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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-Q



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QUARTERLY REPORT

pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2007

000-14136

(Commission file number)



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CARDIUM THERAPEUTICS, INC.

(Exact
name of registrant as specified in its charter)



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|                         |  |                                  
|------------------------ |  | ---------------------------------
|Delaware                 |  | 27-0075787                       
|(State of incorporation) |  | (IRS Employer Identification No.)



|                                                                |  |                                
|--------------------------------------------------------------- |  | -------------------------------
|3611 Valley Centre Drive, Suite 525 San Diego, California 92130 |  | (858) 436-1000                 
|(Address of principal executive offices)                        |  | (Registrants telephone number)



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Indicate by check mark whether Cardium Therapeutics, Inc. (Cardium) (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that Cardium was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    x  Yes ̈No

Indicate by check mark whether Cardium is a
large accelerated filer, an accelerated filer, or a non-accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Large accelerated
filer ̈Accelerated filer ̈Non-accelerated filer  x

Indicate by check mark
whether Cardium is a shell company (as defined in Rule 12b-2 of the Exchange Act.): ̈Yes    x  No

As of May 10, 2007 40,914,425 shares of
Cardiums common stock were outstanding.



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TABLE OF CONTENTS



|           |  |                                                                                       |  |     
|---------- |  | ------------------------------------------------------------------------------------- |  | ----
|           |  |                                                                                       |  | Page
|PART I     |  | FINANCIAL INFORMATION                                                                 |  | 1   
|           |  |                                                                                      
|Item 1.    |  | Financial Statements                                                                  |  | 1   
|           |  |                                                                                      
|           |  | Condensed Consolidated Balance Sheets                                                 |  | 1   
|           |  | Condensed Consolidated Statements of Operations                                       |  | 2   
|           |  | Condensed Consolidated Statements of Cash Flows                                       |  | 3   
|           |  | Notes to Condensed Consolidated Financial Statements                                  |  | 4   
|           |  |                                                                                      
|Item 2.    |  | Managements Discussion and Analysis of Financial Condition and Results of Operations |  | 15  
|           |  |                                                                                      
|Item 3.    |  | Quantitative and Qualitative Disclosures About Market Risk                            |  | 18  
|           |  |                                                                                      
|Item 4.    |  | Controls and Procedures                                                               |  | 19  
|           |  |                                                                                      
|PART II    |  | OTHER INFORMATION                                                                     |  | 19  
|           |  |                                                                                      
|Item 1.    |  | Legal Proceedings                                                                     |  | 19  
|           |  |                                                                                      
|Item 1A.   |  | Risk Factors                                                                          |  | 19  
|           |  |                                                                                      
|Item 2.    |  | Unregistered Sales of Equity Securities and Use of Proceeds                           |  | 19  
|           |  |                                                                                      
|Item 3.    |  | Defaults Upon Senior Securities                                                       |  | 19  
|           |  |                                                                                      
|Item 4.    |  | Submission of Matters to a Vote of Security Holders                                   |  | 19  
|           |  |                                                                                      
|Item 5.    |  | Other Information                                                                     |  | 20  
|           |  |                                                                                      
|Item 6.    |  | Exhibits                                                                              |  | 20  
|           | 
|SIGNATURES |  | 24                                                                                   



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PART I  FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CARDIUM THERAPEUTICS, INC.

(a development stage company)

Condensed Consolidated Balance Sheets



|                                                                                                                                                        |  |                |             |   |                   |   |             |  
|------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------- | ----------- | - | ----------------- | - | ----------- | -
|                                                                                                                                                        |  | March 31, 2007 |             |   | December 31, 2006 |  
|                                                                                                                                                        |  | (Unaudited)    |             |   |                   |  
|Assets                                                                                                                                                  |  |                |             |   |                   |   |             |  
|Current assets:                                                                                                                                         |  |                |             |   |                   |   |             |  
|Cash and cash equivalents                                                                                                                               |  | $              | 19,777,626  |   |                   | $ | 5,931,123   |  
|Accounts receivable                                                                                                                                     |  |                | 263,995     |   |                   |   | 275,590     |  
|Inventory                                                                                                                                               |  |                | 1,033,623   |   |                   |   | 857,034     |  
|Prepaid expenses                                                                                                                                        |  |                | 501,586     |   |                   |   | 654,448     |  
|                                                                                                                                                        |  |                |             |   |                   |   |             |  
|Total current assets                                                                                                                                    |  |                | 21,576,830  |   |                   |   | 7,718,195   |  
|                                                                                                                                                        |  |                |             |   |                   |   |             |  
|Property and equipment, net                                                                                                                             |  |                | 924,351     |   |                   |   | 791,277     |  
|Patented technology, net                                                                                                                                |  |                | 5,012,937   |   |                   |   | 5,327,648   |  
|Intangibles, net                                                                                                                                        |  |                | 336,006     |   |                   |   | 228,338     |  
|Deposits                                                                                                                                                |  |                | 152,437     |   |                   |   | 51,965      |  
|                                                                                                                                                        |  |                |             |   |                   |   |             |  
|Total assets                                                                                                                                            |  | $              | 28,002,561  |   |                   | $ | 14,117,423  |  
|                                                                                                                                                        |  |                |             |   |                   |   |             |  
|Liabilities and Stockholders Equity                                                                                                                    |  |                |             |   |                   |   |             |  
|Current liabilities:                                                                                                                                    |  |                |             |   |                   |   |             |  
|Accounts payable                                                                                                                                        |  | $              | 905,155     |   |                   | $ | 989,021     |  
|Accrued liabilities                                                                                                                                     |  |                | 1,010,386   |   |                   |   | 1,975,047   |  
|                                                                                                                                                        |  |                |             |   |                   |   |             |  
|Total liabilities                                                                                                                                       |  |                | 1,915,541   |   |                   |   | 2,964,068   |  
|                                                                                                                                                        |  |                |             |   |                   |   |             |  
|Commitments and contingencies                                                                                                                           |  |                |             |   |                   |   |             |  
|Stockholders equity:                                                                                                                                   |  |                |             |   |                   |   |             |  
|Common stock, $0.0001 par value; 200,000,000 shares authorized; issued and outstanding 40,914,425 at March 31, 2007 and 32,190,804 at
December 31, 2006 |  |                | 4,091       |   |                   |   | 3,218       |  
|Additional paid-in capital                                                                                                                              |  |                | 55,961,598  |   |                   |   | 35,188,957  |  
|Deficit accumulated during development stage                                                                                                            |  |                | (29,878,669 | ) |                   |   | (24,038,820 | )
|                                                                                                                                                        |  |                |             |   |                   |   |             |  
|Total stockholders equity                                                                                                                              |  |                | 26,087,020  |   |                   |   | 11,153,355  |  
|                                                                                                                                                        |  |                |             |   |                   |   |             |  
|Total liabilities and stockholders equity                                                                                                              |  | $              | 28,002,561  |   |                   | $ | 14,117,423  |  
|                                                                                                                                                        |  |                |             |   |                   |   |             |  

See accompanying notes, which are an integral part of these financial statements.



1



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CARDIUM THERAPEUTICS, INC.

(a development stage company)

Condensed Consolidated Statements of Operations

(Unaudited)



|                                                        |  |                              |            |   |      |   |            |                                                             |  |   |             |  
|------------------------------------------------------- |  | ---------------------------- | ---------- | - | ---- | - | ---------- | ----------------------------------------------------------- |  | - | ----------- | -
|                                                        |  |                              |            |   |      |   |            | Period from December 22, 2003 (Inception) to March 31, 2007 | 
|                                                        |  | Three Months Ended March 31, |            |  
|                                                        |  | 2007                         |            |   | 2006 |   |           
|Revenues                                                |  | $                            | 309,331    |   |      | $ | 39,342     |                                                             |  | $ | 1,065,468   |  
|Cost of good sold                                       |  |                              | 246,565    |   |      |   | 53,328     |                                                             |  |   | 1,200,759   |  
|                                                        |  |                              |            |   |      |   |            |                                                             |  |   |             |  
|Gross profit (loss)                                     |  |                              | 62,766     |   |      |   | (13,986    | )                                                           |  |   | (135,291    | )
|                                                        |  |                              |            |   |      |   |            |                                                             |  |   |             |  
|Operating expenses:                                     |  |                              |            |   |      |   |            |                                                             |  |   |             |  
|Research and development                                |  |                              | 3,242,866  |   |      |   | 43,338     |                                                             |  |   | 15,627,190  |  
|Selling, general and administrative                     |  |                              | 2,539,101  |   |      |   | 2,665,421  |                                                             |  |   | 14,184,880  |  
|Amortization - intangibles                              |  |                              | 207,043    |   |      |   | 51,327     |                                                             |  |   | 880,273     |  
|                                                        |  |                              |            |   |      |   |            |                                                             |  |   |             |  
|Total operating expenses                                |  |                              | 5,989,010  |   |      |   | 2,760,086  |                                                             |  |   | 30,692,343  |  
|                                                        |  |                              |            |   |      |   |            |                                                             |  |   |             |  
|Interest income                                         |  |                              | 86,395     |   |      |   | 219,781    |                                                             |  |   | 948,965     |  
|                                                        |  |                              |            |   |      |   |            |                                                             |  |   |             |  
|Net loss                                                |  | $                            | (5,839,849 | ) |      | $ | (2,554,291 | )                                                           |  | $ | (29,878,669 | )
|                                                        |  |                              |            |   |      |   |            |                                                             |  |   |             |  
|Net loss per common share  basic and diluted           |  | $                            | (0.17      | ) |      | $ | (0.09      | )                                                           |  |   |             |  
|                                                        |  |                              |            |   |      |   |            |                                                             |  |   |             |  
|Weighted average shares outstanding  basic and diluted |  |                              | 34,362,080 |   |      |   | 29,888,690 |                                                             |  |   |             |  
|                                                        |  |                              |            |   |      |   |            |                                                             |  |   |             |  

See accompanying notes, which are an integral part of these financial statements.



2



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CARDIUM THERAPEUTICS, INC.

(a development stage company)

Condensed Consolidated Statements of Cash Flows

(Unaudited)



|                                                                               |  |                              |            |   |      |   |            |                                                             |  |   |             |  
|------------------------------------------------------------------------------ |  | ---------------------------- | ---------- | - | ---- | - | ---------- | ----------------------------------------------------------- |  | - | ----------- | -
|                                                                               |  |                              |            |   |      |   |            | Period from December 22, 2003 (Inception) To March 31, 2007 | 
|                                                                               |  | Three Months Ended March 31, |            |  
|                                                                               |  | 2007                         |            |   | 2006 |   |           
|Cash Flows From Operating Activities                                           |  |                              |            |   |      |   |            |                                                             |  |   |             |  
|Net loss                                                                       |  | $                            | (5,839,849 | ) |      | $ | (2,554,291 | )                                                           |  | $ | (29,878,669 | )
|Adjustments to reconcile net loss to net cash used in operating activities:    |  |                              |            |   |      |   |            |                                                             |  |   |             |  
|Depreciation and amortization                                                  |  |                              | 86,692     |   |      |   | 36,174     |                                                             |  |   | 346,379     |  
|Amortization - intangibles                                                     |  |                              | 207,043    |   |      |   | 51,327     |                                                             |  |   | 880,273     |  
|Common stock issued for services and reimbursement of expenses                 |  |                              |           |   |      |   |           |                                                             |  |   | 41,500      |  
|Stock based compensation expense                                               |  |                              | 614,837    |   |      |   | 277,071    |                                                             |  |   | 2,249,643   |  
|In-process purchased technology                                                |  |                              |           |   |      |   |           |                                                             |  |   | 1,027,529   |  
|Changes in operating assets and liabilities, excluding effects of acquisition: |  |                              |            |   |      |   |            |                                                             |  |   |             |  
|Accounts receivable                                                            |  |                              | 11,595     |   |      |   | (13,056    | )                                                           |  |   | (87,401     | )
|Inventory                                                                      |  |                              | (176,589   | ) |      |   | (14,176    | )                                                           |  |   | (936,959    | )
|Prepaid expenses                                                               |  |                              | 152,862    |   |      |   | (61,927    | )                                                           |  |   | (483,038    | )
|Deposits                                                                       |  |                              | (100,472   | ) |      |   | (22,275    | )                                                           |  |   | (125,776    | )
|Accounts payable                                                               |  |                              | (83,866    | ) |      |   | 490,709    |                                                             |  |   | 856,725     |  
|Accrued liabilities                                                            |  |                              | (964,661   | ) |      |   | (505,144   | )                                                           |  |   | 106,735     |  
|                                                                               |  |                              |            |   |      |   |            |                                                             |  |   |             |  
|Net cash used in operating activities                                          |  |                              | (6,092,408 | ) |      |   | (2,315,588 | )                                                           |  |   | (26,003,059 | )
|                                                                               |  |                              |            |   |      |   |            |                                                             |  |   |             |  
|Cash Flows From Investing Activities                                           |  |                              |            |   |      |   |            |                                                             |  |   |             |  
|In-process technology purchased from Tissue Repair Company                     |  |                              |           |   |      |   |           |                                                             |  |   | (1,000,000  | )
|Purchases of property and equipment                                            |  |                              | (219,766   | ) |      |   | (150,664   | )                                                           |  |   | (1,070,661  | )
|                                                                               |  |                              |            |   |      |   |            |                                                             |  |   |             |  
|Net cash used in investing activities                                          |  |                              | (219,766   | ) |      |   | (150,664   | )                                                           |  |   | (2,070,661  | )
|                                                                               |  |                              |            |   |      |   |            |                                                             |  |   |             |  
|Cash Flows From Financing Activities                                           |  |                              |            |   |      |   |            |                                                             |  |   |             |  
|Proceeds from officer loan                                                     |  |                              |           |   |      |   |           |                                                             |  |   | 62,882      |  
|Cash acquired in a merger or an acquisition                                    |  |                              |           |   |      |   | 51,800     |                                                             |  |   | 1,551,800   |  
|Proceeds from the exercise of warrants                                         |  |                              |           |   |      |   |           |                                                             |  |   | 498,598     |  
|Proceeds from the sale of common stock, net                                    |  |                              | 20,158,677 |   |      |   |           |                                                             |  |   | 45,738,066  |  
|                                                                               |  |                              |            |   |      |   |            |                                                             |  |   |             |  
|Net cash provided by financing activities                                      |  |                              | 20,158,677 |   |      |   | 51,800     |                                                             |  |   | 47,851,346  |  
|                                                                               |  |                              |            |   |      |   |            |                                                             |  |   |             |  
|Net increase (decrease) in cash and cash equivalents                           |  |                              | 13,846,503 |   |      |   | (2,414,452 | )                                                           |  |   | 19,777,626  |  
|Cash and cash equivalents at beginning of period                               |  |                              | 5,931,123  |   |      |   | 21,787,869 |                                                             |  |   |            |  
|                                                                               |  |                              |            |   |      |   |            |                                                             |  |   |             |  
|Cash and cash equivalents at end of period                                     |  | $                            | 19,777,626 |   |      | $ | 19,373,417 |                                                             |  | $ | 19,777,626  |  
|                                                                               |  |                              |            |   |      |   |            |                                                             |  |   |             |  
|Non-Cash Activity:                                                             |  |                              |            |   |      |   |            |                                                             |  |   |             |  
|Subscription receivable for common shares                                      |  | $                            |           |   |      | $ |           |                                                             |  | $ | 17,000      |  
|Common stock issued for services                                               |  | $                            |           |   |      | $ |           |                                                             |  | $ | 62,882      |  
|Net assets acquired for the issuance of common stock (exclusive of cash)       |  | $                            |           |   |      | $ | 5,824,000  |                                                             |  | $ | 5,824,000   |  

See accompanying notes, which are an integral part of these financial statements.



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CARDIUM THERAPEUTICS, INC.

(a development stage company)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1. Organization

Cardium Therapeutics, Inc. (the Company, Cardium, we, our and
us) was organized in Delaware in December 2003. We are a medical technology company primarily focused on the development, manufacture and sale of innovative products for cardiovascular and related indications. We have initially focused
on acquiring fallen angel opportunities having potential unrealized value. In October 2005, we acquired a portfolio of biologic growth factors and related delivery techniques from the Schering AG Group, Germany, which we plan to develop
as cardiovascular-directed growth factor therapeutics for potential use by interventional cardiologists as a one-time treatment to promote and stimulate the growth of collateral circulation in the hearts of patients with ischemic conditions such as
recurrent angina. In March 2006, we acquired the technologies and products of Innercool Therapies, Inc., a medical technology company in the emerging field of therapeutic hypothermia or patient temperature modulation, whose systems and products are
designed to rapidly and controllably cool the body to reduce cell death and damage following acute ischemic events such as cardiac arrest and stroke, and to potentially lessen or prevent associated injuries such as adverse neurologic outcomes. In
August 2006, we acquired rights to the assets and technologies of Tissue Repair Company, a company focused on the development of growth factor therapeutics for the potential treatment of tissue wounds such as chronic diabetic wounds, and whose
product candidate, ExcellarateTMis initially being developed as a single administration for the treatment of
non-healing, neuropathic diabetic foot ulcers. Innercool Therapies and Tissue Repair Company are each operated as a wholly-owned subsidiary of Cardium.

We
are a development stage company in the initial stage of our operations. We have yet to generate positive cash flows from operations, and are essentially dependent on debt and equity funding to finance our operations. Before October 2005, cash
requirements were funded by loans from executive officers. In October 2005, we closed a private placement of 19,325,651 shares of our common stock at a purchase price of $1.50 per share and received net proceeds of $25,542,389. In connection with
the offering, we completed a reverse merger, whereby Cardium merged with Aries Ventures Inc. (Aries), a publicly-traded company. As a result of these transactions, the stockholders of Cardium became the controlling stockholders of Aries.
Accordingly, the acquisition of Cardium by Aries was a reverse merger. The historical financial results before the reverse merger on October 20, 2005, are those of Cardium. Aries results of operations are included in Cardiums
financial results beginning October 20, 2005.

In January 2006, Aries was merged with and into Cardium, with Cardium as the surviving entity and the
successor issuer to Aries. As a result, we are now in our present form a publicly-traded, Delaware corporation named Cardium Therapeutics, Inc.

On
March 9, 2007, we closed a private placement of 8,636,000 shares of common stock at a purchase price of $2.50 per share and received net proceeds of approximately $20 million. Investors received five-year warrants to buy up to 35% of the number
of shares of common stock purchased in the private placement, at an exercise price of $3.75 per share. Warrants to purchase approximately 3,022,600 shares of common stock, in the aggregate, were issued to such investors.

Note 2. Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation

Our principal activities are expected to focus on the commercialization of our licensed technologies, other
technologies and the expansion of our existing products. The accompanying financial statements have been prepared in accordance with Statement of Financial Accounting Standard (SFAS) No. 7, Development Stage Enterprises.



4



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The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with
accounting principles generally accepted in the United States of America for interim financial information and pursuant to the instructions to Form 10-Q and applicable rules and regulations. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. In managements opinion, all adjustment necessary for a fair
presentation of the financial position, results of operations and cash flows have been included and are of a normal, recurring nature. The results of operations for the three months ended March 31, 2007 are not necessarily indicative of the
operating results for the full fiscal year or any future periods.

You should read the accompanying condensed consolidated financial statements and these
notes, which are an integral part of the financial statements, in conjunction with our audited financial statements included in our Annual Report on Form 10-KSB for the year ended December 31, 2006 (2006 Annual Report). The
accounting policies used to prepare the financial statements included in this report is the same as those described in the notes to the consolidated financial statements in our 2006 Annual Report unless otherwise noted below.

Income Taxes

We account for income taxes under SFAS No. 109,
Accounting for Income Taxes. SFAS No. 109 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statements and tax basis of assets and liabilities, and for
the expected future tax benefit to be derived primarily from tax loss carryforwards. We have established a valuation allowance related to the benefits of net operating losses for which utilization in future periods is uncertain. We believe it is
more likely than not that we will not realize the benefits of these deductible differences in the near future and, therefore, a valuation allowance has been recorded to offset future tax benefits.

The Company has federal net operating losses available to offset future taxable income, which, if not utilized, will expire in 2027. No provision for income taxes has
been recorded in the financial statements as a result of such operating losses. Any benefit for income taxes as a result of the use of our net operating losses will likely be limited as a result of cumulative changes in stock ownership.

Loss Per Common Share

We compute earnings per share in accordance
with SFAS No. 128, Earnings Per Share. SFAS No. 128 requires dual presentation of basic and diluted earnings per share.

Basic loss
per common share is computed by dividing net loss by the weighted average number of common shares outstanding during the period. Diluted loss per common share is computed by dividing net loss by the weighted average number of common shares
outstanding, plus the issuance of common shares, if dilutive, resulting from the exercise of outstanding stock options and warrants. These potentially dilutive securities were not included in the calculation of loss per common share for the three
months ended March 31, 2007 and 2006 because we incurred a loss during such periods and thus their inclusion would have been anti-dilutive. Accordingly, basic and diluted loss per common share is the same for all periods presented. The common
stock issued and outstanding with respect to the stockholders of Aries has been included since October 20, 2005, the effective date of the reverse merger.

Potentially dilutive securities consisted of outstanding stock options and warrants to acquire 11,005,551 shares as of March 31, 2007. As of March 31, 2006, potentially dilutive securities consisted of outstanding stock options
and warrants to acquire 6,901,818 shares.

Stock-Based Compensation

Effective January 1, 2006, we adopted the fair value recognition provisions of SFAS No. 123 (revised 2004), Share-Based Payment (SFAS 123R), using the modified prospective transition method.
Under the transition method, stock-based compensation expense is recognized (i) for all stock-based compensation awards granted before, but not yet vested as of, January 1, 2006, based on the grant date fair value estimated in accordance
with the original provision of SFAS No. 123, Accounting for Stock-Based Compensation (SFAS 123), and (ii) for all stock-based compensation awards granted after January 1, 2006, based on the grant date fair value estimated
in accordance with the provisions of SFAS 123R.



5



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We recognize stock-based compensation costs on a straight-line basis over the requisite service period of the award,
which is generally the vesting term of the award. Total stock-based compensation expense included in the consolidated statements of operations was $614,837 for the three months ended March 31, 2007. $280,980 was recorded as a component of
research and development expenses and $333,857 was recorded as a component of general and administrative expenses. For the three months ended March 31, 2006, total stock-based compensation expense included in the consolidated statements of
operations was $277,071 and was recorded as a component of general and administrative expense. As of March 31, 2007, the Company had $6,161,852 of unvested stock-based compensation at fair value remaining to be expensed ratably over the period
April 2007 through June 2010.

The fair value of the stock options and similar stock-based compensation granted is estimated on the date of grant using the
Black-Scholes option valuation model. The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable. Option valuation models require the
input of highly subjective assumptions, including expected life and stock price volatility. The following weighted-average assumptions were used:



|                        |  |                                      |   |  |      |  
|----------------------- |  | ------------------------------------ | - |  | ---- | -
|                        |  | For the Three Months Ended March 31, |  
|                        |  | 2007                                 |   |  | 2006 |  
|Dividend yield          |  | 0                                    | % |  | 0    | %
|Expected life (years)   |  | 5.25                                 |   |  | 5.25 |  
|Risk-free interest rate |  | 4.75                                 | % |  | 4.33 | %
|Volatility              |  | 76                                   | % |  | 66   | %

Recent Accounting Pronouncements

In July 2006, the Emerging Issues Task Force (EITF) reached a consensus on EITF Issue No. 06-3, How Taxes Collected from Customers and Remitted to Governmental Authorities Should Be Presented in
the Income Statement (That Is, Gross versus Net Presentation) (EITF 06-3). EITF 06-3 provides that the presentation of taxes assessed by a governmental authority that are directly imposed on a revenue-producing transaction between
a seller and a customer on either a gross basis (included in revenues and costs) or on a net basis (excluded from revenues) is an accounting policy decision that should be disclosed. EITF 06-3 is effective for interim and annual periods beginning
after December 15, 2006. The adoption of EITF 06-3 did not have a material effect on our condensed consolidated financial statements.

Effective
January 1, 2007, the Company adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes  an interpretation of FASB Statement No. 109 (FIN 48). FIN 48 prescribes a
recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be
more-likely-than-not to be sustained upon examination by taxing authorities. Differences between tax positions taken or expected to be taken in a tax return and the benefit recognized and measured pursuant to the interpretation are referred to as
unrecognized benefits. A liability is recognized (or amount of net operating loss carry forward or amount of tax refundable is reduced) for an unrecognized tax benefit because it represents an enterprises potential future
obligation to the taxing authority for a tax position that was not recognized as a result of applying the provisions of FIN 48.

In accordance with FIN 48,
interest costs related to unrecognized tax benefits are required to be calculated (if applicable) and would be classified as Interest expense, net in General and administrative expenses.

The Company files income tax returns in the United States (federal) and in various state and local jurisdictions. In most instances, the Company is no longer subject to
federal, state and local income tax examinations by tax authorities for years prior to 2003.



6



---

The adoption of the provisions of FIN 48 did not have a material impact on the Companys condensed consolidated
financial position and results of operations. As of March 31, 2007, no liability for unrecognized tax benefits was required to be recorded.

The
Company recognized a deferred tax asset of approximately $12 million as of March 31, 2007, primarily relating to net operating loss carryforwards of approximately $28 million (which excludes net operating losses of $71 million that represent
pre merger losses for which the use of these losses is limited in accordance with Section 382 of the Internal Revenue Code of 1986, as amended), available to offset future taxable income through 2027.

The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become
deductible. The Company considers projected future taxable income and tax planning strategies in making this assessment. At present, the Company does not have a sufficient history of income to conclude that it is more-likely-than-not that the
Company will be able to realize all of its tax benefits in the near future and therefore a valuation allowance was established in the full value of the deferred tax asset.

A valuation allowance will be maintained until sufficient positive evidence exists to support the reversal of any portion or all of the valuation allowance. Should the Company continue to be profitable in future
periods with supportable trends, the valuation allowance will be reversed accordingly.

In February 2007, the Financial Accounting Standards Board
(FASB) issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities (SFAS 159). SFAS 159 provides companies with an option to report selected financial assets and liabilities at
fair value. The objective of SFAS 159 is to reduce both complexity in accounting for financial instruments and the volatility in earnings caused by measuring related assets and liabilities differently. Generally accepted accounting principles have
required different measurement attributes for different assets and liabilities that can create artificial volatility in earnings. The FASB has indicated it believes that SFAS 159 helps to mitigate this type of accounting-induced volatility by
enabling companies to report related assets and liabilities at fair value, which would likely reduce the need for companies to comply with detailed rules for hedge accounting. SFAS 159 also establishes presentation and disclosure requirements
designed to facilitate comparisons between companies that choose different measurement attributes for similar types of assets and liabilities.

SFAS 159
does not eliminate disclosure requirements included in other accounting standards, including requirements for disclosures about fair value measurements included in SFAS No. 157, Fair Value Measurements and SFAS No. 107,
Disclosures about Fair Value of Financial Instruments. SFAS 159 is effective for the Company as of the beginning of fiscal year 2009. The Company has not yet determined the impact SFAS 159 may have on its consolidated financial position,
results of operations, or cash flows.

Note 3. Property and Equipment

Property and equipment consisted of the following:



|                                          |  |                |           |   |                   |   |           |  
|----------------------------------------- |  | -------------- | --------- | - | ----------------- | - | --------- | -
|                                          |  | March 31, 2007 |           |   | December 31, 2006 |  
|Computer and telecommunication equipment  |  | $              | 543,588   |   |                   | $ | 528,447   |  
|Machinery and equipment                   |  |                | 244,738   |   |                   |   | 135,225   |  
|Office equipment                          |  |                | 27,595    |   |                   |   | 27,595    |  
|Instrumentation                           |  |                | 103,439   |   |                   |   | 84,000    |  
|Construction in progress                  |  |                | 75,673    |   |                   |   |          |  
|Office furniture and equipment            |  |                | 275,697   |   |                   |   | 275,697   |  
|                                          |  |                |           |   |                   |   |           |  
|                                          |  |                | 1,270,730 |   |                   |   | 1,050,964 |  
|Accumulated depreciation and amortization |  |                | (346,379  | ) |                   |   | (259,687  | )
|                                          |  |                |           |   |                   |   |           |  
|Property and equipment, net               |  | $              | 924,351   |   |                   | $ | 791,277   |  
|                                          |  |                |           |   |                   |   |           |  



7



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Depreciation and amortization of property and equipment totaled $86,692 for the three months ended March 31, 2007,
$36,174 for the three months ended March 31, 2006 and $346,379 for the period from December 22, 2003 (date of inception) through March 31, 2007.

Note 4. Patented Technology and Other Intangible Assets

In connection with the Companys acquisition of Innercool Therapies, the
Company recorded patented technology and other intangibles. The following is a summary of intangible assets:



|                           |  |                |           |                         |   |           |  |              |           |              |   |         |  |   |         |  |   |          
|-------------------------- |  | -------------- | --------- | ----------------------- | - | --------- |  | ------------ | --------- | ------------ | - | ------- |  | - | ------- |  | - | ---------
|                           |  | March 31, 2007 |           | December 31, 2006      
|                           |  | Cost           |           | AccumulatedAmortization |   | Net Asset |  | Amortization |           | Amortization |   | Net    
|Acquired technology        |  | $              | 5,965,114 |                         | $ | 833,505   |  | $            | 5,131,609 |              | $ | 196,039 |  | $ | 637,466 |  | $ | 5,327,648
|Trade names and trademarks |  |                | 264,102   |                         |   | 46,768    |  |              | 217,334   |              |   | 11,004  |  |   | 35,764  |  |   | 228,338  
|                           |  |                |           |                         |   |           |  |              |           |              |   |         |  |   |         |  |   |          
|Total                      |  | $              | 6,229,216 |                         | $ | 880,273   |  | $            | 5,348,943 |              | $ | 207,043 |  | $ | 673,230 |  | $ | 5,555,986

Based on the carrying amount of the intangible assets as of March 31, 2007, the amortization expense for the
next five years and thereafter is estimated as follows:



|                              |  |        |          
|----------------------------- |  | ------ | ---------
|Twelve months ended March 31, |  | Amount
|2008                          |  | $      | 789,656  
|2009                          |  |        | 789,656  
|2010                          |  |        | 789,656  
|2011                          |  |        | 789,656  
|2012                          |  |        | 789,656  
|Thereafter                    |  |        | 1,400,663
|                              |  |        |          
|Total                         |  | $      | 5,348,943
|                              |  |        |          

Note 5. Accrued Liabilities

Accrued Liabilities consisted of the following:



|                             |  |                |           |                   |   |          
|---------------------------- |  | -------------- | --------- | ----------------- | - | ---------
|                             |  | March 31, 2007 |           | December 31, 2006
|Accrued consulting expense   |  | $              | 37,500    |                   | $ | 37,500   
|Accrued legal expenses       |  |                | 129,818   |                   |   | 70,933   
|Accrued expenses other       |  |                | 406,701   |                   |   | 462,470  
|Accrued payroll and benefits |  |                | 436,367   |                   |   | 1,404,144
|                             |  |                |           |                   |   |          
|Total                        |  | $              | 1,010,386 |                   | $ | 1,975,047



8



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Note 6. Business Combinations

Innercool Therapies Acquisition

On March 8, 2006, Cardium, through its wholly-owned subsidiary, Innercool Therapies, Inc., a Delaware
corporation, acquired substantially all of the assets and the business of Innercool Therapies, Inc., an unaffiliated California corporation, in the development stage. As partial consideration, Cardium issued to the seller 2,500,000 shares of
Cardiums common stock. In addition, as part of the acquisition, Cardium agreed to (i) deliver to the seller $5,000,000 (to be recorded as acquired technology) in cash or shares of Cardiums common stock, at Cardiums election,
if net sales revenue from certain of Innercools products acquired in the acquisition equals or exceeds $20,000,000 in any one calendar year beginning with 2006 and ending December 31, 2011; (ii) assume certain liabilities of the
seller in the aggregate amount of approximately $580,000; and (iii) pay certain transaction costs associated with the acquisition and amounts that may be payable to former employees of the seller for accrued and unpaid vacation, in the
aggregate, equal to approximately $170,000, as well as certain transaction fees of $100,000. The acquisition was recorded based on Cardiums common stock price of $2.35 per share.

The results of operations of Innercool Therapies have been included in the accompanying condensed consolidated financial statements from the date of acquisition. The total cost of the acquisition is as follows:



|                         |  |   |          
|------------------------ |  | - | ---------
|Issuance of common stock |  | $ | 5,875,000
|Transaction costs        |  |   | 100,000  
|                         |  |   |          
|Total purchase price     |  | $ | 5,975,000
|                         |  |   |          

The allocation of the purchase price for the Innercool Therapies acquisition as of March 8, 2006, the date of
the acquisition, is as follows:



|                                               |  |   |          
|---------------------------------------------- |  | - | ---------
|Assets acquired:                               |  |   |          
|Cash                                           |  | $ | 51,800   
|Accounts receivable                            |  |   | 176,593  
|Inventory                                      |  |   | 96,664   
|Property and equipment                         |  |   | 110,943  
|Prepaid expenses                               |  |   | 18,548   
|Deposits                                       |  |   | 24,381   
|Intangible assets (amortizable over 6 years)   |  |   | 264,102  
|Acquired technology (amortizable over 8 years) |  |   | 5,965,114
|                                               |  |   |          
|Total assets acquired                          |  | $ | 6,708,145
|                                               |  |   |          
|Liabilities assumed:                           |  |   |          
|Accounts payable                               |  | $ | 387,105  
|Other accrued expenses                         |  |   | 346,040  
|                                               |  |   |          
|Total liabilities assumed                      |  | $ | 733,145  
|                                               |  |   |          
|Total consideration paid                       |  | $ | 5,975,000
|                                               |  |   |          

Tissue Repair Company Acquisition

On August 11, 2006, Cardium, through its newly-formed, wholly-owned subsidiary, Cardium Biologics, Inc., a
Delaware corporation, acquired the rights to the assets and technologies of Tissue Repair Company, a privately-held, San Diego-based corporation. The rights acquired included product rights to a lead product candidate, ExcellarateTM, a DNA-activated collagen gel for topical treatment formulated with an adenovector delivery carrier encoding human
platelet-derived growth factor-B (PDGF-B). Excellarate is initially being developed as a single administration for the treatment of non-healing, neuropathic diabetic foot ulcers. The Excellarate topical gel is



9



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designed to stimulate angiogenesis and granulation tissue formation through the recruitment and proliferation of chemotactic cells such as monocytes and
fibroblasts, which are necessary for the stimulation of a variety of wound healing processes. The rights acquired also included technologies applicable to the treatment of ischemic heart disease. Following the acquisition, Cardium Biologics, Inc.
changed its name to Tissue Repair Company (TRC).

As consideration for the rights acquired, Cardium, through its TRC subsidiary, paid the seller $1.0
million and assumed approximately $120,000 in liabilities of the seller. If TRC advances the Excellarate product candidate to a Phase 2 clinical study, TRC would be obligated to pay a product advancement milestone of $1.0 million. TRC has the right
to return the assets and product rights at anytime before the milestone payment and would have no further obligation under the terms of the acquisition. If TRC successfully commercializes Excellarate, TRC would pay royalties based on worldwide net
sales of such product. The royalty rate to the seller would be 10% minus any applicable third party royalties (including a royalty to the University of Michigan under a license agreement assumed by TRC), and would also be subject to a development
cost-recovery offset that could be deducted at the rate of $5.0 million per year from any applicable royalty obligations. The deduction for third party royalties would apply until worldwide net sales exceeded $100 million per year. The cost-recovery
offset would apply until TRC recovered 50% of its associated product development costs. TRC would also have a right to buy out the ongoing royalty obligation based on a one-time payment of 30% of net sales for the fifth calendar year or the first
year in which sales exceeded $250 million. If pre-specified milestones relating to the commercial development of Excellarate are not satisfied, and TRC did not elect to return the assets to the seller, then Cardium would issue to the seller stock
purchase warrants to purchase up to an aggregate of 2.0 million shares of Cardiums common stock (one 500,000 share allotment for each of up to four missed events) at an exercise price of $4.00 per share. The seller could also require TRC
to return certain product rights if TRC failed to meet the Excellarate development milestones by more than six months, excluding delays caused by defined product-related limitations.

The results of operations of TRC have been included in the accompanying condensed consolidated financial statements from the date of acquisition.

Based on our evaluation, the allocation of the purchase price for the Tissue Repair Company acquisition is as follows as of August 11, 2006, the date of the acquisition:



|                                                           |  |   |          
|---------------------------------------------------------- |  | - | ---------
|Assets and technology acquired:                            |  |   |          
|Property and equipment                                     |  | $ | 89,126   
|Deposits                                                   |  |   | 2,280    
|In-process purchased technology (research and development) |  |   | 1,027,529
|                                                           |  |   |          
|Total assets acquired                                      |  | $ | 1,118,935
|                                                           |  |   |          
|Liabilities assumed:                                       |  |   |          
|Other accrued expenses                                     |  | $ | 118,935  
|                                                           |  |   |          
|Total liabilities assumed                                  |  | $ | 118,935  
|                                                           |  |   |          
|Cash consideration                                         |  | $ | 1,000,000
|                                                           |  |   |          

Unaudited pro forma consolidated financial information is presented below as if the Innercool Therapies and Tissue
Repair Company acquisitions had occurred before the beginning of the periods shown. The results have been adjusted to account for the amortization of acquired technology and intangibles and other pro forma adjustments. The pro forma information
presented below does not purport to present what actual results would have been if the acquisition occurred at the beginning of such periods, nor does the information project results for any future period. The unaudited pro forma consolidated
financial information should be read in conjunction with the historical financial information of Cardium included in this report, as well as the historical financial information of Cardium and Innercool Therapies included in other reports and
documents we have filed with the SEC.



10



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The unaudited pro forma consolidated financial information for the three month period ended March 31, 2006 is as
follows:



|                                                               |  |                                               |            |  
|-------------------------------------------------------------- |  | --------------------------------------------- | ---------- | -
|                                                               |  | Pro Forma Combined for the Three Months Ended |           
|                                                               |  | March 31, 2006                                |           
|Revenues                                                       |  |                                               |            |  
|Net sales                                                      |  | $                                             | 392,240    |  
|                                                               |  |                                               |            |  
|Net loss                                                       |  |                                               | (3,630,500 | )
|                                                               |  |                                               |            |  
|Net loss per common share  basic and diluted                  |  | $                                             | (0.11      | )
|                                                               |  |                                               |            |  
|Weighted average common shares outstanding  basic and diluted |  |                                               | 31,749,801 |  
|                                                               |  |                                               |            |  

Note 7. Purchase of Technology from Schering AG Group (Germany)

In October 2005, we completed a transaction with Schering AG Group (Germany) and related licensors, including the
University of California, New York University and Yale University, for the transfer or license of certain assets and technology relating to (i) methods of gene therapy for the treatment of cardiovascular disease (including methods for the
delivery of genes to the heart or vasculature and the use of angiogenic and/or non-angiogenic genes for the potential treatment of diseases of the heart or vasculature); (ii) therapeutic genes that include fibroblast growth factors (including
FGF-4); insulin-like growth factors (including IGF-I); and potentially other related biologics (including mutant eNOS); and (iii) other technology and know-how, including manufacturing and formulation technology, as well as data relating to the
clinical development of GenerxTMand corresponding FDA regulatory matters. Under the terms of the transaction, we
paid Schering a $4 million fee, and will pay a $10 million milestone payment upon the first commercial sale of each resulting product. We also are obligated to pay the following royalties to Schering: (i) 5% on net sales of an FGF-4 based
product such as Generx, or (ii) 4% on net sales of other products developed based on technology transferred to Cardium by Schering. To date, no royalty payments have been required.

Note 8. Commitments and Contingencies

Effective November 1, 2005, we entered into a two year lease for our
principal executive offices. The lease contains two options, the first for an additional term of one year and the second for an additional term of two years. The second option is subject to a third party right of first refusal. During the first year
of the lease, the monthly installment of base rent was approximately $21,500, which increased to approximately $22,335 in November 2006. In March 2007, we signed the one year lease extension, which extends the lease to October 31, 2008, and
increases the base monthly rent to approximately $23,229 effective November 1, 2007. In addition to base rent, we also are required to pay our proportionate share of operating and tax expenses for the office park in which our space is located.

As part of the acquisition of Innercool Therapies, we acquired all of the rights and assumed all of the obligations of the seller under the terms of a
lease for approximately 24,000 square feet in San Diego, California, and a sublease of approximately 6,600 square feet of such facilities to an unaffiliated third party. The base monthly rent under the lease is $25,200. The monthly base rent payable
to Innercool under the terms of the sublease is approximately $7,300. In November 2006, we entered into an amendment to the sublease in anticipation of our new technology center described below pursuant to which the subtenant agreed to sublease an
additional 11,000 square feet. As a result, the monthly base rent payable to Innercool under the terms of the sublease has increased to $20,500. The lease and the sublease both expire October 31, 2007.

On December 20, 2006, we entered into a six year lease for our technology center, which will house the operations of Innercool Therapies, Inc. and Tissue Repair
Company. Under the terms of the lease, we have the option to cancel the last two years of the lease for a one time fee of $75,000, if we give written notice of our intent to exercise such option no later than July 20, 2010, or to cancel only
the last year of the lease for a one time fee of $50,000, if we give written notice no later than September 20, 2011. During the first year of the lease, the monthly installment of base rent will average $38,320, which amount will increase to
approximately $41,506 in the



11



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second year of the lease. In addition to base rent, we also are required to pay our proportionate share of operating and tax expenses for the office park in
which our space is located. Innercool has moved into the facility with the exception of operations, which requires some tenant improvement modifications. Once the required tenant improvements are completed, Innercool operations and the Tissue
Repair Company will move to our technology center as well.

The Tissue Repair Company currently rents on a month to month basis approximately 2,700 square
feet of combined office and lab space for approximately $2,700, which it will vacate when its space in the technology center is ready.

Future annual
minimum rental payments along with sub-lease income under the leases are as follows:



|                               |  |                              |           |                    |   |          |     |  |   |          
|------------------------------ |  | ---------------------------- | --------- | ------------------ | - | -------- | --- |  | - | ---------
|Twelve months ending March 31, |  | Facilities (Operating Lease) |           | Sub-Lease (Income) |   |          | Net
|2008                           |  |                              | 927,210   |                    |   | (144,075 | )   |  |   | 783,135  
|2009                           |  |                              | 665,043   |                    |   |         |     |  |   | 665,043  
|2010                           |  |                              | 520,024   |                    |   |         |     |  |   | 520,024  
|2011                           |  |                              | 475,167   |                    |   |         |     |  |   | 475,167  
|                               |  |                              |           |                    |   |          |     |  |   |          
|Total                          |  | $                            | 2,587,444 |                    | $ | (144,075 | )   |  | $ | 2,443,369
|                               |  |                              |           |                    |   |          |     |  |   |          

Rent expense was $134,026 and $64,430 for the three months ended March 31, 2007 and 2006, respectively.

The Company also has license arrangements with New York University, Yale University, University of Michigan and SurModics, Inc. which may require the
Company to pay royalties of 3%-4% based on certain future sales and other milestones, as defined in the agreements.

Employment Agreements

The two executive founders of Cardium entered into formal two-year employment agreements with the Company on October 20, 2005. The agreements
provided for their combined base annual compensation in an amount initially equal to $675,000, as such amount may be adjusted from time to time by the Companys Board of Directors. Effective as of March 16, 2007, the Compensation Committee
of the Board of Directors approved an increase in their combined base annual compensation to $708,750. In the event a founder is terminated without cause, the founder shall be entitled to severance pay in an amount equal to the greater of the
remaining term of the contract, or one year.

From November 2005 until March 2006, a, stockholder
had been providing consulting services to the Company pursuant to a.Consulting Services Agreement, Under the
agreement, the stockholder was paid consulting fees of $8,333 per month, The agreement was terminated in March 2006 when the stockholder became an employee.

In connection with the Innercool transaction described in Note 6 above, the President and Chief Operating Officer of the seller was appointed as the President and Chief Operating Officer of Innercool, and entered into a three year
employment agreement with Innercool effective March 8, 2006, the agreement provides for his annual base salary of $266,000. If the officer is terminated without cause or if he terminates his employment for good reason, he will be entitled to a
severance benefit in an amount equal to one years base salary.



12



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Note 9. Stockholders Equity

Common Stock

On March 9, 2007, we closed a private placement of 8,636,000 shares of common stock at a purchase
price of $2.50 per share and received net proceeds of approximately $20 million. Investors received five-year warrants to buy up to 35% of the number of shares of common stock purchased in the private placement, at an exercise price of $3.75 per
share. Warrants to purchase approximately 3,022,600 shares of common stock, in the aggregate, were issued to such investors.

In connection with the
private placement, we incurred selling commissions, and expenses payable to the placement agent, totaling approximately $1,478,350, and legal, accounting and other fees and expenses totaling approximately $100,000. In addition, a five-year warrant
to purchase 518,160 shares of our common stock was issued to the placement agent at an exercise price of $3.78 per share.

Option Activity

We have an equity incentive plan that was established in 2005 under which 5,665,856 shares of our common stock have been reserved for issuance to
employees, non-employee directors and consultants of the Company.

During the three months ended March 31, 2007, no options or warrants were issued to
employees, non-employee directors or consultants of the Company.

The following is a summary of stock option activity under our equity incentive plan and
warrants issued outside of the plan to employees and consultants, which are included as options below, during the three months ended March 31, 2007:



|                                       |  |                               |  |                                 |      |                                                        |     |                           |   |          
|-------------------------------------- |  | ----------------------------- |  | ------------------------------- | ---- | ------------------------------------------------------ | --- | ------------------------- | - | ---------
|                                       |  | Number of Options or Warrants |  | Weighted Average Exercise Price |      | Weighted Average Remaining Contractual Life (in years) |     | Aggregate Intrinsic Value
|Balance outstanding, December 31, 2006 |  | 5,304,000                     |  | $                               | 2.27 |                                                        | 8.4 |                           |   |         
|Granted                                |  |                              |  |                                 |     |                                                        |    |                           |   |         
|Exercised                              |  |                              |  |                                 |     |                                                        |    |                           |   |         
|Expired                                |  |                              |  |                                 |     |                                                        |    |                           |   |         
|Cancelled                              |  |                              |  |                                 |     |                                                        |    |                           |   |         
|                                       |  |                               |  |                                 |      |                                                        |     |                           |   |          
|Balance outstanding, March 31, 2007    |  | 5,304,000                     |  | $                               | 2.27 |                                                        | 8.1 |                           | $ | 3,871,920
|                                       |  |                               |  |                                 |      |                                                        |     |                           |   |          
|Exercisable, March 31, 2007            |  | 1,449,258                     |  |                                 | 2.11 |                                                        |     |                           |   |          
|                                       |  |                               |  |                                 |      |                                                        |     |                           |   |          

The following is a summary of unvested options and warrants as of March 31, 2007, and changes during the
three months ended March 31, 2007:



|                                                |  |                               |   |  |                                        |     
|----------------------------------------------- |  | ----------------------------- | - |  | -------------------------------------- | ----
|                                                |  | Number of Options or Warrants |   |  | Weighted Average Grant Date Fair Value
|Unvested balance outstanding, December 31, 2006 |  | 4,234,053                     |   |  | $                                      | 1.40
|Granted                                         |  |                              |   |  |                                        |    
|Vested                                          |  | (379,311                      | ) |  |                                        | 1.32
|Expired                                         |  |                              |   |  |                                        |    
|Cancelled                                       |  |                              |   |  |                                        |    
|                                                |  |                               |   |  |                                        |     
|Unvested balance outstanding, March 31, 2007    |  | 3,854,742                     |   |  | $                                      | 1.60
|                                                |  |                               |   |  |                                        |     



13



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Warrants

Concurrently with the reverse merger in October 2005, the Company closed a private placement of 19,325,651 shares of its common stock at a purchase price of $1.50 per share and received net proceeds of $25,552,390. In connection therewith,
National Securities Corporation, the placement agent, received a five-year warrant to purchase 2,032,555 shares of our common stock at an exercise price of $1.50 per share. The warrant was fully exercisable when issued.

Investors who invested at least $1,000,000 in shares of common stock also received a three-year warrant to buy 10% of the number of shares of common stock purchased at
an exercise price of $1.75 per share. Warrants to purchase 424,263 shares of common stock, in the aggregate, were issued to such investors.

At the closing
of the reverse merger, a three-year warrant to purchase 400,000 shares of Aries Ventures common stock at an exercise price of $1.75 per share was issued to an Aries Ventures stockholder who held of record or beneficially more than 45% of the
outstanding common stock of Aries Ventures prior to the reverse merger. The warrant was issued as consideration for his agreement, subject to certain exceptions, not to sell any of his shares of Aries Ventures common stock for a period of
approximately five months from the effective time of the reverse merger.

On March 9, 2007, we closed a private placement of 8,636,000 shares of
common stock at a purchase price of $2.50 per share and received net proceeds of $20,158,677. Investors received five-year warrants to buy up to 35% of the number of shares of common stock purchased in the private placement, at an exercise price of
$3.75 per share. Warrants to purchase approximately 3,022,600 shares of common stock, in the aggregate, were issued to such investors. In addition, a five-year warrant to purchase 518,160 shares of our common stock was issued to the placement agent
at an exercise price of $3.78 per share.

The following table summarizes warrant activity for the three months ended March 31, 2007:



|                                       |  |                   |   |  |                |  |                                                       
|-------------------------------------- |  | ----------------- | - |  | -------------- |  | ------------------------------------------------------
|                                       |  | Number ofWarrants |   |  | Exercise Price |  | Weighted Average Remaining Contractual Life (in years)
|Balance outstanding, December 31, 2006 |  | 2,307,853         |   |  | $1.50 -$1.75   |  | 2  4                                                 
|Warrants issued                        |  | 3,540,760         |   |  | 3.75 - 3.78    |  | 4                                                     
|Warrants exercised                     |  | (147,062          | ) |  | 1.50           |  | 5                                                     
|Warrants expired                       |  |                  |   |  |               |  |                                                      
|Warrants cancelled                     |  |                  |   |  |               |  |                                                      
|                                       |  |                   |   |  |                |  |                                                       
|Balance outstanding, March 31, 2007    |  | 5,701,551         |   |  | $1.50  3.78   |  | 2 - 5                                                 
|                                       |  |                   |   |  |                |  |                                                       
|Warrants exercisable at March 31, 2007 |  | 5,701,551         |   |  | $1.50  3.78   |  | 2 - 5                                                 
|                                       |  |                   |   |  |                |  |                                                       

The table above summarizes investor warrant activity and warrants issued in connection with the reverse merger
transaction. It does not include warrants issued to employees and consultants described and included under Option Activity above.



14



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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

The following
discussion and analysis is intended to help you understand our financial condition and results of operations for the three months ended March 31, 2007. You should read the following discussion and analysis together with our unaudited condensed
consolidated financial statements and the notes to the condensed consolidated financial statements included under Item 1 in this report, as well as the risk factors and other information included in our 2006 Annual Report and other reports and
documents we file with the United States Securities and Exchange Commission (SEC). Our future financial condition and results of operations will vary from our historical financial condition and results of operations described below.

Executive Overview

The following overview does not address all of
the matters covered in the other sections of this Item 2 or other items in this report or contain all of the information that may be important to our stockholders or the investing public. This overview should be read in conjunction with the
other section of this Item 2 and this report.

We are a medical technology company primarily focused on the development and commercialization of
novel biologic therapeutics and medical devices for cardiovascular and ischemic disease. Building upon our core products and product candidates, our strategic goal is to develop a portfolio of medical products at various stages of development and
secure additional financial resources to commercialize these products in a timely and effective manner. The key elements of our strategy are to:



| |  |  | initiate the Phase 3 AWARE clinical study for Generx in the first half of 2007;
| | - |  | -------------------------------------------------------------------------------



| |  |  | initiate a Phase 2b clinical study for Excellarate in the second half of 2007;
| | - |  | ------------------------------------------------------------------------------



| |  |  | accelerate the development and sales of Innercools endovascular patient temperature modulation system and, at the
same time, broaden and expand our technology into other medical indications and applications;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | leverage our financial resources and focused corporate infrastructure through the use of contract manufacturers to produce clinical supplies and a contract research
organization to manage or assist planned clinical studies;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | advance the pre-clinical development of Corgentin and potentially seek partnering opportunities for the Corgentin and Genvascor product candidates;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | broaden and expand our product base and financial resources through other corporate development transactions in an attempt to enhance stockholder value, which could
include acquiring other companies or product opportunities and/or securing additional capital; and
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | monetize the economic value of our product portfolio by establishing strategic collaborations at appropriate valuation inflection points.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------

We plan to continue to build our business through internal development and external acquisitions. As an emerging public company, we have
initially focused on acquiring undervalued opportunities having unrealized value but which we believe have potential for significant future growth and development or partnering prospects when combined with the skills and perspectives of our
experienced management team.

To the extent our current products and product candidates become successfully advanced, we intend to continue to pursue
opportunistic acquisitions designed to enhance long-term stockholder value. At the same time, as technologies and product candidates are advanced and businesses are built-up, further developed and mature, we may consider various corporate
development transactions to enhance and monetize stockholder value such as corporate partnerings, spin-out transactions and equity distribution.

We
recognize that the practical realities of developing therapeutic products in the current regulatory environment require sizable financial investment. In view of this, we plan to pursue clinical development strategies intended to facilitate
collaborations and partnerships for joint development of our products at appropriate valuation inflection points during their clinical development cycle.



15



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More detailed information about our products, product candidates and our intended efforts to develop our products is
included in our 2006 Annual Report.

Critical Accounting Policies and Estimates

The preparation of our financial statements requires that we make estimates and assumptions that affect the amounts reported in our financial statements and their accompanying notes. We have identified certain
policies that we believe are important to the portrayal of our financial condition and results of operations. These policies require the application of significant judgment by our management. We base our estimates on our historical experience,
industry standards, and various other assumptions that we believe are reasonable under the circumstances. Actual results could differ from these estimates under different assumptions or conditions. An adverse effect on our financial condition,
changes in financial condition, and results of operations could occur if circumstances change that alter the various assumptions or conditions used in such estimates or assumptions.

Our significant accounting policies are described under Item 7 of our 2006 Annual Report and in the notes to the financial statements included in this report.

Results of Operations

The $270,000 increase in revenues and $193,000
increase in cost of goods sold were due primarily to our acquisition of Innercool Therapies, Inc. and its Celsius Control System in March 2006. Before March 2006, we had no products available for sale or use. Thus, the amounts for the three months
ended March 31, 2006, reflect less than one month of revenues and cost of goods sold. As of March 31, 2007, a significant portion of our revenues resulted from the sale of Innercool Therapies products. Tissue Repair Company received grant
revenue of $40,000.

Research and development expenses increased $3.2 million from the comparable quarter last year due primarily to our efforts to advance
our lead product candidate, Generx, to a Phase 3 clinical trial (AWARE), to develop and launch a next-generation console for the Celsius Control System, and to advance our Excellarate product candidate acquired in the Tissue Repair Company
acquisition to a Phase 2b clinical study. Because we did not acquire Innercool Therapies and its Celsius Control System until March 2006, research and development expenses for the quarter ended March 31, 2006 include only one month of expenses
related to Innercool Therapies and the development of its products. Similarly, due to the timing of the Tissue Repair Company acquisition in August 2006, research and development expenses for the quarter ended March 31, 2006 do not include any
expenses related to the development of Tissue Repair Companys products.

The $126,000 decrease in selling, general and administrative expenses from
the comparable quarter last year was due in part to a reclassification of expenses related to our clinical staff. In the first half of 2006, we classified our clinical staff as general and administrative expense, as they were then focused on the
technology transfer from Schering AG Group, Germany. As they have transitioned to development activities and clinical studies for our product candidates, we now include the related expenses in research and development. The decrease in selling,
general and administrative expenses due to the reclassification was significantly offset by incremental selling, general and administrative expenses related to our acquisitions of Innercool Therapies and Tissue Repair Company.

In connection with our acquisition of Innercool Therapies, we recorded patented technology and other intangibles. The $156,000 increase in amortization is due to the
timing of our acquisition of Innercool Therapies in March 2006.

We derive interest income from the investment of our available cash in various short-term
obligations, such as certificates of deposit, commercial paper and money market funds. The $133,000 decrease in interest income is directly related to the decrease in cash available for investment as we used the proceeds from our October 2005
private placement to fund operations, partially offset by the investment of the proceeds received from the private placement we completed in March 2007.

Liquidity and Capital Resources

Our primary source of liquidity has been cash flows from financing activities and in particular proceeds
from the sale of our common stock. Net cash provided by financing activities was $20,158,677 for the three months ended March 31, 2007, and was from proceeds we received from the sale of our common stock, net of issuance costs. Net cash used in
operating activities was $6,092,408 for the three months ended March 31, 2007 compared to $2,315,588 in the comparable period in the prior year. The increase in net cash used in operating activities was due primarily to an increase in expenditures
for research and development and the spending associated with adding Innercool Therapies and Tissue Repair Company to our Company. During the three months ended March 31, 2007, we purchased $219,766 of property and equipment.

Since inception, our operations have consumed substantial amounts of cash and we have had only limited revenues. As a result, we anticipate that the negative cash flow
from operations will continue. On March 9, 2007, we completed a private placement of our common stock that resulted in net proceeds to the Company of approximately $20 million. As of March 31, 2007, we had $19,800,000 in cash and cash equivalents.
As a result, we believe we have sufficient funds available to fund our operations for the next 12 months. However, the amount and timing of future cash requirements will depend on the amount and rate at which resources are applied to clinical trials
and other activities associated with researching, developing, manufacturing, commercializing and supporting our products and product candidates, which could lead to our cash resources being consumed sooner than currently expected. If we do not have
sufficient cash to maintain operations and fund planned programs, we would either need to reduce or slow our expenditures, which could cause a delay in the implementation or accomplishment of one or more components of our operation described above,
or seek additional financing through the sale of equity securities, debt financing, and/or strategic licensing agreements. Any additional capital may not be available on terms that are desirable or acceptable to us, or at all.



16



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Off-Balance Sheet Arrangements

As of March 31, 2007, we did not have any significant off-balance sheet debt nor did we have any transactions, arrangements, obligations (including contingent obligations) or other relationships with any
unconsolidated entities or other persons that have or are reasonably likely to have a material current or future effect on financial condition, changes in financial condition, results of operations, liquidity, capital expenditures, capital
resources, or significant components of revenue or expenses material to investors. We do have operating lease obligations of $2,443,369 extending through 2011.

Special Note About Forward-Looking Statements

Certain statements in this report, including information incorporated by reference, are
forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and the Private Securities Litigation Reform Act of 1995. Forward-looking
statements reflect current views about future events and financial performance based on certain assumptions. They include opinions, forecasts, intentions, plans, goals, projections, guidance, expectations, beliefs or other statements that are not
statements of historical fact. Words such as may, will, should, could, would, expects, plans, believes, anticipates, intends,
estimates, approximates, predicts, or projects, or the negative or other variation of such words, and similar expressions may identify a statement as a forward-looking statement. Any statements that
refer to projections of our future financial performance, our anticipated growth and trends in our business, our goals, strategies, focus and plans, and other characterizations of future events or circumstances, including statements expressing
general optimism about future operating results and the development of our products, are forward-looking statements. Forward-looking statements in this report may include statements about:



| |  |  | future financial and operating results;
| | - |  | ---------------------------------------



17



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| |  |  | the timing, conduct and outcome of discussions with regulatory agencies, regulatory submissions and clinical trials;
| | - |  | --------------------------------------------------------------------------------------------------------------------



| |  |  | the performance of Innercools Celsius Control SystemTM, GenerxTM,
ExcellarateTMand other product candidates and their potential to attract development partners and/or generate
revenues;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | our beliefs and opinions about the safety and efficacy of our products and product candidates and the results of our clinical studies and trials;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the development or commercialization of competitive products or medical procedures;
| | - |  | -----------------------------------------------------------------------------------



| |  |  | our development of new products and product candidates;
| | - |  | -------------------------------------------------------



| |  |  | our growth, expansion and acquisition strategies, the success of such strategies, and the benefits we believe can be derived from such strategies;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the outcome of litigation matters;
| | - |  | ----------------------------------



| |  |  | our intellectual property rights and those of others, including actual or potential competitors;
| | - |  | ------------------------------------------------------------------------------------------------



| |  |  | the ability to enter into acceptable relationships with one or more contract manufacturers or other service providers on which we may depend and the ability of such
contract manufacturers or other service providers to manufacture biologics or devices or to provide services of an acceptable quality on a cost-effective basis;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | our personnel, consultants and collaborators;
| | - |  | ---------------------------------------------



| |  |  | operations outside the United States;
| | - |  | -------------------------------------



| |  |  | current and future economic and political conditions;
| | - |  | -----------------------------------------------------



| |  |  | overall industry and market performance;
| | - |  | ----------------------------------------



| |  |  | the impact of accounting pronouncements;
| | - |  | ----------------------------------------



| |  |  | managements goals and plans for future operations; and
| | - |  | -------------------------------------------------------



| |  |  | other assumptions described in this report underlying or relating to any forward-looking statements.
| | - |  | ----------------------------------------------------------------------------------------------------

The forward-looking statements in this report speak only as of the date of this report and caution should be taken not to place undue reliance on any such
forward-looking statements. Forward-looking statements are subject to certain events, risks, and uncertainties that may be outside of our control. When considering forward-looking statements, you should carefully review the risks, uncertainties and
other cautionary statements in this report as they identify certain important factors that could cause actual results to differ materially from those expressed in or implied by the forward-looking statements. These factors include, among others, the
risks described under Item 1A of Part II and elsewhere in this report and in our 2006 Annual Report, as well as in other reports and documents we file with the SEC.

Unless the context requires otherwise, all references in this report to the Company, Cardium, we, our, and us refer to Cardium Therapeutics, Inc. and, as
applicable, Innercool Therapies, Inc., and Tissue Repair Company, each a wholly-owned subsidiary of Cardium.



|ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|------- | ----------------------------------------------------------

We are
exposed to a limited level of market risk, which is the potential loss arising from adverse changes in market rates and prices, such as interest rates, due to the investment of our available cash in various instruments. The goal of our investment
activities is to preserve principal while seeking to increase income received on our investments without significantly increasing risk. In the normal course of business, we employ established policies and procedures to manage our exposure to changes
in the fair value of our investments. We generally do not, however, enter into derivatives or other financial instruments for trading or speculative purposes or to otherwise manage our exposure to interest rate changes. Generally, we seek to limit
our exposure to risk by investing substantially in short-term, investment grade securities, such as commercial paper, certificates of deposit and money market funds. The amount of interest income we receive on our investments will vary with changes
in the general level of interest rates in the United States, generally decreasing as interest rates decrease and increasing as interest rates increase.

While we cannot predict with any certainty our future exposure to fluctuations in interest rates or other market risks or the impact, if any, such fluctuations may have on our future business, consolidated financial condition, results of
operations or cash flows, due to the short-term, investment grade nature of our investments, we do not believe our exposure to market risk is material.



18



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ITEM 4. CONTROLS AND PROCEDURES

We maintain certain disclosure controls and procedures. They are designed to help ensure
that material information is: (1) gathered and communicated to our management, including our principal executive and financial officers, on a timely basis; and (2) recorded, processed, summarized, reported and filed with the SEC as
required under the Securities Exchange Act of 1934, as amended.

Our management, with the participation of our Chief Executive Officer and Chief Financial
Officer, evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2007. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were
effective for their intended purpose described above. There were no changes to our internal controls during the quarterly period ended March 31, 2007 that have materially affected, or that are reasonably likely to materially affect, our
internal controls.

PART II  OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, we may become involved in various investigations, claims and legal
proceedings that arise in the ordinary course of our business. These matters may relate to intellectual property, employment, tax, regulation, contract or other matters. The resolution of these matters as they arise will be subject to various
uncertainties and, even if such claims are without merit, could result in the expenditure of significant financial and managerial resources.

As of
May 10, 2007, neither Cardium nor its subsidiaries were a party to any material pending legal proceeding nor was any of their property the subject of any material pending legal proceeding. We anticipate, however, that we will be regularly
engaged in various patent prosecution and related matters in connection with the technology we develop and/or license. To the extent we are not successful in defending against any adverse claims concerning our technology, we could be compelled to
seek licenses from one or more third parties who could be direct or indirect competitors and who might not make licenses available on terms that we find commercially reasonable or at all. In addition, any such proceedings, even if decided in our
favor, involve lengthy processes, are subject to appeals, and typically result in substantial costs and diversion of resources.

ITEM 1A. RISK FACTORS

There have been no material changes from the risk factors previously disclosed in our 2006 Annual
Report. You should carefully consider the risks described under Item 6 of our 2006 Annual Report, as well as the other information in our 2006 Annual Report, this report and other reports and documents we file with the SEC, when evaluating our
business and future prospects. If any of the identified risks actually occur, our business, financial condition and results of operations could be seriously harmed. In that event, the market price of our common stock could decline and you could lose
all or a portion of the value of your investment in our common stock.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Other than as previously reported in our Current
Report on Form 8-K filed with the SEC on March 6, 2007, during the three months ended March 31, 2007, we did not sell any unregistered securities.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None



19



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ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

The following exhibit index shows those exhibits filed with this report and those incorporated by
reference:

EXHIBIT INDEX



|              |  |                                                                                                                                                                                                |  |                                                                                                                                         
|------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------
|ExhibitNumber |  | Description                                                                                                                                                                                    |  | Incorporated By Reference To                                                                                                            
|2.1           |  | Agreement and Plan of Merger dated as of October 19, 2005 and effective as of October 20, 2005, by and among Aries Ventures Inc., Aries Acquisition Corporation and Cardium Therapeutics,
Inc. |  | Exhibit 2.1 of our Current Report on Form 8-K dated October 20, 2005, filed with the commission on October 26, 2005                     
|              |  |                                                                                                                                                                                               
|2.2           |  | Certificate of Merger of Domestic Corporation as filed with the Delaware Secretary of State on October 20, 2005                                                                                |  | Exhibit 2.1 of our Current Report on Form 8-K dated October 20, 2005, filed with the commission on October 26, 2005                     
|              |  |                                                                                                                                                                                               
|2.3           |  | Agreement and Plan of Merger dated January 17, 2006, between Aries Ventures Inc. and Cardium Therapeutics, Inc.                                                                                |  | Exhibit 2.4 of our Registration Statement on Form SB-2 (File No. 333-131104), filed with the commission on January 18, 2006             
|              |  |                                                                                                                                                                                               
|2.4           |  | Certificate of Merger, as filed with the Delaware Secretary of State on January 17, 2006                                                                                                       |  | Exhibit 2.5 of our Registration Statement on Form SB-2 (File No. 333-131104), filed with the commission on January 18, 2006             
|              |  |                                                                                                                                                                                               
|3(i)          |  | Second Amended and Restated Certificate of Incorporation of Cardium Therapeutics, Inc. as filed with the Delaware Secretary of State on January 13, 2006                                       |  | Exhibit 3(i) of our Registration Statement on Form SB-2 (File No. 333-131104), filed with the commission on January 18, 2006            
|              |  |                                                                                                                                                                                               
|3(ii)         |  | Amended and Restated Bylaws of Cardium Therapeutics, Inc. as adopted on January 12, 2006                                                                                                       |  | Exhibit 3(ii) of our Registration Statement on Form SB-2 (File No. 333-131104), filed with the commission on January 18, 2006           
|              |  |                                                                                                                                                                                               
|3(iii)        |  | Certificate of Designation of Series A Junior Participating Preferred Stock                                                                                                                    |  | Exhibit 3.2 of our Registration Statement on Form 8-A, filed with the commission on July 11, 2006                                       
|              |  |                                                                                                                                                                                               
|4.1           |  | Form of Warrant issued to Lead Investors and Mark Zucker                                                                                                                                       |  | Exhibit 4.2 of our Current Report on Form 8-K dated October 20, 2005, filed with the commission on October 26, 2005                     
|              |  |                                                                                                                                                                                               
|4.2           |  | Form of Warrant issued to employees and consultants of Innercool Therapies, Inc.                                                                                                               |  | Exhibit 4.1 of our Current Report on Form 8-K dated March 8, 2006, filed with the commission on March 14, 2006                          
|              |  |                                                                                                                                                                                               
|4.3           |  | Form of Common Stock Certificate for Cardium Therapeutics, Inc.                                                                                                                                |  | Exhibit 4.5 of our Annual Report on Form 10-KSB for the fiscal year ended December 31, 2005, filed with the commission on March 31, 2006
|              |  |                                                                                                                                                                                               
|4.4           |  | Form of Rights Agreement dated as of July 10, 2006, between Cardium Therapeutics, Inc. and Computershare Trust Company, Inc., as Rights Agent                                                  |  | Exhibit 4.1 of our Registration Statement on Form 8-A, filed with the commission on July 11, 2006                                       



20



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|      |  |                                                                                                                                                                                                                                    |  |                                                                                                                                         
|----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------
|4.5   |  | Form of Rights Certificate                                                                                                                                                                                                         |  | Exhibit 4.2 of our Registration Statement on Form 8-A, filed with the commission on July 11, 2006                                       
|      |  |                                                                                                                                                                                                                                   
|4.6   |  | Form of Warrant issued to purchasers in 2007 private financing                                                                                                                                                                     |  | Exhibit 4.1 of our Current Report on Form 8-K dated March 6, 2007, filed with the commission on March 6, 2007                           
|      |  |                                                                                                                                                                                                                                   
|4.7   |  | Form of Warrant issued to Oppenheimer & Co. Inc. as Placement Agent in 2007 financing                                                                                                                                              |  | Exhibit 4.7 of our Annual Report on Form 10-KSB for the fiscal year ended December 31, 2006, filed with the commission on March 15, 2007
|      |  |                                                                                                                                                                                                                                   
|10.1  |  | Transfer, Consent to Transfer, Amendment and Assignment of License Agreement effective as of August 31, 2005, by and among New York University, Collateral Therapeutics, Inc. and Cardium
Therapeutics, Inc.                       |  | Exhibit 10.1 of our Current Report on Form 8-K dated October 20, 2005, filed with the commission on October 26, 2005                    
|      |  |                                                                                                                                                                                                                                   
|10.2  |  | Transfer, Consent to Transfer, Amendment and Assignment of License Agreement effective as of August 31, 2005, by and among Yale University, Schering Aktiengesellschaft and Cardium
Therapeutics, Inc.                             |  | Exhibit 10.2 of our Current Report on Form 8-K dated October 20, 2005, filed with the commission on October 26, 2005                    
|      |  |                                                                                                                                                                                                                                   
|10.3  |  | Transfer, Consent to Transfer, Amendment and Assignment of License Agreement effective as of July 31, 2005, by and among the Regents of the University of California, Collateral Therapeutics,
Inc. and Cardium Therapeutics, Inc. |  | Exhibit 10.3 of our Current Report on Form 8-K dated October 20, 2005, filed with the commission on October 26, 2005                    
|      |  |                                                                                                                                                                                                                                   
|10.4  |  | Transfer, Consent to Transfer, Amendment and Assignment of License Agreement effective as of July 31, 2005, by and among the Regents of the University of California, Collateral Therapeutics,
Inc. and Cardium Therapeutics, Inc. |  | Exhibit 10.4 of our Current Report on Form 8-K dated October 20, 2005, filed with the commission on October 26, 2005                    
|      |  |                                                                                                                                                                                                                                   
|10.5  |  | Technology Transfer Agreement effective as of October 13, 2005, by and among Schering AG, Berlex, Inc., Collateral Therapeutics, Inc. and Cardium Therapeutics, Inc.                                                               |  | Exhibit 10.5 of Aries Current Report on Form 8-K dated October 20, 2005, filed with the commission on October 26, 2005                 
|      |  |                                                                                                                                                                                                                                   
|10.6  |  | Amendment to the Exclusive License Agreement for Angiogenesis Gene Therapy effective as of October 20, 2005, between the Regents of the University of California and Cardium
Therapeutics, Inc.                                  |  | Exhibit 10.6 of our Current Report on Form 8-K dated October 20, 2005, filed with the commission on October 26, 2005                    
|      |  |                                                                                                                                                                                                                                   
|10.7  |  | Amendment to License Agreement effective as of October 20, 2005, by and between New York University and Cardium Therapeutics, Inc.                                                                                                 |  | Exhibit 10.7 of our Current Report on Form 8-K dated October 20, 2005, filed with the commission on October 26, 2005                    
|      |  |                                                                                                                                                                                                                                   
|10.8  |  | Second Amendment to Exclusive License Agreement effective as of October 20, 2005, by and between Yale University and Cardium Therapeutics, Inc.                                                                                    |  | Exhibit 10.8 of our Current Report on Form 8-K dated October 20, 2005, filed with the commission on October 26, 2005                    
|      |  |                                                                                                                                                                                                                                   
|10.9  |  | 2005 Equity Incentive Plan as adopted effective as of October 20, 2005*                                                                                                                                                            |  | Exhibit 10.9 of our Current Report on Form 8-K dated October 20, 2005, filed with the commission on October 26, 2005                    
|      |  |                                                                                                                                                                                                                                   
|10.10 |  | Employment Agreement dated as of October 20, 2005 by and between Aries Ventures Inc. and Christopher Reinhard*                                                                                                                     |  | Exhibit 10.10 of our Current Report on Form 8-K dated October 20, 2005, filed with the commission on October 26, 2005                   
|      |  |                                                                                                                                                                                                                                   
|10.11 |  | Employment Agreement dated as of October 20, 2005 by and between Aries Ventures Inc. and Tyler Dylan*                                                                                                                              |  | Exhibit 10.11 of our Current Report on Form 8-K dated October 20, 2005, filed with the commission on October 26, 2005                   



21



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|      |  |                                                                                                                                                                                                                                                                                                                          |  |                                                                                                                                               
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ----------------------------------------------------------------------------------------------------------------------------------------------
|10.12 |  | Office Lease between Cardium and Kilroy Realty, L.P. dated as of September 30, 2005 and commencing on November 1, 2005                                                                                                                                                                                                   |  | Exhibit 10.12 of our Annual Report on Form 10-KSB for the fiscal year ended September 30, 2005, filed with the commission on December 22, 2005
|      |  |                                                                                                                                                                                                                                                                                                                         
|10.13 |  | Yale Exclusive License Agreement between Yale University and Schering Aktiengesellschaft dated September 8, 2000                                                                                                                                                                                                         |  | Exhibit 10.13 of our Annual Report on Form 10-KSB for the fiscal year ended September 30, 2005, filed with the commission on December 22, 2005
|      |  |                                                                                                                                                                                                                                                                                                                         
|10.14 |  | Research and License Agreement between New York University and Collateral Therapeutics, Inc. dated March 24, 1997 (with amendments dated April 28, 1998 and March 24,
2000)                                                                                                                                              |  | Exhibit 10.14 of our Annual Report on Form 10-KSB for the fiscal year ended September 30, 2005, filed with the commission on December 22, 2005
|      |  |                                                                                                                                                                                                                                                                                                                         
|10.15 |  | Exclusive License Agreement for Angiogenesis Gene Therapy between the Regents of the University of California and Collateral Therapeutics, Inc. dated as of September 27, 1995 (with
amendments dated September 19, 1996, June 30, 1997, March 11, 1999 and February 8, 2000)                                          |  | Exhibit 10.15 of our Annual Report on Form 10-KSB for the fiscal year ended September 30, 2005, filed with the commission on December 22, 2005
|      |  |                                                                                                                                                                                                                                                                                                                         
|10.16 |  | Placement Agency Agreement dated July 1, 2005 by and between Cardium Therapeutics, Inc. and National Securities Corporation                                                                                                                                                                                              |  | Exhibit 1.1 of our Current Report on Form 8-K dated October 20, 2005, filed with the commission on October 26, 2005                           
|      |  |                                                                                                                                                                                                                                                                                                                         
|10.17 |  | Asset Purchase Agreement dated as of March 8, 2006, by and among Cardium Therapeutics, Inc., Innercool Therapies, Inc. (a Delaware corporation), and Innercool Therapies, Inc. (a California
corporation) (without schedules)                                                                                            |  | Exhibit 10.1 of our Current Report on Form 8-K dated March 8, 2006, filed with the commission on March 14, 2006                               
|      |  |                                                                                                                                                                                                                                                                                                                         
|10.18 |  | Production Service Agreement effective as of January 24, 2006, by and between Molecular Medicine Bioservices, Inc. and Cardium Therapeutics, Inc.                                                                                                                                                                        |  | Exhibit 10.18 of our Annual Report on Form 10-KSB for the fiscal year ended December 31, 2005, filed with the commission on March 31, 2006    
|      |  |                                                                                                                                                                                                                                                                                                                         
|10.19 |  | Executive Employment Agreement dated March 8, 2006 by and between Innercool Therapies, Inc. and Michael Magers*                                                                                                                                                                                                          |  | Exhibit 10.19 of our Annual Report on Form 10-KSB for the fiscal year ended December 31, 2005, filed with the commission on March 31, 2006    
|      |  |                                                                                                                                                                                                                                                                                                                         
|10.20 |  | Master License Agreement effective as of December 1, 1999, by and between SurModics, Inc. and Innercool Therapies, Inc.                                                                                                                                                                                                  |  | Exhibit 10.20 of our Annual Report on Form 10-KSB for the fiscal year ended December 31, 2005, filed with the commission on March 31, 2006    
|      |  |                                                                                                                                                                                                                                                                                                                         
|10.21 |  | Lease dated August 12, 1997, by and between R.G. Harris Co., and Elizabeth G. Harris, Henry K. Workman and Don C. Sherwood, Trustees of the Harris Family Revocable Trust (as landlord) and Copper
Mountain Networks, Inc. (as tenant)                                                                                   |  | Exhibit 10.21 of our Annual Report on Form 10-KSB for the fiscal year ended December 31, 2005, filed with the commission on March 31, 2006    
|      |  |                                                                                                                                                                                                                                                                                                                         
|10.22 |  | Lease Amendment No. 1 effective as of August 1, 1999, by and among R.G. Harris Co., and Elizabeth G. Harris, Henry K. Workman and Don C. Sherwood, Trustees of the Harris Family Revocable
Trust (as landlord), Copper Mountain Networks, Inc. (as tenant), and Neurothermia, Inc. (as assignee)                         |  | Exhibit 10.22 of our Annual Report on Form 10-KSB for the fiscal year ended December 31, 2005, filed with the commission on March 31, 2006    
|      |  |                                                                                                                                                                                                                                                                                                                         
|10.23 |  | Assignment, Assumption and Consent effective as of October 2, 1999, by and among Copper Mountain Networks, Inc., Neurothermia, Inc., and R.G. Harris Co., and Elizabeth G. Harris, Henry K.
Workman and Don C. Sherwood, Trustees of the Harris Family Revocable Trust                                                   |  | Exhibit 10.23 of our Annual Report on Form 10-KSB for the fiscal year ended December 31, 2005, filed with the commission on March 31, 2006    
|      |  |                                                                                                                                                                                                                                                                                                                         
|10.24 |  | Lease Amendment No. 2 effective as of October 16, 2002, by and between E.G. Sirrah, LLC, as successor-in-interest to R.G. Harris Co., and Elizabeth G. Harris, Henry K. Workman and Don C.
Sherwood, Trustees of the Harris Family Revocable Trust, and Innercool Therapies, Inc. (formerly known as Neurothermia, Inc.) |  | Exhibit 10.24 of our Annual Report on Form 10-KSB for the fiscal year ended December 31, 2005, filed with the commission on March 31, 2006    



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|      |  |                                                                                                                                                                                                                                          |  |                                                                                                                                           
|----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------
|10.25 |  | Sublease dated August 30, 2005, by and between Innercool Therapies, Inc., and Acadia Pharmaceuticals Inc.                                                                                                                                |  | Exhibit 10.25 of our Annual Report on Form 10-KSB for the fiscal year ended December 31, 2005, filed with the commission on March 31, 2006
|      |  |                                                                                                                                                                                                                                         
|10.26 |  | Asset Purchase Agreement dated as of August 11, 2006, by and among Cardium Therapeutics, Inc., Cardium Biologics, Inc. (a Delaware corporation), and Tissue Repair Company (a Delaware
corporation)                                      |  | Exhibit 10.26 of our Current Report on Form 8-K dated August 11, 2006, filed with the commission on August 15, 2006                       
|      |  |                                                                                                                                                                                                                                         
|10.27 |  | Form of Securities Purchase Agreement, dated March 6, 2007, by an between Cardium Therapeutics, Inc. and each purchaser in 2007 private financing (agreements on substantially this form were
signed by each purchaser in the financing) |  | Exhibit 10.1 of our Current Report on Form 8-K dated March 6, 2007, filed with the commission on March 6, 2007                            
|      |  |                                                                                                                                                                                                                                         
|10.28 |  | Form of Lock-Up Agreement executed by each executive officer and director of Cardium Therapeutics, Inc. in connection with 2007 private financing                                                                                        |  | Exhibit 10.2 of our Current Report on Form 8-K dated March 6, 2007, filed with the commission on March 6, 2007                            
|      |  |                                                                                                                                                                                                                                         
|10.29 |  | Placement Agent Agreement dated November 1, 2006, by and between Cardium Therapeutics, Inc. and Oppenheimer & Co. Inc.                                                                                                                   |  | Exhibit 10.3 of our Current Report on Form 8-K dated March 6, 2007, filed with the commission on March 6, 2007                            
|      |  |                                                                                                                                                                                                                                         
|10.30 |  | Office Lease dated as of September 16, 2006 and commencing on January 20, 2007, by and between Cardium Therapeutics, Inc. and Jaguar Properties, L.L.C.                                                                                  |  | Exhibit 10.30 of our Annual Report on Form 10-KSB for the fiscal year ended December 31, 2006, filed with the commission on March 15, 2007
|      |  |                                                                                                                                                                                                                                         
|10.31 |  | Amendment 1 effective on October 31, 2006, to Sublease dated August 30, 2005, by and between Innercool Therapies, Inc., and Acadia Pharmaceuticals Inc.                                                                                  |  | Exhibit 10.31 of our Annual Report on Form 10-KSB for the fiscal year ended December 31, 2006, filed with the commission on March 15, 2007
|      |  |                                                                                                                                                                                                                                         
|10.32 |  | Amendment 2 effective as of January 2, 2007, to Sublease dated August 30, 2005, by and between Innercool Therapies, Inc., and Acadia Pharmaceuticals Inc.                                                                                |  | Exhibit 10.32 of our Annual Report on Form 10-KSB for the fiscal year ended December 31, 2006, filed with the commission on March 15, 2007
|      |  |                                                                                                                                                                                                                                         
|10.33 |  | Michigan License agreement between the Regents of the University of Michigan and Matrigen, Inc. dated July 13, 1995                                                                                                                      |  | Exhibit 10.33 of our Annual Report on Form 10-KSB for the fiscal year ended December 31, 2006, filed with the commission on March 15, 2007
|      |  |                                                                                                                                                                                                                                         
|10.34 |  | Amendment to License agreement between the Regents of the University of Michigan and Matrigen, Inc. dated August 10, 1995                                                                                                                |  | Exhibit 10.34 of our Annual Report on Form 10-KSB for the fiscal year ended December 31, 2006, filed with the commission on March 15, 2007
|      |  |                                                                                                                                                                                                                                         
|10.35 |  | Second Amendment to the Michigan License agreement between the Regents of the University of Michigan and Selective Genetics, Inc. dated February 1, 2004                                                                                 |  | Exhibit 10.35 of our Annual Report on Form 10-KSB for the fiscal year ended December 31, 2006, filed with the commission on March 15, 2007
|      |  |                                                                                                                                                                                                                                         
|10.36 |  | Third Amendment to Michigan License Agreement between the Regents of the University of Michigan, and Tissue Repair Company, and Cardium Biologics Inc. dated August 10, 2006                                                             |  | Exhibit 10.36 of our Annual Report on Form 10-KSB for the fiscal year ended December 31, 2006, filed with the commission on March 15, 2007



23



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|      |  |                                                                                                                                                        |  |               
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------ |  | --------------
|10.37 |  | First Amendment to Lease Agreement between Cardium Therapeutics, Inc. and Kilroy Realty, L.P. dated February 15, 2007                                  |  | Filed herewith
|      |  |                                                                                                                                                       
|10.38 |  | First Amendment dated March 16, 2007 to Employment Agreement dated as of October 20, 2005 by and between Aries Ventures Inc. and Christopher Reinhard* |  | Filed herewith
|      |  |                                                                                                                                                       
|10.39 |  | First Amendment dated March 16, 2007 to Employment Agreement dated as of October 20, 2005 by and between Aries Ventures Inc. and Tyler Dylan*          |  | Filed herewith
|      |  |                                                                                                                                                       
|31.1  |  | Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer                                                                                      |  | Filed herewith
|      |  |                                                                                                                                                       
|31.2  |  | Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer                                                                                      |  | Filed herewith
|      |  |                                                                                                                                                       
|32    |  | Section 1350 Certification                                                                                                                             |  | Filed herewith

---

|* | Indicates management contract or compensatory plan or arrangement.
|- | ------------------------------------------------------------------

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, Cardium Therapeutics, Inc., the registrant,
has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: May 15, 2007



CARDIUM THERAPEUTICS, INC.By:

/s/ Dennis M. MulroyDennis M. Mulroy, Chief Financial Officer


Mr. Mulroy is the principal financial officer of Cardium Therapeutics, Inc. and has been duly
authorized to sign on its behalf.



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