CDIOW filing — read by section

Item 1. Business

Item 1. Business 

 References in this report to “Cardio,”
“we,” “us” or the “Company” refer to Cardio Diagnostics Holdings, Inc. References to our “management”
or our “management team” refer to the officers and directors of Cardio Diagnostics Holdings, Inc. 

 Background 

 Mana Capital Acquisition Corp. was formed on
May 19, 2021 under the laws of the State of Delaware, as a blank check company for the purpose of engaging in a merger, share exchange,
asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination, with one or more target businesses
or entities.

 On October 25, 2022 (the “Closing”),
Cardio Diagnostics Holdings, Inc. (the “Company”), f/k/a Mana Capital Acquisition Corp., our legal predecessor and a special
purpose acquisition company (“Mana”) sponsored by Mana Capital, LLC, consummated the previously announced Merger with Cardio
Diagnostics, Inc. (“Legacy Cardio”), and Mana Merger Sub, Inc. (“Merger Sub”), a wholly owned subsidiary of Mana
pursuant to a Merger Agreement and Plan of Reorganization dated as of May 27, 2022, as amended on September 15, 2022 (the “Business
Combination Agreement”). Pursuant to the Merger, Merger Sub merged with and into Legacy Cardio, the separate corporate existence
of Merger Sub ceased, and Legacy Cardio continued as the surviving corporation in the Merger and as a wholly owned subsidiary of Mana.
The Merger was approved by Mana’s stockholders at a meeting held on October 25, 2022. On the Closing, the Company changed its name
from Mana Capital Acquisition Corp. to Cardio Diagnostics Holdings, Inc.

 As of the opening of trading on October 26,
2022, the Company’s Common Stock (the “Common Stock”) and public warrants (the “Public Warrants”), formerly
those of Mana, began trading on The Nasdaq Capital Market (“Nasdaq”) under the symbols “CDIO” and “CDIOW,”
respectively.

 At the Closing and subject to the conditions
of the Business Combination Agreement, all shares of Common Stock of Legacy Cardio were cancelled and converted into the right to receive
a number of shares of the Company’s Common Stock equal to 3.427259 (the “Exchange Ratio”) per Legacy Cardio share and
a pro rata portion of up to 43,334 shares of the Company’s Common Stock issuable upon conversion of certain promissory notes aggregating
$433,334 issued to Legacy Cardio in consideration of loans made to us to extend the corporate existence of Mana through October 26, 2022
(the “Extension Notes”). In addition, each outstanding option and warrant to purchase shares of Legacy Cardio Common Stock
was converted into an option or warrant, as the case may be, to purchase shares of the Company’s Common Stock with the same terms
except for the number of shares exercisable and the exercise price, as adjusted for the Exchange Ratio.

 4 

 Our Company 

 Legacy Cardio
was founded in 2017 in Coralville, Iowa by Meeshanthini (Meesha) Dogan, PhD, and Robert (Rob) Philibert, MD PhD. It was formed in January
2017 as an Iowa LLC and was subsequently incorporated as a Delaware C Corp in September 2019.

 Cardio was formed to further develop and commercialize
a series of products for major types of cardiovascular disease and associated co-morbidities, including coronary heart disease (“CHD”),
stroke, heart failure and diabetes, by leveraging our Artificial Intelligence (“AI”)-driven Integrated Genetic-Epigenetic
Engine™. As a company, we aspire to give every American adult insight into their unique risk for various cardiovascular diseases.
Cardio aims to become one of the leading medical technology companies for enabling improved prevention, early detection and treatment
of cardiovascular disease. Cardio is transforming the approach to cardiovascular disease from reactive to proactive and hopes to accelerate
the adoption of Precision Medicine for all. We believe that incorporating our solutions into routine practice in primary care and prevention
efforts can help alter the trajectory that nearly one in two Americans is expected to develop some form of cardiovascular disease by 2035.

 According to the CDC, epigenetics is the study
of how a person’s behaviors and environment can cause changes that affect the way a person’s genes work. Unlike genetic changes,
epigenetic changes are reversible and do not change one’s DNA sequence, but they can change how a person’s body reads a DNA
sequence. We believe that we are the first company to develop and commercialize epigenetics-based clinical tests for cardiovascular disease
that have clear value propositions for multiple stakeholders including (i) patients, (ii) clinicians, (iii) hospitals/health systems,
(iv) employers and (v) payors.

 An estimated 80% of cardiovascular disease ("CVD”)
is preventable, yet, it is responsible for one in every four deaths and remains the number one killer in the United States for both men
and women. Coronary heart disease is the most common type of CVD and the major cause of heart attacks. The enormous number of unnecessary
heart attacks and deaths associated with CHD is attributable to the failure of current primary prevention approaches in clinical practice
to effectively detect, reduce and monitor risk for CHD prior to life altering and costly health complications. Several reasons for this
failure include (i) the current in-person risk screening approach is incompatible with busy everyday life as demonstrated by the COVID-19
associated decrease in primary care visits for preventive screening; (ii) even if the current risk screening tests are taken, they only
identify 44% and 32% of men and women at high risk, respectively; and (iii) the lack of patient care plan personalization. A highly accessible,
personalized and precise solution for CHD prevention is not currently available.

 Furthermore, with the ongoing COVID-19 pandemic,
preventable illnesses such as CHD are expected to spike. Therefore, now more than ever, there is an urgent need for a highly sensitive,
scalable, at-home risk screening tool that can help physicians better direct care and allow patients to receive the help they need sooner.

 Our first test, Epi+Gen CHD™, which was
introduced for market testing in 2021, is a three-year symptomatic CHD risk assessment test targeting CHD events, including heart attacks.
In March 2023, we announced the launch of our second product, PrecisionCHD™, an integrated
epigenetic-genetic blood test for the early detection of coronary heart disease. The Company earned only $901 and $950 in revenue
for the years ended December 31, 2021 and 2022, respectively, through a telemedicine platform. Rather than using its resources to actively
pursue this sales channel, in mid to late 2022, we started focusing our efforts on establishing relationships with potential customers,
a process that can take many months and up to as much as a year or more to finalize, depending on the sales channel. For example, hospitals
routinely take a year or longer to make purchasing decisions. While these relationships take considerable time to establish, we believe
that they provide far greater revenue potential for our existing and future tests.

 We believe that our Epi+Gen CHD™ and PrecisionCHD™
tests are categorized as laboratory-developed tests, or “LDTs.” Under current FDA policy, an LDT does not require premarket
authorization or other FDA clearance or approval. As such, we believe that the Epi+Gen CHD™ and PrecisionCHD™ tests do not require
FDA premarket evaluation of our performance claims or marketing authorization, and such premarket review and authorization has not been
obtained. Although submissions that are pending before the FDA or that have been denied are not publicly available, to the best of our
knowledge, no epigenetic-based clinical test for cardiovascular disease has, to date, been cleared or approved by the FDA.

 5 

 Industry Background 

 According to the American Heart Association
(“AHA”), even though an estimated 80% of cardiovascular disease (“CVD”) is preventable, it remains the leading
cause of death in the United States and globally. The AHA also reported that over 650,000 deaths in the United States each year are attributable
to heart disease, which amounts to one in every four deaths. The Centers for Disease Control and Prevention (“CDC”) estimates
that in the United States, one person dies every 36 seconds from CVD. Unfortunately, the incidence of CVD is expected to continue to rise
with the AHA projecting that by 2035, nearly half of Americans will have some form of CVD.

 CVD represents conditions that affect the heart
and blood vessels such as coronary heart disease (“CHD”), stroke, and congestive heart failure (“CHF”). CHD is
the most common type of heart disease and according to the CDC, was responsible for nearly 370,000 deaths in 2019. The National Center
for Health Statistics reported that the prevalence of CHD is approximately 6.7%, and according to the AHA, over 20 million adults aged
20 or older in the United States have CHD. CHD is also the major cause of heart attacks. According to the AHA, every 40 seconds, someone
in the United States has a heart attack, with over 800,000 Americans having a heart attack each year. The CDC reported that in 2020, stroke
was responsible for one in six CVD-related deaths. The AHA estimates that every year, nearly 800,000 Americans have a stroke which is
the leading cause of major long-term disability, with a stroke-related death occurring every 3.5 minutes. According to the AHA, over six
million adults have heart failure and nearly 380,000 deaths in 2018 were attributable to heart failure. There are numerous risk factors
that could increase an individual’s risk for CVD. Several key risk factors include diabetes, high blood cholesterol, and high blood
pressure. For example, according to the CDC, over 34 million adults have diabetes and according to Johns Hopkins Medicine, those with
diabetes are two to four times more likely to develop CVD. Alongside genetics, age, sex, and ethnicity, lifestyle factors such as smoking,
unhealthy diet, physical inactivity, and being overweight can also increase the risk for CVD.

 In addition to the enormous morbidity and mortality
associated with CVD, the economic burden of CVD is also staggering as depicted in the figure below from the Cardiovascular Disease: A
Costly Burden For America, Projections Through 2035 report by the AHA. CVD is the costliest disease in the United States and the economic
burden associated with CVD is expected to continue to soar. According to the CDC
Foundation, every year, one in six United States healthcare dollars is expended on CVD. 

 The AHA reports that in 2016, the cost of CVD
was $555 billion and is expected to rise to over $1 trillion by 2035. Of the $555 billion, $318 billion was associated with medical costs,
and the remaining $237 billion with indirect costs such as lost productivity. By 2035, the medical costs associated with CVD are expected
to increase 135% to $749 billion, while the indirect costs are expected
to rise by 55% to $368 billion. Currently, among the various types of CVD, the medical costs of CHD are the highest at $89 billion and
are expected to rise to $215 billion by 2035 as depicted in the figure below from the Cardiovascular Disease: A Costly Burden For America,
Projections Through 2035 report by the AHA.

 6 

 To address this expected significant rise in human
health and economic burdens, the United States healthcare market is seeking more efficient and effective methods to better prevent CVD.
This same trend is playing out across developed nations around the globe as the burden of CVD continues to grow due to a rise in major
risk factors such as obesity, poor diet and Type 2 diabetes. This is consistent with the cardiovascular diagnostic testing market trends
reported by Research and Markets in their Outlook on the Cardiovascular Diagnostic Testing Global Market to 2027 - Increasing Number of
Insurance Providers Presents Opportunities press release published on July 4, 2022. They estimate that the Global Cardiovascular Diagnostic
Testing Market is estimated to grow from $8.47 billion in 2022 to $12.41 billion by 2027, with a CAGR of 7.94%.

 There are several healthcare tailwinds that
are driving this expected growth and are expected to support the large-scale adoption of our solutions:

 · 
 The aging population: According to the Population Reference Bureau, by 2060, the number of Americans aged 65 and over is projected to more than double from 46 million to over 98 million. This demographic shift will result in increased demand for healthcare services in general and for CVD specifically because the risk for CVD increases with age. According to the AHA, the risk for CVD at age 24 is about 20% and more than doubles to 50% by age 45, with 90% of those over the age of 80 having some form of CVD. 

 · 
 The rise of chronic diseases: Chronic diseases such as heart disease, cancer, and diabetes are rising in the United States. The rise of these conditions is further driven by less-than-ideal lifestyle choices such as smoking, an unhealthy diet, and sedentary behavior. As a result, better predictive and diagnostic tools are needed to get ahead of these conditions alongside the need for improved treatment and management of these conditions. 

 · 
 The shift to value-based care: The shift to value-based care drives healthcare providers to focus on quality rather than quantity of care. The shift to value-based care is a crucial driver of growth for Cardio because it incentivizes health care providers to focus on providing quality care rather than simply providing more care. Cardio believes providers can tackle the costliest and deadliest disease category with its solutions while reducing costs. 

 · 
 The growth of telemedicine: Driven largely by the COVID-19 pandemic, telemedicine is a growing trend in healthcare, as it allows patients to receive care from providers remotely. Remote, telemedicine-based preventative programs and tests can serve those who are already undergoing routine screening, but more importantly, expand reach to most Americans who currently are not receiving preventative healthcare, including rural and underserved populations. Our evidence-based solutions can be deployed remotely, which is expected to further drive adoption by patients and clinicians. 

 7 

 · 
 The adoption of Artificial Intelligence (AI): AI is increasingly incorporated into many aspects of healthcare, including administrative tasks, diagnosis and treatment. AI has the potential to improve the quality of care while reducing costs. Machine learning, which is a type of AI, is instrumental to our cutting-edge solutions, powering their clinical performance and differentiating them from other technologies for CVD. 

 · 
 The rise of patient engagement: Thanks to technology, patients are becoming more engaged in their healthcare. They use online tools to research their conditions and treatments and are more likely to participate in their care. This includes demanding cutting-edge clinical tests that can help them better prevent chronic diseases such as CVD while improving the length and quality of life. As a result, healthcare providers and organizations that offer such services including our solutions are likely to have an edge over those who do not. 

 Our Strategy 

 · 
 Building compelling evidence. Our AI-driven Integrated Genetic-Epigenetic
 Engine™ enables rapid design, development, and launch of diagnostic solutions resulting from a decade of research studies. Our
 solutions that result from this technology, including our Epi+Gen CHD™ test for coronary heart disease risk assessment and
 PrecisionCHD™ for the early detection of coronary heart disease, were developed through rigorous studies that are
 peer-reviewed and published and others that are being prepared for peer-reviewed publication in collaboration with leading
 healthcare and research institutions. In addition to the superior sensitivity of the Epi+Gen CHD™ and PrecisionCHD™
 tests, the evidence bases for the Epi+Gen CHD™ test also include an economic case to drive a more holistic and compelling
 argument for adoption. We plan to continue such studies including similar health economic studies for the PrecisionCHD™ test. 

 · 
 Engaging experts and key stakeholders. At Cardio, we understand that engaging experts and key healthcare stakeholders is critical to realizing our solutions’ full potential and ensuring that these solutions reach as many people as possible. 

 · 
 Prioritizing and executing strategic acquisitions . Our expertise at several intersections across biology, machine learning, lab assay development, and cardiovascular disease, provide an array of strategic acquisition opportunities to better serve the cardiovascular disease market by horizontally and vertically integrating the cardiac care continuum. 

 · 
 Prioritizing payor coverage. We believe that to continue to grow the market traction of our solutions, it would require pursuing additional payor coverage. We are engaging the appropriate experts, building necessary evidence, and have a roadmap in place for this. As part of this priority, we are pursuing pilots and strategic collaborations. We expect that it will take six to twelve months to engage additional payors. 

 · 
 Evaluating FDA pathway. Cardio is evaluating an FDA regulatory pathway to enable broader access to our tests. 

 · 
 Targeting multiple revenue channels. To ensure that our revenue stream is diversified, Cardio has and will continue to target multiple revenue channels for which our solutions have compelling value propositions. This strategy includes, but is not limited to, providers, health systems, and employers. 

 · 
 Launching synergistic products. To more fully address cardiovascular health, Cardio is
 leveraging our AI-driven Integrated Genetic-Epigenetic Engine™ to develop a series of clinical tests for major types of
 cardiovascular disease and associated co-morbidities, including coronary heart disease, stroke and congestive heart failure. 

 8 

 Our Technology 

 At the core of Cardio is our proprietary AI-driven
Integrated Genetic-Epigenetic Engine™, an engine invented and built by three key employees/officers over the past decade. Our technology
enables rapid design, development and launch of new diagnostic solutions through the identification of robust integrated genetic-epigenetic
biomarkers and their translation into clinical tests for cardiovascular disease. This engine consists of multiple layers. It begins with
genome-wide genetic (single nucleotide polymorphisms or SNPs), genome-wide epigenetic (DNA methylation) and clinical data points. Using
high-performance computing, ML/AI techniques and deep domain expertise in medicine, molecular biology and engineering, a panel of SNP-DNA
methylation biomarkers and mined, modeled and translated into standalone laboratory assays.

 As
a result, our products, which are clinical tests, consist of two components. The first is a laboratory component, which involves epigenetic
DNA biomarkers. Genetic biomarkers (“SNPs”) represent an individual’s inherited risk for the disease, have been reported to
drive less than 20% of the risk for cardiovascular disease (Hou, K et al, Aug 2019, Nature Genetics) and do not change with intervention
( i.e. , static). Epigenetic biomarkers (DNA methylation) represent an individual’s acquired risk for the disease that is
influenced by lifestyle and environment which is a larger driver for cardiovascular risk compared to genetics, is largely confounded
by genetics and has been shown to change over time with intervention or changes in one’s lifestyle and environment ( i.e. ,
dynamic). The second is an analytical component, which involves applying
a proprietary interpretive predictive machine learning model to predict risk and provide personalized insights to assist physicians in
tailoring a prevention and care plan. The combination of biomarkers and predictive machine learning model is unique to each clinical
test we develop. 

 9 

 Our Products and Services 

 We have and will continue to leverage our AI-driven
Integrated Genetic-Epigenetic Engine™ to develop a series of clinical tests for cardiovascular disease. As of March 2023, we have
leveraged this Engine to develop two products: Epi+Gen CHD™ and PrecisionCHD™ .

 We believe that our first product, Epi+Gen CHD™,
is the first epigenetics-based clinical test capable of assessing near-term (three-year) risk for coronary heart disease (“CHD”) and our
second product, PrecisionCHD™, is the first epigenetics-based clinical test for the early detection of CHD.

 10 

 Clinicians’ Current Approach to Cardiovascular Disease 

 Currently, a patient’s risk for CVD is
generally assessed using two common lipid-based clinical tests known as Framingham Risk Score (FRS) and ASCVD Pooled Cohort Equation (PCE).
FRS and PCE are 10-year CVD risk calculators that aggregate common clinical variables such as cholesterol and diabetes, demographics and
subjective, self-reported information such as smoking status. For the early detection of CHD, tests that are routinely used in a provider
setting include stress echocardiograms. These tests have several limitations and are less effective for several reasons:

 · 
 In a peer-reviewed published study by Cardio in
 collaboration with Intermountain Healthcare (Dogan, Meeshanthini & Knight, Stacey & Dogan, Timur & Knowlton, Kirk &
 Philibert, Robert. (2021), External validation of integrated genetic-epigenetic biomarkers for predicting incident coronary heart
 disease. Epigenomics. 13. 10.2217/epi-2021-0123), we found that for three-year coronary heart disease risk assessment, the average
 sensitivity of FRS and PCE was 44% in men and 32% in women. This means that for every 100 men and 100 women deemed
 "at-risk” for a coronary heart disease event, the test only correctly identifies 44 men and 32 women. A similar study was
 performed for PrecisionCHD™ that demonstrates its high sensitivity and is undergoing the process to be peer-reviewed and
 published. 

 · 
 The fasting requirement for current tests could be cumbersome for patients to comply, and the lack of fasting could affect test results. 

 · 
 The patient care plan that results from these tests generally lack personalization. 

 · 
 Lipid-based risk assessment tests depend on self-reported, subjective information such as smoking status from patients, and inaccurate information could affect the accuracy of test results. 

 · 
 Undergoing these tests requires an in-person clinic visit to collect blood samples and other necessary data points such as blood pressure, which may delay or prevent access to primary prevention, e.g., for those who are unable to make time for the visit, have transportation issues or live in rural areas are likely to delay primary prevention altogether. Similarly, to undergo a stress echocardiogram for instance, an in-person visit is required, and such a visit can take weeks to schedule that could delay care for patients especially if they are experiencing symptoms such as chest pain. 

 · 
 Risk assessment tests were also developed predominantly using data from men and therefore, may be less effective for women. 

 Epi+Gen CHD™ is the Only Epigenetics-based
Clinical Test for Coronary Heart Disease Risk Assessment 

 Epi+Gen
CHD™ is a scientifically backed clinical test that is based on an individual’s objective genetic and epigenetic DNA biomarkers.
In a peer-reviewed study done in collaboration with Intermountain Healthcare (Dogan, Meeshanthini & Knight, Stacey & Dogan, Timur
& Knowlton, Kirk & Philibert, Robert, 2021; External
validation of integrated genetic-epigenetic biomarkers for predicting incident coronary heart disease . Epigenomics. 13. 10.2217/epi-2021-0123),
this test demonstrated a 76% and 78% sensitivity for men and women, respectively, for three-year CHD risk. This means
 that for every 100 men and 100 women deemed "at-risk” for a coronary
heart disease event, the test correctly identifies 76 men and 78 women. In comparison, the average sensitivity of the Framingham Risk
Score and the ASCVD Pooled Cohort Equation was found to be 44% and 32% for men and women, respectively. The performance of the test in
this study was evaluated across two cohorts that were independent of each other. One cohort was used for the development of this test
and the other was used to independently validate the performance of the test, showing Epi+Gen CHD™ to be approximately 1.7 times
and 2.4 times more sensitive than the current lipid-based clinical risk estimators in men and women, respectively. In another peer-reviewed
study focusing on the cost utility of Epi+Gen CHD™ (Jung, Younsoo & Frisvold, David & Dogan, Timur & Dogan, Meeshanthini
& Philibert, Robert, 2021, Cost-utility analysis of an integrated genetic/epigenetic test for assessing risk for coronary heart
disease . Epigenomics. 13. 10.2217/epi-2021-0021), this test was associated with up to $42,000 in cost savings per quality adjusted
life year and improved survival compared to the ASCVD Pooled Cohort Equation. 

 11 

 The blood-based version of this test was introduced
for market testing in 2021 and the saliva-based version is anticipated to be launching in 2023. The current charge to perform the test
is $350, which can be paid for either out-of-pocket or via HSA/FSA. The price of the test and revenue streams could change in the future
depending on market forces and payor requirements, as well as on the customer and the region in which the test is being sold. We are building
additional clinical and health economics evidence to pursue payor coverage. To date, we have sold our Epi+Gen CHD™ test to multiple
customers who are patients through a telemedicine provider platform.

 We believe that the Epi+Gen CHD™ test empowers
patients to prevent CHD with actionable information about their near-term risk for CHD-related events, including a heart attack. We believe
that our Company’s initial product will enable clinicians to identify patients in need of clinical attention and gaps in cardiovascular
care for their patients so they can bridge the gap in care and proactively manage them. In addition, we believe that our products can
enable healthcare organizations and payors to reduce the cost of care.

 We have a worldwide exclusive license agreement
with the University of Iowa Research Foundation (“UIRF”) relating to our patent and patent-pending technology. Under the terms of that license
agreement, Cardio is required to pay each of: (i) 2% of annual net sales, and (ii) 15% of non-royalty fees paid to the Company if it enters
into one or more sublicensing agreements.

 In addition to that licensed technology, we have
other patent applications pending relating to improvements to and bolstering our technology, which are potentially valuable and of possible
strategic importance to the Company. Under UIRF’s Inventions Policy, inventors are generally entitled to 25% of income from earnings
from their inventions. Consequently, Meeshanthini Dogan and Robert Philibert, our Chief Executive Officer and Chief Medical Officer, who
are co-inventors of the technology along with UIRF, will benefit from this policy.

 PrecisionCHD™ is the Only Epigenetics-based Clinical Test
for the Early Detection of Coronary Heart Disease 

 PrecisionCHD™
is a scientifically backed clinical test that is based on an individual’s objective genetic and epigenetic DNA biomarkers for the
early detection of coronary heart disease. PrecisionCHD™ aids in the early detection of coronary heart disease to better
enable the management of this condition to prevent a symptomatic event such as a heart attack. Using epigenetic (DNA methylation) and
genetic (single nucleotide polymorphism) biomarkers along with a proprietary machine-learning model developed by analyzing billions of
genomic and epigenomic data points, PrecisionCHD™ detects coronary heart disease with better than 75% sensitivity in both men and
women. A key defining characteristic of PrecisionCHD™ is its accompanying provider-only Actionable Clinical Intelligence ™ 
platform, which maps a patient’s unique biomarker profile onto modifiable risk factors such as diabetes, hypertension, hypercholesterolemia,
and smoking, known to be critical drivers of coronary heart disease.

 12 

 Cardio intends to accelerate the adoption of
Epi+Gen CHD™ and PrecisionCHD™ by:

 · 
 developing strategic clinical partnerships to reach as many patients as possible; 

 · 
 leveraging industry organizations to engage and educate providers; 

 · 
 launching a piloting program to for innovative providers and key strategic partners; and 

 · 
 developing a customized customer portal to reduce transaction friction. 

 Cardio foresees potential opportunities to increase
the gross margin of the Epi+Gen CHD™ and PrecisionCHD™ by:

 · 
 acquiring a laboratory to potentially reduce cost associated with processing samples; 

 · 
 processing patient samples in the laboratory in larger batches; 

 · 
 shipping sample collection kits in larger batches; and 

 · 
 increasing the level of automation to reduce manual processing. 

 FDA Pathway 

 We
are evaluating an FDA regulatory pathway to enable broader access to the Epi+Gen CHD™ and PrecisionCHD ™ tests.
We are currently determining the appropriate FDA pathway and are assembling the necessary FDA pre-submission materials to obtain feedback
from the FDA. We have engaged regulatory experts and attorneys for this process. 

 13 

 Product Pipeline 

 In March 2023, we announced the debut of the
PrecisionCHD™ test, our second clinical test for the early detection of CHD. In
addition to this test, we have several other tests in our product pipeline at various stages for congestive heart failure (expected
launch in 2023), stroke (expected launch in 2023) and diabetes (expected launch in 2024).

 However, as a company in the early stages of
its development, we continuously reevaluate our business, the market in which we operate and potential new opportunities. We may modify
our product pipeline, seek other alternatives within the healthcare field in order
to grow the Company’s business and increase revenues. Such alternatives may include, but not be limited to, combinations or strategic
partnerships with other laboratory companies or with medical practices such as hospitalists or behavioral health. 

 Our Market Opportunity 

 Cardiovascular
disease (“CVD”) is the leading cause of death in the United States, accounting for one in four deaths. Despite being largely preventable,
the American Heart Association projects that by 2035, nearly 45% of Americans will have some form of CVD. One of the key ways to
address the prevalence of CVD is to shift the approach for CVD from reactive treatment to proactive prevention and early detection. As
such, technologies that can more precisely assess the risk for and detect CVD before symptoms emerge or a catastrophic cardiac event occurs
becomes even more critical.

 According to Research and Markets in their Outlook
on the Cardiovascular Diagnostic Testing Global Market to 2027 - Increasing Number of
Insurance Providers Presents Opportunities press release published on July 4, 2022, the Global Cardiovascular Diagnostic Testing Market
is estimated to grow from $8.47 billion in 2022 to $12.41 billion by 2027, with a CAGR of 7.94%. The increasing prevalence of cardiovascular
diseases, technological advancements in cardiovascular disease diagnostics, and the growing number of initiatives to promote cardiovascular
disease testing are the major factors driving the growth of this market. 

 Our
principal mission is to enable better detection of the presence and risk of major cardiovascular diseases through a series of clinical
tests developed by leveraging our proprietary AI-driven Integrated Genetic-Epigenetic Engine™. Our initial product, Epi+Gen CHD™,
is a highly sensitive and accessible clinical test for three-year coronary heart disease (“CHD”) risk assessment. Our second product, PrecisionCHD™,
is a highly sensitive and accessible clinical test for the early detection of CHD.

 Using data from the US Census Bureau, Cardio
estimates that 146 million adults would potentially benefit from our Epi+Gen CHD™ test, 157 million adults for our PrecisionCHD™
test, 152 million adults for the congestive heart failure test, 153 million adults for the stroke test and 140 million adults for the
diabetes test. The pricing of each of our tests may vary, but assuming $350 per test, the US addressable market
equates to $51 billion for Epi+Gen CHD™, $55 billion for PrecisionCHD™, $53 billion for congestive heart failure, $53 billion for stroke
and $49 billion for diabetes for a total US addressable market of $261 billion. This total addressable market evaluation also assumes
that one patient could be tested with multiple tests, and each test is administered to each patient a single time in a year although some
patients may benefit from being re-tested in less than a year. 

 Go-To-Market Strategy for Epi+Gen CHD™ and PrecisionCHD™ 

 Since the launch of Epi+Gen CHD™ in 2021
via telemedicine, the predominant initial go-to-market (“GTM”) strategy was bottom-up consumer-led sales focused on directly acquiring and
retaining savvy and health-conscious consumers interested in using the latest technologies to address their cardiovascular disease risk
concerns. Our sales and marketing efforts were largely limited due to constraints in resources and predominantly leveraged digital marketing
channels. Sales were handled through our telemedicine partner to multiple customers. Moving forward, with additional resources and a growing
team, in addition to this bottom-up GTM motion, we have adopted a product-led innovation growth strategy that emphasizes enterprise-wide
adoption across key healthcare sub-verticals with a particular emphasis on deeply centralized key opinion and health trend leaders like
innovative providers, health systems, and employers.

 14 

 Healthcare Sub-Vertical Priorities for Epi+Gen CHD™ and
PrecisionCHD™ 

 By
assessing the risk for CHD early and/or detecting CHD early to potentially avert a heart attack, we believe that the clinical and economic
utility of the Epi+Gen CHD™ and PrecisionCHD TM tests will support their commercial adoption. We believe that Epi+Gen
CHD™ and PrecisionCHD TM can address a significant addressable market opportunity even before these tests are covered
by insurance and eligible for approval for reimbursement. While we believe that such coverage and reimbursement would be necessary to
gain widespread adoption, obtaining such coverage and reimbursement from federal and private payors is expected to take several years,
if it is obtained at all. We intend to focus on the following key channels: 

 · 
 Innovative Health Systems 

 As
innovative health systems diversify their business models and care delivery pathways, there is a renewed emphasis on using precision medical
technologies to better manage expensive and chronic conditions, including CHD. By assessing the
risk for CHD before a cardiac event, Epi+Gen CHD™ has the potential to improve population health. We believe that the improved performance
of our test compared to other risk calculators, coupled with evidence of cost savings and enhanced survival, will drive the adoption of
Epi+Gen CHD™ by health systems to continue improving the health of their patients. Similarly, with PrecisionCHD ™ ,
innovative health systems are able to help test their patients detect CHD early with a simple blood test, potentially leading to better
patient outcomes. 

 · 
 Physician-Directed Channels, Including Concierge Practices 

 Early
adoption is driven by practices committed to innovation in medicine for patients who are more focused on preventive health and
wellness and have the financial means to pay out-of-pocket for concierge subscription services. There is a convergence in innovative providers,
health-conscious consumers, and best-in-class tests and technologies in concierge medicine practices to provide on-demand elite personalized
and readily accessible healthcare. With an estimated 2,000 to 5,000 concierge practices in the United States, there is robust growth in
high-end healthcare services with an equal demand for innovative diagnostic tools. Additionally, concierge practices are not price-sensitive,
so reimbursement is not a top priority. 

 · 
 Employers 

 Early adoption in the employer space will be
driven by remote-first companies looking to provide employee perks relevant to health. We believe the two reasons for this are replacing
in-office amenities and acknowledging that health is top of mind for most employees in a post-pandemic world. Health equity is top-of-mind
for many employers to ensure that their employees are healthy and productive.
Employers view healthcare investments as another investment in the business. Employers leveraging innovative diagnostic solutions can
connect better health for employees to drive overall business objectives and have a competitive advantage in attracting and retaining
talent.

 · 
 Telemedicine and Marketplaces 

 Many Americans are concerned about being proactive
with their health needs. Understanding their personalized risk with tests at the forefront of medicine is crucial for those with financial
resources. According to the U.S. Census Bureau based on the 2020 census, there are nearly 44 million households that earn $100,000 or
more annually. Because the Epi+Gen CHD™ test is currently out-of-pocket, we expect high-earning Americans who are proactive about
their health to constitute the initial attainable market. Additionally, many have discretionary flexible spending account ("FSA”)
or health savings account ("HSA”) funds. A strategic partner will be health and wellness marketplaces that aggregate FSA and
HSA-eligible items for those who wish to tackle their health using their pre-tax dollars. According to the Global Wellness Institute,
Americans spend more than $275 billion annually on out-of-pocket wellness and health initiatives.

 15 

 Sales
and Marketing for Epi+Gen CHD™ and PrecisionCHD™ with
a Focus on Strategic Channel Partnerships 

 While our overall sales and marketing initiatives
will span the gamut across traditional, print, and digital media, our primary sales and marketing strategy consists of the branding, collaboration,
co-marketing, and co-sales opportunities involved in strategic channel partnerships. By prioritizing strategic channel partnerships, we
believe we can accelerate our market penetration into the key healthcare sub-verticals we intend to prioritize for our growth. The key
to our efforts is a well-defined and executed channel partnership integration strategy that will serve to accelerate the sales cycles
for each of our distribution channels. The sales cycles are generally defined as the period in which such distribution channel will turn
over its inventory of our tests, which may vary for each distribution channel. Utilizing and developing such strategic channel partnerships,
we believe, will generate revenue in a myriad of ways including larger contracts for our Epi+Gen CHD ™ and PrecisionCHD™
tests, and bundling our solutions alongside other synergistic technologies, services, and products. We are targeting accelerating the
sales cycles for distribution channels for telemedicine, concierge practices, innovative health systems and employers to cycles of four
to six weeks, one to nine months, nine to twelve months and six to nine months, respectively.

 Strategic channel partnerships are key for the
growth of our solutions. There are several key revenue and strategy benefits to developing a robust channel partnership strategy, including:

 · 
 Defensibility and Displacement 

 Strategic channel partners would have exclusivity
agreements for Epi+Gen CHD™ and PrecisionCHD™, which forecloses distribution channels to potential competitors.

 · 
 Distribution and Network Effects 

 Channel partners under consideration for Epi+Gen
CHD™ and PrecisionCHD™ strategic partnerships have large, related healthcare and life science networks that we expect to leverage
as part of the relationship.

 · 
 Bi-Directional Value 

 The cardiovascular disease space is of paramount
concern to stakeholders across the healthcare continuum; the scale of the disease across the population and the associated costs ensures
that addressing cardiovascular disease from a payment, cost, patient outcome, and prevention standpoint for stakeholders across the spectrum.

 · 
 Pricing Differentiation 

 The economics of each channel partnership can
be crafted independently to offer each strategic partner a per-unit cost relevant to the size of their network.

 · 
 Complementary Goods 

 Bundling Epi+Gen CHD™, PrecisionCHD™
and future Cardio solutions alongside complementary clinical, analytics, treatment pathways, and services-consulting for primary prevention
optimization with key partners expands the ROI of the investment in our solutions.

 Hiring and Talent to Accelerate Growth 

 Our growth strategy will require investment
in internal and external healthcare enterprise sales, marketing and deep customer insights. By combining best-in-class revenue operations
technologies with seasoned healthcare sales and marketing experts, we believe we can quickly scale the selling approaches we have outlined
and validated to transform the cardiovascular healthcare experience, driving revenue and increased margins. New hires will be targeting
the entire continuum of revenue needs, including opportunity identification, campaign design, and execution.

 16 

 Manufacture/Supply Chain 

 The sample collections kits for both Epi+Gen
CHD™ and PrecisionCHD™ are identical, and we rely on third-party suppliers for kit contents required to collect and transport
a blood sample to the lab for processing. These are commonly used supplies that are and can be sourced from multiple distributors. Upon
sourcing these contents, they are assembled into lancet-based and vacutainer-based sample collection kits internally and fulfilled. We
intend to maintain an inventory of fully assembled kits to meet expected demand for at least six months. However, since there are no particular
or unique assembly protocols and assembly is handled internally, the lead time to assemble additional sample collection kits would be
minimal after the contents are sourced.

 Proprietary genetic and DNA methylation components
are sourced from large manufacturers and manufactured under good manufacturing practices (“cGMP”). There are alternative manufacturers
for each of these components, and no additional lead time is expected. Laboratory assays that are manufactured under cGMP to specifications
are expected to be available to meet anticipated demand for at least six months.

 Both the Epi+Gen CHD™ and PrecisionCHD™
tests will be offered as Laboratory Developed Tests (“LDTs”) through an experienced laboratory with the appropriate Clinical
Laboratory Improvement Amendments of 1988 (“CLIA”) certification and state licensure. However, we intend to acquire a laboratory
and are currently evaluating potential lab candidates for acquisition.

 Our Competitive Strengths 

 Innovation
is the key to success. In the rapidly moving cardiac diagnostics space, we believe that we have the team, differentiated technology, and
deep technical and business expertise to deliver a market differentiating suite of products for our customers to address unmet
clinical needs in the cardiovascular space and help us dominate our market.

 The pillar of our strategy has been innovation,
from the onset with our technology development and intellectual property that account for future growth, to our commercialization and
partnership efforts that bring together key healthcare.

 We believe that,
among other reasons, the future belongs to Cardio based on the following competitive strengths: 

 • 
 Technology and products are strongly backed by science. 

 Our
technology and products stem from over a decade of rigorous scientific research by the Founders in collaboration with other clinical
and research experts from leading organizations. Our founders are experts in machine learning approaches in healthcare and in epigenetics
with highly-cited peer-reviewed publications. The technology and products are developed and validated with extensive clinical data. The
key findings have been published after undergoing stringent independent third-party peer review. 

 • 
 Broad intellectual property portfolio protects our current and future products and their applications. 

 As of
March 2023, our patent portfolio includes four patent families, one issued U.S. patent, six patent applications pending worldwide, one
issued EU patent, one notice of allowance for China, two pending PCT International applications, and one provisional application generally
directed to biomarkers associated with cardiovascular disease and diabetes for diagnosis
and other applications. In addition, we have extensive trade secrets and know-how, including algorithms and assay designs, that that are
critical for the continued development and improvement of our current and future products. 

 • 
 Big data and artificial intelligence (machine learning) expertise drive future product development. 

 Our expertise
 in processing billions of clinical genotypic, epigenetic and phenotypic data points to generate
critical insights allows us to continue to develop innovative products. 

 17 

 • 
 Proprietary cutting-edge AI-driven Integrated Genetic-Epigenetic Engine™ accelerates product development. 

 We have
built a proprietary AI-driven Integrated Genetic-Epigenetic Engine™ that is made up of layers of big data, our algorithms
 informed by biology and its expert domain knowledge that was designed and built over the past decade
and can be leveraged to enable rapid design, development and launch of new diagnostic solutions. 

 • 
 Multiple potential product offerings with strong value propositions for key healthcare stakeholders. 

 We have
built a robust product pipeline for various types of cardiovascular disease and other indications that leverage our AI-driven Integrated
Genetic-Epigenetic Engine™ to continue to build market traction. We believe that our current and future products have
strong value propositions for various key stakeholders in healthcare. As a result, we believe that our customers will adopt and champion
our products. 

 • 
 Products that can potentially drive value in multiple ways. 

 We believe
that our tests are the first epigenetics-based clinical tests for heart disease. Unlike genetic biomarkers that are static, the DNA methylation
(epigenetic) biomarkers included in our products are generally dynamic. Therefore, DNA methylation biomarkers can change over time and
as a result, in addition to initial assessment , our products could potentially be used to
personalize interventions and help monitor the effectiveness of these interventions. 

 • 
 Commercial processes that are inherently scalable to meet demand. 

 Our commercial pipeline is
inherently scalable. Laboratory testing kits consist of easy to synthesize oligonucleotide products, readily available PCR reagents, and
can be kitted months in advance. Our lancet and vacutainer-based sampling kits incorporate readily available components that can be sourced
from several vendors. Our propriety algorithms can be scaled and automated to process data from thousands of samples. In addition, the
laboratory processes can be automated and scaled by adding existing commercial equipment. 

 • 
 A leadership team of seasoned healthcare professionals and executives that is led by a visionary founder. 

 Cardio is led by a management team with experience
in inventing innovative technologies, developing and commercializing clinical products, and building high growth companies.

 Competition 

 Even though we believe that our solutions provide
significant advantages over solutions that are currently available from other sources, we expect continued intense competition. This
includes companies that are entering the cardiovascular diagnostics market or existing companies that are looking to capitalize on the
same or similar opportunities as Cardio is in the clinical and non-clinical spaces. Some of our potential and current competitors have
longer operating histories and have, or will have, substantially greater financial, technical, research, and other resources than we
do, along with larger, more established marketing, sales, distribution, and service organizations. This could enable our competitors
to respond more quickly or efficiently than it can to capture a larger market share, respond to changes in the regulatory landscape or
adapt to meet new trends in the market. Having access to more resources, these competitors may undertake more extensive research and
development efforts, substantially reduce the time to introducing new technologies, accelerate key hires to drive adoption of their technologies,
deploy more far-reaching marketing campaigns and implement a more aggressive pricing policy to build larger customer bases than we have.
In some cases, we are competing for the same resources our customers allocate for purchasing cardiovascular diagnostics products or for
establishing strategic partnerships. We expect new competitors to emerge and the intensity of competition to increase. There is a likelihood
that our competitors may develop solutions that are similar ours and ones that could achieve greater market acceptance than ours. This
could attract customers away from our solutions and reduce our market share. To compete effectively, we must scale our organization and
infrastructure appropriately and demonstrate that our products have superior value propositions, cost savings, and clinical performance. 

 18 

 The clinical cardiovascular diagnostic space
is perhaps the most intensely competitive market space in clinical medicine. Even though we believe our solutions offer significant advantages
to existing methods, we expect alternative biomarker assessment approaches to continue to exist and to be developed. With respect to coronary
heart disease (CHD) risk assessment and early detection, our competitors use a variety of technologies including genetic, serum lipid-based,
imaging, proteomic and "people tracking” approaches, but no competitors of which we are aware use epigenetics.

 Genetic testing, both whole genome and more
focused panel modalities, is the first type of biomarker assessment and is used by many clinicians to assess lifetime risk for CHD. However,
whereas the scientific tenets for this approach are generally accepted, it does not identify when the CHD might develop, and we believe
that the relative power of this method for predicting CHD as compared to its Epi+Gen CHD™ test is limited. In addition, whereas
the use of this test may divert revenues for testing, this approach is in some respects complementary, and it is conceivable that some
clinicians may elect to get both forms of testing to have a more holistic assessment of both short term and lifetime risk.

 The best-known biomarker approach is that embodied
by the American Heart Association/American College of Cardiology Atherosclerotic Cardiovascular Risk Calculator (referred to ASCVD risk
calculator or Pooled Cohort Equation). This method integrates laboratory assessment of serum lipids, blood pressure and self-reported
health variables to impute 10-year risk for all forms of atherosclerotic cardiovascular disease (mainly CHD, but also stroke and peripheral
artery disease) using a standard algebraic equation. This is the most commonly used method of assessing CHD risk and enjoys general acceptance
by the medical community. It is perhaps the most direct competitor for our Epi+Gen CHD™ test. We believe that our test has superior
performance, does not require overnight fasting and will eventually provide greater information to the clinician than this current market
standard. In addition, we note that our test assesses risk over a three-year window rather than a 10-year window which it believes is
a more relevant period of time for patient management.

 Imaging modalities coupled to machine
learning are also used to assess risk for and detect CHD. Perhaps the most commonly used imaging method for predicting risk for CHD
is Coronary Artery Calcium (“CAC”) screening. In this method, a low intensity computed tomography (“CT”)
scan is taken of the heart. Then using this data, the amount of calcium laden plaque is determined and the result used to assess
10-year risk for CHD. Strengths of this approach include the general acceptance of the medical community. Weaknesses include the
necessity of exposing patients to x-ray radiation and the inability of the CAC test to monitor patient response. In many ways, this
test competes with our test. At the same time, we note that this test is not yet recommended as a primary method for screening low
risk individuals, uses a longer risk assessment window, and could actually be used as secondary testing to evaluate patients who are
not found to be at low risk using Epi+Gen CHD™ or who are flagged for CHD by the PrecisionCHD™ test.

 Proteomic methods, as exemplified by serologic
assessments of individual proteins such as c-reactive protein or of entire protein panels, such as that for the HART CADhs or CVE tests
from Prevencio are another risk assessment tool. The CADhs test is a good example of a proteomic competitor and predicts the one-year
risk for having ≥70% stenosis in a major coronary artery while another Prevencio test HART CVE, predicts one year risk for individuals
at risk for developing a major adverse cardiovascular event. Important differences between our tests and their offerings include the window
of prediction (three-year vs one-year), the type of technology employed (AI-guided interpretation of genotype and methylation sensitive
digital PCR results compared to algorithm interpretation of results from Luminex bead immunoassays). Because we believe that digital PCR
based methods are more scalable testing solutions than Luminex bead platforms, we believe that our approach has an advantage.

 Finally, researchers have described methods
to use wearable devices, such as the Huami wrist device, to predict risk for cardiovascular disease. Although people doubtlessly use these
and similar methods derived from wearable devices to assess risk, their exact clinical market penetrance is currently low, and whether
they would pose as a direct competitor for our test remains uncertain.

 However,
the aforementioned is only a snapshot of the current market space in which we currently compete and which we intend to compete in the
future. Our intellectual property claims include methods to develop tests for coronary heart
disease, as well as incident and prevalent heart failure, stroke and diabetes. The test for prevalent coronary heart disease, whose basis
was published in 2018, is well underway, and we expect this test to become a strong competitor for other methods of establishing current
CHD, such as exercise treadmill testing, and for monitoring response to CHD treatment. 

 19 

 In summary, the cardiovascular diagnostic space
is extremely competitive and fast moving. We believe that the serum lipid, proteomic and to a certain extent, imaging-based modalities
are direct competitors for customers and enjoy both large existing market share and substantial financial backing. In addition, it is
clear that these existing alternative assessment strategies have significant degrees of scientific literature supporting their use, enjoy
backing from key medical constituencies for their use in certain circumstances, and have established strategies for obtaining third party
reimbursement. As the population ages, this competition is likely to increase. At the same time, we believe that there are important differences
between the current tests offered and our solutions with respect to clinical performance, window of clinical assessment, scalability,
capacity for assisting with interventions and response monitoring . However, the
other technologies are not static, and we expect refinements and/or combination of existing approaches to vigorously compete for customers
in our business space. We will need to scale our efforts, orient our organization appropriately and demonstrate that our products provide
better value for our customers. 

 Intellectual Property 

 We
have made broad pending intellectual property (“IP”) claims with respect to the use of epigenetic and gene-methylation interactions
for the assessment and monitoring of cardiovascular disease, specifically coronary heart disease, congestive heart failure and stroke,
as well as diabetes. Our portfolio falls into three patent families. These patent applications have been filed in the United States and
foreign jurisdictions, including the European Union, Japan, Canada and China. In the European Union a patent has already been granted.
Recently, a new provisional patent application was filed. In the U.S., Patent No. 11,414,704, titled Compositions and Methods for Detecting
Predisposition to Cardiovascular Disease, was issued in 2022 to the University of Iowa Research Foundation (“UIRF”),
the co-inventors of which are Dr. Dogan and Dr. Philibert, our Chief Executive Officer and Chief Medical Officer, respectively. This patent
is exclusively licensed to Cardio under our license agreement with UIRF. Our issued and pending patents cover general methods as well
as key technological steps that enable these core approaches while facilitating the continued patenting of material included in the patent
applications. We expect to continue to file new patent applications to protect additional products and methodologies as they emerge.

 The initial work on our AI-driven Integrated
Genetic-Epigenetic Engine™ is derived from work done by our founders while at the University of Iowa, around which there is currently
a family of patent and patent applications. Follow-on work on our core technology also is derived from work done by our founders while
at the University of Iowa but was furthered by our founders and Cardio’s Chief Technology Officer independent of the University
of Iowa. The follow-on work is described in the second and third families of patent applications.

 The initial work is described in the first family
of patents and patent applications and is generally directed to a number of single nucleotide polymorphism (“SNP”) biomarkers
and a number of methylation site biomarkers that are highly associated, at a statistically significant level, with the presence or the
early onset of a number of cardiovascular diseases. The first family of patents and patent applications is owned solely by UIRF and is
exclusively licensed by Cardio. As of March 2023, this family includes seven granted patents, one soon-to-be issued patent (received notice
of allowance), and six pending patent applications. Any and all patents issuing in this family will be solely owned by UIRF and, barring
any changes to the UIRF exclusive license agreement, will fall under the exclusive license to Cardio.

 The first family includes a granted patent in
Europe and the U.S., an allowed application in China and pending applications in Australia, Canada, Europe, India, Japan and the U.S.
The issued claims in the EP patent are directed to compositions ( e.g ., a kit) for determining the methylation status of at least
one CpG dinucleotide and a genotype of at least one SNP that includes at least one primer that detects the presence or absence of methylation
in a particular region of the genome (referred to as cg26910465) and at least one primer that detects a
first SNP in a particular region of the genome (referred to as rs10275666) or another SNP in linkage disequilibrium with the first SNP.
The European patent is validated in six European countries including France, Germany, Italy, Ireland, Switzerland, and United Kingdom.
The allowed claims in the U.S. are directed to methods for determining the presence of a biomarker associated with coronary heart disease
(CHD) that includes performing a genotyping assay on a nucleic acid sample to detect the presence of a SNP in a particular region of the
genome (referred to as rs11597065), bisulfite converting a nucleic acid sample and performing a methylation assay to detect the presence
or absence of methylation in a particular region of the genome (referred to as cg12586707), and inputting the data from the genotyping
assay and the methylation assay into a basic, non-specific algorithm. The original algorithm developed during the initial work is not
disclosed in the first family of patents and patent applications. This family of patents is in-licensed under our exclusive license agreement
with UIRF and is expected to expire in 2037, absent any applicable patent term adjustments or extensions. 

 20 

 The
second family, which is follow-on work conducted by Cardio, is generally directed to a number of SNP biomarkers and a number of methylation
site biomarkers that are highly associated, at a statistically significant level, with diabetes. This family includes a pending
PCT International application, with claims directed to compositions ( e.g ., a kit) that include at least one primer for determining
the methylation status of at least one CpG dinucleotide from a group of five different methylation sites, or a different CpG dinucleotide
in linkage disequilibrium with one of the listed CpG dinucleotides, and at least one primer for determining the genotype of at least one
SNP from a group of five different SNPs, or a different SNP in linkage disequilibrium with one of the listed SNPs. The PCT application
also includes claims to methods of determining the presence of biomarkers associated with diabetes, claims to a computer-readable medium
for performing such methods, and claims to a system for determining the methylation status of at least one CpG dinucleotide and the genotype
of at least one SNP. The specific algorithm developed for the association of biomarkers with diabetes, which includes an Artificial Intelligence
(AI) component, is not a part of the disclosure of the second family of patent applications, and Cardio presently intends to maintain
this aspect as a trade secret. Patents issuing from the second family are expected to expire in 2041, absent any applicable patent term
adjustments or extensions.

 The second family of patent applications is
co-owned by UIRF and Cardio, since Cardio expanded on and further refined some of the original research that was done at the University
of Iowa. As of December 2022, this family includes one International PCT application.
The ownership of any and all patents that ultimately issue in this family will depend on the specific subject matter that is claimed in
each issued patent; ownership with UIRF or Cardio, or ownership could be shared between UIRF and us. For example, depending upon the specific
biomarkers claimed and when those biomarkers were identified ( e.g ., during the initial work at the University of Iowa or during
the follow-on work at Cardio), ownership could lie solely with UIRF or Cardio, or ownership could be shared between UIRF and Cardio ( e.g .,
if a claimed biomarker was initially identified at the University of Iowa and its significance with respect to diabetes was further refined
by Cardio; or if one of the claimed biomarkers was identified at the University of Iowa and another one of the claimed biomarkers
was identified at Cardio).

 The third family of patent applications, also
considered follow-on work of Cardio, is generally directed to a number of SNP biomarkers and a number of methylation site biomarkers that
are highly associated, at a statistically significant level, with the three-year incidence of cardiovascular disease. This family includes
one pending PCT International application and a pending U.S. application, with claims directed to compositions (e.g., a kit) that include
at least one primer for determining the methylation status of at least one CpG dinucleotide from a group of three different methylation
sites, or a different CpG dinucleotide in linkage disequilibrium with one of the listed CpG dinucleotides, and at least one primer for
determining the genotype of at least one SNP from a group of five different SNPs, or a different SNP in linkage disequilibrium with one
of the listed SNPs. The PCT application also includes claims to methods of determining the presence of biomarkers associated with three-year
incidence of cardiovascular disease, claims to a computer-readable medium for performing such methods, and claims to a system for determining
the methylation status of at least one CpG dinucleotide and the genotype of a SNP. The specific algorithm developed for the association
of biomarkers with three-year incidence of cardiovascular disease, which includes an Artificial Intelligence (AI) component, is not a
part of the disclosure of the third family of patent applications, and Cardio presently intends to maintain this aspect as a trade secret.
This family of patents is owned exclusively by Cardio. As of December 2022, this family includes one International PCT application as
well as a one U.S. utility application. Any and all patents issuing in this family
will be solely owned by Cardio. Patents issuing from the third family are expected to expire in 2041, absent any applicable patent term
adjustments or extensions. 

 The
Exclusive License Agreement entered into with UIRF and those licenses granted under that license agreement terminate on the expiration
of the patent rights licensed under the license agreement, unless certain proprietary, non-patented technical information is still being
used by us, in which case the license agreement will not terminate until the date of termination of such use. The licenses under the license
agreement could terminate prior to the expiration of the licensed patent rights if we materially breach our obligations under the license
agreement, including failing to pay the applicable license fees and any
interest on such fees, and failing to fully remedy such breach within the period specified in the license agreement, or if we enter liquidation,
have a receiver or administrator appointed over any assets related to the license agreement, or cease to carry on business, or file for
bankruptcy or if an involuntary bankruptcy petition is filed against the Cardio. 

 21 

 Additionally,
we have considerable IP in the form of trade secrets, including bioinformatics and high-performance computing techniques and
machine learning algorithms used to identify genetic and epigenetic biomarkers for various products and to interpret genetic and epigenetic
data from patient samples to generate clinically actionable information, as well as the methods to develop new methylation sensitive assays.
We protect our proprietary information, which includes, but is not limited to, trade secrets, know-how, trademarks and copyrights. Our
future success depends on protecting that knowledge, obtaining trademarks on our products, copyright on key materials, and avoiding infringing
on the IP rights of others. Where appropriate, we will assess the operating space and acquire licenses for critical technologies that
we do not possess or cannot create. We continue to invest in technological innovation and will seek mutualistic and symbiotic licensing
opportunities to promote and maintain our competitive position. 

 In
order to provide our products, we currently use a variety of third party technologies including, for example, genotyping, digital methylation
assessment and data processing technologies. The terms of these agreements for the non-exclusive use of these technologies are subject
to change without notice and could affect our ability to deliver our solutions. In addition, from time to time, we may face claims
from third parties asserting ownership of, or demanding release of, the open-source software or derivative works that we developed using
such software (which could include our proprietary source code), or otherwise seeking to enforce the terms of the applicable open-source
license. These claims could result in litigation that could be costly to defend, have a negative effect on our operating results and financial
condition or require us to devote additional research and development resources to change our existing or future solutions. Responding
to any infringement or noncompliance claim by an open-source vendor, regardless of its validity, discovering certain open-source software
code in our products, or a finding that we have breached the terms of an open-source software license, could harm our business, results
of operations and financial condition. In each case, we would be required to either seek licenses to software or services from other parties
and redesign our products to function with such other parties’ software or services or develop these components internally, which
would result in increased costs and could result in delays to product launches. Furthermore, we might be forced to limit the features
available in our current or future solutions.

 Government Regulation 

 The
laboratory testing and healthcare industry and the practice of medicine are extensively regulated at both the state and federal levels,
and additionally, the practice of medicine is similarly extensively regulated by the various states. our ability to operate profitably
will depend in part upon its ability, and that of its vendor partners, to maintain all necessary licenses and to operate in compliance
with applicable laws and rules. Those laws and rules continue to evolve, and therefore we devote significant resources to monitoring
relevant developments in FDA, CLIA, healthcare and medical practice regulation. Those laws and rules include, but are not limited to,
ones that govern the regulation of clinical laboratories in general and the regulation of laboratory-developed tests ("LDTs”)
in particular. As discussed below, legislation has been introduced in Congress that would substantially alter federal regulation of diagnostic
tests, including LDTs. As the applicable laws and rules change, we are likely to make conforming modifications
in our business processes from time to time. In many jurisdictions where we operate, neither our current nor our anticipated business
model has been the subject of judicial or administrative interpretation. We cannot be assured that a review of our business by courts
or regulatory authorities will not result in determinations that could adversely affect our operations or that the laboratory and healthcare
regulatory environment will not change in a way that restricts our operations. 

 22 

 State and Federal Regulatory Issues 

 Clinical Laboratory Improvement Amendments
of 1988 and State Regulation 

 Clinical
laboratories are required to hold certain federal and state licenses, certifications and permits to conduct our business. As to federal
certifications, in 1988, Congress passed the Clinical Laboratory Improvement Amendments of 1988, or CLIA, establishing more rigorous
quality standards for all commercial laboratories that perform testing on human specimens for the purpose of providing information for
the diagnosis, prevention, or treatment of disease or the assessment of the health of human beings. CLIA requires such laboratories to
be certified by the federal government and mandates compliance with various operational, personnel, facilities administration, validation,
quality and proficiency testing requirements intended to ensure the accuracy, reliability and timeliness of patient test results. CLIA
certification is also a prerequisite to be eligible to bill state and federal healthcare programs, as well as many commercial third-party
payers, for laboratory testing services.

 Laboratories
must comply with all applicable CLIA requirements. If a clinical laboratory is found not to comply with CLIA standards ,
the government may impose sanctions, limit or revoke the laboratory’s CLIA certificate (and prohibit the owner, operator or laboratory
director from owning, operating, or directing a laboratory for two years following license revocation), subject the laboratory to a directed
plan of correction, on-site monitoring, civil monetary penalties, civil actions for injunctive relief, criminal penalties, or suspension
or exclusion from the Medicare and Medicaid programs. 

 CLIA
provides that a state may adopt laboratory licensure requirements and regulations that are more stringent than those under federal law
and requires compliance with such laws and regulations. New York State in particular, has implemented its own more stringent laboratory
regulatory requirements. State laws may require the laboratory to obtain state licensure and/ or laboratory personnel to meet certain
qualifications, specify certain quality control procedures or facility requirements, or prescribe record maintenance requirements. Moreover,
several states impose the same or similar state requirements on out-of-state laboratory testing specimens collected or received from,
or test results reported back to, residents within that state. Therefore, the laboratory is required to meet certain laboratory licensing
requirements for those states in which we offer services or from which we accept specimens and that have adopted regulations beyond CLIA.
For more information on state licensing requirements, see "— California Laboratory Licensing,” "— New York
Laboratory Licensing” and "— Other State Laboratory Licensing Laws.”

 The laboratory running the
test has also been accredited by the College of American Pathologists, or CAP, which means that it has been certified as following CAP
standards and guidelines in operating the laboratory facility and in performing tests that ensure the quality of the test results. CAP
is a deemed accrediting body for CMS, meaning that successful inspection by CAP satisfies a laboratory’s CLIA requirements, and
results in the issuance of a Certificate of Accreditation by CMS. 

 California Laboratory Licensing 

 In
addition to federal certification requirements for laboratories under CLIA, the laboratory is required under California law to maintai n
a California state license and comply with California state laboratory laws and regulations. Similar to the federal CLIA regulations,
the California state laboratory laws and regulations establish standards for the operation of a clinical laboratory and performance of
test services, including the education and experience requirements of the laboratory director and personnel (including requirements for
documentation of competency), equipment validations, and quality Management practices. All testing personnel must maintain a California
state license or be supervised by licensed personnel.

 Clinical laboratories are subject to both routine
and complaint-initiated on-site inspections by the state. If a clinical laboratory is found to be out of compliance with California laboratory
standards, the California Department of Public Health, or CDPH , may suspend, restrict
or revoke the California state laboratory license to operate the clinical laboratory (and exclude persons or entities from owning, operating,
or directing a laboratory for two years following license revocation), assess civil money penalties, and/or impose specific corrective
action plans, among other sanctions. Clinical laboratories must also provide notice to CDPH of any changes in the ownership, directorship,
name or location of the laboratory. Failure to provide such notification may result in revocation of the state license and sanctions under
the CLIA program. Any revocation of a CLIA certificate or exclusion from participation in Medicare or Medicaid programs may result in
suspension of the California state laboratory license. 

 23 

 New York Laboratory Licensing 

 We
currently do not conduct tests on specimens originating from New York State. In order to test specimens originating from, and return results
to New York State, a clinical laboratory is required to obtain a New York state laboratory permit and comply with New York state laboratory
laws and regulations. The New York state laboratory laws, regulations and rules are equal to or more stringent than the CLIA regulations
and establish standards for the operation of a clinical laboratory and performance of test services, including education and experience
requirements of a laboratory director and personnel, physical requirements of a laboratory facility, equipment validations, and
quality Management practices. The laboratory director(s) must maintain a Certificate of Qualification issued by the New York State Department
of Health, or NYS DOH, in the permitted test categories.

 A clinical laboratory conducting tests on specimens
originating in New York is subject to proficiency testing and on-site survey inspections conducted by the Clinical Laboratory Evaluation
Program, or CLEP, under the NYS DOH. If a laboratory is found to be out of compliance with New York’s CLEP standards, the NYS DOH,
may suspend, limit, revoke or annul the New York laboratory permit, censure the holder of the license or assess civil money penalties.
Statutory or regulatory noncompliance may result in a laboratory’s operator, owners and/or laboratory director being found guilty
of a misdemeanor under New York law. Clinical laboratories must also provide notice to CLEP of any changes in ownership, directorship,
name or location of the laboratory. Failure to provide such notification may result in revocation of the state license and sanctions under
the CLIA program. Any revocation of a CLIA certificate or exclusion from participation in the Medicare or Medicaid programs may result
in suspension of the New York laboratory permit. 

 The NYS DOH also must approve
each LDT before that test is offered to patients located in New York. 

 Other State Laboratory Licensing Laws 

 In
addition to New York and California, certain other states require licensing
of out-of-state laboratories under certain circumstances. We have obtained licenses in the states that we believe require us to do so
and believe we are in compliance with applicable state laboratory licensing laws, including Maryland and Pennsylvania. 

 Potential 
sanctions for violation of state statutes and regulations can include significant monetary fines, the rejection of license applications,
the suspension or loss of various licenses, certificates and authorizations, and in some cases criminal penalties, which could harm our
business. CLIA does not preempt state laws that have established laboratory quality standards that are more stringent than federal law.

 Laboratory-Developed Tests 

 The FDA generally considers a laboratory-developed
test, or LDT, to be a test that is developed, validated, used and performed within a single laboratory.

 The FDA has historically taken the position
that it has the authority to regulate LDTs as in vitro diagnostic, or IVD medical devices under the Federal Food, Drug and Cosmetic Act,
or FDC Act, but it has generally exercised enforcement discretion with regard to LDTs. This means that even though the FDA believes it
can impose regulatory requirements on LDTs, such as requirements to obtain premarket approval, de novo authorization, or 510(k) clearance
of LDTs, it has generally chosen not to enforce those requirements to date. However, there have been situations in which FDA, because
of safety, public health, or other concerns, has required companies offering LDTs to comply with FDA regulations applicable to other IVDs,
including the requirement for premarket review and authorization.

 Separately, the Centers for Medicare and Medicaid
Services, or CMS, oversees clinical laboratory operations through the CLIA program.

 The regulatory environment for LDTs has changed
over time. For example, in 2020, the Department of Health and Human Services, or HHS, directed the FDA to stop regulating LDTs, but in
2021, HHS reversed its policy. Thereafter, the FDA resumed requiring submission of emergency use authorization, or EUA, requests, for
COVID-19 LDTs, but has not indicated an intent to change its policy of enforcement discretion with respect to other, non-COVID, LDTs.

 24 

 Various bills have been
introduced in Congress seeking to substantially change the regulation of both LDTs and IVDs: 

 The VALID Act 

 In March 2020, the Verifying
Accurate Leading-edge IVCT Development, or VALID, Act was introduced in the Senate, and proposed a common regulatory framework
for in vitro clinical tests, or IVCTs, which would comprise both IVDs and LDTs, and would require premarket approval for some tests currently
offered as LDTs. The VALID Act was reintroduced in
June 2021 and would similarly clarify and enhance the FDA’s authority to regulate LDTs. The VALID Act was included in the
FDA Safety and Landmark Advancements, or FDASLA, legislation, which was favorably voted upon by the Senate Health, Education, Labor and
Pensions (HELP) Committee in June 2022. The FDASLA will now be considered by the full Senate. In May 2022, the House Energy and Commerce
Committee approved a version of the FDASLA that does not include the VALID Act, and which will now be considered by the full House. If
the Senate and the House pass their respective versions of the FDASLA, a Senate-House conference committee will be convened to reconcile
the differences in the legislation, including any differences relating to the VALID Act.

 If enacted, VALID will foreseeably have a significant
impact on the clinical laboratory sector, and many LDTs will be required to undergo FDA premarket review and authorization at some point.
The particular impact on our LDTs is difficult to predict at this time. Depending on the final version of the legislation, some tests
already on the market as of the date of enactment may be "grandfathered” and may not require premarket authorization, at least
initially. Other LDTs may not be required to obtain premarket authorization at all. Additionally, the FDA will need to undertake rulemaking
or develop guidance to implement the new law, a process that would likely take months or years. It is therefore not possible to predict
the specific impact of VALID on our operations. If premarket authorization is required, it could lead to a substantial increase in the
time and cost to bring the tests to market or require significant resources to obtain FDA authorization to allow continued marketing of
tests. VALID may also result in ongoing FDA regulatory obligations even for tests that do not need to undergo FDA review.

 The VITAL Act 

 In March 2020, the Verified
Innovative Testing in American Laboratories, or VITAL, Act was introduced in the Senate, and would expressly shift the regulation
of LDTs from the FDA to CMS. The VITAL Act was reintroduced in May 2021. Unlike the VALID Act, the VITAL Act has not been referred to
the HELP Committee and has not been incorporated into FDASLA, making its prospects of enactment in this session of Congress unlikely.

 In addition to potential legislation affecting
LDTs, the FDA or the Federal Trade Commission, or FTC, as well as state consumer protection agencies and competitors, regulate the materials
and methods used in the promotion of LDTs, including with respect to the product claims in promotional materials. Enforcement actions
by the FDA, FTC and/or state consumer protection agencies for objectionable claims may include, among others, injunctions, civil penalties,
and equitable monetary relief.

 Neither the VALID Act nor the VITAL Act has been
enacted into law as of the date of this Annual Report on Form 10-K. Although, as mentioned above, the VALID Act was favorably voted upon
in June 2022 by the Senate Health, Education, Labor and Pensions Committee as part of the FDA Safety and Landmark Advancements bill, it
was not included in the version of that legislation that was enacted by Congress and signed into law. Congress may, through the enactment
of other legislation during the current session of Congress or the subsequent Congress, enact VALID or establish new regulatory requirements
for LDTs through other legislation.

 Regulation by the U.S. Food and Drug Administration
 
 Should the FDA decide not to exercise enforcement
discretion for LDTs, LDTs would be subject to extensive regulation as medical devices under 
the FDC Act and its implementing regulations, which govern, among other things, medical device development, testing, labeling, storage,
premarket clearance or approval, advertising and promotion and product sales and distribution. To be commercially distributed in the United
States, medical devices, including collection devices used to collect samples for testing, and certain types of software must receive
from the FDA prior to marketing, unless subject to an exemption, clearance of a premarket notification, or 510(k), premarket approval,
or a PMA, or a de novo authorization.

 25 

 In vitro diagnostics, or IVDs, are a type of
medical device that can be used in the diagnosis or detection of diseases or conditions, including assessment of state of health, through
collection, preparation and examination of specimens from the human body. IVDs can be used to detect the presence of certain chemicals,
genetic information or other biomarkers related to health or disease. IVDs include tests for disease prediction, prognosis, diagnosis,
and screening.

 The FDC Act classifies medical devices into
one of three categories based on the risks associated with the device and the level of control necessary to provide reasonable assurance
of safety and effectiveness. Class I devices are deemed to be low risk and are subject to the fewest regulatory controls. Many Class I
devices are exempt from FDA premarket review requirements. Class II devices, including some software products to the extent that they
qualify as a device, are deemed to be moderate risk, and generally require clearance
through the premarket notification , or 510(k) clearance, process. Class
III devices are generally the highest risk devices and are subject to the highest level of regulatory control to provide reasonable assurance
of the device's safety and effectiveness. Class III devices typically require a
PMA by the FDA before they are marketed. A clinical trial is almost always required to support a PMA application or de novo authorization
and is sometimes required for 510(k) clearance. All clinical studies of investigational devices must be 
conducted in compliance with any applicable FDA and Institutional Review Board requirements. Devices that are exempt from FDA premarket
review requirements must nonetheless comply with post-market general controls as described below, unless the FDA has chosen otherwise.

 510(k) clearance pathway. To obtain 510(k)
clearance, a manufacturer must submit a premarket notification demonstrating to the FDA’s satisfaction that the proposed device
is substantially equivalent to a previously 510(k)-cleared device or to a device that was in commercial distribution before May 28, 1976
for which the FDA has not called for submission of a PMA application. The previously cleared device is known as a predicate .
The FDA’s 510(k) clearance pathway usually takes from three to 12 months from submission, but it can take longer, particularly for
a novel type of product. In addition, the COVID-19 pandemic has resulted in significant workload increases within the Center for Devices
and Radiological Health that could affect 510(k) review timelines.

 PMA pathway. The PMA pathway requires
proof of the safety and effectiveness of the device to the FDA’s satisfaction. The PMA pathway is costly, lengthy, and uncertain.
A PMA application must provide extensive preclinical and clinical trial data as well as information about the device and its components
regarding, among other things, device design, manufacturing, and labeling. As part of its PMA review process, the FDA will typically inspect
the manufacturer’s facilities for compliance with QSR requirements, which impose extensive testing, control, documentation, and
other quality assurance procedures. The PMA review process typically takes one to three years from submission but can take longer, including,
as noted above, due to delays resulting from the COVID-19 pandemic.

 De novo pathway. If no predicate device
can be identified, a device is automatically classified as Class III, requiring a PMA application. However, the FDA can reclassify, either
on its own initiative or in response to a request for de novo classification, for a device for which there was no predicate device if
the device is low- or moderate-risk. If the device is reclassified as Class II, the FDA will identify special controls that the manufacturer
must implement, which may include labeling, performance standards, or other requirements. Subsequent applicants can rely upon the de novo
product as a predicate for a 510(k) clearance, unless the FDA exempts subsequent devices from the need for a 510(k). The de novo route
is intended to be less burdensome than the PMA process. In October 2021, the FDA issued final regulations codifying FDA’s expectations
for de novo requests, which went into effect in January 2022. In October 2021, the FDA also issued updated and final guidance on the de
novo request and classification process, for the purpose of providing clarity and transparency regarding the de novo classification process.
The de novo route has historically been used for many IVD products.

 Post-market general controls. After a
device, including a device exempt from FDA premarket review, is placed on the market, numerous regulatory requirements apply. These include:
the QSR, labeling regulations, registration and listing, the Medical Device Reporting regulation (which requires that manufacturers report
to the FDA if their device may have caused or contributed to a death or serious injury or malfunctioned in a way that would likely cause
or contribute to a death or serious injury if it were to recur), and the Reports of Corrections and Removals 
regulation (which requires manufacturers to report to the FDA corrective actions made to products in the field, or removal of products
once in the field if such actions were initiated to reduce a risk to health posed by the device or to remedy a violation of the FDC Act).
Depending on the severity of the legal violation that led to correction or removal, the FDA may classify the manufacturer’s action
as a recall.

 26 

 The FDA enforces compliance with its requirements
through inspection and market surveillance. If the FDA finds a violation, it can institute a wide variety of actions, ranging from an
untitled or public warning letter to enforcement actions such as fines, injunctions, and civil penalties; recall or seizure of products;
operating restrictions, partial suspension or total shutdown of production; refusing requests for 510(k) clearance or PMA approval of
new products; withdrawal of PMAs already granted; and criminal prosecution. 

 Corporate Practice of Medicine; Fee-Splitting 

 We contract with a healthcare telemedicine company
to deliver services to our patients. This contractual relationship is subject to various state laws, including those of New York, Texas
and California, that prohibit fee-splitting or the practice of medicine by lay entities or persons and are intended to prevent unlicensed
persons from interfering with or influencing the physician’s professional judgment. In addition, various state laws also generally
prohibit the sharing of professional services income with nonprofessional or business interests. Activities other than those directly
related to the delivery of healthcare may be considered an element of the practice of medicine in many states. Under the corporate practice
of medicine restrictions of certain states, decisions and activities such as scheduling, contracting, setting rates and the hiring and
management of non-clinical personnel may implicate the restrictions on the corporate practice of medicine.

 State corporate practice of medicine and fee-splitting
laws vary from state to state and are not always consistent among states. In addition, these requirements are subject to broad powers
of interpretation and enforcement by state regulators. Some of these requirements may apply to any telemedicine company we contract with.
Failure to comply with regulations could lead to adverse judicial or administrative action against us and/or the telemedicine providers
we work with, civil or criminal penalties, receipt of cease-and-desist orders from state regulators, loss of provider licenses, the need
to make changes to the terms of engagement with any telemedicine company we contract with that interfere with our business and other materially
adverse consequences.

 Federal and State Fraud and Abuse Laws 

 Healthcare Laws Generally 

 The federal Health Insurance Portability and
Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act, or HITECH, and their
implementing regulations, which is collectively referred to as HIPAA, established several separate criminal penalties for making 
false or fraudulent claims to insurance companies and other non-governmental payors of healthcare services. Under HIPAA, these two additional
federal crimes are: "Healthcare Fraud” and "False Statements Relating to Healthcare Matters.” The Healthcare Fraud
statute prohibits knowingly and recklessly executing a scheme or artifice to defraud any healthcare benefit program, including private
payors. A violation of this statute is a felony and may result in fines, imprisonment or exclusion from government-sponsored programs.
The False Statements Relating to Healthcare Matters statute prohibits knowingly and willfully falsifying, concealing or covering up a
material fact by any trick, scheme or device or making any materially false, fictitious or fraudulent statement in connection with the
delivery of or payment for healthcare benefits, items or services. A violation of this statute is a felony and may result in fines or
imprisonment. This statute could be used by the government to assert criminal liability if a healthcare provider knowingly fails to refund
an overpayment. These provisions are intended to punish some of the same conduct in the submission of claims to private payors as the
federal False Claims Act covers in connection with governmental health programs.

 27 

 In addition, the Civil Monetary Penalties Law
imposes civil administrative sanctions for, among other violations, inappropriate billing of services to federally funded healthcare programs
and employing or contracting with individuals or entities who are excluded from participation in federally funded healthcare programs.
Moreover, a person who offers or transfers to a Medicare or Medicaid beneficiary any remuneration, including waivers of co-payments and
deductible amounts (or any part thereof), that the person knows or should know is likely to influence the beneficiary’s selection
of a particular provider, practitioner or supplier of Medicare or Medicaid payable items or services may be liable for civil monetary
penalties of up to $10,000 for each wrongful act. Moreover, in certain cases, providers who routinely waive copayments and deductibles
for Medicare and Medicaid beneficiaries can also be held liable under the Anti-Kickback Statute and civil False Claims Act, which can
impose additional penalties associated with the wrongful act. One of the statutory exceptions to the prohibition is non-routine, unadvertised
waivers of copayments or deductible amounts based on individualized determinations of financial need or exhaustion of reasonable collection
efforts. The OIG emphasizes, however, that this exception should only be used occasionally to address special financial needs of a particular
patient. Although this prohibition applies only to federal healthcare program beneficiaries, the routine waivers of copayments and deductibles
offered to patients covered by commercial payers may implicate applicable state laws related to, among other things, unlawful schemes
to defraud, excessive fees for services, tortious interference with patient contracts and statutory or common law fraud.

 Federal Stark Law 

 We are subject to the federal self-referral
prohibitions, commonly known as the Stark Law. Where applicable, this law prohibits a physician from referring Medicare patients to an
entity providing "designated health services” if the physician or a member of such physician’s immediate family has a
"financial relationship” with the entity, unless an exception applies. The penalties for violating the Stark Law include the
denial of payment for services ordered in violation of the statute, mandatory refunds of any sums paid for such services, civil penalties
of up to $15,000 for each violation and twice the dollar value of each such service and possible exclusion from future participation in
the federally-funded healthcare programs. A person who engages in a scheme to circumvent the Stark Law’s prohibitions may be fined
up to $100,000 for each applicable arrangement or scheme. The Stark Law is a strict liability statute, which means proof of specific intent
to violate the law is not required. In addition, the government and some courts have taken the position that claims presented in violation
of the various statutes, including the Stark Law can be considered a violation of the federal False Claims Act (described below) based
on the contention that a provider impliedly certifies compliance with all applicable laws, regulations and other rules when submitting
claims for reimbursement. A determination of liability under the Stark Law could have a material adverse effect on our business, financial
condition and results of operations. 

 Federal Anti-Kickback Statute 

 We are also subject to the federal Anti-Kickback
Statute. The Anti-Kickback Statute is broadly worded and prohibits the knowing and willful offer, payment, solicitation or receipt of
any form of remuneration in return for, or to induce, (i) the referral of a person covered by Medicare, Medicaid or other governmental
programs, (ii) the furnishing or arranging for the furnishing of items or services reimbursable under Medicare, Medicaid or other
governmental programs or (iii) the purchasing, leasing or ordering or arranging or recommending purchasing, leasing or ordering of
any item or service reimbursable under Medicare, Medicaid or other governmental programs. Certain federal courts have held that the Anti-Kickback
Statute can be violated if "one purpose” of a payment is to induce referrals. In addition, a person or entity does not need
to have actual knowledge of this statute or specific intent to violate it to have committed a violation, making it easier for the government
to prove that a defendant had the requisite state of mind or "scienter” required for a violation. Moreover, the government
may assert that a claim including items or services resulting from a violation of the Anti-Kickback Statute constitutes a false or fraudulent
claim for purposes of the False Claims Act, as discussed below. Violations of the Anti-Kickback Statute can result in exclusion from Medicare,
Medicaid or other governmental programs as well as civil and criminal penalties, including fines of $50,000 per violation and three times
the amount of the unlawful remuneration. Imposition of any of these remedies could have a material adverse effect on our business, financial
condition and results of operations. In addition to a few statutory exceptions, the U.S. Department of Health and Human Services Office
of Inspector General, or OIG, has published safe-harbor regulations that outline categories of activities that are deemed protected from
prosecution under the Anti-Kickback Statute provided all applicable criteria are met. The failure of a financial relationship to meet
all of the applicable safe harbor criteria does not necessarily mean that the particular arrangement violates the Anti-Kickback Statute.
However, conduct and business arrangements that do not fully satisfy each applicable safe harbor may result in increased scrutiny by government
enforcement authorities, such as the OIG.

 28 

 False Claims Act 

 Both federal and state government agencies have
continued civil and criminal enforcement efforts as part of numerous ongoing investigations of healthcare companies and their executives
and managers. Although there are a number of civil and criminal statutes that can be applied to healthcare providers, a significant number
of these investigations involve the federal False Claims Act. These investigations can be initiated not only by the government but also
by a private party asserting direct knowledge of fraud. These "qui tam” whistleblower lawsuits may be initiated against any
person or entity alleging such person or entity has knowingly or recklessly presented, or caused to be presented, a false or fraudulent
request for payment from the federal government or has made a false statement or used a false record to get a claim approved .
In addition, the improper retention of an overpayment for 60 days or more is also a basis for a False Claim Act action, even if the
claim was originally submitted appropriately. Penalties for False Claims Act violations include fines ranging from $5,500 to $11,000 for
each false claim, plus up to three times the amount of damages sustained by the federal government. A False Claims Act violation may provide
the basis for exclusion from the federally-funded healthcare programs. In addition, some states have adopted similar fraud, whistleblower
and false claims provisions.

 State Fraud and Abuse Laws 

 Several
states in which we operate have also adopted similar fraud and abuse laws as described above. The scope of these laws and the interpretations
of them vary from state to state and are enforced by state courts and regulatory authorities, each with broad discretion. Some state fraud
and abuse laws apply to items or services reimbursed by any third-party payor, including commercial insurers, not just those reimbursed
by a federally-funded healthcare program. A determination of liability under such state fraud and abuse laws could result in fines and
penalties and restrictions on our ability to operate in these jurisdictions.

 State and Federal Health Information Privacy and Security Laws 

 There are numerous U.S. federal and state laws
and regulations related to the privacy and security of personally identifiable information, or PII, including health information. In particular,
HIPAA establishes privacy and security standards that limit the use and disclosure of protected health information, or PHI, and require
the implementation of administrative, physical, and technical safeguards to ensure the confidentiality, integrity and availability of
individually identifiable health information in electronic form. Since the effective date of the HIPAA Omnibus Final Rule on September 23,
2013, HIPAA’s requirements are also directly applicable to the independent contractors, agents and other "business associates”
of covered entities that create, receive, maintain or transmit PHI in connection with providing services to covered entities. Although
Cardio is a covered entity under HIPAA, Cardio is also a business associate of other covered entities when Cardio is working on behalf
of our affiliated medical groups.

 Violations of HIPAA may result in civil and
criminal penalties. The civil penalties range from $100 to $50,000 per violation, with a cap of $1.5 million per year for violations
of the same standard during the same calendar year. However, a single breach incident can result in violations of multiple standards.
Cardio must also comply with HIPAA’s breach notification rule. Under the breach notification rule, covered entities must notify
affected individuals without unreasonable delay in the case of a breach of unsecured PHI, which may compromise the privacy, security or
integrity of the PHI. In addition, notification must be provided to the HHS and the local media in cases where a breach affects more than
500 individuals. Breaches affecting fewer than 500 individuals must be reported to HHS on an annual basis. The regulations also require
business associates of covered entities to notify the covered entity of breaches by the business associate.

 State attorneys general also have the right
to prosecute HIPAA violations committed against residents of their states. While HIPAA does not create a private right of action that
would allow individuals to sue in civil court for a HIPAA violation, its standards have been used as the basis for the duty of care in
state civil suits, such as those for negligence or recklessness in misusing personal information. In addition, HIPAA mandates that HHS
conduct periodic compliance audits of HIPAA covered entities and their business associates for compliance. It also tasks HHS with establishing
a methodology whereby harmed individuals who were the victims of breaches of unsecured PHI may receive a percentage of the Civil Monetary
Penalty fine paid by the violator. In light of the HIPAA Omnibus Final Rule, recent enforcement activity, and statements from HHS, we
expect increased federal and state HIPAA privacy and security enforcement efforts.

 29 

 HIPAA also required HHS to adopt national standards
establishing electronic transaction standards that all healthcare providers must use when submitting or receiving certain healthcare transactions
electronically. On January 16, 2009, HHS released the final rule mandating that everyone covered by HIPAA must implement ICD-10 for
medical coding on October 1, 2013, which was subsequently extended to October 1, 2015 and is now in effect.

 Many states in which we operate and in which
our patients reside also have laws that protect the privacy and security of sensitive and personal information, including health information.
These laws may be similar to or even more protective than HIPAA and other federal privacy laws. For example, the laws of the State of
California, in which we operate, are more restrictive than HIPAA. Where state laws are more protective than HIPAA, we must comply with
the state laws we are subject to, in addition to HIPAA. In certain cases, it may be necessary to modify our planned operations and procedures
to comply with these more stringent state laws. Not only may some of these state laws impose fines and penalties upon violators, but also
some, unlike HIPAA, may afford private rights of action to individuals who believe their personal information has been misused. In addition,
state laws are changing rapidly, and there is discussion of a new federal privacy law or federal breach notification law, to which we
may be subject.

 In addition to HIPAA, state health information
privacy and state health information privacy laws, we may be subject to other state and federal privacy laws, including laws that prohibit
unfair privacy and security practices and deceptive statements about privacy and security and laws that place specific requirements on
certain types of activities, such as data security and texting.

 In recent years, there have been a number of
well-publicized data breaches involving the improper use and disclosure of PII and PHI. Many states have responded to these incidents
by enacting laws requiring holders of personal information to maintain safeguards and to take certain actions in response to a data breach,
such as providing prompt notification of the breach to affected individuals and state officials. In addition, under HIPAA and pursuant
to the related contracts that we enter into with our business associates, we must report breaches of unsecured PHI to our contractual
partners following discovery of the breach. Notification must also be made in certain circumstances to affected individuals, federal authorities
and others.

 State Privacy Laws 

 Various states have enacted laws governing the
privacy of personal information collected and used by businesses online. For example, California adopted the California Consumer Privacy
Act of 2018 ("CCPA”), which went into effect on January 1, 2020 and was recently amended by the California Privacy Rights Act
of 2020 which significantly modified the CCPA in ways that affect businesses. This law, in part, requires that companies make certain
disclosures to consumers via their privacy policies, or otherwise at the time the personal data is collected. We will have to determine
what personal data it is collecting from individuals and for what purposes, and to update its privacy policy every 12 months to make the
required disclosures, among other things.

 Employees and Human Capital Resources 

 As of March 27, 2023, we had seven
full-time employees and one part-time employee. Three of our employees hold Ph.D. or M.D. degrees. We also engage consultants from
time to time. None of our employees are represented by a labor union or covered under a collective bargaining agreement.

 Our human capital resources objectives include,
identifying, recruiting, retaining, incentivizing and integrating our existing and additional employees into our collaborative culture.
Our compensation program is designed to retain, motivate and attract highly qualified executives and talented employees and consultants.
We are committed to fostering a culture that supports diversity and an environment of mutual respect, equity and collaboration that helps
drive our business and our mission to become one of the leading medical technology companies for enabling improved prevention, early detection
and treatment of cardiovascular disease.

 30 

 Corporate Information 

 Mana Capital
Acquisition Corp. was formed on May 19, 2021 under the laws of the State of Delaware as a blank check company for the purpose of engaging
in a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination,
with one or more target businesses or entities. Legacy Cardio was formed in January 2017 as an Iowa limited liability company (Cardio
Diagnostics, LLC) and was subsequently incorporated as a Delaware C-Corp (Cardio Diagnostics, Inc.) on September 6, 2019. Upon completion
of the Business Combination on October 25, 2022, we changed our name to Cardio Diagnostics Holdings, Inc.

 Our corporate headquarters is located at 400
N. Aberdeen St., Suite 900, Chicago IL 60642. Our telephone number is (855) 226-9991 and our website address is cardiodiagnosticsinc.com.
The information contained on, or that can be accessed through, our website is not incorporated by reference in this Annual Report on Form
10-K and does not form a part of this Annual Report on Form 10-K. The reference to our website address does not constitute incorporation
by reference of the information contained at or available through our website, and you should not consider it to be a part of this registration
statement. 

 Emerging Growth Status 

 We are an “emerging growth company , ”
as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS
Act”), and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies
that are not emerging growth companies, including, but not limited to, not being required to comply with the auditor attestation requirements
of Section 404 of the Sarbanes-Oxley Act of 2002, as amended (the “Sarbanes-Oxley Act”), reduced disclosure obligations
regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding
advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

 Further, Section 102(b)(1) of the JOBS
Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies
(that is, those that have not had a registration statement under the Securities Act declared effective or do not have a class of securities
registered under the Securities Exchange Act of 1934, as amended the “Exchange Act”), are required to comply with the new
or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period
and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable.
We have elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different
application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time
private companies adopt the new or revised standard. This may make comparison of our financial statements with another public company
which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period
difficult or impossible because of the potential differences in accounting standards used. 

 We will remain an emerging growth company until
the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of the IPO, (b) in
which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated
filer, which means the market value of our Common Stock held by non-affiliates equaled or exceeded $700 million as of the
prior June 30, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities
during the prior three-year period. 

 Additionally, we are a “smaller reporting
company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced
disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller
reporting company until the last day of the fiscal year in which (1) the market value of our Common Stock held by non-affiliates
equaled or exceeded $250 million as of the end of the prior June 30th, or (2) our annual revenues equaled or exceeded $100 million
during such completed fiscal year and the market value of our Common Stock held by non-affiliates equaled or exceeded $700 million
as of the prior June 30th.

 31 

 Available Information 

 We are required to file Annual Reports on Form
10-K and Quarterly Reports on Form 10-Q with the SEC on a regular basis, and are required to disclose certain material events in a Current
Report on Form 8-K. The SEC maintains an Internet website that contains reports, proxy and information statements and other information
regarding issuers that file electronically with the SEC. The SEC’s Internet website is located at www.sec.gov. In addition, the
Company will provide copies of these documents without charge upon request from us in writing at 400 N. Aberdeen St., Suite 900, Chicago
IL 60642.
Cardio Diagnostics Holdings, Inc. 10-K

Item 1. Business
