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Summary of Significant Accounting Policies
 9 Months Ended
Sep. 30, 2025
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies

Note 2 – Summary of Significant Accounting Policies

 

Principles of Consolidation

 

The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Legacy Cardio. All intercompany accounts and transactions have been eliminated.

 

Use of Estimates in the Preparation of Financial Statements

 

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

 

Segments

 

The Company uses the “management approach” in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Company’s chief operating decision maker (“CODM”), who is our chief executive officer, for making operating decisions and assessing performance as the source for determining the Company’s reportable segments. Management, including the CODM, reviews operating results solely by monthly revenue and operating results of the Company and, as such, the Company has determined that the Company has one operating segment (product testing) as defined by ASC Topic 280 “Segment Reporting”.

 

One hundred percent of the Company’s revenues are generated from products tests for major types of cardiovascular disease, and therefore the Company has one operating segment for financial reporting purposes. The Company’s principal products are its Epi+Gen CHD and PrecisionCHD tests. Epi+Gen CHD assesses the risk for a coronary heart disease event, including a heart attack, in the next three years. PrecisionCHD aids in diagnosing and managing coronary heart disease. The tests can be paid for by provider organizations, patients, and/or employers. Customers are generally charged for tests utilized for the minimum committed test volume and the pricing can vary based on organization type, size and volume.

  

Reportable segment information is presented below: 

        
​
 		  
 		 September 30,
2025		  
 		  
 		 December 31,
2024		  
 
Current Segment assets          
    Cash  $6,355,218   $7,827,487 
    Accounts receivable   11,221    18,612 
    Prepaid expenses and other current assets   561,033    944,683 
           
Total current segment assets   6,927,472    8,790,782 
           
Long-term segment assets          
    Property and equipment, net   744,335    672,861 
    Right of use assets, net   303,767    432,397 
    Intangible assets, net   —    5,333 
    Deposits   12,850    12,850 
    Patent costs, net   800,478    701,089 
           
Total segment assets  $8,788,902   $10,615,312 
           

The accounting policies of the product testing segment are the same as those described in the summary of significant accounting policies. The measure of segment assets is reported on the balance sheet as total consolidated assets.

 

Reportable segment operating results are presented below:

         
   Nine Months Ended September 30, 
Revenue  2025   2024 
   Product Test sales  $11,270   $30,378 
Total Segment Revenue  $11,270   $30,378 
           
Segment Operating Expenses          
   Payroll and related costs  $1,312,755   $3,898,268 
   Rent and facility expense   223,085    171,967 
   Legal and professional expense   770,060    590,273 
   Consulting and contractor expense   528,598    560,113 
   Insurance expense   473,153    547,667 
   Filing fees expense   71,700    82,212 
   Transfer agent expense   23,250    35,551 
   Software and web computing expense   251,055    217,205 
   Board compensation expense   149,152    149,910 
   Investor relations expense   8,948    76,453 
   Other segment items (a)   360,881    368,238 
   Research and development expense   354,345    23,367 
   Sales and marketing expense   445,566    144,240 
   Amortization expense   59,578    14,389 
   Interest expense, net   11,943    14,670 
Total Segment Operating Expenses   5,044,069    6,894,523 
Total Segment Net Income (Loss)  $(5,032,799)  $(6,864,145)

  

(a)   Other segment items included in segment net income (loss) include shipping expense, taxes expense, subscription fees expense, bank fees expense and other overhead expense.

 

 

         
   Three Months Ended September 30, 
Revenue  2025   2024 
   Product Test sales  $2,855   $6,580 
Total Segment Revenue  $2,855   $6,580 
           
Segment Operating Expenses          
   Payroll and related costs  $351,238   $511,248 
   Rent and facility expense   67,231    70,745 
   Legal and professional expense   258,796    145,800 
   Consulting and contractor expense   201,891    163,836 
   Insurance expense   158,323    184,109 
   Filing fees expense   29,410    5,255 
   Transfer agent expense   11,314    15,398 
   Software and web computing expense   70,741    79,717 
   Board compensation expense   49,762    49,952 
   Investor relations expense   1,448    8,929 
   Other segment items (a)   126,891    118,450 
   Research and development expense   189,049    5,247 
   Sales and marketing expense   192,703    52,059 
   Amortization expense   5,655    4,802 
   Interest expense, net   2,939    3,599 
Total Segment Operating Expenses   1,717,391    1,419,146 
Total Segment Net Income (Loss)  $(1,714,536)  $(1,412,566)

 

  (a) Other segment items included in segment net income (loss) include shipping expense, taxes expense, subscription fees expense, bank fees expense and other overhead expense.

 

Research and Development

 

Research and development costs are expensed as incurred. Research and development costs charged to operations for the nine months ended September 30, 2025 and 2024 were $354,345 and $23,367, respectively, and for the three months ended September 30, 2025 and 2024 were $189,049 and $5,247, respectively.

 

Advertising Costs

 

The Company expenses advertising costs as incurred. Advertising costs of $81,513 and $144,240 were charged to operations for the nine months ended September 30, 2025 and 2024, respectively, and of $31,078 and $52,059 for the three months ended September 30, 2025 and 2024, respectively.

  

Cash and Cash Equivalents

 

Cash and cash equivalents are comprised of cash and highly liquid investments with original maturities of 90 days or less at the date of purchase. The Company does not have any cash equivalents as of September 30, 2025 and December 31, 2024. Cash is maintained at a major financial institution. Accounts held at U.S. financial institutions are insured by the FDIC up to $250,000. The Company is exposed to credit risk in the event of default by the financial institutions or the issuers of these investments to the extent the amounts on deposit or invested are in excess of amounts that are insured. The Company’s accounts at a major financial institution may, at times, exceed the federally insured limits. The amount in excess of the FDIC insurance as of September 30, 2025 and December 31, 2024, was approximately $6.0 million and $7.5 million, respectively. The Company has not experienced any losses on these accounts and management believes, based upon the quality of the major financial institution that the Company uses for its banking, that the credit risk with regard to these deposits is not significant.

 

Reclassification

 

Certain prior period amounts have been reclassified to conform with the current period presentation. On the condensed consolidated statements of changes in stockholders’ equity and cash flows, payment of placement agent fee has been combined with common stock and warrants issued for cash rather than being separated out, to present net proceeds.

 

Recent Accounting Pronouncements

 

Income Taxes

 

In December 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 is intended to improve income tax disclosures primarily through enhanced disclosure of income tax rate reconciliation items, and disaggregation of income (loss) from continuing operations, income tax expense (benefit) and income taxes paid, net disclosures by federal, state and foreign jurisdictions, among others. ASU 2023-09 was effective for annual reporting periods beginning after December 15, 2024. The Company will adopt the standard on the effective date in our annual reporting for the year ended December 31, 2025. The standard can be applied either prospectively or retrospectively.

 

Disaggregation of Income Statement Expenses

 

In November 2024, the FASB issued ASU No. 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses”, which requires disaggregated disclosure of income statement expenses for public business entities. ASU 2024-03 requires new financial statement disclosures in tabular format, disaggregating information about prescribed categories underlying any relevant income statement expense caption. The prescribed categories include, among other things, purchases of inventory, employee compensation, depreciation, and intangible asset amortization. Additionally, entities must disclose the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and for interim reporting periods within fiscal years beginning after December 15, 2027. The guidance can be applied prospectively with an option for retrospective application. Early adoption is also permitted. We are currently evaluating the provisions of this ASU.

 

Financial Instruments – Measurement of Credit Losses for Accounts Receivable and Contract Assets

 

In July 2025, the FASB issued ASU No. 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The amendments in this update provide a practical expedient permitting an entity to assume that conditions at the balance sheet date remain unchanged over the life of the asset when estimating expected credit losses for current classified accounts receivable and contract assets. This update is effective for annual periods beginning after December 15, 2025, including interim periods within those fiscal years. Adoption of this ASU can be applied prospectively for reporting periods after its effective date. Early adoption is permitted. The Company is currently evaluating the impact that ASU 2025-05 will have on the consolidated financial statements.

 

We have reviewed other recent accounting pronouncements and concluded they are either not applicable to the business, or no material effect is expected on the condensed consolidated financial statements as a result of future adoption.