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CARDIGANT MEDICAL INC.

(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF CASH FLOWS - Unaudited (Continued)

Non-cash investing and financing activities:

During the six months ended June 30, 2013, the Company issued 5,712 shares of its common stock for services provided by its Chief Scientific Officer valued at $3,000 and charged to expense. The Company also issued 4,500 shares of its common stock for services provided by its Chief Financial Officer valued at $2,363 and charged to expense. During the three months ended June 30, 2013, the Company issued a technical consultant options to purchase 5,000 shares of the Company’s common stock at $0.53 per share. The options were valued at $932 using the Black-Sholes Option Model, of which all were immediately vested.

In July 2012, the Company issued the new Chairman of its Scientific Advisory Board, 14,286 shares of its common stock pursuant to the terms of the consulting agreement. The 14,286 shares were valued at $0.525 each, totaling $7,500, which is being charged to operations over the one-year term of the consulting agreement.

In April 2012, the Company issued its new Chairman of its Board of Directors 40,000 shares of its common stock pursuant to the terms of the consulting agreement. The 40,000 shares were valued at $21,000, which is being charged to operations over the one-year term of the consulting agreement. For the six months ended June 30, 2013, $5,250 was charged to operations. As of June 30, 2013, the shares are fully amortized. In connection with the consulting agreement, the Company granted its new Chairman options to purchase 80,000 shares of the Company common stock at $0.525 per share. The options were valued at $17,492 using the Black-Sholes Option Model, of which 50,000 are vested.

During the six months ended June 30, 2012, the Company issued 5,712 shares of its common stock for services provided by its Chief Scientific Officer valued at $3,000 and charged to expense.

CARDIGANT MEDICAL, INC.

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2013

(UNAUDITED)

(1) Nature and Continuance of Operations

Description of the Business

Cardigant Medical Inc. ("Cardigant" or "Company") is a development stage biotechnology company focused on the development of novel biologic compounds and enhanced methods for local delivery for the treatment of vascular disease, certain cancers and infectious disease of the liver. Cardigant was founded on April 17, 2009 and is incorporated within the state of Delaware. The Company is engaged in research and development in multiple locations but maintains its corporate office in greater Los Angeles.

The Company is in the development stage, as defined in Accounting Codification Standard ("ACS") Topic 915-10. From its inception (April 17, 2009) through June 30, 2013, the Company has not had any revenue from its principal planned operations. The Company will continue to report as a development stage company until significant revenues are produced.

Effective January 19, 2012, and for a period of one year thereafter, the Company and certain shareholders, through a self-underwritten registration, offered to the general public a total of 5,000,000 shares of the Company’s common stock at a price of $0.525 per share. During the six-months ended June 30, 2013, the Company issued 163,238 shares of its common stock and received $85,700 through the offering. The total shares issued on the offering were 477,064 with total proceeds of $250,460. The offering terminated in January 2013.

On March 4, 2013, the Company filed an amendment to its articles of incorporation changing its authorized common stock to 50,000,000. Also on March 4, 2013, the Company authorized a 2:1 forward stock split. The accompanying financial statements have been restated to reflect the change in capital and stock split as if they occurred at the Company’s inception.

Going Concern

The Company's financial statements are prepared using the accrual method of accounting in accordance with accounting principles generally accepted in the United States of America and have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities in the normal course of business. The Company has generated losses from operations to date, does not expect to generate operating revenue for several years, and its viability is dependent upon its ability to obtain financing and the success of its future operations. These financial statements do not include any adjustments relating to the recoverability and classification of recorded assets or liabilities that might be necessary should the Company be unable to continue as a going concern.

Basis of Presentation

The accompanying unaudited financial statements contain all adjustments (consisting only of normal recurring adjustments) which, in the opinion of management, are necessary to present fairly the financial position of the Company as of June 30, 2013, and the results of its operations for the three and six months ended June 30, 2013 and 2012, and cash flows for the six months ended June 30, 2013 and 2012. Certain information and footnote disclosures normally included in financial statements have been condensed or omitted pursuant to rules and regulations of the U.S. Securities and Exchange Commission (“the Commission”). The Company believes that the disclosures in the unaudited financial statements are adequate to ensure the information presented is not misleading. However, the

unaudited financial statements included herein should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012, filed with the Commission on April 5, 2013.

The accompanying financial statements are prepared using the accrual method of accounting in accordance with accounting principles generally accepted in the United States of America.

(2) Summary of Significant Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with U.S. 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 condensed financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid debt instruments and other short-term investments with maturities of three months or less, when purchased, to be cash equivalents. The Company maintains cash balances at one financial institution that is insured by the Federal Deposit Insurance Corporation ("FDIC") up to $250,000. As of June 30, 2013, the Company's cash balances did not exceed the FDIC limits.

Revenue Recognition

The Company will recognize revenue when evidence of an arrangement exists, title has passed or services have been rendered, the selling price is fixed or determinable and collectability is reasonably assured. Revenue from product sales to new customers will be recognized when all elements of the sale have been delivered. All costs related to product shipment will be recognized at time of shipment. The Company does not expect to provide for rights of return to customers on product sales and therefore will not record a provision for returns. Revenue from grant awards is recorded as income when the grant has been awarded and all conditions under the grant have been met.

Property and Equipment

Property and equipment are stated at cost. Major renewals and improvements are charged to the asset accounts while replacements, maintenance and repairs that do not improve or extend the lives of the respective assets are expensed. At the time property and equipment are retired or otherwise disposed of, the asset and related accumulated depreciation accounts are relieved of the applicable amounts. Gains or losses from retirements or sales are credited or charged to income.

Depreciation is computed on the straight-line method for financial reporting and income tax reporting purposes. The Company’s computer software is being depreciated over three years for financial reporting and three years for tax purposes as permitted by the tax code. The Company’s equipment is being depreciated over five years for financial reporting and five years for tax purposes as permitted by the tax code. Depreciation expense charged to operations for the three months ended June 30, 2013 and 2012 amounted to $555 and $375, respectively. Depreciation expense charged to operations for the six months ended June 30, 2013 and 2012 amounted to $959 and $375, respectively.

Long-Lived Assets

The Company accounts for its long-lived assets in accordance with ASC Topic 360-10 "Accounting for the Impairment or Disposal of Long-Lived Assets." ASC Topic 360-10 requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the historical cost carrying value of an asset

may no longer be appropriate. The Company assesses recoverability of the carrying value of an asset by estimating the future net cash flows expected to result from the asset, including eventual disposition. If the future net cash flows are less than the carrying value of the asset, an impairment loss is recorded equal to the difference between the asset's carrying value and fair value or disposable value. As of June 30, 2013, the Company had no long-lived assets.

Research and Development

The Company accounts for research and development costs in accordance with ASC Topic 730-10 "Research and Development." Under ASC Topic 730-10, all research and development costs must be charged to expenses as incurred. Third-party research and development costs are expensed when the contracted work has been performed or as milestone results have been achieved. Company sponsored research and development costs related to both present and future products are expensed in the period incurred. For the three months ended June 30, 2013 and 2012, the Company incurred research and development expenses of $52,015 and $34,214, respectively. For the six months ended June 30, 2013 and 2012, the Company incurred research and development expenses of $103,288 and $65,129, including non-cash compensation of $16,519 and $6,000 respectively.

Income Taxes

Income taxes are accounted for under the asset and liability method in accordance with ASC Topic 740-10. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. When it is considered to be more likely than not that a deferred tax asset will not be realized, a valuation allowance is provided for the excess.

Effective January 1, 2012, the Company has elected to revoke it S election status, and will be a taxable entity going forward. Previously, the Company’ shareholders elected under the Internal Revenue Code to be taxed as an S corporation. Generally, in lieu of corporate income taxes, the shareholders of an S corporation are taxed on their proportionate share of the Company's taxable income.

Stock-Based Compensation

The Company accounts for its stock-based compensation under ASC Topic 505-50. This standard defines a fair value-based method of accounting for stock-based compensation. In accordance with ASC Topic 505-50, the cost of stock-based compensation is measured at the grant date based on the value of the award and is recognized over the period in which the Company expects to receive the benefit, which is generally the vesting period.

See Note (6) Stockholder’s Equity (Deficit) for detail stock-based compensation activity.

The Company adopted its 2010 Stock Option Plan in May of 2010 allowing for a maximum of five million shares to be issued. At June 30, 2013, 328,000 options have been granted with an exercise price of $0.525, of which 274,000 are vested, and 5,000 options have been granted with an exercise price of $0.53, of which 5,000 are vested.

Prior to January 19, 2012, the Company placed a value for our private share placements at $0.10 per share. On January 19, 2012, the United States Securities and Exchange Commission granted our registration statement as filed on Form S-1 effective. The restated pricing in this offering is $0.525. All equity based transactions occurring subsequent to January 19, 2012 are priced at $0.525 until such time as a market develops for our shares, if one develops at all.

Per Share Amounts

The Company reports earnings (loss) per share in accordance with ASC Topic 260-10 "Earnings per Share." Basic earnings (loss) per share is computed by dividing income (loss) available to common shareholders by the weighted average number of common shares available. As of June 30, 2013, the Company has issued 333,000 stock options of which 279,000 are vested, which, if exercised, would be dilutive. As of June 30, 2012 the Company did not have equity or financial instruments issued or granted which would be dilutive. As of June 30, 2013 and 2012 the Company did not have equity or financial instruments issued or granted which would be anti-dilutive.

Recent Accounting Pronouncements

The Company continually assesses any new accounting pronouncements to determine their applicability to the Company. Where it is determined that a new accounting pronouncement affects the Company’s financial reporting, the Company undertakes a study to determine the consequence of the change to its financial statements and assures that there are proper controls in place to ascertain that the Company’s financials properly reflect the change.

(3) Fair Value Measurements

The Company follows the provisions of ASC No. 820-10 "Fair Value Measurements."ASC 820-10 relates to financial assets financial liabilities. ASC 820-10 defines fair value, establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (GAAP), and expands disclosures about fair value measurements. The provisions of this standard apply to other accounting pronouncements that require or permit fair value measurements and are to be applied prospectively with limited exceptions.

ASC 820-10 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820-10 establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity's own assumptions, about market participant assumptions, that are developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists and of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3).

The three levels of the fair value hierarchy under ASC 820-10 are described below:

Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

Level 3 - Inputs that are both significant to the fair value measurement and unobservable. These inputs rely on management's own assumptions about the assumptions that market participants would use in pricing the asset or liability. (The unobservable inputs are developed based on the best information available in the circumstances and may include the Company's own data.)

The Company’s financial instruments for 2013 and 2012 consist of accounts payables, accrued expenses and a short term loan payable. The Company considers the carrying value of such amounts in the financial statements to approximate their fair value due their respective short maturity dates.

(4) Related Party Transactions

The Company has received some of its working capital from its founder, Jerett A. Creed. Mr. Creed has also paid Company expenses with personal funds. These costs have been carried as a shareholder loan accruing interest at the rate of 5% per annum with a balance of $21,500, and $23,826 as of June 30, 2013, and 2012, respectively. Accrued interest charged to operations for the quarter ended June 30, 2013 and 2012 was $279 and $453, respectively. Accrued interest charged to operations for the six months ended June 30, 2013 and 2012 was $646 and $916, respectively.

(5) Accrued Officer's Compensation

The Company has been accruing a salary in the amount of $120,000 per annum for its founder Jerett A. Creed since January 3, 2010. The balances accrued, net of any salary payments, at June 30, 2013 and 2012 were $502,000 and $390,000, respectively. Salary is allocated between research and development and general and administrative based upon time spent.

(6) Stockholder's Equity (Deficit)

There is no public market for the Company's common shares. Since its inception, the Company has established the value of its common stock in arm's length transactions with unrelated parties and applied such value to any related party transactions.

Six Months Ended June 30, 2013

During the six-months ended June 30, 2013, the Company issued 163,238 shares of its common stock and received $85,700 through the January 19, 2012 S-1 offering. The offering terminated in January 2013.

During the six months ended June 30, 2013, the Company issued 5,712 shares of its common stock for services provided by its Chief Scientific Officer valued at $3,000 and charged to expense. The Company also issued 4,500 shares of its common stock for services provided by its Chief Financial Officer valued at $2,363 and charged to expense. During the three months ended June 30, 2013, the Company issued a laboratory consultant options to purchase 5,000 shares of the Company common stock at $0.53 per share. The options were valued at $932 using the Black-Sholes Option Model, of which all were immediately vested. Their fair value of $932 was charged to operations. The option valuation factors included a term of 10 years, volatility of approximately 23%, a U.S Treasury interest rate of 2.13%, a dividend rate of 0.0% with an exercise price of $0.53, and a stock price of $0.525.

In August 2012, the Company issued a new member of its Board of Directors 24,000 shares of its common stock pursuant to the terms of the director’s agreement. The 24,000 shares were valued at $12,600, which is being charged to operations over the one-year term of the director’s agreement. For the six months ended June 30, 2013, $6,300 was charged to operations. The unamortized balance at June 30, 2013 of $1,050 is included in prepaid expense. In connection with the director’s agreement, the Company granted its new member of the Board of Directors options to purchase 48,000 shares of the Company common stock at $0.525 per share. The options were valued at $10,150 using the Black-Sholes Option Model, of which 24,000 are vested and for the six months ended June 30, 2013, their fair value of $2,538 was charged to operations. The option valuation factors included a term of 10 years, volatility of approximately 28%, a U.S Treasury interest rate of 1.83%, a dividend rate of 0.0% with an exercise price of $0.525, and a stock price of $0.525.

$7,500, which is being charged to operations over the one-year term of the consulting agreement. For the six months ended June 30, 2013, $3,750 was charged to operations and is fully amortized.

In April 2012, the Company issued its new Chairman of its Board of Directors 40,000 shares of its common stock pursuant to the terms of the consulting agreement. The 40,000 shares were valued at $21,000, which is being charged to operations over the one-year term of the consulting agreement. For the six months ended June, 2013, $5,250 was charged to operations. As of June 30, 2013, the shares are fully amortized. In connection with the consulting agreement, the Company granted its new Chairman options to purchase 80,000 shares of the Company common stock at $0.525 per share. The options were valued at $17,492 using the Black-Sholes Option Model, of which 50,000 are vested. For the six months ended June 30, 2013 $4,373 was charged to operations. The option valuation factors included a term of 10 years, volatility of approximately 28%, a U.S Treasury interest rate of 2.23%, a dividend rate of 0.0% with an exercise price of $0.525, and a stock price of $0.525.

In January 2012, the Company issued 30,000 shares of its common stock to its Chief Medical Officer in connection with its research and development efforts. The 30,000 shares were valued at $3,000, which was being charged to operations over the remaining one-year term of the underlying agreement. For the six months ended June 30, 2012, $1,500 was charged to operations. The unamortized balance at June 30, 2012 of $1,500 was included in prepaid expense.

(7) Income Taxes

Effective January 1, 2012, with the consent of its shareholders, the Company revoked its “S” election status, and is now subject to income tax on its net taxable income. As of June 30, 2013, the Company has a net operating loss carryover of approximately $180,000 available to offset future income for income tax reporting purposes, which will expire in 2033, if not previously utilized. As of June 30, 2013, the Company has a deferred tax asset consisting solely of its taxable net operating loss of approximately $41,000. The Company has established a valuation allowance offsetting its deferred tax asset in full as management believes that it is more likely than not that the net operating loss will not be utilized.

The Company's policy regarding income tax interest and penalties is to expense those items as general and administrative expense and to identify them for tax purposes. In the quarter ended June 30, 2013, the Company estimated and recognized potential interest and penalties on the 2010 over overpayment of a grant received by the Company and administered by the Internal Revenue Service. During the six months ended June 30, 2013 and 2012, income tax interest and penalties in the statement of operations totaled $5,578 and $0, respectively. The $5,578 consisted of estimated interest of $2,653, and estimated penalties of $2,925. The Company files income tax returns in the U.S. federal jurisdiction and the state of California. The Company is subject to income tax examination by tax authorities for 2010, 2011 and 2012.

(8) Commitments and Contingencies

Rental Agreement

On May 3, 2011 the Company entered into a rental agreement for laboratory space at a bioscience collective in Pasadena, California. The rental agreement calls for a security deposit of $1,100 and monthly rent payments of $1,200. The lease is month to month and can be terminated by either party with thirty days' notice.

Rent expense for the three months ended June 30, 2013 and 2012 totaled $3,885 and $3,585, respectively. Rent expense for the six months ended June 30, 2013 and 2012 totaled $7,770 and $7,170, respectively.

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

The following discussion and analysis should be read in conjunction with our financial statements and related notes thereto.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This report contains certain statements that may be deemed “forward-looking statements” within the meaning of United States of America securities laws. All statements, other than statements of historical fact, that address activities, events or developments that we intend, expect, project, believe or anticipate and similar expressions or future conditional verbs such as will, should, would, could or may occur in the future are forward-looking statements. Such statements are based upon certain assumptions and assessments made by our management in light of their experience and their perception of historical trends, current conditions, expected future developments and other factors they believe to be appropriate.

These statements include, without limitation, statements about our anticipated expenditures, including those related to clinical research studies and general and administrative expenses; the potential size of the market for our potential products, future development and/or expansion of our potential products and therapies in our markets, our ability to generate product revenues, our ability to obtain regulatory clearance and expectations as to our future financial performance. Our actual results will likely differ, perhaps materially, from those anticipated in these forward-looking statements as a result of various factors, including: our need and ability to raise additional cash, the costs of conducting research in the life sciences field and risks associated with the regulatory requirements applicable to us. The forward-looking statements included in this report are subject to a number of additional material risks and uncertainties, including but not limited to the risks described in our filings with the Securities and Exchange Commission.

The following discussion and analysis of our financial condition and results of operations should be read together with our financial statements and the related notes to those statements included in this filing. In addition to historical financial information, this discussion may contain forward-looking statements reflecting our current plans, estimates, beliefs and expectations that involve risks and uncertainties. As a result of many important factors, particularly those set forth under "Special Note Regarding Forward-Looking Statements", our actual results and the timing of events may differ materially from those anticipated in these forward-looking statements.

Overview

We are a development stage biotechnology company focused on systemic and local drug delivery for the treatment of vascular disease, certain cancers and infectious disease of the liver. Cardigant was founded to capitalize on the belief that local drug delivery to the vasculature holds the potential to improve outcomes and treat previously untreated disease segments most notably vulnerable atherosclerotic plaque lesions of the coronary, peripheral, and neuro vasculatures. Our primary focus is on treating atherosclerosis and acute plaque stabilization using systemic and targeted delivery of large molecule therapeutics based on high density lipoprotein (“HDL”) targets. Circulating plasma levels of HDL have been shown to be inversely correlated with coronary artery disease. Towards this goal, we are evaluating drug formulations based on the Apolipoprotein A-I (“ApoA-1”) protein that are delivered both systemically via intravenous infusion and locally to one or more lesions. Our product candidate consists of a recombinant protein construct coding for the ApoA-1 protein in a phospholipid formulation. The ApoA-1 protein's primary function is the promotion of reverse cholesterol transport (“RCT”) from the arterial wall to the liver for catabolism and excretion. ApoA-1 is a protein that in humans is encoded by the ApoA-1 gene. It has a specific role in the metabolism of lipids. Naturally occurring ApoA-1 is the major protein component of HDL also known as the good cholesterol. ApoA-1 protein constitutes roughly 70% of the HDL composition. There are both naturally occurring and synthetically modified mutations of the AApoA-1 protein. Some of these mutations can have positive effects on cholesterol mobilization. We are currently evaluating various ApoA-1 based protein sequences to determine the optimal drug candidate based on efficacy, minimum royalty costs and available production methods

among other factors. We have also been evaluating the local delivery of our product for specifically reducing the plaque content and burden within one or more adjacent sites. Additionally, we are building a platform technology using synthetic HDL based nanoparticles for the targeted and receptor mediated delivery of therapeutics for the treatment of certain HDL receptor expressing cancers and infectious diseases of the liver. We are evaluating off patent chemotherapeutic agents, short peptides and siRNA to address these diseases based on our synthetic HDL platform.

As we are a development stage company, we have incurred losses since our inception in April of 2009. As we continue to raise funds and further our development program, we expect to incur even greater expenses and losses. We have no revenues and do not expect to incur any revenue for several years until such time as one of our therapeutic compounds may, if at all, be approved by a regulatory body for sale in a region of the world covered by that regulatory body.

Revenues

We are a development stage company with our first product candidate several years away from generating any revenue. We do not expect to generate any revenue from the sale of our technology for several years. We do however occasionally apply for non-taxable grant funding to support our research and development efforts. We currently have no grant applications outstanding.

Cost of Product Sales

We do not currently sell any products and do not expect to for several years. We are targeting a product cost in the 10-15% of sales as our goal. This is simply an internal goal that is subject to many uncertainties including the ability to cost effectively produce the product, establish a supportable market price in the region of approval and obtain sufficient reimbursement from governmental and or third party insurance agencies.

Research and Development Expenses ("R&D")

Our research and development expenses primarily consist of personnel-related costs, technical consulting fees, and contract research fees. As our senior management is largely involved with overseeing our current development programs, we currently allocate 80% of Mr. Creed's salary (accrued or otherwise) and 100% of Dr. Sinibaldi, Dr. Perin, Dr. Rodriguez, and Dr. Merz to R&D expense. We expect to hire additional technical personnel, engage in additional pre-clinical studies and incur additional patent fees. As such we expect our R&D spending to increase in the coming periods.

Our lead program is focused on optimizing our biologic compound for delivery in the treatment of symptomatic carotid plaque lesions for the treatment of ischemic stroke. Assuming we are able to raise sufficient funds, we expect to incur an additional $1.1 million over the next 12 months in execution of our pre-clinical and clinical development programs. We believe this will take us through the required approval to begin a Phase I trial.

Selling, General and Administrative Expenses ("SG&A")

Our selling, general and administrative expenses consist primarily of non allocated salaries including benefits. As we expect to hire additional personnel, we expect this amount to increase to approximately $350,000 over the next 12-18 months. Additionally we expect to move into a new office space which will add an additional $22,000 annual expense. In addition to hiring accounting personnel for public company reporting requirements, we also expect to incur an additional $30,000 per year of investor relations expenses for disseminating company information, news releases and public filings.

Results of Operations for the three and six months ended June 30, 2013 as compared to the three and six months ended June 30, 2012

Revenues

We are development stage and do not have a product commercially available for sale. We do not expect to realize any revenue for several years. As such it is imperative that the reader recognize that our primary source of working capital will generally come from equity sales. We do however occasionally apply for non taxable grant funding to support our research and development efforts. We currently do not have grant applications outstanding.

Cost of Product Sales

We do not currently have any product costs and do not expect to incur any costs of this type for several years. Any costs associated with producing or procuring product for pre-clinical or clinical studies is considered R&D expenses.

Research and Development Expenses

Research and development expenses for the three months ended June 30, 2013 were $52,015 versus $34,214 for the three months ended June 30, 2012. This represents a 52% increase from the prior year period. Research and development expenses for the six months ended June 30, 2013 were $103,288 versus $65,129 for the six months ended June 30, 2012. This represents a 59% increase from the prior year period. These expenses consisted mainly of allocated salary for our CEO, expense for our CSO and other consultants and laboratory supplies. We expect our R&D expenses to ramp up to approximately $700,000 over the next 18 months with most of the expenses back ended.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the three months ended June 30, 2013 were $31,767 versus $28,748 for the three months ended June 30, 2012. This represents an 11% increase from the prior period. Selling, general and administrative expenses for the six months ended June 30, 2013 were $73,002 versus $58,629 for the six months ended June 30, 2012. This represents a 25% increase from the prior period. This amount consisted primarily of salary expense and the change is due primarily to the hiring of a Chief Financial Officer and the addition of two additional members of the Board of Directors and associated non-cash compensation expense.

Net Income (Loss)

We had a net loss for the three months ended June 30, 2013 of $86,714 versus a net loss of $63,415 for the three months ended June 30, 2012. This change is due increased research and development expense of approximately $18,000, approximately $3,000 increase in general and administrative expense for the addition of a Chief Financial Officer and two additional members of the Board of Directors, and approximately $2,600 for accrued interest expense.

We had a net loss for the six months ended June 30, 2013 of $180,389 versus a net loss of $125,474 for the six months ended June 30, 2012. This change is due increased research and development expense of approximately $38,000, and approximately $14,000 increase in general and administrative expense for the addition of a Chief Financial Officer and two additional members of the Board of Directors.

Liquidity and Capital Resources

Sources of Liquidity

During the six months ended June 30, 2013, net cash used by operating activities totaled $89,808. Net cash used by investing activities totaled $3,600. Net cash provided by financing activities during the period was $77,348 of which

included proceeds of $85,700 received from the sale of 163,238 shares of our common stock through our public offering plus net repayments of $8,352 to our chief executive officer. The resulting change in cash for the period was a decrease of $16,060. The cash balance at the beginning of the period was $54,194. The cash balances at June 30, 2013 and 2012 were $38,134 and $153,771, respectively.

As of June 30, 2013, the Company had $597,058 in total current liabilities, which was represented by $9,038 in accounts payable, $64,520 in accrued expenses, $502,000 in accrued officer’s compensation and $21,500 due to the Company’s CEO, a stockholder. This is in comparison to June 30, 2012, where the Company had $470,572 in total current liabilities, which was represented by $8,015 in accounts payable, $48,731 in accrued expenses, $390,000 in accrued officer’s compensation and $23,826 due to the Company’s CEO for advances he made to the Company.

The Company had no long-term liabilities at June 30, 2013; therefore the Company’s total liabilities at June 30, 2013 amounted to $597,058. This is in comparison to June 30, 2012, where the Company had no long-term liabilities and had total liabilities of $470,572.

The Company is not aware of any known trends, events or uncertainties which may affect its future liquidity. We are development stage and do not have a product commercially available for sale. We do not expect to realize any revenue for several years. As such it is imperative that the reader recognize that our primary source of working capital will generally come from equity sales, or the issuance of debt. We do, however, occasionally apply for non-taxable grant funding to support our research and development efforts. We currently do not have grant applications outstanding, and we can make no guarantees that any grant money will be awarded from any future applications. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources and possible cost overruns.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.

Future Financings

We will continue to rely on equity sales of our common shares in order to continue to fund our business operations. Issuances of additional shares will result in dilution to existing stockholders. There is no assurance that we will achieve any additional sales of the equity securities or arrange for debt or other financing to fund our operations and other activities or if we are able, there is no guarantee that existing shareholders will not be substantially diluted.

Critical Accounting Policies

We regularly evaluate the accounting policies and estimates that we use to make budgetary and financial statement assumptions. A complete summary of these policies is included in the notes to our financial statements. In general, management's estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.

Use of Estimates

The preparation of financial statements in conformity with U.S. 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 reporting period. Actual results could differ from those estimates.

Revenue Recognition

Research and development

The Company accounts for research and development costs in accordance with the ASC 730-10, “Research and Development.” Under ASC 730-10, all research and development costs must be charged to expense as incurred. Accordingly, internal research and development costs are expensed as incurred. Third-party research and development costs are expensed when the contracted work has been performed or as milestone results have been achieved. Company-sponsored research and development costs related to both present and future products are expensed in the period incurred.

Fair Value of Financial Instruments

The Company follows the provisions of ASC No. 820-10 "Fair Value Measurements."ASC 820-10 relates to financial assets and financial liabilities included on its balance sheet as of December 31, 2012, and 2011. The Company's financial instruments consist of payables and due to related party. The Company considers the carrying value of such amounts in the financial statements to approximate their fair value due to the short-term nature of these financial instruments.

ASC 820-10 defines fair value, establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (GAAP), and expands disclosures about fair value measurements. The provisions of this standard apply to other accounting pronouncements that require or permit fair value measurements and are to be applied prospectively with limited exceptions.

ASC 820-10 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820-10 establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity's own assumptions, about market participant assumptions, that are developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy under ASC 820-10 are described below:

Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

liability. (The unobservable inputs are developed based on the best information available in the circumstances and may include the Company's own data.)

The Company’s financial instruments for 2013and 2012 consist of accounts payables, accrued expenses and a short term loan payable. The Company considers the carrying value of such amounts in the financial statements to approximate their fair value due their respective short maturity dates.

Loss Per Share of Common Stock

Stock-Based Compensation

The Company accounts for stock-based compensation under ASC Topic 505-50. This standard defines a fair value-based method of accounting for stock-based compensation. The cost of stock-based compensation is measured at the grant date based on the value of the award and is recognized over the period in which the Company expects to receive the benefit, which is generally the vesting period.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

N/A

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

In connection with our compliance with securities laws and rules, our Chief Financial Officer has evaluated our disclosure controls and procedures on June 30, 2013. Prior to September 2012, the Chief Financial Officer was also serving in the capacity of Chief Executive Officer, Chief Accounting Officer and company director. Because of these multiple roles, it is impossible to fully segregate duties. As such he has concluded that our disclosure controls and procedures are ineffective. There have been no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation including any corrective actions with regard to significant deficiencies and material weaknesses. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in the Internal Control-Integrated Framework. Inherent in a development stage entity is the problem of segregation of duties. Given that the Company has a limited accounting department, segregation of duties cannot be completely accomplished at this stage in the business lifecycle.

Based on its assessment, management has concluded that the Company's disclosure controls and procedures and internal control over financial reporting are not effective based on those criteria.

Changes in Internal Control over Financial Reporting

There has been no change in our internal control over financial reporting during the quarter ended June 30, 2013 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

We are not currently a party to or engaged in any material legal proceedings. However, we may be subject to various claims and legal actions arising in the ordinary course of business from time to time.

Item 1A. Risk Factors

N/A

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

See Note (6) Stockholder’s Equity (Deficit) in Notes To Financial Statements of this filing for detail stock-based compensation activity.

Item 3. Defaults Upon Senior Securities

None

Item 4. (Reserved)

Item 5. Other Information

Current report form 8-K filed on March 7, 2013 is incorporated by reference.

Definitive Information Statement form DEF 14C filed on February 20, 2013 is incorporated by reference.

Item 6. Exhibits


Exhibit No.		Description
31.1		Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).

31.2		Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).

101.INS		XBRL Instance Document

101.SCH		XBRL Schema Document

101.CAL		XBRL Calculation Linkbase Document



101.LAB		XBRL Label Linkbase Document

101.PRE		XBRL Presentation Linkbase Document

SIGNATURES

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 thereunto duly authorized.


	CARDIGANT MEDICAL, INC.

		By: /s/ Jerett A Creed
Dated: August 14, 2013		Jerett A. Creed
		Chief Executive Officer

		By: /s/ Jack R. A. Mott
Dated: August 14, 2013		Jack R. A. Mott
		Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)


DELAWARE		26-4731758
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

1500 ROSECRANS AVENUE, ST 500, MANHATTAN BEACH, CALIFORNIA		90266
(Address of principal executive offices)		(Zip Code)


Large Accelerated Filer	Accelerated Filer	Non-Accelerated Filer	Smaller reporting company X
		(Do not check if a smaller reporting company)


CARDIGANT MEDICAL INC. (A DEVELOPMENT STAGE COMPANY) CONDENSED BALANCE SHEETS - Unaudited
	June 30, 2013		December 31, 2012

ASSETS
CURRENT ASSETS
Cash & Equivalents		$ 38,134	$ 54,194
Prepaid expenses		27,473	42,789
Deposits		1,195	1,195
Total current assets		66,802	98,178

PROPERTY AND EQUIPMENT, net		6,012	3,371
TOTAL ASSETS		$ 72,814	$ 101,549


LIABILITIES AND STOCKHOLDERS' (DEFICIT)
CURRENT LIABILITIES
Accounts payable and accounts payable related party		$ 9,038	$ 8,834
Accrued expenses		64,520	57,622
Accrued officer compensation		502,000	448,000
Due to stockholder		21,500	29,852
Total current liabilities		597,058	544,308
TOTAL LIABILITIES		597,058	544,308
STOCKHOLDERS' (DEFICIT)
Common stock, 50,000,000 shares authorized; $0.001 par value; 23,074,954 shares issued and outstanding at June 30, 2013; 22,901,504 shares issued and outstanding at December 31, 2012		23,075	22,902
Additional paid-in capital		423,793	325,061
Deficit accumulated during the development stage		(971,112)	(790,722)
Total stockholders' (deficit)		(524,244)	(442,759)
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT)		$ 72,814	$ 101,549

The accompanying notes are an integral part of these unaudited financial statements.


CARDIGANT MEDICAL INC. (A DEVELOPMENT STAGE COMPANY) STATEMENTS OF OPERATIONS – Unaudited
	For the Three Months Ended June 30,		For the Six Months Ended June 30,		From Date of Inception (April 17, 2009) to June 30, 2013
	2013	2012	2013	2012
REVENUE	$ -	$ -	$ -	$ -	$ -
OPERATING EXPENSES
Research and development	52,015	34,214	103,288	65,129	720,664
Selling, general, and administrative	31,767	28,748	73,002	58,629	389,138
Total operating expenses	83,782	62,962	176,290	123,758	1,109,802
LOSS FROM OPERATIONS	(83,782)	(62,962)	(176,290)	(123,758)	(1,109,802)
OTHER INCOME (EXPENSES)
Grant from National Institute of Health	-	-	-	-	151,247
Interest income	-	-	-	-	381
Interest expense	(2,932)	(453)	(3,299)	(916)	(9,737)
Total other income (expenses)	(2,932)	(453)	(3,299)	(916)	141,891
NET LOSS BEFORE INCOME TAXES	(86,714)	(63,415)	(179,589)	(124,674)	(967,911)
PROVISION FOR INCOME TAXES	-	-	(800)	(800)	(3,200)
NET LOSS	$ (86,714)	$ (63,415)	$ (180,389)	$(125,474)	$ (971,111)
LOSS PER COMMON SHARE - BASIC AND DILUTED	(0.00)	(0.00)	(0.01)	(0.01)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING	23,070,905	22,744,721	23,055,920	22,712,209

The accompanying notes are an integral part of these unaudited financial statements.


CARDIGANT MEDICAL INC. (A DEVELOPMENT STAGE COMPANY) STATEMENTS OF CASH FLOWS – Unaudited
	For the Six Months Ended June 30,		From Date of Inception (April 17, 2009) to June 30,
CASH FLOWS FROM OPERATING ACTIVITIES	2013	2012	2013
Net loss	$ (180,389)	$ (125,474)	$ (971,111)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities
Stock-based compensation	28,505	13,436	110,257
Depreciation expense	959	375	2,083
Net changes in operating assets and liabilities:
(Increase) in prepaid expenses	16	(5,071)	(27,173)
(Increase) in deposits	-	-	(1,195)
Increase (decrease) in accounts payable	203	(9,437)	17,935
Increase (Decrease) in accrued expenses	6,898	5,344	64,520
Increase in accrued officer compensation	54,000	60,000	502,000
Net cash provided by (used in) operating activities	(89,808)	(60,827)	(302,684)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase and reinvestments in certificate of deposit	-	-	(100,381)
Redemption of certificate of deposit		50,381	100,381
Purchase of equipment and computer software	(3,600)	(4,495)	(8,095)
Net cash provided by (used in) investing activities	(3,600)	45,886	(8,095)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock	85,700	164,760	286,312
Advances from related party	23,848	22,260	201,768
Repayments on related-party advances	(32,200)	(26,538)	(139,167)
Net cash provided by (used in) financing activities	77,348	160,482	348,913
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	(16,060)	145,541	38,134
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD	54,194	8,230	-
CASH AND CASH EQUIVALENTS - END OF PERIOD	$ 38,134	$ 153,771	$ 38,134
SUPPLEMENTAL DISCLOSURES OF CASH FLOW ACTIVITY
Cash paid during the year for income taxes	$ 800	$ 800	$ 2,260
Cash paid during the year for interest expense	$ -	$ -	$ 162

The accompanying notes are an integral part of these unaudited financial statements.


X	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


PART I	FINANCIAL INFORMATION

	Item 1.	Financial Statements

		Condensed Balance Sheets as of June 30, 2013 (unaudited) and December 31, 2012	3

		Unaudited Statements of Operations for the three and six months ended June 30, 2013 and 2012	4

		Unaudited Statements of Cash Flows for the six months ended June 30, 2013 and 2012	5

		Notes to Unaudited Financial Statements	7

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	13

	Item 3.	N/A

	Item 4.	Controls and Procedures	18

PART II	OTHER INFORMATION

	Item 1.	Legal Proceedings	18

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	19
	Item 3.	Defaults Upon Senior Securities	19
	Item 4.	Reserved	19
	Item 5.	Other Information	19
	Item 6.	Exhibits	19