non-clinical spaces. Some of our potential and current competitors have longeroperating histories and have, or will have, substantially greater financial, technical, research, and other resources than we do, alongwith larger, more established marketing, sales, distribution, and service organizations. This could enable our competitors to respondmore quickly or efficiently than it can to capture a larger market share, respond to changes in the regulatory landscape or adapt to meetnew trends in the market. Having access to more resources, these competitors may undertake more extensive research and development efforts,substantially reduce the time to introducing new technologies, accelerate key hires to drive adoption of their technologies, deploy morefar-reaching marketing campaigns and implement a more aggressive pricing policy to build larger customer bases than we have. In some cases,we are competing for the same resources our customers allocate for purchasing cardiovascular diagnostics products or for establishingstrategic partnerships. We expect new competitors to emerge and the intensity of competition to increase. There is a likelihood that ourcompetitors may develop solutions that are similar ours and ones that could achieve greater market acceptance than ours. This could attractcustomers away from our solutions and reduce our market share. To compete effectively, we must scale our organization and infrastructureappropriately and demonstrate that our products have superior value propositions, cost savings, and clinical performance.

The clinical cardiovascular diagnostic spaceis perhaps the most intensely competitive market space in clinical medicine. Even though we believe our solutions offer significant advantagesto existing methods, we expect alternative biomarker assessment approaches to continue to exist and to be developed. With respect to coronaryheart disease (CHD) risk assessment and early detection, our competitors use a variety of technologies including genetic, serum lipid-based,imaging, proteomic and “people tracking” approaches.

Genetic testing, both whole genome and morefocused panel modalities, is the first type of biomarker assessment and is used by many clinicians to assess lifetime risk for CHD. However,whereas the scientific tenets for this approach are generally accepted, it does not identify when the CHD might develop, and we believethat the relative power of this method for predicting CHD as compared to its Epi+Gen CHD™ test is limited. In addition, whereasthe use of this test may divert revenues for testing, this approach is in some respects complementary, and it is conceivable that someclinicians may elect to get both forms of testing to have a more holistic assessment of both short term and lifetime risk.

The best-known biomarker approach is that embodiedby the American Heart Association/American College of Cardiology Atherosclerotic Cardiovascular Risk Calculator (referred to ASCVD riskcalculator or Pooled Cohort Equation). This method integrates laboratory assessment of serum lipids, blood pressure and self-reportedhealth variables to impute 10-year risk for all forms of atherosclerotic cardiovascular disease (mainly CHD, but also stroke and peripheralartery disease) using a standard algebraic equation. This is the most commonly used method of assessing CHD risk and enjoys general acceptanceby the medical community. It is perhaps the most direct competitor for our Epi+Gen CHD™ test. We believe that our test has superiorperformance, does not require overnight fasting and will eventually provide greater information to the clinician than this current marketstandard. In addition, we note that our test assesses risk over a three-year window rather than a 10-year window which it believes isa more relevant period of time for patient management.

Imaging modalities are also used to assess riskfor and detect CHD. Perhaps the most commonly used imaging method for predicting risk for CHD is Coronary Artery Calcium (“CAC”)screening. In this method, a low intensity computed tomography (“CT”) scan is taken of the heart. Then using this data, theamount of calcium laden plaque is determined and the result used to assess 10-year risk for CHD. Strengths of this approach include thegeneral acceptance of the medical community. Weaknesses include the necessity of exposing patients to x-ray radiation and the inabilityof the CAC test to monitor patient response. In many ways, this test competes with our test. At the same time, we note that this testis not yet recommended as a primary method for screening low risk individuals, uses a longer risk assessment window, and could actuallybe used as secondary testing to evaluate patients who are not found to be at low risk using Epi+Gen CHD™ or who are flagged forCHD by the PrecisionCHD™ test.

Proteomic methods, as exemplified by serologicassessments of individual proteins such as c-reactive protein or of entire protein panels, such as that for the HART CADhs or CVE testsfrom Prevencio are another risk assessment tool. The CADhs test is a good example of a proteomic competitor and predicts the one-yearrisk for having ≥70% stenosis in a major coronary artery while another Prevencio test HART CVE, predicts one year risk for individualsat risk for developing a major adverse cardiovascular event. Important differences between our tests and their offerings include the windowof prediction (three-year vs one-year), the type of technology employed (AI-guided interpretation of genotype and methylation sensitivedigital PCR results compared to algorithm interpretation of results from Luminex bead immunoassays). Because we believe that digital PCRbased methods are more scalable testing solutions than Luminex bead platforms, we believe that our approach has an advantage.

Finally, researchers have described methodsto use wearable devices, such as the Huami wrist device, to predict risk for cardiovascular disease. Although people doubtlessly use theseand similar methods derived from wearable devices to assess risk, their exact clinical market penetrance is currently low, and whetherthey would pose as a direct competitor for our test remains uncertain.

However, the aforementioned is only a snapshotof the current market space in which we currently compete and which we intend to compete in the future. Our intellectual property claimsinclude methods to develop tests for coronary heart disease, as well as incident and prevalent heart failure, stroke and diabetes. Thetest for prevalent coronary heart disease, whose basis was published in 2018, is well underway, and we expect this test to become a strongcompetitor for other methods of establishing current CHD, such as exercise treadmill testing, and for monitoring response to CHD treatment.

In summary, the cardiovascular diagnostic spaceis extremely competitive and fast moving. We believe that the serum lipid, proteomic and to a certain extent, imaging-based modalitiesare direct competitors for customers and enjoy both large existing market share and substantial financial backing. In addition, it isclear that these existing alternative assessment strategies have significant degrees of scientific literature supporting their use, enjoybacking from key medical constituencies for their use in certain circumstances, and have established strategies for obtaining third partyreimbursement. As the population ages, this competition is likely to increase. At the same time, we believe that there are important differencesbetween the current tests offered and our solutions with respect to clinical performance, window of clinical assessment, scalability,capacity for assisting with interventions and response monitoring. However, the other technologies are not static, and we expect refinementsand/or combination of existing approaches to vigorously compete for customers in our business space. We will need to scale our efforts,orient our organization appropriately and demonstrate that our products provide better value for our customers.

Intellectual Property

We have made broad pending intellectual property(“IP”) claims with respect to the use of epigenetic and gene-methylation interactions for the assessment and monitoring ofcardiovascular disease, specifically coronary heart disease, congestive heart failure and stroke, as well as diabetes. Our portfolio fallsinto five patent families. These patent applications have been filed in the United States and a number of foreign jurisdictions includingthe European Union, Japan, India, Canada and China. In the U.S., Patent No. 11,414,704, titled Compositions and Methods for DetectingPredisposition to Cardiovascular Disease, was issued in 2022 to the University of Iowa Research Foundation (“UIRF”), the co-inventorsof which are Dr. Dogan and Dr. Philibert, our Chief Executive Officer and Chief Medical Officer, respectively. This patent family alsoincludes issued patents in Europe, China, Australia, India, a notice of allowance in the US, and a number of other pending applications.We have a worldwide exclusive license agreement with UIRF. Under UIRF’s Inventions Policy, inventors are generally entitled to 25%of income from earnings from their inventions. Consequently, Dr. Dogan and Dr. Philibert will benefit from this policy.

Our issued and pending patents cover generalmethods as well as key technological steps that enable these core approaches while facilitating the continued patenting of material includedin the patent applications. In addition to the technology licensed from UIRF, we have other patent applications pending relating to improvementsto our technology, which are potentially valuable and of possible strategic importance to the Company. We expect to continue to filenew patent applications to protect additional products and methodologies as they emerge.

The initial work on our AI-driven IntegratedGenetic-Epigenetic Engine™ is derived from work done by our founders while at the University of Iowa. Follow-on work on our coretechnology also is derived from work done by our founders while at the University of Iowa but was furthered by our founders and Cardio’sChief Technology Officer independent of the University of Iowa. The follow-on work is described in our second, third, fourth and fifthfamilies of patent applications.

The initial work is described in the firstfamily of patents and patent applications and is generally directed to a number of single nucleotide polymorphism (“SNP”)biomarkers and a number of methylation site biomarkers that are associated with the presence or the early onset of a number of cardiovasculardiseases. The first family of patents and patent applications is owned solely by UIRF and is exclusively licensed by Cardio. As of November2024, this family includes eleven granted patents, one soon-to-be issued patent (received notice of allowance), and seven pending patentapplications. Any and all patents issuing in this family will be solely owned by UIRF and, barring any changes to the UIRF exclusivelicense agreement, will fall under the exclusive license to Cardio.

The first family is generally directed to biomarkers associated withcardiovascular disease. This family includes issued patents in the US, United Kingdom, France, Germany, Italy, Switzerland, Ireland,Hong Kong, Australia, China and India, an allowed application in the U.S., and pending applications in Australia, Canada, China, Europe,Hong Kong, and Japan. The issued claims in the US, Australia, China and India are directed to methods and/or compositions (e.g.,kits) for determining the methylation status of at least one CpG dinucleotide and the genotype of at least one single-nucleotide polymorphism(“SNP”) that use or include at least one primer for detecting the presence or absence of methylation in a particular regionof the genome (referred to as cg12586707) and at least one primer for detecting the presence or absence of a SNP in a particular regionof the genome (referred to as rs11597065). The issued claims in the EP patent are similarly directed to compositions (e.g., akit) for determining the methylation status of at least one CpG dinucleotide and a genotype of at least one SNP that includes at leastone primer that detects the presence or absence of methylation in a particular region of the genome (referred to as cg26910465) and atleast one primer that detects a SNP in a particular region of the genome (referred to as rs10275666) or another SNP in linkage disequilibriumwith the first SNP. The allowed claims in the U.S. are directed to methods for determining the methylation status of at least one CpGdinucleotide and the genotype of at least one SNP that includes at least one primer that detects the presence or absence of methylationin a particular region of the genome (referred to as cg11964099) and at least one primer that detects a SNP in a particular region ofthe genome (referred to as rs9988960). This family of patents is in-licensed under an exclusive license agreement with UIRF, and is expectedto expire in 2037, absent any applicable patent term adjustments or extensions.

The second family is generally directed to biomarkersassociated with diabetes. This family includes pending applications in the U.S., Australia, United Arab Emirates, Canada, China, Europe,Hong Kong, India, Japan, Saudi Arabia, and Singapore, with claims directed to compositions (e.g., a kit) that include at leastone primer for determining the methylation status of at least one CpG dinucleotide from a group of five different methylation sites, ora different CpG dinucleotide in linkage disequilibrium with one of the listed CpG dinucleotides, and at least one primer for determiningthe genotype of at least one SNP from a group of five different SNPs, or a different SNP in linkage disequilibrium with one of the listedSNPs. The pending applications also include claims to methods of determining the presence of biomarkers associated with diabetes, claimsto a computer-readable medium for performing such methods, and claims to a system for determining the methylation status of at least oneCpG dinucleotide and the genotype of at least one SNP. This family is co-owned by Cardio Diagnostics and UIRF, and the UIRF-owned portionis in-licensed under the same exclusive license agreement as the first family. Patents issuing from this second family are expected toexpire in 2041, absent any applicable patent term adjustments or extensions.

The second family of patent applications isco-owned by UIRF and Cardio, since Cardio expanded on and further refined some of the original research that was done at the Universityof Iowa. The ownership of any and all patents that ultimately issue in this family will depend on the specific subject matter that isclaimed in each issued patent. For example, depending upon the specific biomarkers claimed and when those biomarkers were identified (e.g.,during the initial work at the University of Iowa or during the follow-on work at Cardio), ownership could lie solely with UIRF or Cardio,or ownership could be shared between UIRF and Cardio (e.g., if a claimed biomarker was initially identified at the University ofIowa and its significance with respect to diabetes was further refined by Cardio; or if one of the claimed biomarkers was identified atthe University of Iowa and another one of the claimed biomarkers was identified at Cardio).

The third family is generally directed to biomarkersassociated with predicting a three-year incidence of cardiovascular disease. This family includes applications pending in the U.S., Australia,United Arab Emirates, Canada, China, Europe, Hong Kong, India, Japan, Saudi Arabia, and Singapore, with claims directed to compositions(e.g., a kit) that include at least one primer for determining the methylation status of at least one CpG dinucleotide from a groupof three different methylation sites, or a different CpG dinucleotide in linkage disequilibrium with one of the listed CpG dinucleotides,and at least one primer for determining the genotype of at least one SNP from a group of five different SNPs, or a different SNP in linkagedisequilibrium with one of the listed SNPs. The pending applications also include claims to methods of determining the presence of biomarkersassociated with three-year incidence of cardiovascular disease, claims to a computer-readable medium for performing such methods, andclaims to a system for determining the methylation status of at least one CpG dinucleotide and the genotype of a SNP. This family of patentsis owned exclusively by Cardio Diagnostics. Patents issuing from this third family are expected to expire in 2041, absent any applicablepatent term adjustments or extensions.

The fourth family is generally directed to computerresources (e.g., a dashboard) designed by Cardio Diagnostics for use by their stakeholders (e.g., patients, physicians, researchers,insurance companies, etc.). The computer resources are designed to provide results as well as information and context related to CardioDiagnostics tests and the specific biomarkers that are used. The pending claims are directed to methods of displaying relevant informationincluding genetic marker test results as well as probability analysis (based on, e.g., the population, age, and/or gender of patients),and hyperlinks to relevant literature. The pending application also includes claims to computer-readable media containing instructionsfor performing such methods and computer systems for executing such instructions. This family currently includes an International PCTapplication and is solely owned by Cardio Diagnostics. Patents issuing from this fourth family are expected to expire in 2044, absentany applicable patent term adjustments or extensions.

The fifth familyis generally directed to biomarkers associated with detecting cardiovascular disease. The pending claims are directed to compositions(e.g., a kit) that include at least one primer for determining the methylation status of at least one CpG dinucleotide from a groupof six different methylation sites, or a different CpG dinucleotide in linkage disequilibrium with one of the listed CpG dinucleotides,and at least one primer for determining the genotype of at least one SNP from a group of ten different SNPs, or a different SNP in linkagedisequilibrium with one of the listed SNPs. The pending application also includes claims to methods of determining the presence of biomarkersassociated with detecting cardiovascular disease, claims to a computer-readable medium for performing such methods, and claims to a systemfor determining the methylation status of at least one CpG dinucleotide and the genotype of a SNP. This family currently includes an InternationalPCT application, a U.S. utility application, and an Indian application .Patents issuing from this fifth family are expected to expire in 2044, absent any applicable patent term adjustments or extensions.

The Exclusive License Agreement entered intowith UIRF and those licenses granted under that license agreement terminate on the expiration of the patent rights licensed under thelicense agreement, unless certain proprietary, non-patented technical information is still being used by Cardio, in which case the licenseagreement will not terminate until the date of termination of such use. The licenses under the license agreement could terminate priorto the expiration of the licensed patent rights if we materially breach our obligations under the license agreement, including failingto pay the applicable license fees and any interest on such fees, and failing to fully remedy such breach within the period specifiedin the license agreement, or if we enter liquidation, have a receiver or administrator appointed over any assets related to the licenseagreement, or if we cease to carry on business, file for bankruptcy or if an involuntary bankruptcy petition is filed against the Cardio

Additionally, we have considerable IP in theform of trade secrets, including bioinformatics and high-performance computing techniques and artificial intelligence and machine learningalgorithms used to identify genetic and epigenetic biomarkers for various products and to interpret genetic and epigenetic data from patientsamples to generate clinically actionable information, as well as the methods to develop new methylation sensitive assays. We protectour proprietary information, which includes, but is not limited to, trade secrets, know-how, and copyrights. Our future success dependson protecting that knowledge, obtaining trademarks on our products, copyright on key materials, and avoiding infringing on the IP rightsof others. Where appropriate, we will assess the operating space and acquire licenses for critical technologies that we do not possessor cannot create. We continue to invest in technological innovation and will seek mutualistic and symbiotic licensing opportunities topromote and maintain our competitive position.

In order to provide our products, we currentlyuse a variety of third party technologies including, for example, genotyping, digital methylation assessment and data processing technologies.The terms of these agreements for the non-exclusive use of these technologies are subject to change without notice and could affect ourability to deliver our solutions. In addition, from time to time, we may face claims from third parties asserting ownership of, or demandingrelease of, the open-source software or derivative works that we developed using such software (which could include our proprietary sourcecode), or otherwise seeking to enforce the terms of the applicable open-source license. These claims could result in litigation that couldbe costly to defend, have a negative effect on our operating results and financial condition or require us to devote additional researchand development resources to change our existing or future solutions. Responding to any infringement or noncompliance claim by an open-sourcevendor, regardless of its validity, discovering certain open-source software code in our products, or a finding that we have breachedthe terms of an open-source software license, could harm our business, results of operations and financial condition. In each case, wewould be required to either seek licenses to software or services from other parties and redesign our products to function with such otherparties’ software or services or develop these components internally, which would result in increased costs and could result indelays to product launches. Furthermore, we might be forced to limit the features available in our current or future solutions.

Government Regulation

The laboratory testing and healthcare industryand the practice of medicine are extensively regulated at both the state and federal levels, and additionally, the practice of medicineis similarly extensively regulated by the various states. our ability to operate profitably will depend in part upon its ability, andthat of its vendor partners, to maintain all necessary licenses and to operate in compliance with applicable laws and rules. Those lawsand rules continue to evolve, and therefore we devote significant resources to monitoring relevant developments in FDA, CLIA, healthcareand medical practice regulation. Those laws and rules include, but are not limited to, ones that govern the regulation of clinical laboratoriesin general and the regulation of LDTs in particular. As discussed below, legislation has been introduced in Congress that, if enacted,would substantially alter federal regulation of diagnostic tests, including LDTs. As the applicable laws and rules change, we are likelyto make conforming modifications in our business processes from time to time. In many jurisdictions where we operate, neither our currentnor our anticipated business model has been the subject of judicial or administrative interpretation. We cannot be assured that a reviewof our business by courts or regulatory authorities will not result in determinations that could adversely affect our operations or thatthe laboratory and healthcare regulatory environment will not change in a way that restricts our operations.

State and Federal Regulatory Issues

Clinical Laboratory Improvement Amendmentsof 1988 and State Regulation

Clinical laboratories are required to hold certainfederal and state licenses, certifications and permits to conduct our business. As to federal certifications, in 1988, Congress passedthe Clinical Laboratory Improvement Amendments of 1988, or (“CLIA”), establishing more rigorous quality standards for allcommercial laboratories that perform testing on human specimens for the purpose of providing information for the diagnosis, prevention,or treatment of disease or the assessment of the health of human beings. CLIA requires such laboratories to be certified by the federalgovernment and mandates compliance with various operational, personnel, facilities administration, validation, quality and proficiencytesting requirements intended to ensure the accuracy, reliability and timeliness of patient test results. CLIA certification is also aprerequisite to be eligible to bill state and federal healthcare programs, as well as many commercial third-party payers, for laboratorytesting services. The Centers for Medicare & Medicaid Services (“CMS”) regulates laboratories that perform testing onindividuals in the U.S. through CLIA.

Laboratories must comply with all applicableCLIA requirements. If a clinical laboratory is found not to comply with CLIA standards, the government may impose sanctions, limit orrevoke the laboratory’s CLIA certificate (and prohibit the owner, operator or laboratory director from owning, operating, or directinga laboratory for two years following license revocation), subject the laboratory to a directed plan of correction, on-site monitoring,civil monetary penalties, civil actions for injunctive relief, criminal penalties, or suspension or exclusion from the Medicare and Medicaidprograms.

CLIA provides that a state may adopt laboratorylicensure requirements and regulations that are more stringent than those under federal law and requires compliance with such laws andregulations. New York State in particular, has implemented its own more stringent laboratory regulatory requirements. State laws may requirethe laboratory to obtain state licensure and/or laboratory personnel to meet certain qualifications, specify certain quality control proceduresor facility requirements, or prescribe record maintenance requirements. Moreover, several states impose the same or similar state requirementson out-of-state laboratory testing specimens collected or received from, or test results reported back to, residents within that state.Therefore, the laboratory is required to meet certain laboratory licensing requirements for those states in which we offer services orfrom which we accept specimens and that have adopted regulations beyond CLIA. For more information on state licensing requirements, see“— California Laboratory Licensing,” “— New York Laboratory Licensing” and “— Other StateLaboratory Licensing Laws.”

California Laboratory Licensing

In addition to federal certification requirementsfor laboratories under CLIA, the laboratory is required under California law to maintain a California state license and comply with Californiastate laboratory laws and regulations. Similar to the federal CLIA regulations, the California state laboratory laws and regulations establishstandards for the operation of a clinical laboratory and performance of test services, including the education and experience requirementsof the laboratory director and personnel (including requirements for documentation of competency), equipment validations, and qualitymanagement practices. All testing personnel must maintain a California state license or be supervised by licensed personnel.

Clinical laboratories are subject to both routineand complaint-initiated on-site inspections by the state. If a clinical laboratory is found to be out of compliance with California laboratorystandards, the California Department of Public Health (“CDPH”), may suspend, restrict or revoke the California state laboratorylicense to operate the clinical laboratory (and exclude persons or entities from owning, operating, or directing a laboratory for twoyears following license revocation), assess civil money penalties, and/or impose specific corrective action plans, among other sanctions.Clinical laboratories must also provide notice to CDPH of any changes in the ownership, directorship, name or location of the laboratory.Failure to provide such notification may result in revocation of the state license and sanctions under the CLIA program. Any revocationof a CLIA certificate or exclusion from participation in Medicare or Medicaid programs may result in suspension of the California statelaboratory license.

New York Laboratory Licensing

We currently do not conduct tests on specimensoriginating from New York State. In order to test specimens originating from, and return results to New York State, a clinical laboratoryis required to obtain a New York state laboratory permit and comply with New York state laboratory laws and regulations. The New Yorkstate laboratory laws, regulations and rules are equal to or more stringent than the CLIA regulations and establish standards for theoperation of a clinical laboratory and performance of test services, including education and experience requirements of a laboratory directorand personnel, physical requirements of a laboratory facility, equipment validations, and quality management practices. The laboratorydirector(s) must maintain a Certificate of Qualification issued by the New York State Department of Health (“NYS DOH”) inthe permitted test categories.

A clinical laboratory conducting tests on specimensoriginating in New York is subject to proficiency testing and on-site survey inspections conducted by the Clinical Laboratory EvaluationProgram (“CLEP”) under the NYS DOH. If a laboratory is found to be out of compliance with New York’s CLEP standards,the NYS DOH, may suspend, limit, revoke or annul the New York laboratory permit, censure the holder of the license or assess civil moneypenalties. Statutory or regulatory noncompliance may result in a laboratory’s operator, owners and/or laboratory director beingfound guilty of a misdemeanor under New York law. Clinical laboratories must also provide notice to CLEP of any changes in ownership,directorship, name or location of the laboratory. Failure to provide such notification may result in revocation of the state license andsanctions under the CLIA program. Any revocation of a CLIA certificate or exclusion from participation in the Medicare or Medicaid programsmay result in suspension of the New York laboratory permit. 

The NYS DOH also must approve each LDT beforethat test is offered to patients located in New York.

Other State Laboratory Licensing Laws

In addition to New York and California, certainother states require licensing of out-of-state laboratories under certain circumstances. We have obtained licenses in the states thatwe believe require us to do so and believe we are in compliance with applicable state laboratory licensing laws, including Maryland andPennsylvania. We currently do not conduct tests on specimens originating from Rhode Island.

Potential sanctions for violation of state statutesand regulations can include significant monetary fines, the rejection of license applications, the suspension or loss of various licenses,certificates and authorizations, and in some cases criminal penalties, which could harm our business. CLIA does not preempt state lawsthat have established laboratory quality standards that are more stringent than federal law.

Laboratory-Developed Tests

The FDA generally considers an LDT to be a testthat is designed, manufactured, and used within a single laboratory that is certified under CLIA and meets the regulatory requirementsunder CLIA to perform high complexity testing. LDTs are performed using a variety of laboratory instruments and reagents and may alsoincorporate FDA-authorized in vitro diagnostics (“IVDs”) that the laboratory modifies in some way and validates for its newuse. The FDA has historically taken the position that it has the authority to regulate LDTs as medical devices under the Federal Food,Drug and Cosmetic Act (“FDC Act”), but it has generally exercised enforcement discretion with regard to LDTs. This means thateven though the FDA believes it can impose regulatory requirements on LDTs, such as requirements to obtain premarket approval, de novoauthorization, or 510(k) clearance of LDTs, it has generally chosen not to enforce those requirements to date. Although FDA has generallyexercised enforcement discretion for LDTs, the FDA has stated it retains discretion to require compliance with premarket when FDA deemsit appropriate to address significant public health concerns.

In September 2023, the FDA announced a proposedregulation that would, if adopted, alter the FDA’s historical exercise of enforcement discretion for LDTs by classifying LDTs asmedical devices. The proposed regulation would subject LDTs to a more stringent regulatory framework, including premarket clearanceor approval requirements, quality system regulations (“QSR”), and post-market surveillance obligations. Failure to comply withthese and other FDA regulations could result in legal actions, including fines and penalties. The FDA has indicated it plans to finalizethe proposed rule in the second quarter of 2024, though it is uncertain whether the FDA will finalize the proposed rule on this timelineor at all or whether there would be litigation challenging the final rule.

Legislative proposals addressing the FDA’soversight of LDTs have been previously introduced. In March 2020, the Verifying Accurate, Leading-edge IVCT Development (“VALID”)Act of 2020 was introduced in the Senate, which proposed a risk-based regulatory framework for IVDs and LDTs and required premarketapproval for some in vitro clinical tests. The VALID Act was reintroduced in June 2021 and again most recently in March 2023;the prospects for enactment are uncertain. In March 2020, the Verified Innovative Testing in American Laboratories (“VITAL”)Act of 2020 was introduced in the Senate, which would expressly shift the regulation of LDTs from FDA to CMS. The VITAL Act was reintroducedin May 2021, and has not since been reintroduced. Neither statute has been enacted.

As mentioned above, separately, CMS overseesclinical laboratory operations through the CLIA program.

Regulation by the U.S. Food and Drug Administration 

In May 2024, the FDA published a final ruleamending the definition of an IVD device to include IVDs manufactured by a clinical laboratory. The final rule also announced the FDA’sintention to phase out its general enforcement discretion policy. Unless the rule is overturned by a court or Congress, the medical devicerequirements for most LDTs will be phased in beginning on May 6, 2025.

Should the FDA decide to no longer exerciseenforcement discretion for LDTs, LDTs would be subject to extensive regulation as medical devices under the FDC Act and its implementingregulations, which govern, among other things, medical device development, testing, labeling, storage, premarket clearance or approval,advertising and promotion and product sales and distribution. To be commercially distributed in the United States, medical devices, includingsome collection devices used to collect samples for testing, and certain types of software, must receive from the FDA prior to marketing,unless subject to an exemption, clearance of a premarket notification (“510(k) clearance”), premarket approval (“PMA”),or a de novo authorization.

IVDs are a type of medical device that are intendedto be used in the diagnosis or detection of diseases or conditions, including a determination of the state of health, through collection,preparation and examination of specimens taken from the human body. IVDs may be used to detect the presence of certain chemicals, geneticinformation or other biomarkers related to diagnosis or detection of diseases or conditions. IVDs may include tests for disease prediction,prognosis, diagnosis, and screening.

The FDC Act classifies medical devices intoone of three categories based on the risks associated with the device and the level of control necessary to provide reasonable assuranceof safety and effectiveness. Class I devices are deemed to be low risk and are subject to the fewest regulatory controls. Many Class Idevices are exempt from FDA premarket review requirements. Class II devices, including some software products to the extent that theyqualify as a device, are deemed to be moderate risk, and generally require clearance through the premarket notification, or 510(k) clearance,process. Class III devices are generally the highest risk devices and are subject to the highest level of regulatory control to providereasonable assurance of the device’s safety and effectiveness. Class III devices typically require a PMA by the FDA before theyare marketed. A clinical trial is almost always required to support a PMA application or de novo authorization and is sometimes requiredfor 510(k) clearance. All clinical studies of investigational devices must be conducted in compliance with any applicable FDA and InstitutionalReview Board requirements. Devices that are exempt from FDA premarket review requirements must nonetheless comply with post-market generalcontrols as described below, unless the FDA has indicated otherwise.

510(k) clearance pathway. To obtain510(k) clearance, a manufacturer must submit a premarket notification demonstrating to the FDA’s satisfaction that the new deviceis substantially equivalent to a “predicate device.” A predicate device is a legally marketed device to which a new devicemay be compared to for a determination regarding substantial equivalence. A legally marketed device is a device that was previously 510(k)-cleared,a device that received de novo authorization, or a device that was in commercial distribution before May 28, 1976 for which the FDA hasnot called for submission of a PMA application. The FDA’s 510(k) clearance pathway usually takes from three to 12 months from submission,but it can take longer, particularly for a novel type of product.

PMA pathway. The PMA pathway requiresproof of the safety and effectiveness of the device to the FDA’s satisfaction. The PMA pathway is costly, lengthy, and uncertain.A PMA application must provide extensive preclinical and clinical trial data as well as information about the device and its componentsregarding, among other things, device design, manufacturing, and labeling. As part of its PMA review process, the FDA will typically inspectthe manufacturer’s facilities for compliance with QSR requirements, which impose extensive testing, control, documentation, andother quality assurance procedures. The PMA review process typically takes one to three years from submission but can take longer.

De novo pathway. If no predicatedevice can be identified, a device is automatically classified as Class III, requiring a PMA application. However, the FDA can reclassify,either on its own initiative or in response to a request for de novo classification, for a device for which there was no predicate deviceif the device is low- or moderate-risk. If the device is reclassified as Class II, the FDA will identify special controls that the manufacturermust implement, which may include labeling, testing, performance standards, or other requirements. Subsequent applicants can rely uponthe de novo device as a predicate for a 510(k) clearance, unless the FDA exempts subsequent devices from the need for a 510(k). The denovo route is intended to be less burdensome than the PMA process.

Post-market general controls. Aftera device, including a device exempt from FDA premarket review, is placed on the market, numerous regulatory requirements apply. Theseinclude: the QSR, labeling regulations, registration and listing, the Medical Device Reporting regulation (which requires that manufacturersreport to the FDA if their device may have caused or contributed to a death or serious injury or malfunctioned in a way that would likelycause or contribute to a death or serious injury if it were to recur), and the Reports of Corrections and Removals regulation (which requiresmanufacturers to report to the FDA corrective actions made to, or removal of, products in the field, if such actions were initiated toreduce a risk to health posed by the device or to remedy a violation of the FDC Act which may present a health risk). Depending on theseverity of the legal violation that led to correction or removal, the FDA may classify the manufacturer’s action as a recall.

The FDA enforces compliance with its requirementsthrough inspection and market surveillance. If the FDA finds a violation, it can institute a wide variety of actions, ranging from anuntitled or warning letter sent to manufacturers to enforcement actions such as fines, injunctions, and civil penalties; recall or seizureof products; operating restrictions, partial suspension or total shutdown of production; refusing requests for 510(k) clearance or PMAapproval of new products; withdrawal of PMAs already granted; and criminal prosecution. 

The FDA has become increasingly active in addressingthe regulation of software used to support clinical decision making.  In 2016, the 21st Century Cures Act, (the “Cures Act”),among other things, amended the medical device definition in the FDC Act to exclude certain software from FDA regulation, including clinicaldecision support (“CDS software”) that meets certain criteria. CDS software is exempt from the medical device definitionif it: (a) displays, analyzes or prints medical information about a patient or other medical information; (b) is intended for the purposeof supporting or providing recommendations about a patient’s care to a health care professional, (“HCP”), user; and(c) provides sufficient information about the basis for the recommendations to the HCP user, so that the HCP user does not rely primarilyon any of the recommendations to make a clinical decision about an individual patient; unless (d) the software function acquires, processes,or analyzes a medical image, a signal from an in vitro diagnostic device, or a pattern or signal from a signal acquisition system.

On September 28, 2022, the FDA issued a finalguidance document interpreting the Cures Act as it pertains to CDS software. Among other views expressed, the final guidance stated thatsoftware functions that assess or interpret the clinical implications or clinical relevance of a signal or pattern, such as those thatprocess or analyze an electrochemical or photometric response generated by an assay and instrument to generate a clinical test result,are not exempt from medical device regulation. The final guidance also stated that software functions that generate risk probabilitiesor risk scores are not exempt because they provide a specific diagnostic, preventive, or treatment output.

Corporate Practice of Medicine; Fee-Splitting

We contract with various healthcare companiesto deliver services to patients. This contractual relationship is subject to various state laws, including those of New York, Texas andCalifornia, that prohibit fee-splitting or the practice of medicine by lay entities or persons and are intended to prevent unlicensedpersons from interfering with or influencing the physician’s professional judgment. In addition, various state laws also generallyprohibit the sharing of professional services income with nonprofessional or business interests. Activities other than those directlyrelated to the delivery of healthcare may be considered an element of the practice of medicine in many states. Under the corporate practiceof medicine restrictions of certain states, decisions and activities such as scheduling, contracting, setting rates and the hiring andmanagement of non-clinical personnel may implicate the restrictions on the corporate practice of medicine.

State corporate practice of medicine and fee-splittinglaws vary from state to state and are not always consistent among states. In addition, these requirements are subject to broad powersof interpretation and enforcement by state regulators. Some of these requirements may apply to any telemedicine company or provider organizationwe contract with. Failure to comply with regulations could lead to adverse judicial or administrative action against us and/or the providerswe work with, civil or criminal penalties, receipt of cease-and-desist orders from state regulators, loss of provider licenses, the needto make changes to the terms of engagement with any telemedicine company or provider organization we contract with that interfere withour business and other materially adverse consequences.

Federal and State Fraud and Abuse Laws

Healthcare Laws Generally

The federal Health Insurance Portability andAccountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act, or HITECH, and theirimplementing regulations, which is collectively referred to as HIPAA, established several separate criminal penalties for making falseor fraudulent claims to insurance companies and other non-governmental payors of healthcare services. Under HIPAA, these two additionalfederal crimes are: “Healthcare Fraud” and “False Statements Relating to Healthcare Matters.” The Healthcare Fraudstatute prohibits knowingly and recklessly executing a scheme or artifice to defraud any healthcare benefit program, including privatepayors. A violation of this statute is a felony and may result in fines, imprisonment or exclusion from government-sponsored programs.The False Statements Relating to Healthcare Matters statute prohibits knowingly and willfully falsifying, concealing or covering up amaterial fact by any trick, scheme or device or making any materially false, fictitious or fraudulent statement in connection with thedelivery of or payment for healthcare benefits, items or services. A violation of this statute is a felony and may result in fines orimprisonment. This statute could be used by the government to assert criminal liability if a healthcare provider knowingly fails to refundan overpayment. These provisions are intended to punish some of the same conduct in the submission of claims to private payors as thefederal False Claims Act covers in connection with governmental health programs.

In addition, the Civil Monetary Penalties Lawimposes civil administrative sanctions for, among other violations, inappropriate billing of services to federally funded healthcare programsand employing or contracting with individuals or entities who are excluded from participation in federally funded healthcare programs.Moreover, a person who offers or transfers to a Medicare or Medicaid beneficiary any remuneration, including waivers of co-payments anddeductible amounts (or any part thereof), that the person knows or should know is likely to influence the beneficiary’s selectionof a particular provider, practitioner or supplier of Medicare or Medicaid payable items or services may be liable for civil monetarypenalties of up to $10,000 for each wrongful act. Moreover, in certain cases, providers who routinely waive copayments and deductiblesfor Medicare and Medicaid beneficiaries can also be held liable under the Anti-Kickback Statute and civil False Claims Act, which canimpose additional penalties associated with the wrongful act. One of the statutory exceptions to the prohibition is non-routine, unadvertisedwaivers of copayments or deductible amounts based on individualized determinations of financial need or exhaustion of reasonable collectionefforts. The OIG emphasizes, however, that this exception should only be used occasionally to address special financial needs of a particularpatient. Although this prohibition applies only to federal healthcare program beneficiaries, the routine waivers of copayments and deductiblesoffered to patients covered by commercial payers may implicate applicable state laws related to, among other things, unlawful schemesto defraud, excessive fees for services, tortious interference with patient contracts and statutory or common law fraud.

Federal Stark Law

We are subject to the federal self-referralprohibitions, commonly known as the Stark Law. Where applicable, this law prohibits a physician from referring Medicare patients to anentity providing “designated health services” if the physician or a member of such physician’s immediate family hasa “financial relationship” with the entity, unless an exception applies. The penalties for violating the Stark Law includethe denial of payment for services ordered in violation of the statute, mandatory refunds of any sums paid for such services, civil penaltiesof up to $15,000 for each violation and twice the dollar value of each such service and possible exclusion from future participation inthe federally-funded healthcare programs. A person who engages in a scheme to circumvent the Stark Law’s prohibitions may be finedup to $100,000 for each applicable arrangement or scheme. The Stark Law is a strict liability statute, which means proof of specific intentto violate the law is not required. In addition, the government and some courts have taken the position that claims presented in violationof the various statutes, including the Stark Law can be considered a violation of the federal False Claims Act (described below) basedon the contention that a provider impliedly certifies compliance with all applicable laws, regulations and other rules when submittingclaims for reimbursement. A determination of liability under the Stark Law could have a material adverse effect on our business, financialcondition and results of operations. 

Federal Anti-Kickback Statute

We are also subject to the federal Anti-KickbackStatute. The Anti-Kickback Statute is broadly worded and prohibits the knowing and willful offer, payment, solicitation or receipt ofany form of remuneration in return for, or to induce, (i) the referral of a person covered by Medicare, Medicaid or other governmentalprograms, (ii) the furnishing or arranging for the furnishing of items or services reimbursable under Medicare, Medicaid or othergovernmental programs or (iii) the purchasing, leasing or ordering or arranging or recommending purchasing, leasing or ordering ofany item or service reimbursable under Medicare, Medicaid or other governmental programs. Certain federal courts have held that the Anti-KickbackStatute can be violated if “one purpose” of a payment is to induce referrals. In addition, a person or entity does not needto have actual knowledge of this statute or specific intent to violate it to have committed a violation, making it easier for the governmentto prove that a defendant had the requisite state of mind or “scienter” required for a violation. Moreover, the governmentmay assert that a claim including items or services resulting from a violation of the Anti-Kickback Statute constitutes a false or fraudulentclaim for purposes of the False Claims Act, as discussed below. Violations of the Anti-Kickback Statute can result in exclusion from Medicare,Medicaid or other governmental programs as well as civil and criminal penalties, including fines of $50,000 per violation and three timesthe amount of the unlawful remuneration. Imposition of any of these remedies could have a material adverse effect on our business, financialcondition and results of operations. In addition to a few statutory exceptions, the U.S. Department of Health and Human Services Officeof Inspector General, or OIG, has published safe-harbor regulations that outline categories of activities that are deemed protected fromprosecution under the Anti-Kickback Statute provided all applicable criteria are met. The failure of a financial relationship to meetall of the applicable safe harbor criteria does not necessarily mean that the particular arrangement violates the Anti-Kickback Statute.However, conduct and business arrangements that do not fully satisfy each applicable safe harbor may result in increased scrutiny by governmentenforcement authorities, such as the OIG.

False Claims Act

Both federal and state government agencies havecontinued civil and criminal enforcement efforts as part of numerous ongoing investigations of healthcare companies and their executivesand managers. Although there are a number of civil and criminal statutes that can be applied to healthcare providers, a significant numberof these investigations involve the federal False Claims Act. These investigations can be initiated not only by the government but alsoby a private party asserting direct knowledge of fraud. These “qui tam” whistleblower lawsuits may be initiated against anyperson or entity alleging such person or entity has knowingly or recklessly presented, or caused to be presented, a false or fraudulentrequest for payment from the federal government or has made a false statement or used a false record to get a claim approved. In addition,the improper retention of an overpayment for 60 days or more is also a basis for a False Claim Act action, even if the claim wasoriginally submitted appropriately. Penalties for False Claims Act violations include fines ranging from $5,500 to $11,000 for each falseclaim, plus up to three times the amount of damages sustained by the federal government. A False Claims Act violation may provide thebasis for exclusion from the federally-funded healthcare programs. In addition, some states have adopted similar fraud, whistleblowerand false claims provisions.

State Fraud and Abuse Laws

Several states in which we operate have alsoadopted similar fraud and abuse laws as described above. The scope of these laws and the interpretations of them vary from state to stateand are enforced by state courts and regulatory authorities, each with broad discretion. Some state fraud and abuse laws apply to itemsor services reimbursed by any third-party payor, including commercial insurers, not just those reimbursed by a federally-funded healthcareprogram. A determination of liability under such state fraud and abuse laws could result in fines and penalties and restrictions on ourability to operate in these jurisdictions.

State and Federal Health Information Privacyand Security Laws

There are numerous U.S. federal and state lawsand regulations related to the privacy and security of personally identifiable information, or PII, including health information. In particular,HIPAA establishes privacy and security standards that limit the use and disclosure of protected health information, or PHI, and requirethe implementation of administrative, physical, and technical safeguards to ensure the confidentiality, integrity and availability ofindividually identifiable health information in electronic form. Since the effective date of the HIPAA Omnibus Final Rule on September 23,2013, HIPAA’s requirements are also directly applicable to the independent contractors, agents and other “business associates”of covered entities that create, receive, maintain or transmit PHI in connection with providing services to covered entities. AlthoughCardio is a covered entity under HIPAA, Cardio is also a business associate of other covered entities when Cardio is working on behalfof our affiliated medical groups.

Violations of HIPAA may result in civil andcriminal penalties. The civil penalties range from $100 to $50,000 per violation, with a cap of $1.5 million per year for violationsof the same standard during the same calendar year. However, a single breach incident can result in violations of multiple standards.Cardio must also comply with HIPAA’s breach notification rule. Under the breach notification rule, covered entities must notifyaffected individuals without unreasonable delay in the case of a breach of unsecured PHI, which may compromise the privacy, security orintegrity of the PHI. In addition, notification must be provided to the HHS and the local media in cases where a breach affects more than500 individuals. Breaches affecting fewer than 500 individuals must be reported to HHS on an annual basis. The regulations also requirebusiness associates of covered entities to notify the covered entity of breaches by the business associate.

State attorneys general also have the rightto prosecute HIPAA violations committed against residents of their states. While HIPAA does not create a private right of action thatwould allow individuals to sue in civil court for a HIPAA violation, its standards have been used as the basis for the duty of care instate civil suits, such as those for negligence or recklessness in misusing personal information. In addition, HIPAA mandates that HHSconduct periodic compliance audits of HIPAA covered entities and their business associates for compliance. It also tasks HHS with establishinga methodology whereby harmed individuals who were the victims of breaches of unsecured PHI may receive a percentage of the Civil MonetaryPenalty fine paid by the violator. In light of the HIPAA Omnibus Final Rule, recent enforcement activity, and statements from HHS, weexpect increased federal and state HIPAA privacy and security enforcement efforts.

HIPAA also required HHS to adopt national standardsestablishing electronic transaction standards that all healthcare providers must use when submitting or receiving certain healthcare transactionselectronically. On January 16, 2009, HHS released the final rule mandating that everyone covered by HIPAA must implement ICD-10 formedical coding on October 1, 2013, which was subsequently extended to October 1, 2015 and is now in effect.

Many states in which we operate and in whichpatients reside also have laws that protect the privacy and security of sensitive and personal information, including health information.These laws may be similar to or even more protective than HIPAA and other federal privacy laws. For example, the laws of the State ofCalifornia, in which we operate, are more restrictive than HIPAA. Where state laws are more protective than HIPAA, we must comply withthe state laws we are subject to, in addition to HIPAA. In certain cases, it may be necessary to modify our planned operations and proceduresto comply with these more stringent state laws. Not only may some of these state laws impose fines and penalties upon violators, but alsosome, unlike HIPAA, may afford private rights of action to individuals who believe their personal information has been misused. In addition,state laws are changing rapidly, and there is discussion of a new federal privacy law or federal breach notification law, to which wemay be subject.

In addition to HIPAA, state health informationprivacy and state health information privacy laws, we may be subject to other state and federal privacy laws, including laws that prohibitunfair privacy and security practices and deceptive statements about privacy and security and laws that place specific requirements oncertain types of activities, such as data security and texting.

In recent years, there have been a number ofwell-publicized data breaches involving the improper use and disclosure of PII and PHI. Many states have responded to these incidentsby enacting laws requiring holders of personal information to maintain safeguards and to take certain actions in response to a data breach,such as providing prompt notification of the breach to affected individuals and state officials. In addition, under HIPAA and pursuantto the related contracts that we enter into with our business associates, we must report breaches of unsecured PHI to our contractualpartners following discovery of the breach. Notification must also be made in certain circumstances to affected individuals, federal authoritiesand others.

State Privacy Laws

Various states have enacted laws governing theprivacy of personal information collected and used by businesses online. For example, California adopted the California Consumer PrivacyAct of 2018 (“CCPA”), which went into effect on January 1, 2020 and was recently amended by the California Privacy RightsAct of 2020 which significantly modified the CCPA in ways that affect businesses. This law, in part, requires that companies make certaindisclosures to consumers via their privacy policies, or otherwise at the time the personal data is collected. We will have to determinewhat personal data it is collecting from individuals and for what purposes, and to update its privacy policy every 12 months to make therequired disclosures, among other things.

Employees and Human Capital Resources

Asof November 20, 2024, we had eight full-time employees and two part-time employees. Three of our employees hold Ph.D. or M.D. degrees.We also engage contractors and consultants from time to time. None ofour employees are represented by a labor union or covered under a collective bargaining agreement.

Our human capital resources objectives include,identifying, recruiting, retaining, incentivizing and integrating our existing and additional employees into our collaborative culture.Our compensation program is designed to retain, motivate and attract highly qualified executives and talented employees and consultants.We are committed to fostering a culture that supports diversity and an environment of mutual respect, equity and collaboration that helpsdrive our business and our mission to become one of the leading medical technologycompanies for enabling improved prevention, detection, treatment and management of cardiovascular disease.

Properties

We do not own any real estate or other physicalproperties materially important to our operations. We currently maintain our principal executive offices at 311 West Superior Street,Suite 444, Chicago, IL 60654 pursuant to a Lease Agreement. The cost for this space is approximately $13,365 per month with an unaffiliatedthird party commencing on December 1, 2023 and is on a three year term. We also maintain a laboratory at 2565 North Dodge, Suite D, IowaCity, IA 52245 pursuant to a Lease Agreement. The cost for this space is approximately $8,505 per month with an unaffiliated third partycommencing on December 1, 2023 and is on a five year term. We consider our current office space, combined with the other office spaceotherwise available to our executive officers, adequate for our current operations.

Legal Proceedings

We are not currently a party to any materiallitigation or other legal proceedings brought against us.

Corporation Information

Our corporate headquarters is located at 311West Superior Street, Suite 444, Chicago IL 60654. Our telephone number is (855) 226-9991 and our website address is cardiodiagnosticsinc.com.The information contained on, or that can be accessed through, our website is not incorporated by reference in this prospectus and doesnot form a part of this prospectus. The reference to our website address does not constitute incorporation by reference of the informationcontained at or available through our website, and you should not consider it to be a part of this registration statement or the prospectuscontained therein. 

Emerging Growth Status 

We are an “emerging growth company,”as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBSAct”), and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companiesthat are not emerging growth companies, including, but not limited to, not being required to comply with the auditor attestation requirementsof Section 404 of the Sarbanes-Oxley Act of 2002, as amended (the “Sarbanes-Oxley Act”), reduced disclosure obligationsregarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbindingadvisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

Further, Section 102(b)(1) of the JOBSAct 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 registration statement under the Securities Act declared effective or do not have a class of securitiesregistered under the Securities Exchange Act of 1934, as amended the “Exchange Act”), are required to comply with the newor revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition periodand comply with the requirements that apply to non-emerging growth companies but any such an 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 differentapplication dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the timeprivate companies adopt the new or revised standard. This may make comparison of our financial statements with another public companywhich is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition perioddifficult or impossible because of the potential differences in accounting standards used. 

We will remain an emerging growth company untilthe earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of the IPO (i.e.,November 22, 2026), (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemedto be a large accelerated filer, which means the market value of our common stock held by non-affiliates equaled or exceeded$700 million as of the prior June 30, and (2) the date on which we have issued more than $1.0 billion in non-convertible debtsecurities during the prior three-year period. 

Additionally, we are a “smaller reportingcompany” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduceddisclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smallerreporting company until the last day of the fiscal year in which (1) the market value of our common stock held by non-affiliatesequaled or exceeded $250 million as of the end of the prior June 30th, or (2) our annual revenues equaled or exceeded $100 millionduring such completed fiscal year and the market value of our common stock held by non-affiliates equaled or exceeded $700 millionas of the prior June 30th.

MANAGEMENT

Management and Board of Directors 

The following table sets forth certain information,including ages as of November 20, 2024, of our executive officers and members of the Board of Directors. 

Name		Age				Position
Executive Officers
Meeshanthini (Meesha) V. Dogan, PhD			36			Chief Executive Officer and Director
Robert Philibert, MD PhD			62			Chief Medical Officer and Director
Elisa Luqman, JD MBA			59			Chief Financial Officer
Timur Dogan, PhD			36			Chief Technology Officer
Non-Employee Directors
Warren Hosseinion, MD			52			Non-Executive Chairman
Wendy J. Betts			52			Director
Paul F. Burton			57			Director
Peter K. Fung, MD			68			Director
James Intrater			60			Director

Executive Officers 

The following is a brief biography of each ofour executive officers:

Meeshanthini V. Dogan has served as ourChief Executive Officer and a director since inception. Together with Dr. Philibert, she isthe Co-Founder of Cardio, with over 10 years’ experience in bridging medicine, engineering and artificial intelligence towards buildingsolutions to fulfill unmet clinical needs such as in cardiovascular disease prevention. Coming from a family with a two-generation historyof heart disease and having worked for an extensive time interacting with those affected by heart disease, she understands the pain pointsand founded Cardio Diagnostics to help prevent others from experiencing its devastating impacts. Dr. Dogan is a pioneer in artificialintelligence/machine learning-driven integrated genetic-epigenetic approaches, which includes highly cited publications, and platformpresentations at the American Heart Association and American Society of Human Genetics. She co-invented the patent-pending IntegratedGenetic-Epigenetic Engine™ of Cardio Diagnostics (European Patent Granted in March 2021). In 2017, Dr. Dogan founded Cardio Diagnosticsto commercialize this technology through a series of clinical tests towards making heart disease prevention and early detection more accessible,personalized and precise. Under her leadership, the company was awarded the prestigious One To Watch award in 2020 by Nature and Merck,has worked its way to become a technology leader in cardiovascular diagnostics, introduced its first product for marketing testing inJanuary 2021, secured both dilutive and non-dilutive funding and key relationships with world renowned healthcare organizations and keyopinion leaders. Dr. Dogan holds a PhD degree in Biomedical Engineering and BSE/MS degrees in Chemical Engineering from University ofIowa. She was named FLIK Woman Entrepreneur to Watch in 2021.

Robert Philibert has served as ourChief Medical Officer and as a director since inception of Legacy Cardio. Together with Dr. Dogan, he is a co-founder of Legacy Cardio.Dr. Philibert graduated from the University of Iowa Medical Scientist Training Program and completed a residency in Psychiatry at theUniversity of Iowa. Between 1993 and 1998, he completed a Pharmacology Research Training Program (“PRAT”) Fellowship and aStaff Fellowship at the National Institutes of Health while also serving in the United States Uniformed Public Health Service. In late1998, he returned to the University of Iowa where he now is a Professor of Psychiatry, with joint appointments in Neuroscience,Molecular Medicine and Biomedical Engineering. He has published over 170 peer reviewed manuscripts and is the recipient of numerous NIHgrant awards and both national and international patents for his pioneering work in epigenetics. In particular, he is credited with discoveringthe epigenetic signatures for cigarette and alcohol consumption. In 2009, he founded Behavioral Diagnostics, LLC, a leading provider ofepigenetic testing services which has introduced two epigenetic tests, Smoke Signature™ and Alcohol Signature™ to the commercialmarket. Simultaneously, he has licensed related non-core technologies to manufacturing partners while developing an ecosystem of key complementaryservice providers in the clinical diagnostics space.

Elisa Luqman hasserved as our Chief Financial Officer since March 2021. In March 2021, Legacy Cardio and Ms. Luqman entered into a consulting agreementunder which she was retained to provide services in connection with a potential merger transaction. Since April 2022, Ms. Luqman has alsobeen serving as Chief Legal Officer (SEC) for Nutex Health, Inc. (“Nutex”), a physician-led, technology-enabled healthcareservices company. She attained that position upon the closing of a merger transaction in which her employer, Clinigence Holdings, Inc.(“Clinigence"), was the surviving entity. She served as the Chief Financial Officer, Executive Vice President Finance and GeneralCounsel of Clinigence from October 2019 until the merger. She also served as a director of Clinigence from October 2019 to February 2021.At Clinigence, Ms. Luqman was responsible for maintaining the corporation’s accounting records and statements, preparingits SEC filings and overseeing compliance requirements. She was an integral member of the Clinigenceteam responsible for obtaining the company’s NASDAQ listing and completing the reverse merger with Nutex. At Nutex Ms. Luqman continuesto be responsible for preparing its SEC filings and overseeing compliance requirements. Ms. Luqman co-founded bigVault Storage Technologies,a cloud- based file hosting company acquired by Digi-Data Corporation in February 2006. From March 2006 through February 2009, Ms. Luqmanwas employed as Chief Operating Officer of the Vault Services Division of Digi-Data Corporation, and subsequently during her tenure withDigi-Data Corporation she became General Counsel for the entire corporation. In that capacity she was responsible for acquisitions, mergers,patents, customer, supplier, and employee contracts, and worked very closely with Digi-Data’soutside counsel firms. In March 2009, Ms. Luqman rejoined iGambit Inc. (“IGMB”) as Chief Financial Officer and General Counsel.Ms. Luqman has overseen and been responsible for IGMB’s SEC filings, FINRA filings and public company compliance requirements fromits initial Form 10 filing with the SEC in 2010 through its reverse merger with Clinigence Holdings, Inc. in October 2019. Ms. Luqmanreceived a BA degree, a JD in Law, and an MBA Degree in Finance from Hofstra University. Ms. Luqman is a member of the bar in New Yorkand New Jersey.

Timur Dogan hasserved as our Chief Technology Officer since May 2022. He has been employed by Legacy Cardio since August 2019, after obtaining his Ph.D.,and was serving as its Senior Data Scientist until he was promoted to CTO. Dr. Dogan was instrumental in developing andadvancing the Integrated Genetic-Epigenetic Engine™ that is at the core ofCardio’s cardiovascular solutions. Along with the founding team, he is the co-inventor of two patent-pending technologiesin cardiovascular disease and diabetes. He holds a joint B.S.E./M.S. and Ph.D. degrees in Mechanical Engineering from the University ofIowa where he researched complex fluid flows. He developed machine learning models on high-performance computing systems using a mixtureof low and high-fidelity numerical simulations and experiments to draw insights from non-linear physics.

Non-Employee Members of the Board of Directors

The following is a brief biography of each ofour non-employee directors:

Warren Hosseinion, M.D. has servedas the Company’s Non-Executive Chairman of the Board since the consummation of the Business Combination in October 2022. He wasLegacy Cardio’s Non-Executive Chairman of the Board since May 2022 and was on Legacy Cardio’s Board of Directors since November2020. In March 2021, Cardio and Dr. Hosseinion entered into a consulting agreement under which he was retained to provide services inconnection with a potential merger transaction. He is also currently the President and a director of Nutex Health, Inc. (“Nutex”),positions he has held since April 2022. Dr. Hosseinion is a Co-Founder of Apollo Medical Holdings, Inc. and served as a member of theBoard of Directors of Apollo Medical Holdings, Inc. (“Apollo Med”) since July2008, the Chief Executive Officer of Apollo Medical Holdings, Inc. from July 2008 to December 2017, and the Co-Chief Executive Officerof Apollo Medical Holdings, Inc. from December 2017 to March 2019. In 2001, Dr. Hosseinion co-founded ApolloMed. Dr. Hosseinion receivedhis B.S. in Biology from the University of San Francisco, his M.S. in Physiology and Biophysics from the Georgetown University GraduateSchool of Arts and Sciences, his Medical Degree from the Georgetown University School of Medicine and completed his residency in internalmedicine from the Los Angeles County-University of Southern California Medical Center.

Wendy J. Bettshas been nominated to serve on our Board of Directors for the coming year. Since June 2024, Ms. Betts has been serving as the InformationSecurity Officer at Rotary International, where she is managing the cybersecurity department, which includes cyber defense, cyberoperations and deployment of strategic technology. Prior to that, she was the Director of Cybersecurity Strategyat United Airlines from October 2022 to September 2023, where she managed the strategic initiativesfor the cybersecurity program. From July 2019 to October 2022, Ms. Betts served as SeniorRisk Manager at Bank of America, where she oversaw the second line work for cybersecurity defense including SOC, Malware, DDoSand Cloud. From March 2010 to July 2019, Ms. Betts was employed by Northern Trust, most recently servingas Vulnerability Manager, where she developed the Secure SDLC program and rolled out DevSecOpsmethodology throughout the application development environment. Ms. Betts is continually active in the technology industry, where sheis currently a member of Information Systems Security Association (“ISSA”), Women in Cybersecurity (“WiCyS”),and Chief, the private network for senior women executives. Ms. Betts earned her BA in Operations ManagementInformation Systems from Northern Illinois University and an MBA with an emphasis in finance from the Keller Graduate School of Management.She is a Certified Information Systems Security Professional (“CISSP”) and Certified Cloud Security Professional (“CCSP”).She also serves as a Director for the Luminarts Culture Foundation, an organization dedicated to supporting young artists throughits competitive programs that offer financial awards, artistic opportunities and mentoring that bridge the gap between education and career.

PaulF. Burton has served as a member of our Board of Directors since December 2023. Since May 2021,Mr. Burton has served as the Managing Partner, of 2Flo Ventures, a start-up studio and early-stage healthcare investor. Through 2Flo Ventures,he provides strategic and financial advice to healthcare companies. In 2010, he founded and continues to serve as Managing Principal ofBurton Advisory, Inc., which provides strategic and financial advice to healthcare companies, drawing fromover 20 years of experience in corporate finance and strategic advisory services. In connection therewith, since December 2018, Mr. Burtonhas been the Chief Executive Officer of Akan Biosciences, a biotech start-up company developing regenerative medicinal therapeutics. From2019 he also has been serving as the Chief Financial Officer of Temprian Therapeutics. From 2019 through2022 he served as the fractional CFO for both Cancer IQ and 4D Healthware. From 2019 through 2022, Mr. Burton was also an Entrepreneurin Residence at Northwestern University, supporting students and faculty with healthcare-oriented commercialization projects. Previously,he was the Chief Executive Officer of ResQ Pharma, Inc.. In 2013 he co-founded Vivacelle Bio, Inc., where he served as Chief FinancialOfficer and a member of its board of directors. Mr. Burton currently serves as a member of the Chicago Biomedical Consortium’s VCAdvisory Committee, as a member of MATTER, a Chicago-based healthcare incubator, and the Bunker Labs, an incubator started in Chicagofor U.S. military veterans. He also is a member of the Board of Directors of Millennium Beacon, a healthcare incubator based on the southsideof Chicago, seeking to serve overlooked populations. Prior thereto, Mr. Burton worked as an investment banking associate at Salomon Brothers(now Citigroup Corporate & Investment Bank). He also served as a United States Regular Army Commissioned Officer (Infantry). Mr. Burtonearned his JD and MBA from the University of Illinois at Urbana-Champaign and earned two Bachelor’s Degrees from the Universityof Illinois at Chicago. He currently serves on the Board of Trustees of the Ravinia Festival, an internationally-renowned, not-for-profitmusic festival.

 

Peter K. Fung,M.D. has been nominated to serve on our Board of Directors for the coming year. Since 2004, Dr. Fung has served as the Director ofCardiovascular Division of Beverly Hospital in Montebello, California. He is also the Director of Research and Education at CentralCalifornia Heart Institute in Fresno, California since 1992 and Director of Nuclear Cardiologyat Central Cardiology Medical Clinic in Bakersfield, California since 1991. Earlier in his professionalcareer from 1990 to 1997, Dr. Fung served as Clinical Faculty at University of California Los Angeles (UCLA). He received his B.Sc.in Psychobiology in 1979 from University of Southern California, his MD in 1983 from Stanford UniversitySchool of Medicine, and was an Internal Medicine resident between 1983 and 1986 and Cardiology Fellow between1986 and 1989 at Cedars-Sinai Medical Center/UCLA. His board certifications include Diplomat of the American Board of Internal Medicine,Diplomat Subspecialty Board of Cardiovascular Disease, Fellow of American College of Cardiology, Fellow of American College of Angiologyand Diplomat of Subspecialty Board of Interventional Cardiology. His extensive clinical expertise includes more than 5,000 cases of coronaryangiography, more than 2,000 cases of percutaneous transluminal coronary angioplasty, more than 400 cases of Peripheral Angiography,more than 200 cases of Peripheral Angioplasty including balloon and TEC devices, more than 100 cases of Carotid Angiography, more than100 cases of Peripheral Stent placement, more than 100 cases of Renal Artery Stent Placement, Rotational Artherectomy, Coronary TEC, PacemakerImplantation, Laser Artherectomy, Stent Placement, Brachytherapy, and Abdominal Aortic Aneurysm Percutaneous Repair/& Grafting.

James Intrater was designated byMana to serve as a director in connection with the Business Combination, and he began his term upon closing of that transaction in October2022. Mr. Intrater is a senior materials and process engineer with over 35 years of professional experience. He has workedin both commercial product development and on Federal R&D projects, including work for NASA, the U.S. Department of Defense, and theU.S. Department of Energy. Since June 2014, Mr. Intrater has served as the president of IntraMont Technologies, a consumer health productsdevelopment company. In addition, since May 2020, he has also provided engineering consultancy services for Falcon AI, a private investmentfirm to evaluate potential portfolio investments. Mr. Intrater has published numerous technical works and reports for various agenciesof the federal government and in technical journals and is listed as holder or co-holder of five patents, with another patent pending.Mr. Intrater received his Master of Science in Metallurgical Engineering from the University of Tennessee and a Bachelor of Sciences inCeramic Engineering from Rutgers University - College of Engineering.

Family Relationships

Otherthan Meeshanthini Dogan and Timur Dogan, who are wife and husband, thereare no family relationships among our executive officers and directors.

Corporate Governance

Cardio has structured its corporate governancein a manner that we believe closely aligns its interests with those of its stockholders. Notablefeatures of this corporate governance include: 

	•	Cardio has independent director representation on its audit, compensation and nominating and corporate governance committees, and its independent directors will meet regularly in executive sessions without the presence of its corporate officers or non-independent directors;
	•	at least one of its directors has qualified as an “audit committee financial expert” as defined by the SEC; and
	•	it has and will implement a range of other corporate governance best practices.

Composition of the Board of Directors and Company Officers

Cardio’s business and affairs are managedunder the direction of our board of directors.

The Company’s board has seven directors.The board of directors will be elected each year at the annual meeting of stockholders.

The Company officers will be appointed by theboard of directors and serve at the discretion of the board of directors, rather than for specific terms of office. The board of directorsis authorized to appoint persons to the offices set forth in our bylaws as it deems appropriate. The Company’s bylaws provide thatour officers may consist of a Chairman of the Board, Chief Executive Officers, Chief Financial Officer, President, Vice Presidents, Secretary,Treasurer, Assistant Secretaries and such other offices as may be determined by the board of directors.

Director Independence

The Nasdaq listing standards require that a majorityof our Board of Directors be independent. An “independent director” is defined generally as a person who has no material relationshipwith the listed company (either directly or as a partner, stockholder or officer of an organization that has a relationship with the company).The Company’s independent directors expect to have regularly scheduled meetings at which only independent directors are present.Any affiliated transactions will be on terms no less favorable to the Company than could be obtained from independent parties. The Company’sBoard of Directors will review and approve all affiliated transactions with any interested director abstaining from such review and approval.

Based on information provided by each directorconcerning his or her background, employment and affiliations, the Board has determined that Wendy J. Betts, Paul F. Burton, Peter K.Fung and James Intrater, representing four of the Company’s seven directors, do not have a relationship that would interfere withthe exercise of independent judgment in carrying out the responsibilities of a director and that each of these directors is an “independentdirector” as defined under the listing standards of Nasdaq and applicable SEC rules. In making these determinations, the CompanyBoard considered the current and prior relationships that each non-employee director has with the Company and all other facts and circumstancesthat the Company Board deemed relevant in determining their independence, including the beneficial ownership of the Company capital stockby each non- employee director, and the transactions involving them. See “Certain Cardio Relationships and Related Persons Transactions.”  

Board Committees 

The standingcommittees of the Cardio Board consist of an audit committee, a compensation committee and a nominating and corporate governance committee.The board of directors may from time to time establish other committees. 

Cardio’s chief executive officer and otherexecutive officers regularly report to the non-executive directors and the audit, the compensation and the nominating and corporate governancecommittees to ensure effective and efficient oversight of our activitiesand to assist in proper risk management and the ongoing evaluation of management controls.

Audit Committee 

Cardio has an audit committee consisting ofWendy J. Betts, Paul F. Burton, and James Intrater, with Mr. Burton serving as the chair of the committee. The Cardio Board has determinedthat each member of the audit committee qualifies as an independent director under the independence requirements of the Sarbanes-OxleyAct, Rule 10A-3 under the Exchange Act and Nasdaq listing requirements. The Cardio Board has determined that Mr. Burton qualifies as an“audit committee financial expert,” as defined in Item 407(d)(5) of Regulation S-K, and that he possesses financial sophistication,as defined under the rules of Nasdaq.

The audit committee’sresponsibilities include, among other things: 

•

reviewing and discussing with Management and the independentauditor the annual audited financial statements, and recommending to the Board whether the audited financial statements should be includedin our Form 10-K;

•

discussing with Management and the independent auditor significantfinancial reporting issues and judgments made in connection with the preparation of our financial statements;

•

discussing with Management major risk assessment and risk Management policies;

•

monitoring the independence of the independent auditor;

•

verifying the rotation of the lead (or coordinating) auditpartner having primary responsibility for the audit and the audit partner responsible for reviewing the audit as required by law;

•

reviewing and approving all related-party transactions;

•

inquiring and discussing with Management our compliance withapplicable laws and regulations;

•

pre-approving all audit services and permitted non-auditservices to be performed by our independent auditor, including the fees and terms of the services to be performed;

•

appointing or replacing the independent auditor;

 

 

•

determining the compensation and oversight of the work ofthe independent auditor (including resolution of disagreements between Management and the independent auditor regarding financial reporting)for the purpose of preparing or issuing an audit report or related work;

•

reviewing and approving any annual or long-term incentivecash bonus or equity or other incentive plans in which our executive officers may participate;

•

establishing procedures for the receipt, retention and treatment of complaints received by us regardingaccounting, internal accounting controls or reports which raise material issues regarding our financial statements or accounting policies;and

•

approving reimbursement of expenses incurred by our managementteam in identifying potential target businesses.

The board ofdirectors has adopted a written charter for the audit committee that is available on our website. 

Compensation Committee

Cardio has a compensation committee consistingof Paul F. Burton, Peter K. Fung and James Intrater, with Mr. Intrater serving as chair of the committee. The Cardio Board has determinedthat each member of the compensation committee qualifies as an independent director under the independence requirements of the Sarbanes-OxleyAct, Rule 10A-3 under the Exchange Act and Nasdaq listing requirements.

The compensation committee’sresponsibilities include, among other things:

•

establishing, reviewing, and approving our overall executive compensation philosophy and policies;

•

reviewing and approving on an annual basis the corporate goals and objectives relevant to our ChiefExecutive Officer’s compensation, evaluating our Chief Executive Officer’s performance in light of such goals and objectivesand determining and approving the remuneration (if any) of our Chief Executive Officer based on such evaluation;

•

reviewing and approving the compensation of all of our other executive officers;

•

approving reimbursement of expenses incurred by our managementteam in identifying potential target businesses.

•

reviewing our executive compensation policies and plans;

•

receiving and evaluating performance target goals for the senior officers and employees (other thanexecutive officers) and reviewing periodic reports from the CEO as to the performance and compensation of such senior officers and employees;

•

implementing and administering our incentive compensation equity-based remuneration plans;

•

reviewing and approving any annual or long-term incentive cash bonus or equity or other incentive plansin which our executive officers may participate;

•

reviewing and approving for our chief executive officer and other executive officers any employmentagreements, severance arrangements, and change in control agreements or provisions;

•

reviewing and discussing with Management the Compensation Discussion and Analysis set forth in Securitiesand Exchange Commission Regulation S-K, Item 402, if required, and, based on such review and discussion, determine whether to recommendto the Board that the Compensation Discussion and Analysis be included in our annual report or proxy statement the annual meeting of stockholders;

•

assisting management in complying with our proxy statement and annual report disclosure requirements;

•

approving all special perquisites, special cash payments and other special compensation and benefitarrangements for our executive officers and employees;

•

if required, producing a report on executive compensation to be included in our annual proxy statement;

 

 

•

reviewing and recommending to the Board for approval the frequency with which we will conduct Say-on-PayVotes, taking into account the results of the most recent stockholder advisory vote on frequency of Say-on-Pay Votes required by Section14A of the Exchange Act, and review and recommend to the Board for approval the proposals regarding the Say-on-Pay Vote and the frequencyof the Say-on-Pay Vote to be included in our proxy statements filed with the SEC;

•

conducting an annual performance evaluation of the committee; and

•

reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors.

The board ofdirectors has adopted a written charter for the compensation committee that is available on our website.

Nominating and Corporate Governance Committee

Cardio has a nominating and corporate governancecommittee consisting of Wendy J. Betts, Peter K. Fung and James Intrater, with Ms. Betts serving as chair of the committee. The CardioBoard has determined that each member of the nominating and corporate governance committee qualifies as an independent director underthe independence requirements of the Sarbanes-Oxley Act, Rule 10A-3 under the Exchange Act and Nasdaq listing requirements.

The nominating and corporate governance committee’sresponsibilities include, among other things:

•

review and assess and make recommendations to the board of directorsregarding desired qualifications, expertise and characteristics sought of board members;

•

identify, evaluate, select or make recommendations to the board of directors regarding nominees forelection to the board of directors;

•

develop policies and procedures for considering stockholder nominees for election to the board of directors;

•

review the Company’s succession planning process for Company’s chief executive officer,and assist in evaluating potential successors to the chief executive officer;

•

review and make recommendations to the board of directors regarding the composition, organization andgovernance of the board and its committees;

•

review and make recommendations to the board of directors regarding corporate governance guidelinesand corporate governance framework;

•

oversee director orientation for new directors and continuing education for directors;

•

oversee the evaluation of the performance of the board of directors and its committees;

•

review and monitor compliance with the Company’s code of business conduct and ethics; and

•

administer policies and procedures for communications with the non-management members of the Company’sBoard of Directors.

 

The boardof directors has adopted a written charter for the nominating and corporate governance committee that is available on our website.

Guidelines for Selecting Director Nominees

The guidelines for selecting nominees generallyprovide that persons to be nominated:

•

should have demonstrated notable or significant achievements in business, education or public service;

•

should possess the requisite intelligence, education and experience to make a significant contributionto the Board of Directors and bring a range of skills, diverse perspectives and backgrounds to its deliberations; and

•

should have the highest ethical standards, a strong sense of professionalism and intense dedicationto serving the interests of the stockholders.

 

The nominating and governance committee willconsider a number of qualifications relating to management and leadership experience, background and integrity and professionalism inevaluating a person’s candidacy for membership on the Board of Directors. The nominating committee may require certain skills orattributes, such as financial or accounting experience, to meet specific board needs that arise from time to time and will also considerthe overall experience and makeup of its members to obtain a broad and diverse mix of board members. The nominating committee does notdistinguish among nominees recommended by stockholders and other persons.

Code of Ethics

The Company has adopted a written code of businessconduct and ethics that applies to its principal executive officer, principalfinancial or accounting officer or person serving similar functions and all of our other employees and members of our board of directors.The code of ethics codifies the business and ethical principles that govern all aspects of our business. Cardiointends to make any legally required disclosures regarding amendments to, or waivers of, provisions of our code of ethics on our website.

Conflicts of Interest

Potential investors should be aware of the followingpotential conflicts of interests:

•

None of our officers and directors is required to commit their full time to our affairs and, accordingly,they may have conflicts of interest in allocating their time among various business activities.

•

In the course of their other business activities, our officers and directors may become aware of investmentand business opportunities which may be appropriate for presentation to our company as well as the other entities with which they areaffiliated. Our Management has pre-existing fiduciary duties and contractual obligations to such entities (as well as to us) and may haveconflicts of interest in determining to which entity a particular business opportunity should be presented.

•

Our officers and directors may in the future become affiliated with entities engaged in business activitiessimilar to those intended to be conducted by our company.

 

Theconflicts described above may not be resolved in our favor.

All ongoing and future transactionsbetween us and any of our management team or their respective affiliates, will be on terms believed by us to be no less favorable to usthan are available from unaffiliated third parties. Such transactions will require prior approval by a majority of our uninterested “independent”directors or the members of our board of directors who do not have an interest in the transaction, in either case who had access,at our expense, to our attorneys or independent legal counsel. We will not enter into any such transaction unless our disinterested “independent”directors determine that the terms of such transaction are no less favorable to us than those that would be available to us with respectto such a transaction from unaffiliated third parties.

Limitation on Liability and Indemnification of Officers and Directors

The Company intends to enter into indemnificationagreements with each of its directors and executive officers that may be broader than the specific indemnification provisions containedin the DGCL. These indemnification agreements, which have been authorized for execution by the Cardio board of directors, requires theCompany, among other things, to indemnify its directors and executive officers against liabilities that may arise by reason of their statusor service. These indemnification agreements also require the Company toadvance all expenses reasonably and actually incurred by its directors and executive officers in investigating or defending any such action,suit or proceeding. Our By-laws provide that Cardio must indemnify and advanceexpenses to Cardio’s directors and officers to the fullest extent authorized by the DGCL. We believe that these agreementsand By-laws provisions are necessary to attract and retain qualified individuals to serve as directors and executive officers.

Cardio maintains insurance policies under whichits directors and officers are insured, within the limits and subject to the limitations of those policies, against certain expenses inconnection with the defense of, and certain liabilities which might be imposed as a result of, actions, suits, or proceedings to whichthey are parties by reason of being or having been its directors or officers. The coverage provided by these policies may apply whetheror not the Company would have the power to indemnify such person against such liability under the provisions of the DGCL.At present, we are not aware of any pending litigation or proceeding involving any person who will be one of the Company’s directorsor officers or is or was one of its directors or officers, or is or was one of its directors or officers serving at its request as a director,officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, for which indemnification issought, and we are not aware of any threatened litigation that may result in claims for indemnification.

The DGCL authorizes corporations to limit oreliminate the personal liability of directors of corporations and their stockholdersfor monetary damages for breaches of directors’ fiduciary duties, subject to certain exceptions. Our Second Amended and RestatedCertificate of Incorporation includes a provision that eliminates the personal liability of directors for damages for any breach of fiduciaryduty as a director where, in civil proceedings, the person acted in good faith and in a manner that person reasonably believed to be inor not opposed to the best interests of our Company or, in criminal proceedings, where the person had no reasonable cause to believe thathis or her conduct was unlawful. 

The limitation of liability, advancement andindemnification provisions in our Second Amended and Restated Certificate of Incorporationand our By-laws may discourage stockholders from bringing lawsuit against directors for breach of their fiduciary duty. These provisionsalso may have the effect of reducing the likelihood of derivative litigation against directors and officers, even though such an action,if successful, might otherwise benefit Cardio and our stockholders. In addition, your investment may be adversely affected to the extentCardio pays the costs of settlement and damage awards against directors and officer pursuant to these indemnification provisions.

There is currentlyno pending material litigation or proceeding involving any of Cardio’s directors, officers, or employees for which indemnificationis sought.

EXECUTIVE AND DIRECTOR COMPENSATION

Overview

This section discusses the material componentsof the executive compensation program for our executive officers who are named in the “2023 Summary Compensation Table” below.For the year ended December 31, 2023, our “named executive officers” (“NEOs”) and their positions were asfollows:

	·	Meeshanthini V. Dogan, Chief Executive Officer;
	·	Warren Hosseinion, Non-executive Chairman of the Board*; and
	·	Elisa Luqman, Chief Financial Officer

 

*

Dr. Hosseinion provides ongoing services to our company as Chairman of the Board and as a consultant. As such, he is not an executive officer and would not be included in the executive compensation tables or accompanying narrative as an NEO under SEC disclosure rules. However, because his contractual compensation is significant and would be payable to him, even if he were no longer our Chairman, we are treating him as an NEO in the interest of full disclosure of the compensation payable to the highest paid persons who work for our company. Dr. Hosseinion is not considered a Named Executive Officer for any purpose other than the following disclosures.

 

2023 Summary Compensation Table

The following table sets forth information concerningthe compensation of our named executive officers for fiscal years ended December 31, 2023 and 2022.

Current Officers Name & Principal Position		Year				Salary				Bonus (3)				Stock				Option Awards (2)				All Other Compensation ($)				Total
							($)				($)				($)				($)				($)				($)
Meeshanthini V. Dogan,			2023				300,000				0				0				341,640				7,253	(1)			648,893
CEO			2022				175,000				250,000				0				4,105,856				8,897	(1)			4,539,753
Warren Hosseinion,			2023				300,000				0				0				155,291				0				455,291
Chairman			2022				50,000				250,000				0				2,052,928				30,000	(4)			2,382,928
Elisa Luqman,			2023				275,000				0				0				72,469				0				347,469
CFO			2022				55,833				100,000				0				1,026,464				20,000	(4)			1,202,297

__________

(1)	All Other Compensation includes Cardio’s contribution to the Company’s 401(k) account on behalf of the executive and health and dental insurance coverage.
(2)	Discretionary stock option grants made in 2023 by the Compensation Committee. The 2023 amounts reflect the grant date fair values of performance awards based upon the Nasdaq closing stock price of $1.26 on the date of grant. Discretionary stock option grants were made in 2022 by Legacy Cardio and subsequently exchanged for options under the Cardio Diagnostics Holdings, Inc. 2022 Equity Incentive Plan in connection with the Closing of the Business Combination. All outstanding 2022 options became immediately vested at the Closing. The 2022 amounts reflect the grant date fair values of performance awards based upon the Nasdaq closing stock price of $5.99 on the date of the Closing of the Business Combination. The amounts reported do not reflect compensation actually received.
(3)	Discretionary cash bonus paid in 2022, for 2021 and 2022 performance and completion of the Business Combination.
(4)	Consulting compensation paid prior to the closing of the Business Combination.

 

Narrative to the Summary Compensation Table

2023 Base Salary

The named executive officers receive a basesalary to compensate them for services rendered to our company. The base salary payable to each named executive officer is intended toprovide a fixed component of compensation reflecting the executive’s skill set, experience, role and responsibilities. In 2023,the base salaries paid to each of Dr. Dogan, Dr. Hosseinion and Ms. Luqman are set forth in the “Summary Compensation Table”above in the column titled “Salary.” Each of the NEOs has entered into an employment agreement (or, in the case of Dr. Hosseinion,a Non-Executive Chairman and Consulting Agreement), which became effective as of the Closing of the Business Combination. A brief summaryof those agreements is set forth below under the caption, “Agreements with Our Executive Officers and Non-Executive Chairman ofthe Board.”

Annual Bonuses

We donot currently maintain an annual bonus program for our employees, including our named executive officers. However, the employment agreementsand, in the case of Dr. Hosseinion, his Non-Executive Chairman and Consulting Agreement,provide that our named executive officers are eligible to receive an annual cash bonus based on the extent to which, in thediscretion of the Board, each such person achieves or exceeds specific and measurable individual and Company performance objectives. TheBoard did not award any annual bonuses in 2023.

2022 Cash Performance Incentives

Prior to the Closing of the Business Combination,Legacy Cardio’s Board of Directors determined that it was in Cardio’s best interests to award cash performance incentive paymentsto certain Legacy Cardio executive officers and directors in recognition of each such individual’s efforts required in connectionwith: (i) successfully completing the private placements of Legacy’s Cardio’s common stock in 2022, and (ii) since May 27,2022, assisting in the preparation and filing with the SEC of the registration statement on Form S-4 relating to the Business Combinationand related matters, as well as amendments thereto, responding to comments thereon made by the SEC applicable to Legacy Cardio, facilitatingthe completion of the SEC’s review thereof, including assisting in seeking to cause the registration statement to be declared effective,and handling numerous other matters incidental to consummating the Business Combination pursuant to the Merger Agreement. The Legacy CardioBoard awarded the cash bonuses to the named executive officers, as reflected in the “Bonus” column of the Summary CompensationTable, which awards were pre-approved by the Mana Board of Directors.

Equity Compensation

Legacy Cardio established and maintained a 2022Equity Incentive Plan (the “2022 Legacy Plan”) pursuant to which Legacy Cardio granted stock options to certain executiveofficers, directors, employees and consultants. Options were granted in May 2022 under the Legacy Cardio Plan, none of which would vestuntil the Closing of the Business Combination, if ever. Unvested stock options granted pursuant to the 2022 Legacy Plan were exchangedfor stock options in the Company under the Cardio Diagnostics Holdings, Inc. 2022 Equity Incentive Plan (the “2022 Equity Plan”),adopted by the Mana Board of Directors and approved by the Mana stockholders in connection with the Business Combination. The optionsgranted to the named executive officers that were exchanged in connection with the Business Combination are reflected in the column “OptionAwards” in the Summary Compensation Table for 2022. The number of options granted to each named executive officer is the numberof previously-granted Legacy Cardio options, as adjusted for the merger exchange ratio.

The 2022 EquityPlan, as adopted, provides for the grant of up to 3,265,516 shares of common stock upon exercise of granted options, awards of restrictedstock units, rewards of restricted stock and other equity awards as may be determined by the Board of Directors. In the discretion ofthe Board, the number of shares of common stock available under the 2022 Plan may be increased as of January 1 of each year, without additionalstockholder approval. After application of the Business Combination exchange ratio of 3.427259,the 511,843 Legacy Cardio stock options were exchanged for 1,754,219 stock options under the 2022 Equity Plan at an exercise price of$3.90 per share. All of the exchanged options vested and became immediately exercisable upon the Closing of the Business Combination. TheBoard did not increase the aggregate number of shares available under the 2022 Equity Plan on January 1, 2023 but the 2022 Equity Planwas increased by 1,060,458 shares as of January 1, 2024. In the future, we may grant cash and equity incentive awards to directors, employees(including our named executive officers) and consultants in order to continue to attract, motivate and retain the talent for which wecompete.

A total of 3,947,407 shares of common stock were availablefor issuance under the 2022 Equity Incentive Plan at November 13, 2024. As of November 13, 2024, there were 3,868,970 options outstandingfor the purchase of common stock, all of which were vested and exercisable except for 5,000 options that will be fully vested and exercisableby December 31, 2024.

Other Elements of Compensation

Retirement Plan

We maintain a 401(k) retirement savings planfor our employees, including our named executive officers, who satisfy certain eligibility requirements. The Internal Revenue Code allowseligible employees to defer a portion of their compensation, within prescribed limits, on a pre-tax basis through contributions to the401(k) plan. We believe that providing a vehicle for tax-deferred retirement savings though our 401(k) plan adds to the overall desirabilityof our executive compensation package and further incentivizes our employees, including our named executive officers, in accordance withour compensation policies.

Employee Benefits and Perquisites

Health/Welfare Plans. All of our full-time employees, includingour named executive officers, are eligible to participate in our health and welfare plans, including:

	·	medical, dental and vision benefits;
	·	medical and dependent care flexible spending accounts;
	·	life insurance and accidental death and dismemberment;

 

We believe the benefits described above arenecessary and appropriate to provide a competitive compensation package to our employees, including our named executive officers. We donot provide any perquisites to our named executive officers.

No Tax Gross-Ups

We do not make gross-up payments to cover ournamed executive officers’ personal income taxes that may pertain to any of the compensation or benefits paid or provided by ourCompany.

Outstanding Equity Awards at Fiscal Year-End Table

The following table summarizes the number ofshares of common stock underlying outstanding equity incentive plan awards for each named executive officer as of December 31, 2023. Wehave made no stock awards under the 2022 Plan and accordingly, that portion of the table has been omitted.

		Option Awards
		Number of Securities Underlying Unexercised Options (#)(1)								Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options				Option Exercise Price				Option Expiration
Name		Exercisable				Unexercisable				(#)				($)				Date
Meeshanthini V. Dogan			272,250				—				—			$	1.26			6/23/2033
			685,452				—				—			$	3.90			5/6/2032
Warren Hosseinion			123,750				—				—			$	1.26			6/23/2033
			342,726				—				—			$	3.90			5/6/2032
Elisa Luqman			57,750				—				—			$	1.26			6/23/2033
			171,363				—				—			$	3.90			5/6/2032

 

Agreements with Our Executive Officers and Non-Executive Chairmanof the Board

In connection with preparations for the BusinessCombination, Cardio executed employment agreements as of May 27, 2022 with each person expectedto be named an executive officer of the combined entity. The agreements became effective upon Closing of the Business Combination. Theprincipal terms of each of agreements is as follows:

Employment Agreement between Cardio andMeeshanthini V. Dogan (Chief Executive Officer)

Dr. Dogan’s five-year employment agreementprovides for (i) an annual base salary of $300,000, (ii) eligibility to receive an annual cash bonus based on the extent to which, inthe discretion of the Board, Dr. Dogan achieves or exceeds specific and measurableindividual and Company performance objectives, and (iii) eligibility to participate in any long-term incentive plan that is made availableto similarly positioned executives, employee benefit or group insurance plans maintained from time to time by Cardio. Long-term incentiveplan awards may include cash, or equity awards settled in shares of Company stock, including but not limited to stock options, restrictedstock and performance shares. If Dr. Dogan were to leave the Company as a "Good Leaver,” as defined in the employment agreement,terms of any long-term incentive award will be deemed satisfied immediately prior to such termination and as such, all awards and grantswill be deemed fully vested. In addition, Dr. Dogan will be reimbursed for her reasonable and usual business expenses incurred on behalfof the Company. Severance benefits will be payable in the event Dr. Dogan’s termination is either by the Company without cause orby her with "good reason,” as defined in the agreement. In such event and in addition to accrued salary benefits as of thedate of termination, the Company will pay Dr. Dogan an amount equal to a (x) two times the sum of her most recent base salary and targetannual bonus and (y) an amount in cash equal to the Company’s premium amounts paid for her coverage under group medical, dentaland vision programs for a period of 24 months. The agreement also contains customary confidentiality, non-solicitation, non-competitionand cooperation provisions. The employment agreement will automatically renew for an additional year following the initial term and anyrenewal term, unless either party provides 60-days’ written notice before the end of the then-current term. The Company may terminateDr. Dogan’s employment without cause (as defined in the agreement) by providing 60 days’ advance written notice. Dr. Doganmay terminate her employment for any reason. 

 

Non-Executive Chairman and Consulting Agreementbetween Cardio and Warren Hosseinion

Cardio has retained Dr. Hosseinion under a five-yearconsulting agreement to serve as Non-Executive Chairman of the Board following the Merger and to provide other services as requested.Upon expiration of such provision, the agreement may be renewed for an additional one-year term. In addition to his duties as Chairman,the agreement provides that Dr. Hosseinion will provide consulting services assisting management in developing business strategy and businessplans, identifying business opportunities and identifying strategic relationships and strategies to further develop the Company’sbrand. In the event he is not reelected as Chairman of the Board, the terms of this agreement will continue strictly as a consulting servicesagreement. Conversely, if his consulting services are terminated, such termination will not affect his Chairman Services, provided thathe remains eligible to serve as Chairman. For his Chairman services and consulting services, the agreement provides for a fee of $300,000per year payable in monthly installments of $25,000. In addition, Dr. Hosseinion is entitled to be awarded any equity compensation otherwisepayable to Board members in connection with their service on the Board and to be reimbursed for all reasonable and necessary businessexpenses incurred in the performance of his consulting services and Chairman services. If Dr. Hosseinion’s services are terminatedby the Company other than for Cause (as defined in the agreement), including any discharge without Cause, liquidation or dissolution ofthe Company, or a termination caused by death or Disability (as defined in the agreement), the Company will pay Dr. Hosseinion (or hisestate) the consulting fees equal to two times his annual consulting compensation, payable within 60 days, in one lump sum, plus any expensesowing for periods prior to and including the date of termination of the consulting services. The agreement also contains customary confidentiality,non-solicitation, non-disparagement and cooperation provisions. Either party may terminate the agreement without cause after giving priorwritten notice to the other party. The agreement may be terminated by the Company at any time for cause, as defined in the agreement.

Employment Agreement between Cardio andElisa Luqman (Chief Financial Officer)

Ms. Luqman’s five-year employment agreementprovides for (i) an annual base salary of $275,000, (ii) eligibility to receive an annual cash bonus based on the extent to which, inthe discretion of the Board, Ms. Luqman achieves or exceeds specific and measurable individual and Company performance objectives, and(iii) eligibility to participate in any long-term incentive plan that is made available to similarly positioned executives, employee benefitor group insurance plans maintained from time to time by Cardio. Long-term incentive plan awards may include cash, or equity awards settledin shares of Company stock, including but not limited to stock options, restricted stock and performance shares. If Ms. Luqman were toleave the Company as a "Good Leaver,” as defined in the employment agreement, terms of any long-term incentive award will bedeemed satisfied immediately prior to such termination and as such, all awards and grants will be deemed fully vested. In addition, Ms.Luqman will be reimbursed for her reasonable and usual business expenses incurred on behalf of the Company. Severance benefits will bepayable in the event Ms. Luqman’s termination is either by the Company without cause or by her with "good reason,” asdefined in the agreement. In such event and in addition to accrued salary benefits as of the date of termination, the Company will payMs. Luqman an amount equal to a (x) the sum of her most recent base salary and target annual bonus and (y) an amount in cash equal tothe Company’s premium amounts paid for her coverage under group medical, dental and vision programs for a period of 12 months, providedthat she has elected continued coverage under COBRA. The agreement also contains customary confidentiality, non-solicitation, non-competitionand cooperation provisions. The employment agreement will automatically renew for an additional year following the initial term and anyrenewal term, unless either party provides 60-days’ written notice before the end of the then-current term. The Company may terminateMs. Luqman’s employment without cause (as defined in the agreement) by providing 60 days’ advance written notice. Ms. Luqmanmay terminate her employment for any reason.

Director Compensation

The following individuals served as non-employee directorsof the Company for all or part of 2023 (other than Dr. Hosseinion, who, as discussed above, is being treated as an NEO for purposes ofthe compensation disclosure in this proxy statement): Paul Burton, James Intrater, Stanley K. Lau, Oded Levy and Brandon Sim. The followingtable sets forth information concerning the compensation for our non-employee directors for services rendered during the year ended December 31,2023. Additionally, we reimburse our non-employee directors for reasonable travel and other out-of-pocket expenses incurred in connectionwith attending board of director and committee meetings or undertaking other business on behalf of Cardio.

Name		Fees Earned or Paid in Cash ($)				Stock Awards ($)				All Other Compensation ($)				Total ($)
Paul F. Burton(1)			—				—				—				—
James Intrater			—				50,000				—				—
Stanley K. Lau			—				50,000				—				—
Oded Levy			—				50,000				—				—
Brandon Sim(2)			—				50,000				—				—

 

(1)	Paul Burton was elected to the Board at the December 18, 2023 Annual Meeting of Stockholders.
(2)	Brandon Sim did not stand for re-election at the 2023 Annual Meeting but did receive shares of common stock upon vesting and settlement of previously awarded RSUs on December 31, 2023.

 

Narrative Disclosureto Non-Employee Director Compensation Table

During 2023, we compensated our non-employee,independent directors for service as a director with Restricted Stock Units (“RSUs”) in the amount of $12,500 in RSU awardsquarterly. The first such award was made on June 30, 2023 for $25,000 to compensate for two quarters of service. Thereafter, on September30, 2023 and December 31, 2023, each independent director received $12,500 in RSU awards. RSUs vested and were settled on the date ofeach respective grant. The number of shares that were issued on each respective vesting date was calculatedby dividing the vesting dollar amount by the closing price of our common stock on such date. As aresult, each non-employee director was issued 21,008 shares on June 30, 2023, 36,765 shares on September 30, 2023 and 5,020 shares onDecember 31, 2023. Although Brandon Sim did not stand for reelection to the Board at our 2023 annual meeting of stockholders and accordingly,his service ended on December 18, 2023, he had been awarded the same number of RSUs for his service on the Board in 2023 and was issued5,020 shares on December 31, 2023 as though he was still serving on that date. No other compensation, payable in cash, stock awards orotherwise, was paid to members of our Board of Directors in fiscal 2023. As of December 31, 2023, no outside director had any stock awards,whether RSUs, options or otherwise, that had not fully vested and been converted into shares of our common stock.

Until the second quarter of 2024, the independentdirectors received the same type and level of compensation as they received in 2023. On January 23, 2024, each currently-serving non-employeedirector was awarded $50,000 in RSUs, which RSUs will vest quarterly. Subject to continued service with the Company on each respectivevesting date, the RSUs were to vest and be settled in shares of common stock based on the closing price of our common stock on each respectivevesting date: (i) $12,500 in value on March 31, 2024; (ii) $12,500 in value on June 30, 2024; (iii) $12,500 in value on September 30,2024; and (iv) $12,500 in value on December 31, 2024. However, on June 21, 2024, the compensation committee reevaluated the compensationof independent directors and determined to compensate the directors by paying a $25,000 cash retainer and granting stock options in lieuof RSUs. All RSUs that had not vested by March 31, 2024 were canceled. On June 30, 2024, each independent director was granted 7,575 immediately-exercisablestock options, exercisable for 10 years at an exercise price of $0.55, and on September 30, 2024, the independent directors each weregranted 18,686 immediately-exercisable stock options, exercisable for 10 years at an exercise price of $0.22.

The Company reimburses its non-employee directorsfor reasonable travel and out-of-pocket expenses incurred in connection with attending board of director and committee meetings orundertaking other business on behalf of our Company.

 

As discussed below under “Certain Relationshipsand Related Party Transactions," we have entered into indemnification agreements with, and obtained directors liability protectionfor, covering our directors.

Compensation ofOther Members of the Board of Directors

In fiscal 2023, Dr. Dogan, our co-founder andChief Executive Officer, and Dr. Hosseinion, our Non-Executive Chairman of the Board, were compensated as an employee and a consultant,respectively, and did not receive any additional compensation for service on our Board. Their total 2023 compensation in all capacitiesis reflected in the Summary Compensation Table. As noted in connection with the Summary Compensation Table above, Dr. Hosseinion’scompensation is disclosed as though he is a Named Executive Officer in order to provide complete transparency as to the compensation heis paid by us as Non-Executive Chairman and a consultant to our company. Robert Philibert, our co-founder, Chief Medical Officer and adirector, is not compensated for his service as a member of the Board of Directors.

CERTAINRELATIONSHIPS AND RELATED PARTY TRANSACTIONS

There have been no transactions since January1, 2022 to which we have been a party in which the amount involved exceeded or will exceed the lesser of $120,000 or 1% of the averageof our total assets at year-end for the last two completed fiscal years, and in which any of our directors, executive officers or, toour knowledge, beneficial owners of more than 5% of our capital stock or any member of the immediate family of any of the foregoing personshad or will have a direct or indirect material interest, other than transactions that are described under the section “Executiveand Director Compensation.”

Cardio has an exclusive, worldwide patent licenseof the Core Technology from the University of Iowa Research Foundation (“UIRF”). Under UIRF’s Inventions Policy inventorsare generally entitled to 25% of income from earnings from their inventions. Consequently, Meeshanthini Dogan and Robert Philibert willbenefit from this policy.

Timur Dogan, spouse of Meeshanthini (Meesha)Dogan (the Company’s Co-Founder, Chief Executive Officer and Director), has been a full-time employee of the Company sinceAugust 2019. In 2021, he was paid $37,500 in salary and an additional $4,765 in benefits.

In May 2022, Legacy Cardio granted 511,843 stockoptions to its executive officers and directors. These options were exchanged for an aggregate of 1,754,219 options under the 2022 EquityIncentive Plan, The Options fully vested and became fully exercisable upon Closing of the Business Combination and have an exercise priceof $3.90 per share (as adjusted for the Exchange Ratio) with an expiration date of May 6, 2032.

Since the Business Combination, the executiveofficers have been granted the following additional stock options, all of which vested and became exercisable immediately on the dateof grant:

Name of Executive Officer or Director		Date of Option Grant		Number of Options		Exercise Price		Option Expiration Date
Meeshanthini Dogan		June 23, 2023		272,250		$1.26		June 23, 2033
		January 23, 2024		476,256		$2.11		January 23, 2034
Timur Dogan		June 23, 2023		156,750		$1.26		June 23, 2033
		January 23, 2024		238,128		$2.11		January 23, 2034
Warren Hosseinion		June 23, 2023		123,750		$1.26		June 23, 2033
		January 23, 2024		35,719		$2.11		January 23, 2034
Elisa Luqman		June 23, 2023		57,750		$1.26		June 23, 2033
		January 23, 2024		35,719		$2.11		January 23, 2034
Robert Philibert		June 23, 2023		148,500		$1.26		June 23, 2033
		January 23, 2024		142,876		$2.11		January 23, 2034
Paul Burton		June 30, 2024		7,575		$0.55		June 30, 2034
		September 30, 2024		18,686		$0.22		September 30, 2034
James Intrater		June 30, 2024		7,575		$0.55		June 30, 2034
		September 30, 2024		18,686		$0.22		September 30, 2034

 

On June 19, 2023, the Company awarded $50,000in value of RSUs to James Intrater and the three other independent directors who are no longer sitting on our Board. The RSUs vested$25,000 on June 30, 2023 and $12,500 on each of September 30, 2023 and December 31, 2023. Upon settlement of the RSUs, each of thesedirectors were issued 21,008 shares at $1.19 on June 30, 2023, 36,765 shares at $0.34 on September 30, 2023 and 5,020 shares at $2.49on December 31, 2023.

On March 31, 2024, the Company issued 8,803shares of common stock based on the closing price of $1.42 on that date in settlement of $12,500 in value of RSUs to each of its independentdirectors, Paul Burton, James Intrater and two independent directors who no longer sit on our Board. On June 21, 2024, the CompensationCommittee of the Board of Directors finalized the compensation arrangements for the independent directors for 2024, confirming that thesedirectors will receive a total of $50,000 in compensation for their service on the Board and any committees of which they are members.The $50,000 includes a cash retainer of $25,000, $12,500 in value of RSUs previously awarded, vested and settled, and $12,500 in valueof stock options, which resulted in the grant of 7,575 immediately-exercisable options, exercisable for 10 years at $0.55 per share and18,686 immediately-exercisable options, exercisable for 10 years at $0.22 per share. The options are included in the option table above.

At the Closing of the Business Combination,Dr. M. Dogan, Dr. Philibert, Ms. Luqman and Dr. T. Dogan each entered into an Invention and Non-Disclosure Agreement. An integral partof the Invention and Non-Disclosure Agreement is the disclosure by the employee of any discoveries, ideas, inventions, improvements, enhancements,processes, methods, techniques, developments, software and works of authorship (“developments”) that were created, made, conceivedor reduced to practice by the employee prior to his or her employment by Cardio and that are not assigned to the Company. Dr. Philibert’sagreement lists certain developments that are epigenetic methods unrelated to the current mission of Cardio and that were developed separateand apart from Cardio. There is no assurance that as the Company broadens the scope of its products and services that one or more of Dr.Philibert’s developments could be relevant. Under the agreement, all rights to the developments listed by Dr. Philibert are hissole property and their use, if desired by the Company, would be in the sole discretion of Dr. Philibert, who is under no obligation tolicense or otherwise grant permission to the Company to use them.

Our Certificate of Incorporation, as amended,restated and currently in effect, and our Bylaws provide for indemnification and advancement of expenses for our directors and officersto the fullest extent permitted by Delaware law, subject to certain limited exceptions. We have entered into indemnification agreementswith each member of our Board and several of our officers.

Related Party Policy

The audit committee of the board of directorshad adopted a policy setting forth the policies and procedures for its review and approval or ratification of “related party transactions.”The policy provides that a “related party transaction” is defined in the policy as any consummated or proposed transactionor series of transactions: (i) in which the Company was or is to be a participant; (ii) the amount of which exceeds (or is reasonablyexpected to exceed) the lesser of $120,000 or 1% of the average of the Company’s total assets at year-end for theprior two completed fiscal years in the aggregate over the duration of the transaction (without regard to profit or loss); and (iii) inwhich a “related party” had, has or will have a direct or indirect material interest. “Related parties” underthis policy included: (i) Cardio’s directors, nominees fordirector or executive officers; (ii) any record or beneficial owner of more than 5% of any class of Cardio’s voting securities;(iii) any immediate family member of any of the foregoing if the foregoing person is a natural person; and (iv) any other personwho maybe a “related person” pursuant to Item 404 of Regulation S-K under the Exchange Act. Pursuant tothe policy, the audit committee would consider (i) the relevant facts and circumstances of each related party transaction, includingif the transaction is on terms comparable to those that could be obtained in arm’s-length dealings with an unrelatedthird party, (ii) the extent of the related party’s interest in the transaction, (iii) whether the transaction contravenesour code of ethics or other policies, (iv) whether the audit committee believes the relationship underlying the transaction to bein the best interests of Cardio and its stockholders and (v) the effect that the transaction may have on a director’s statusas an independent member of Cardio’s board and on his or her eligibility to serve on Cardio’s board’s committees. Thepolicy requires that the Company’s management present to the audit committee each proposed related party transaction, includingall relevant facts and circumstances relating thereto. Under the policy, the Company is permitted to consummate related party transactionsonly if the audit committee approves or ratifies the transaction in accordance with the guidelines set forth in the policy. The policydoes not permit any director or executive officer to participate in the discussion of, or decision concerning, a related person transactionin which he or she is the related party.   

 

PRINCIPAL STOCKHOLDERS

The following table sets forth information regardingthe beneficial ownership of the Company’s common stock as of November 20, 2024 by:

	·	each person known to the Company to be the beneficial owner of more than 5% of the Company’s common stock;
	·	each person who is “named executive officer,” director or director nominee of the Company; and
	·	all of the Company’s executive officers and directors as a group.

 

Beneficial ownership is determined in accordancewith SEC rules and includes voting or investment power with respect to securities. Except as indicated by the footnotes below that thepersons named in the table below have, sole voting and investment power with respect to all stock that they beneficially own, subjectto applicable community property laws. All Company stock subject to options or warrants exercisable within 60 days of the date ofthe table are deemed to be outstanding and beneficially owned by the persons holding those options or warrants for the purpose of computingthe number of shares beneficially owned and the percentage ownership of that person. They are not, however, deemed to be outstanding andbeneficially owned for the purpose of computing the percentage ownership of any other person.

Subject to the paragraph above, percentage ownershipof outstanding shares is based on 40,439,810 shares of the Company’s common stock outstanding.

Name and Address of Beneficial Owner(1)		Amount and Nature of Beneficial Ownership				Approximate Percentage of Outstanding Shares
Directors, Director Nominees, Executive Officers and Greater than 5% Holders
Meeshanthini V. Dogan(2)			3,653,199				8.6	%
Timur Dogan(3)			3,653,199				8.6	%
Robert Philibert(4)			2,489,332				6.0	%
Warren Hosseinion(5)			618,248				1.5	%
Elisa Luqman(6)			322,772				*
Paul F. Burton(7)			35,064				*
James Intrater(7)			97,857				*
Wendy J. Betts			—				—
Peter K. Fung			—				—
All Executive Officers and Directors as a Group (9) individuals(8)			7,216,472				16.4	%

_________

* Less than 1%

 

(1)

Unless otherwise noted, the address for the persons in the table is 311 West Superior Street, Suite 444, Chicago IL 60654.

(2)

Meeshanthini Dogan, the Company’s Chief Executive Officer and Director, and Timur Dogan, the Company’s Chief Technology Officer, are married. The beneficial ownership of Meeshanthini Dogan reflected in the table includes the shares and options of Timur Dogan. Meeshanthini Dogan’s direct ownership is 1,655,429 shares of common stock, including 68,965 shares jointly owned with her husband, and 1,433,958 shares issuable upon exercise of currently exercisable options, which is 7.4%, as calculated in accordance with Rule 13d-3(d)(1)(i). Timur Dogan’s direct ownership is 197,310 shares of common stock, including 68,965 shares jointly owned with his wife, and 435,467 shares issuable upon exercise of currently exercisable options, which is 1.6% as calculated in accordance with Rule 13d-3(d)(1)(i). Dr. Dogan may be deemed to be the indirect beneficial owner of the securities owned by her husband; however, she disclaims beneficial ownership of the shares held indirectly, except to the extent of her pecuniary interest.

 

 

 

(3)	Timur Dogan, the Company’s Chief Technology Officer, and Meeshanthini Dogan, the Company’s Chief Executive Officer and Director, are married. The beneficial ownership of Timur Dogan reflected in the table includes the shares and options of Meeshanthini Dogan. Timur Dogan’s direct ownership is 197,310 shares of common stock, including 68,965 shares jointly owned with his wife, and 435,467 shares issuable upon exercise of currently exercisable options, which is 1.6% as calculated in accordance with Rule 13d-3(d)(1)(i). Meeshanthini Dogan’s direct ownership is 1,655,429 shares of common stock, including 68,965 shares jointly owned with her husband, and 1,433,958 shares issuable upon exercise of currently exercisable options, which is 7.4%, as calculated in accordance with Rule 13d-3(d)(1)(i). Dr. Dogan may be deemed to be the indirect beneficial owner of the securities owned by his wife; however, he disclaims beneficial ownership of the shares held indirectly, except to the extent of his pecuniary interest.
(4)	Dr. Philibert directly owns 75,676 shares of common stock. His total also includes (i) 1,586,464 shares of common stock held of record by BD Holdings, Inc; (ii) 14,126 shares of common stock held of record by Behavioral Diagnostics, LLC; and (iii) 7,601 shares of common stock held of record by Ingrid Philibert, Dr. Philibert’s wife. BD Holdings, Inc. is a corporation owned and controlled by Dr. Philibert, and Behavioral Diagnostics, LLC is a limited liability company also controlled by Dr. Philibert. The address of both entities is 2500 Crosspark Road, Suite W245, Coralville, IA 52241. Dr. Philibert disclaims beneficial ownership of all such indirectly-owned shares except to the extent of his pecuniary interest. Also includes 805,465 shares of common stock issuable upon exercise of options that are currently exercisable.
(5)	Includes 502,195 shares of common stock issuable upon exercise of options that are currently exercisable.
(6)	Includes 264,832 shares of common stock issuable upon exercise of options that are currently exercisable.
(7)	Includes 26,261 shares of common stock issuable upon exercise of options that are currently exercisable.
(8)	Includes 3,494,439 shares of common stock issuable upon exercise of options that are currently exercisable.

 

 

SELLING STOCKHOLDERS

The following table details the name of theselling stockholders, the number of shares of our common stock beneficially owned by the selling stockholders, and the number of sharesof our common stock being offered by the selling stockholders for sale under this prospectus. The percentage of shares of our common stockbeneficially owned by the selling stockholders following the offering of securities pursuant to this prospectus, is based on 41,113,956shares of our common stock outstanding as of November 13, 2024, which includes 40,439,810 shares of our common stock outstanding as ofNovember 13, 2024 and assumes the exercise of warrants to purchase 674,146 shares of common stock issued to the selling stockholders onFebruary 2, 2024 in connection with the February 2, 2024 private placement of Units.

The selling stockholders acquired the sharesof our common stock and warrants in a private placement pursuant to exemptions from registration under Section 4(a)(2) of the SecuritiesAct and Rule 506 of Regulation D promulgated thereunder.

Information with respect to shares of commonstock owned beneficially after the offering assumes the sale of all of the shares of common stock offered under this prospectus and noother purchases or sales of our common stock. The selling stockholders may offer and sell some, all or none of the shares of common stock. 

We have determined beneficial ownership in accordancewith the rules of the SEC. Except as indicated by the footnotes below, we believe, based on the information furnished to us, that theselling stockholders have sole voting and investment power with respect to all shares of common stock that they beneficially own, subjectto applicable community property laws. Except as otherwise described below, based on the information provided to us by the selling stockholders,no Selling Stockholder is a broker-dealer or an affiliate of a broker-dealer. 

		Number of Shares of Common Stock Owned Prior to Offering(1)								Maximum Number of Shares of Common Stock to be Offered Pursuant to this				Number of Shares of Common Stock Owned After Offering
			Number				Percent			Prospectus(2)					Number				Percent
Enebybergs Revisionsbyra      AB(3)			228,369				*				112,358				116,011				*
Henrik Gumaelius(4)			114,183				*				56,178				58,005				*
Jedair Holdings Ltd(5)			155,943				*				112,358				43,585				*
Tommy Maartensson(6)			569,099				1.4%				337,078				232,021				*
Olive or Twist AB(7)			87,641				*				56,178				31,463				*
Jan Saur(8)			569,099				1.4%				337,078				232,021				*
Kristian Stensjo and      Pernilla Stensjo(9)			228,369				*				112,358				116,011				*
Altitude Capital Group,      LLC(10)			112,353				*				112,353				—				—

__________

(1)	Number of Shares of Common Stock Owned Prior to the Offering includes, as to each selling stockholder, includes both shares of common stock owned and any shares of common stock issuable upon exercise of warrants, all of which are currently exercisable.
(2)	Except as otherwise noted below, includes shares of common stock soldin the private placement and an equal number of shares of common stock issuable upon exercise of warrants issued in the private placement.
(3)	Shares of Common Stock Owned Prior to Offering includes 94,688 shares issuable upon currently exercisable warrants. Enebybergs Revisionsbyra AB (“Enebybergs”) is an entity based in Sweden, the equity owner of which is an accredited investor. Lars Svantemark exercises voting and dispositive control over the securities owned by Enebybergs.

 

 

 

(4)	Shares of Common Stock Owned Prior to Offering includes 47,343 shares issuable upon currently exercisable warrants.
(5)	Shares of Common Stock Owned Prior to Offering includes 70,649 sharesissuable upon currently exercisable warrants. Jediar Holdings Ltd (“Jediar”) is an entity based in Cyprus, the equity ownersof which are accredited investors. Sofoklis Markidis and Orestis Livadas share investment and dispositive control over the securitiesowned by Jediar.
(6)	Shares of Common Stock Owned Prior to Offering includes 245,556 shares issuable upon currently exercisable warrants.
(7)	Shares of Common Stock Owned Prior to Offering includes 38,535 shares issuable upon currently exercisable warrants. Olive or Twist AB (“Olive or Twist”) is an entity based in Sweden, the equity owner of which is an accredited investor. Joel Wahlstrom exercises voting and dispositive control over the securities owned by Olive or Twist.
(8)	Shares of Common Stock Owned Prior to Offering includes 245,556 shares issuable upon currently exercisable warrants.
(9)	Shares of Common Stock Owned Prior to Offering includes 94,688 shares issuableupon currently exercisable warrants. Does not include 19,376 shares and 9,627 warrants held by Kristian Stensjo separately. If the securitiesseparately owned by Kristian Stensjo are included in the totals, the Shares Owned Before the Offering total 257,372 shares, including104,315 shares issuable upon exercise of currently exercisable warrants, and the After Offering total is 145,014.
(10)	Shares of Common Stock Owned Prior to Offering includes 112,353 shares issuable upon currently exercisable warrants. Altitude Capital Group, LLC was the placement agent for the private placement. The shares registered for resale under this prospectus are the shares issuable upon exercise of the placement agent warrants issued to Altitude Capital Group, LLC as partial compensation for services rendered. Michael S. DiMeo exercises voting and dispositive control over the securities owned by Altitude Capital Group, LLC. Warren Hosseinion, the Company’s Chairman of the Board, has a minority interest in Altitude Capital Group, LLC. Altitude Capital Group, LLC is registered with the SEC as a broker-dealer member of FINRA and SIPC and an SEC registered investment adviser.

 

DESCRIPTION OF SECURITIES

The following is a description of the capitalstock of Cardio Diagnostics Holdings, Inc. (“Cardio,” the “Company,” “we,” “us,” and “our”)and certain provisions of our second amended and restated certificate of incorporation (the “certificate of incorporation”),our bylaws (the “bylaws”) and the General Corporation Law of the State of Delaware (the “DGCL”), as well as theterms of the warrants issued in our initial public offering (the “public warrants”). This description is summarized from,and qualified in its entirety by reference to, our certificate of incorporation, bylaws, the warrant agreement, dated as of November 22,2021 (the “Warrant Agreement”), by and between the Company and Continental Stock Transfer & Trust Company, and the applicableprovisions of the DGCL. For a complete description, investors should refer to our certificate of incorporation, bylaws, and the warrantagreement, all of which are filed as exhibits to the registration statement of which this prospectus is a part.

General

Ourcertificate of incorporation currently authorizes the issuance of 300,000,000 shares of common stock, par value $0.00001 and 100,000,000shares of preferred stock, par value $0.00001 per share. As of November 13, 2024,40,439,810 shares of common stock are outstanding. No shares of preferredstock are currently outstanding.

Common Stock

Voting Rights

Each holder of our common stock is entitledto cast one vote per share. Holders of common stock are not entitled to cumulative voting rights. Except as otherwise required by lawor The Nasdaq Stock Market rules (or such other national stock exchange on which are common stock may then by listed), matters to be votedon by stockholders must be approved by the vote of a majority of the votes cast with respect to the matter. Except as otherwise requiredby the DGCL, our certificate of incorporation or the voting rights granted to the holders of any preferred stock we may subsequently issue,the holders of outstanding shares of common stock and preferred stock entitled to vote thereon, if any, will vote as one class with respectto all matters to be voted on by our stockholders.

Dividend Rights

Each holder of our common stock is entitledto the payment of dividends and other distributions (based on the number of shares of common stock held) as may be declared by our Boardof Directors out of our assets or funds legally available for dividends and other distributions. These rights are subject to the preferentialrights of the holders of our preferred stock, if any, and any contractual limitations on our ability to declare and pay dividends.

Liquidation, Dissolution and Winding Up

If we are involved in a voluntary or involuntaryliquidation, dissolution or winding up of our affairs or a similar event, each holder of our common stock will participate prorata in all assets remaining after payment of liabilities, subject to prior distribution rights of the holders of our preferredstock, if any, then outstanding.

Other Matters

Holders of shares of our common stock do nothave subscription, redemption or conversion rights. All outstanding shares of our common stock are validly issued, fully paid and non-assessable. 

Holders of our common stock are entitled toone vote for each share held on all matters submitted to a vote of stockholders and do not have cumulative voting rights. An electionof directors by our stockholders shall be determined, in an uncontested election, by a majority of the votes cast by the stockholdersentitled to vote on the election and, in a contested election, by a pluralityof the votes cast by the stockholders entitled to vote on the election. Holders of common stock are entitled to receive proportionatelyany dividends as may be declared by our board of directors, subject to any preferential dividend rights of any series of preferred stockthat we may designate and issue in the future.

Our stockholders have no redemption, preemptiveor other subscription rights and there are no sinking fund or redemption provisions applicable to the shares of common stock.

In the event of our liquidation or dissolution,the holders of common stock are entitled to receive an amount of our net assets available for distribution to stockholders after the paymentof all debts and other liabilities and subject to the prior rights of any outstanding preferred stock. Holders of common stock have nopreemptive, subscription, redemption or conversion rights. Our outstandingshares of common stock are validly issued, fully paid and nonassessable. The rights, preferences and privileges of holders of common stockare subject to and may be adversely affected by the rights of the holders of shares of any series of preferred stock that we may designateand issue in the future.

Preferred Stock

There are no shares of preferred stock outstanding.Our certificate of incorporation filed with the State of Delaware authorizes the issuance of 100,000,000 shares of preferred stock, $0.00001par value per share, with such designation, rights and preferences as may be determined from time to time by our board of directors. Accordingly,our board of directors is empowered, without stockholder approval, to issue preferred stock with dividend, liquidation, conversion, votingor other rights which could adversely affect the voting power or other rights of the holders of common stock. In addition, the preferredstock could be utilized as a method of discouraging, delaying or preventing a change in control of us. Although we do not currently intendto issue any shares of preferred stock, we reserve the right to do so in the future.

Public Warrants

Our public warrants are issued under thatcertain warrant agreement dated November 22, 2021, by and between us and Continental Stock Transfer & Trust Company, as warrant agent.Pursuant to the warrant agreement, each whole Public Warrant entitles the registered holder to purchase one whole share of our commonstock at a price of $11.50 per share, subject to adjustment as discussed below. The public warrants will expire on October 25, 2027, whichis five years after completion of our initial business combination, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation.

We will not be obligated to deliver any sharesof common stock pursuant to the exercise of a Public Warrant and will have no obligation to settle such warrant exercise unless a registrationstatement under the Securities Act with respect to the shares of common stock underlying the warrants is then effective and a prospectusrelating thereto is current, subject to our satisfying our obligations described below with respect to registration. No Public Warrantwill be exercisable, and we will not be obligated to issue shares of common stock upon exercise of a Public Warrant, unless common stockissuable upon such warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residenceof the registered holder of the public warrants. In the event that the conditions in the two immediately preceding sentences are not satisfiedwith respect to a Public Warrant, the holder of such warrant will not be entitled to exercise such warrant and such warrant may have novalue and expire worthless. In no event will we be required to net cash settle any Public Warrant.

We were obligated to file a registration statementcovering the shares of common stock issuable upon exercise of the public warrants, and such registration statement was declared effectiveon January 24, 2023. A post-effective amendment to that registration statement was declared effective by the Securities and Exchange Commissionon September 5, 2024. As specified in the warrant agreement, we are obligated to maintain a current prospectus relating to those sharesof common stock until the public warrants expire or are redeemed. During any period when we will have failed to maintain an effectiveregistration statement, warrantholders may exercise public warrants on a “cashless basis” in accordance with Section 3(a)(9)of the Securities Act or another exemption. If that exemption, or another exemption, is not available, holders will not be able to exercisetheir public warrants on a cashless basis.

We may call the warrants for redemption:

•		in whole and not in part;
•		at a price of $0.01 per warrant;
•		upon not less than 30 days’ prior written notice of redemption (the “30-day redemption period”) to each warrantholder;
•		if, and only if, there is a current registration statement in effect with respect to the shares of common stock underlying such warrants at the time of redemption and for the entire 30-day trading period referred to above and continuing each day thereafter until the date of redemption; and
•		if, and only if, the reported last sale price of common stock equals or exceeds $18.00 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 three business days before we send the notice of redemption to the warrantholders.

We have established the last of the redemptioncriteria discussed above to prevent a redemption call unless there is at the time of the call a significant premium to the warrant exerciseprice. If the foregoing conditions are satisfied, and we issue a notice of redemption of the public warrants, each warrantholder willbe entitled to exercise its public warrants prior to the scheduled redemption date. However, the price of common stock may fall belowthe $18.00 redemption trigger price (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) aswell as the $11.50 warrant exercise price after the redemption notice is issued.

If and when the public warrants become redeemableby us, we may not exercise our redemption right if the issuance of shares of common stock upon exercise of the public warrants is notexempt from registration or qualification under applicable state blue sky laws or we are unable to effect such registration or qualification.

If we call the public warrants for redemption,they may be exercised, for cash or on a “cashless basis” in accordance with the warrant agreement, at the option of a holder,at any time after notice of redemption. The notice of redemption will contain the information necessary to calculate the number of sharesof common stock to be received in the event the holder has elected to exercise on a cashless basis. If a record holder has not followedthe procedures specified in the notice of redemption and has not surrendered his, her or its Public Warrant before the redemption date,then on and after the redemption date the holder will have no further rights except to receive, upon surrender of the public warrants,the cash redemption price specified of $0.01.

A holder of a public warrants may notify usin writing in the event it elects to be subject to a requirement that such holder will not have the right to exercise such public warrants,to the extent that after giving effect to such exercise, such person (together with such person’s affiliates), to the warrant agent’sactual knowledge, would beneficially own in excess of 4.9% or 9.8% (or such other amount as a holder may specify) of the shares of commonstock outstanding immediately after giving effect to such exercise.

If the number of outstanding shares of commonstock is increased by a stock dividend payable in shares of common stock, or by a split-up of shares of common stock or other similarevent, then, on the effective date of such stock dividend, split-up or similar event, the number of shares of common stock issuable onexercise of each Public Warrant will be increased in proportion to such increase in the outstanding shares of common stock. In addition,if we, at any time while the public warrants are outstanding and unexpired, pay a dividend or make a distribution in cash, securitiesor other assets to the holders of common stock on account of such shares of common stock (or other shares of our capital stock into whichthe public warrants are convertible), other than in certain circumstances as described in the warrant agreement, then the warrant exerciseprice will be decreased, effective immediately after the effective date of such event, by the amount of cash and/or the fair market valueof any securities or other assets paid on each share of common stock in respect of such event.

If the number of outstanding shares of our commonstock is decreased by a consolidation, combination, reverse stock split or reclassification of shares of common stock or other similarevent, then, on the effective date of such consolidation, combination, reverse stock split, reclassification or similar event, the numberof shares of common stock issuable on exercise of each Public Warrant will be decreased in proportion to such decrease in outstandingshares of common stock.

Whenever the number of shares of common stockpurchasable upon the exercise of the public warrants is adjusted, as described above, the warrant exercise price will be adjusted by multiplyingthe warrant exercise price immediately prior to such adjustment by a fraction (x) the numerator of which will be the number of sharesof common stock purchasable upon the exercise of the public warrants immediately prior to such adjustment, and (y) the denominator ofwhich will be the number of shares of common stock so purchasable immediately thereafter.

In case of any reclassification or reorganizationof the outstanding shares of common stock (other than those described above or that solely affects the par value of such shares of commonstock), or in the case of any merger or consolidation of us with or into another corporation (other than a consolidation or merger inwhich we are the continuing corporation and that does not result in any reclassification or reorganization of our outstanding shares ofcommon stock), or in the case of any sale or conveyance to another corporation or entity of the assets or other property of us as an entiretyor substantially as an entirety in connection with which we are dissolved, the holders of the public warrants will thereafter have theright to purchase and receive, upon the basis and upon the terms and conditions specified in the public warrants and in lieu of the sharesof our common stock immediately theretofore purchasable and receivable upon the exercise of the rights represented thereby, the kind andamount of shares of stock or other securities or property (including cash) receivable upon such reclassification, reorganization, mergeror consolidation, or upon a dissolution following any such sale or transfer, that the holder of the public warrants would have receivedif such holder had exercised their public warrants immediately prior to such event.

The public warrants have been issued in registeredform under the warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us. Investors should reviewa copy of the warrant agreement, which is an exhibit to the registration statement of which this prospectus is a part, for a completedescription of the terms and conditions applicable to the public warrants. The warrant agreement provides that the terms of the publicwarrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision, but requires the approvalby the holders of at least a majority of the then outstanding public warrants to make any change that adversely affects the interestsof the registered holders of public warrants.

The public warrants may be exercised upon surrenderof the Public Warrant certificate on or prior to the expiration date at the offices of the warrant agent, with the exercise form on thereverse side of the warrant certificate completed and executed as indicated, accompanied by full payment of the exercise price (or ona cashless basis, if applicable), by certified or official bank check payable to us, for the number of public warrants being exercised.The warrantholders do not have the rights or privileges of holders of common stock and any voting rights until they exercise their publicwarrants and receive shares of common stock. After the issuance of shares of common stock upon exercise of the public warrants,each holder will be entitled to one vote for each share held of record on all matters to be voted on by stockholders.

No fractional shares will be issued upon exerciseof the public warrants. If, upon exercise of the public warrants, a holder would be entitled to receive a fractional interest in a share,we will, upon exercise, round down to the nearest whole number the number of shares of common stock to be issued to the warrantholder.

Private Warrants

In addition to our public warrants, as of November13, 2024, we have the following privately-issued warrants:

•		674,146 warrants issued to the selling stockholders and the Placement Agent, which are exercisable through February 2, 2030 at $1.78 per share, subject to adjustment for stock splits, reverse stock splits and other similar events of recapitalization, which are the warrants registered on the registration statement of which this prospectus is as part;
•		2,500,000 warrants sold to our former sponsor, which are exercisable through October 25, 2027 at $11.50 per share, subject to adjustment for stock splits, reverse stock splits and other similar events of recapitalization;
•		1,293,391 warrants, exercisable at $3.90 per share, subject to adjustment for stock splits, reverse stock splits and other similar events of recapitalization, which were sold in a private placement by Legacy Cardio in 2021 and 2022, having an expiration date five years from the date of issuance; and
•		811,236 warrants, exercisable at $6.21 per share, subject to adjustment for stock splits, reverse stock splits and other similar events of recapitalization, which were sold in a private placement by Legacy Cardio in 2022, having an expiration date five years from the date of issuance.

Dividends

Wehave not paid any cash dividends on our shares of common stock to date and do not intend to pay cash dividends prior to the completionof a business combination. The payment of cash dividends in the future will be dependent upon our revenues andearnings, if any, capital requirements and general financial condition subsequent to completion of a business combination. The paymentof any dividends subsequent to a business combination will, subject to the laws of the State of Delaware, be within the discretion ofour then board of directors. It is the present intention of our board of directors to retain all earnings, if any, for use in our businessoperations and, accordingly, our board of directors does not anticipate declaring any cash dividends in the foreseeable future. In addition,our board of directors is not currently contemplating and does not anticipate declaring any share dividends in the foreseeable future.

Listing of Securities

Our commonstock and public warrants are listed on the Nasdaq Capital Market under the symbols “CDIO” and “CDIOW,”respectively.

Our Transfer Agent and Warrant Agent

Thetransfer agent for our common stock and warrant agent for our public warrants is Continental StockTransfer & Trust Company, 1 State Street Plaza, New York, New York 10004.

Certain Anti-Takeover Provisions of Delaware Law and our Amendedand Restated Certificate of Incorporation and By-Laws

Weare subject to the provisions of Section 203 of the DGCL regulating corporate takeovers. This statute prevents certain Delawarecorporations, under certain circumstances, from engaging in a “businesscombination” with:

•		a stockholder who owns 15% or more of our outstanding voting stock (otherwise known as an “interested stockholder”);
•		an affiliate of an interested stockholder; or
•		an associate of an interested stockholder, for three years following the date that the stockholder became an interested stockholder.

 

A“business combination” includes a merger or sale of more than 10% of our assets. However, the above provisions of Section203 do not apply if:

•		our board of directors approves the transaction that made the stockholder an “interested stockholder,” prior to the date of the transaction;
•		after the completion of the transaction that resulted in the stockholder becoming an interested stockholder, that stockholder owned at least 85% of our voting stock outstanding at the time the transaction commenced, other than statutorily excluded shares of common stock; or
•		on or subsequent to the date of the transaction, the business combination is approved by our board of directors and authorized at a meeting of our stockholders, and not by written consent, by an affirmative vote of at least two-thirds of the outstanding voting stock not owned by the interested stockholder.

Our authorized but unissued common stock andpreferred stock are available for future issuances without stockholder approval and could be utilized for a variety of corporate purposes,including future offerings to raise additional capital, acquisitions and employee benefit plans. The existence of authorized but unissuedand unreserved common stock and preferred stock could render more difficult or discourage an attempt to obtain control of us by meansof a proxy contest, tender offer, merger or otherwise.

Exclusive