CDIO Reports Unregistered Equity Sales, Potential Dilution

TL;DR

**CDIO just sold more stock and warrants, expect dilution.**

AI Summary

Cardio Diagnostics Holdings, Inc. (CDIO) filed an 8-K on February 2, 2024, reporting unregistered sales of equity securities. This filing indicates the company issued common stock and redeemable warrants, potentially diluting existing shareholders' ownership. For investors, this matters because an increase in the number of shares outstanding can reduce the value of each individual share, impacting stock price and future earnings per share.

Why It Matters

This filing signals potential dilution for existing shareholders as Cardio Diagnostics Holdings, Inc. issued new equity, which could impact the per-share value of their investment.

Risk Assessment

Risk Level: medium — The issuance of unregistered equity securities carries a medium risk due to potential shareholder dilution and the lack of full public disclosure typically associated with registered offerings.

Analyst Insight

A smart investor would monitor CDIO's stock price for potential dips following this dilution news and evaluate the company's use of proceeds from these unregistered sales for future growth prospects.

Key Players & Entities

• Cardio Diagnostics Holdings, Inc. (company) — the registrant filing the 8-K
• February 2, 2024 (date) — date of the earliest event reported and filing date
• 001-41097 (other) — Commission File Number
• 87-0925574 (other) — I.R.S. Employer Identification No.

Forward-Looking Statements

• The issuance of unregistered equity securities will lead to a short-term dip in CDIO's stock price due to dilution concerns. (CDIO) — medium confidence, target: 2024-02-09

FAQ

Key Financial Figures

• $0.00001 — ch registered Common Stock, par value $0.00001 CDIO The Nasdaq Stock Market LLC
• $1.78 — Warrants"), having an exercise price of $1.78 per share (the "Private Placement"). Th
• $1,000,000, b — ing in gross proceeds to the Company of $1,000,000, before deducting placement agent fees and

Filing Documents

• cdio_8k.htm (8-K) — 30KB
• ex4x1.htm (EX-4.1) — 61KB
• 0001079973-24-000172.txt ( ) — 323KB
• cdio-20240202.xsd (EX-101.SCH) — 4KB
• cdio-20240202_def.xml (EX-101.DEF) — 26KB
• cdio-20240202_lab.xml (EX-101.LAB) — 36KB
• cdio-20240202_pre.xml (EX-101.PRE) — 25KB
• cdio_8k_htm.xml (XML) — 6KB

02. Unregistered

Item 3.02. Unregistered Sales of Equity Securities. On February 2, 2024, Cardio Diagnostics Holdings, Inc. (the "Company") completed entering into subscription agreements with 7 accredited investors (the "Subscription Agreements"), whereby the Company issued a total of 561,793 units ("Units"), with each Unit consisting of (i) one share of the Company's common stock, $0.00001 par value (the "Common Stock"), and (ii) one six year Common Stock purchase warrant (the "Warrants"), having an exercise price of $1.78 per share (the "Private Placement"). The Private Placement resulted in the issuance to investors of 561,793 shares of Common Stock and 561,793 Warrants in an unregistered offering of securities. The Company intends to register for resale the shares of Common Stock and the Common Stock issuable upon exercise of the Warrants within 180 days from the closing date (the "Resale Registration Statement"). In addition, the Company intends to afford the Private Placement investors the right to participate in future Company financings through February 2, 2025, with the exception of the at the market offering the Company described in the Company's Registration Statement on Form S-3 (File No. 333-276725), which the Securities and Exchange Commission declared effective on February 1, 2024 and with the exception of certain other financings. The purchase price of the securities was $1.78 per Unit, resulting in gross proceeds to the Company of $1,000,000, before deducting placement agent fees and other offering expenses. The Company intends to use the net proceeds from the Private Placement for working capital and general corporate purposes. The Private Placement closed on February 2, 2024. In connection with the Private Placement, the Company entered into a Placement Agent Agreement dated January 23, 2024 (the "Placement Agent Agreement") with Altitude Capital Group, LLC, as placement agent ("Altitude Capital" or the "Placement Agent"). Pursuant to the Placement Agent Agre

01. Other Information

Item 8.01. Other Information. Warren Hosseinion, M.D., the Company's Chairman of the Board, holds a 10% ownership interest in Altitude Capital, which, as discussed above, acted as placement agent for the Private Placement. Dr. Hosseinion recused himself from board action with respect to approving the Private Placement and issuance of the securities. He is not an officer or director of Altitude Capital and received no payment or other compensation as a result of the closing of the Private Placement.

01. Financial Statements and Exhibits

Item 9.01. Financial Statements and Exhibits. Exhibit Description 4.1 Form of Warrant 104 Cover Page Interactive Data File (embedded within the Inline XBRL document). SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Dated: February 2, 2024 CARDIO DIAGNOSTICS HOLDINGS INC. By: /s/ Elisa Luqman Elisa Luqman Chief Financial Officer

View Full Filing

View this 8-K filing on SEC EDGAR