Cardio Diagnostics (CDIO) - 2022 Q3 - Quarterly Report

PART I: FINANCIAL INFORMATION This section presents the unaudited financial statements of Cardio Diagnostics Holdings, Inc. for the period ended September 30, 2022, reflecting its SPAC status prior to business combination Financial Statements (Unaudited) The unaudited financial statements for the period ended September 30, 2022, reflect the company's pre-business combination SPAC status, showing a net loss and assets primarily in a trust account Balance Sheet Summary (as of Sept 30, 2022 vs. Dec 31, 2021) | Metric | September 30, 2022 (Unaudited) | December 31, 2021 (Audited) | | :--- | :--- | :--- | | Cash | $177,681 | $526,625 | | Investments held in Trust Account | $65,573,383 | $65,000,484 | | Total Assets | $65,801,435 | $65,807,166 | | Total Liabilities | $631,748 | $124,434 | | Common stock subject to possible redemption | $65,523,383 | $65,000,000 | | Total Stockholders' Equity (Deficit) | ($353,696) | $682,732 | Statement of Operations Summary | Metric | Three Months Ended Sept 30, 2022 | Nine Months Ended Sept 30, 2022 | | :--- | :--- | :--- | | Loss from Operations | ($165,291) | ($890,962) | | Investment income on Trust Account | $367,387 | $377,637 | | Net Income (Loss) | $202,269 | ($513,045) | | Basic and diluted net income (loss) per share | $0.02 | ($0.06) | - The business combination with Legacy Cardio was consummated on October 25, 2022, subsequent to this reporting period, with holders of 6,465,452 shares redeeming their stock for approximately $65.3 million[29][98] - To extend the time for business combination, the company received loans totaling $433,334 from Legacy Cardio, which were deposited into the Trust Account and converted into common stock upon the merger's closing[82] Management's Discussion and Analysis of Financial Condition and Results of Operations Management's discussion confirms the company operated as a blank check company with no revenue, with net loss driven by organizational costs and income from trust account interest - The company's activities from inception to September 30, 2022, were limited to organizational tasks, the IPO, and identifying and negotiating the business combination with Legacy Cardio[116] Results of Operations Analysis | Period | Net Income / (Loss) | Key Drivers | | :--- | :--- | :--- | | Q3 2022 | $202,269 | Interest income of $367,387 from the Trust Account offset operating/franchise tax expenses of $215,291 | | Nine Months 2022 | ($513,045) | Operating/franchise tax expenses of $1,040,962 exceeded interest income of $377,637 from the Trust Account | - As of September 30, 2022, the company had $177,681 in cash held outside the Trust Account for working capital purposes, and received $433,334 in loans from Legacy Cardio to fund extensions, which were deposited into the Trust Account[122][123][124] Quantitative and Qualitative Disclosures About Market Risk The company is exempt from market risk disclosures as it qualifies as a smaller reporting company under SEC regulations - As a "smaller reporting company," the company is exempt from the disclosure requirements of Item 305(e) of Regulation S-K regarding market risk[132] Controls and Procedures Management concluded that the company's disclosure controls and procedures were not effective as of September 30, 2022, but financial statements are fairly stated - Management concluded that the company's disclosure controls and procedures were not effective as of September 30, 2022[133] - No changes were made to the internal control over financial reporting during the nine months ended September 30, 2022, that materially affected, or are reasonably likely to materially affect, internal controls[136] PART II: OTHER INFORMATION This section covers legal proceedings, risk factors, use of IPO proceeds, and exhibits, confirming no defaults or mine safety issues Legal Proceedings The company reported no legal proceedings - There are no legal proceedings to report[136] Risk Factors No material changes to risk factors were reported from previous disclosures in the 2021 Form 10-K and Form S-4 registration statement - The company states there have been no material changes to the risk factors previously disclosed in its 2021 Form 10-K and its Form S-4 registration statement[137] Unregistered Sales of Equity Securities and Use of Proceeds This section details the use of $65 million IPO proceeds placed in a trust account and $2.5 million from private placement warrants for working capital - Gross proceeds of $65 million were generated from the IPO and over-allotment option exercise, which were placed in a U.S.-based Trust Account[138][139] - Simultaneously with the IPO, 2,500,000 private warrants were sold to the Sponsor at $1.00 per warrant, generating $2.5 million under a registration exemption[139] - Net proceeds of approximately $900,000 were available for working capital after transaction costs, and were used for expenses related to searching for and negotiating a Business Combination[141] Defaults Upon Senior Securities The company reported no defaults upon senior securities - There are no defaults upon senior securities to report[144] Mine Safety Disclosures The company reported no mine safety disclosures - This item is not applicable to the company[145] Other Information The company reported no other information - There is no other information to report[145] Exhibits This section lists the exhibits filed with the Quarterly Report on Form 10-Q, including officer certifications and Inline XBRL documents - The exhibits filed with this report include certifications from the Principal Executive Officer and Principal Accounting Officer under Sections 302 and 906 of the Sarbanes-Oxley Act, as well as Inline XBRL data files[148]