Cardio Diagnostics Holdings, Inc. 10-K

Item 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities Market Information On January 12, 2022, we announced that the holders of the Company’s Units may elect to separately trade the securities underlying such units which commenced on January 14, 2022. Any units not separated will continue to trade on The Nasdaq Global Market under the symbol “MAAQU”. Any underlying shares of common stock, warrants, and rights that are separated are traded on The Nasdaq Global Market under the symbols “MAAQ”, “MAAQW” and “MAAQR” respectively. No fractional warrants are issuable upon separation of the units and only whole warrants will trade. Each warrant entitles the holder to purchase one share of common stock at a price of $11.50. Warrants may only be exercised for whole shares and will become exercisable on the later of 30 days after the completion of our initial business combination or twelve months from the closing of our initial public offering. The warrants will expire five years after the completion of a Business Combination or earlier upon redemption or liquidation. Except in cases where we are not the surviving company in a business combination, each holder of a right will automatically receive one-seventh (1/7) of one share of common stock upon consummation of a business combination. Holders As of March 30, 2022, there was one holder of record of our units, four holders of record of our common stock, two holders of record of our warrants, and one holder of record of our rights. The number of record holders was determined from the records of our transfer agent and does not include beneficial owners of any of our securities whose securities are held in the names of various security brokers, dealers, and registered clearing agencies. The transfer agent for our units and common stock and warrant agent for our warrants and the rights agent for our rights is Continental Stock Transfer & Trust Company. Dividends We have not paid any cash dividends on our common stock to date and do not intend to pay cash dividends prior to the completion of an initial business combination. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial conditions subsequent to completion of an initial business combination. The payment of any cash dividends subsequent to an initial business combination will be within the discretion of our board of directors at such time. If we incur any indebtedness, our ability to declare dividends may be limited by restrictive covenants we may agree to in connection therewith. Securities Authorized for Issuance Under Equity Compensation Plans None. 54 Sales of Unregistered Securities On June 22, 2021, the Sponsor received 1,437,500 shares of our common stock, or founder shares, for $25,000. Subsequently, in September 2021, under the First Amended and Restated Subscription Agreement, we issued the sponsor an additional 62,5000 Shares so that it would hold an aggregate of 20% of our outstanding common stock after our initial public offering. In November 2021, under the Second Amended and Restated Subscription Agreement, we issued the sponsor an additional 50,000 shares of Common Stock (so that it would hold 20% of our issued and outstanding shares of common stock after the initial public offering). Further, we agreed that if the underwriters exercise the over-allotment option, we will issue the sponsor such number of additional shares of common stock (up to 232,500 shares) so as to enable it to maintain its ownership of 20% of our issued and outstanding shares of common stock. In connection with the partial exercise by the underwriters of the over-allotment option, on November 30, 2021, we issued an additional 75,000 shares to the Sponsor pursuant to the Second Amended and Restated Subscription Agreement. Such securities were issued pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act. Our sponsor is an accredited investor for purposes of Rule 501 of Regulation D. Simultaneously with the closing of our initial public offering, we completed the private sale of an aggregate of 2,500,000 warrants to the Sponsor at a purchase price of $1.00 per private warrant, generating gross proceeds to us of $2,500,000. The private warrants are identical to the public warrants sold in our initial public offering, except that the Sponsor has agreed not to transfer, assign or sell any of the private warrants, (except to certain permitted transferees) until 30 days after the completion of our initial business combination. No underwriting discounts or commissions were paid with respect to the private placement. The private placement was conducted as a non-public transaction and, as a transaction by an issuer not involving a public offering, is exempt from registration under the Securities Act of 1933 in reliance upon Section 4(a)(2) thereof. Use of Proceeds On November 26, 2021, we consummated our initial public offering of 6,200,000 units. Each unit consists of one share of common stock, par value $0.00001 per share, one-half of one redeemable warrant, with each whole warrant entitling the holder thereof to purchase one share of common stock for $11.50 per share, subject to adjustment, and one right to receive one-seventh (1/7) of one share of common stock upon the consummation of our initial business combination. The units were sold at a price of $10.00 per unit, generating gross proceeds to us of $62,000,000. In connection with our initial public offering, the underwriters were granted a 45-day option to purchase up to 930,000 additional units to cover over-allotments, if any. On November 30, 2021, the underwriters purchased an additional 300,000 units pursuant to the partial exercise of the over-allotment option. The additional units were sold at an offering price of $10.00 per unit, generating additional gross proceeds of $3,000,000. Simultaneously with the consummation of the initial public offering, we completed the private sale of an aggregate of 2,500,000 private warrants to our Sponsor at a purchase price of $1.00 per private warrant, generating gross proceeds to the Company of $2,500,000. A total of $65,000,000 of the proceeds from the sale of the units and private placement warrants, including the sale of the units from the partial exercise of the over-allotment option, were placed in a U.S.-based trust account at J.P. Morgan Chase Bank, N.A., with Continental Stock Transfer & Trust Company acting as trustee. The Sponsor previously advanced expenses or loaned us the sum of $125,872, evidenced by a note dated as of June 11, 2021. In connection with the completion of our initial public offering, the Sponsor instructed us to offset repayment of the amount outstanding under the note with a corresponding portion of the purchase price for the private placement of warrants. We incurred transaction costs for our initial public offering of $1,697,431, consisting of $1,300,000 of underwriting fees and $397,431 of other offering costs. The net proceeds from our IPO available to us out of trust for our working capital requirements in searching for a business combination and for working capital requirements are approximately $900,000. We intend to use the proceeds for legal, accounting and other expenses of structuring and negotiating business combinations, due diligence of prospective target businesses, legal and accounting fees related to SEC reporting obligations, our monthly office rent, as well as for reimbursement of any out-of-pocket expenses incurred by our founders, officers and directors in connection with activities on our behalf as described above. 55 The funds held in trust has been invested only in United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act having a maturity of 180 days or less, or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations, so that we are not deemed to be an investment company under the Investment Company Act. Except with respect to interest earned on the funds held in the trust account that may be released to us to pay our income or other tax obligations, the proceeds will not be released from the trust account until the earlier of the completion of a business combination or our redemption of 100% of the outstanding public shares if we have not completed a business combination in the required time period. The proceeds held in the trust account may be used as consideration to pay the sellers of a target business with which we complete a business combination. Any amounts not paid as consideration to the sellers of the target business may be used to finance operations of the target business. Officers, directors and founders will receive reimbursement for any out-of-pocket expenses incurred by them in connection with activities on our behalf, such as identifying potential target businesses, performing business due diligence on suitable target businesses and business combinations as well as traveling to and from the offices, plants or similar locations of prospective target businesses to examine their operations. Our audit committee will review and approve all reimbursements and payments made to our founders, officers, directors or our or their respective affiliates, with any interested director abstaining from such review and approval. There is no limit on the amount of such expenses reimbursable by us; provided, however, that to the extent such expenses exceed the available proceeds not deposited in the trust account, such expenses would not be reimbursed by us unless we consummate an initial business combination. Since the role of present management after a business combination is uncertain, we have no ability to determine what remuneration, if any, will be paid to those persons after a business combination. Item 6. [Reserved]