Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

You should read the following management's discussion and analysis of our financial condition and results of operations in conjunction with our unaudited financial statements and notes thereto included in Part I, Item 1 of this Quarterly Report on Form 10-Q and with our audited financial statements and notes thereto for the year ended December 31, 2025, included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 filed on March 31, 2026 (the "Annual Report") with the U.S. Securities and Exchange Commission (the "SEC"). This discussion, particularly information with respect to our future results of operations or financial condition, business strategy, plans and objectives for future operations, includes forward-looking statements that involve risks and uncertainties as described under the heading "Special note regarding forward-looking statements" in this Quarterly Report on Form 10-Q. You should review the disclosure under Part 1, Item 1A of the Annual Report for a discussion of important factors that could cause our actual results to differ materially from those anticipated in these forward-looking statements. References in this Quarterly Report on Form 10-Q to "we," "us," "our" and similar first-person expressions refer to Cadrenal Therapeutics, Inc. ("Cadrenal").

Special Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed in the forward-looking statements. The statements contained in this report that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Forward-looking statements are often identified by the use of words such as, but not limited to, "anticipate," "believe," "can," "continue," "could," "estimate," "expect," "intend," "may," "plan," "project," "seek," "should," "strategy," "target," "will," "would" and similar expressions or variations intended to identify forward-looking statements. These statements are based on the beliefs and assumptions of our management based on information currently available to management. Such forward-looking statements are subject to risks, uncertainties and other important factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified under Part 1, Item 1A of the Annual Report. Furthermore, such forward-looking statements speak only as of the date of this report. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.

Company Overview

The Company

We are a late-stage biopharmaceutical company advancing novel therapies for life-threatening immune and thrombotic conditions. As a result of our acquisition of a 12-lipoxygenase ("12-LOX") platform of assets in December 2025, we shifted our primary strategic focus to developing CAD-1005 for the treatment of immune-mediated and thrombotic disorders. Our lead product candidate, CAD-1005, is a first-in-class selective 12-LOX inhibitor being developed to treat heparin-induced thrombocytopenia ("HIT"), a deadly immune-mediated thrombotic disorder. CAD-1005 has been evaluated in a blinded, placebo-controlled Phase 2 clinical trial of 24 patients and in Phase 1 clinical trials involving more than 100 patients.

We achieved a major regulatory milestone after completing our End-of-Phase 2 ("EOP2") meeting with the U.S. Food and Drug Administration ("FDA") and receiving guidance on key elements of the Phase 3 pivotal trial for CAD-1005. The meeting with the FDA provided critical guidance on protocol design, study population, dosing, background therapy, exposure, the safety database, and the primary endpoint of new or worsening thrombotic events. After considering FDA feedback on a pivotal registration study, we plan to advance directly to a randomized, blinded, placebo-controlled Phase 3 study evaluating CAD-1005 added to the current standard of care for patients with HIT.

We expect that our planned pivotal Phase 3 study will evaluate CAD-1005 in approximately 120 patients across clinical centers worldwide and is intended to support a projected NDA submission in 2029. The primary endpoint of the Phase 3 study is expected to be the incidence of new or worsening thrombotic events in patients with Serotonin Release Assay (SRA)-confirmed HIT, with at least one planned interim analysis. We believe that CAD-1005 is the only treatment in clinical development that targets the underlying immune drivers of HIT. Our Phase 3 trial protocol will remain subject to additional information and any further comments we may receive from the FDA during their review of the final protocol. CAD-1005 has an ODD from the FDA for prophylaxis of thrombosis in patients with HIT, an FDA Fast Track designation for the treatment and prevention of HIT, and an orphan designation from the EMA for the treatment of platelet-activating factor 4 disorders.

Our broader pipeline includes two additional clinical-stage assets - tecarfarin and frunexian. Tecarfarin is an oral vitamin K antagonist ("VKA") (a warfarin replacement for patients with complex needs) designed to prevent heart attacks, strokes, and deaths from blood clots in patients requiring chronic anticoagulation. Specifically, our focus for tecarfarin is chronic use in patients with kidney dysfunction and atrial fibrillation, or in those with left ventricular assist devices ("LVADs"). Tecarfarin has been designed to overcome metabolic factors that can make warfarin less reliable. Frunexian is a first-in-class, Phase 2-ready intravenous ("IV") Factor XIa inhibitor designed for acute care settings where contact activation of coagulation by medical devices or artificial surfaces is significant. Frunexian is the only IV FXIa inhibitor in clinical development that targets the acute/critical care hospital setting exclusively.

Recent Developments

On March 31, 2026, we entered into a warrant inducement letter agreement (the "Inducement Agreement") with a holder of warrants to purchase shares of our common stock, par value $0.001 per share (the "common stock"), issued in a private placement offering that closed on November 4, 2024 (the "Existing Warrants"). Pursuant to the Inducement Agreement, on April 1, 2026, the holder of the Existing Warrants exercised for cash the Existing Warrants to purchase up to an aggregate of 571,430 shares of common stock, at the adjusted exercise price of $4.50 per share (reduced from the initial exercise price of $16.50 per share) and, in consideration for the investor's exercise of the Existing Warrants, we issued to such investor new unregistered Series B-1 common stock purchase warrants (the "Series B-1 Warrants") to purchase an aggregate of 571,430 shares of common stock and new unregistered Series B-2 common stock purchase warrants (the "Series B-2 Warrants" and, together with the Series B-1 Warrants, the "New Warrants") to purchase an aggregate of 571,430 shares of common stock. The New Warrants are immediately exercisable at an exercise price of $4.50 per share. The Series B-1 Warrants and the Series B-2 Warrants are exercisable for a term of five (5) years and eighteen (18) months, respectively, from the date that a resale registration statement registering the resale of the shares of common stock issuable upon exercise of the New Warrants (the "Resale Registration Statement") is declared effective by the SEC. The Resale Registration Statement was declared effective on April 29, 2026.

The transactions contemplated by the agreement closed on April 1, 2026. We received aggregate gross proceeds of approximately $2.5 million from the exercise of the Existing Warrants, before deducting placement agent fees and other expenses payable by us. H.C. Wainwright & Co., LLC ("H.C.W.") served as our exclusive placement agent in connection with the transactions consummated pursuant to the Inducement Agreement. As compensation for H.C.W. serving as our placement agent in connection with the offering, we paid H.C.W. a cash fee equal to 7.0% of the aggregate gross proceeds received upon exercise of the Existing Warrants and we issued to designees of H.C.W. warrants to purchase up to 37,143 shares of common stock, which warrants have substantially the same terms as the Series B-1 Warrants, except that they have an exercise price of $5.625 per share, which is equal to 125% of the exercise price of the New Warrants.

ATM Facility

During the three months ended March 31, 2026, we sold 168,690 shares of common stock through our at-the-market (ATM) facility with H.C.W. These sales were made at a weighted average price of $8.10 per share, resulting in total gross proceeds of approximately $1,366,535 and net proceeds of approximately $1,302,565.

Results of Operations

Results of Operations for the Three Months Ended March 31, 2026 and 2025

The following table summarizes our results of operations for the three months ended March 31, 2026 and 2025.

		Three Months Ended March 31,
		2026				2025				$ Change				% Change
Operating expenses:
General and administrative expenses		$	1,742,315			$	2,254,577			$	(512,262	)			(23	)%
Research and development expenses			771,508				1,667,882				(896,374	)			(54	)%
Depreciation expense			555				5,517				(4,962	)			(90	)%
Total operating expenses			2,514,378				3,927,976				(1,413,598	)			(36	)%
Loss from operations			(2,514,378	)			(3,927,976	)			1,413,598				(36	)%
Other income
Interest and dividend income			17,838				82,596				(64,758	)			(78	)%
Total other income			17,838				82,596				(64,758	)			(78	)%
Net loss and comprehensive loss		$	(2,496,540	)		$	(3,845,380	)		$	1,348,840				(35	)%

General and administrative expenses

General and administrative expenses were $1.7 million for the three months ended March 31, 2026, compared to $2.3 million for the three months ended March 31, 2025, a decrease of approximately $0.5 million, or 23%. The decrease was primarily driven by a $0.2 million decrease in expenses related to being a public company, a $0.1 million decrease in personnel expenses, a $0.1 million decrease in stock-based compensation, and a $0.1 million decrease in consulting expenses.

Research and development expenses

Research and development expenses were $0.8 million for the three months ended March 31, 2026, compared to $1.7 million for the three months ended March 31, 2025, a decrease of approximately $0.9 million, or 54%. The decrease was primarily attributable to a $0.5 million decrease in expenses associated with chemistry, manufacturing, and controls ("CMC"), a $0.3 million decrease in personnel expenses, a $0.2 million decrease in stock-based compensation, and a $0.1 million decrease in trial readiness expenses. These decreases were partially offset by a $0.2 million increase in consulting expenses and professional fees. We expect research and development expenses to increase when we commence clinical trials.

Liquidity and Capital Resources

Since inception, we have incurred recurring losses and utilized cash in operations. To date, we have funded our operations from the proceeds of the sale of convertible and promissory notes, our IPO completed in January 2023, our private placement offering completed in July 2023, our warrant inducements completed in November 2024 and April 2026, our registered direct offering and concurrent private placement completed in December 2025, and the sale of common stock through our ATM facility with H.C.W.

As of March 31, 2026, we had cash and cash equivalents of $2.3 million. For the three months ended March 31, 2026, we reported a net loss of $2.5 million, which included $0.3 million of non-cash expenses, and cash used in operating activities of $3.0 million. On April 1, 2026, we completed a warrant inducement transaction resulting in gross proceeds of approximately $2.5 million, which we expect to partially extend our operational runway. We expect to continue to incur operating losses and negative cash flows for the foreseeable future as we advance our clinical and regulatory activities. Based on our current operating plan, we believe that our existing cash resources will not be sufficient to fund our operating and capital requirements for the next 12 months. With our cash position of $3.5 million as of early May 2026, we believe we will be able to fund our operations into October 2026; however, the current cash will not be sufficient to commence and complete our planned clinical trials and no assurances can be provided and our cash runway could differ materially from our expectations based on various factors, many of which are out of our control. To meet anticipated funding needs, we plan to seek additional capital through strategic partnerships, sales under our ATM facility with H.C.W., equity offerings, debt financings, or a combination thereof. However, there can be no assurance that additional funding will be available on acceptable terms or at all. These factors raise substantial doubt about our ability to continue as a going concern for at least one year following the issuance of the accompanying financial statements. If we are unable to obtain additional financing, we may be required to delay or reduce the scope of our development programs, implement cost-saving measures, or cease operations entirely. The accompanying financial statements do not include any adjustments that might result from this uncertainty.

Cash Flows

The following table summarizes our cash flows for the period presented:

		Three Months Ended March 31,
		2026				2025
Cash used in operating activities		$	(3,002,217	)		$	(4,648,755	)
Cash used in investing activities			-				(3,251	)
Cash provided by financing activities			1,302,565				1,970,136
Net change in cash			(1,699,652	)			(2,681,870	)
Cash and cash equivalents, beginning of period			4,007,789				10,017,942
Cash and cash equivalents, end of period		$	2,308,137			$	7,336,072

Operating activities

During the three months ended March 31, 2026, cash used in operating activities was $3.0 million. Net loss adjusted for the non-cash items as detailed on the statement of cash flows, used $2.2 million in cash, and the changes in operating assets and liabilities, as detailed on the statement of cash flows, used $0.8 million in cash primarily from a $0.7 million decrease in accrued liabilities and a $0.2 million increase in prepaid expenses, partially offset by a $0.2 million increase in accounts payable.

During the three months ended March 31, 2025, cash used in operating activities was $4.6 million. Net loss adjusted for the non-cash items as detailed on the statement of cash flows, used $3.3 million in cash, and the changes in operating assets and liabilities, as detailed on the statement of cash flows, used $1.3 million in cash primarily from a $0.6 million decrease in accrued liabilities, a $0.2 million decrease in accounts payable and a $0.5 million increase in prepaid expenses.

Financing activities

During the three months ended March 31, 2026, net cash provided by financing activities totaled $1.3 million from the use of our ATM facility.

During the three months ended March 31, 2025, net cash provided by financing activities totaled $2.0 million from the use of our ATM facility.

Critical Accounting Estimates

This discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States, or GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported expenses incurred during the reporting periods. Significant estimates and assumptions made in the accompanying financial statements include but are not limited to the fair value of financial instruments, the fair value of stock-based awards, deferred tax assets and valuation allowance, income tax uncertainties, and certain accruals. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimated under different assumptions or conditions.

Stock-Based Compensation

We measure our stock-based awards granted to employees, consultants and directors based on the estimated grant-date fair values of the awards and recognize the compensation over the requisite service period. We use the Black-Scholes option-pricing model to estimate the fair value of our stock option awards. Stock-based compensation is recognized using the straight-line method. As the stock compensation expense is based on awards ultimately expected to vest, it is reduced by forfeitures. We account for forfeitures as they occur.

OFF-BALANCE SHEET ARRANGEMENTS

We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined under SEC rules.