What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-04-01 compared with 2023-03-31 · 788 added, 369 removed, 308 unchanged (79% of the section changed)

1 unchanged sentence

INDEX TO FINANCIAL STATEMENTS

Report Independent Public Accounting Firm (PCAOB ID 273 )

Report of Independent Registered

Public Accounting Firm (PCAOB ID 273 )

Consolidated Balance Sheets as of December 31, 2023 and 2022

Consolidated Statements of Operations for the Years Ended December 31, 2023 and 2022

Consolidated Statements of Changes in Stockholders Equity (Deficiency) for the Years Ended December 31, 2022 and 2021

Consolidated Statements of Changes in Stockholders Equity for the Years Ended December 31, 2023 and 2022

Consolidated Statements of Cash Flows for the Years Ended December 31, 2023 and 2022

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balance sheets of Cardio Diagnostics Holdings, Inc.

(the Company) as of December 31, 2022 and 2021, and the related consolidated statements

of operations, changes in stockholders’ equity, and cash flows for the years then ended, and the related notes (collectively referred

to as the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects,

the consolidated financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows

for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

(the “Company”) as of December 31, 2023 and 2022, and the related consolidated

statements of operations, changes in stockholders’ equity, and cash flows for the years ended December 31, 2023 and 2022, and the

related notes (collectively referred to as the consolidated financial statements).

In our opinion, the consolidated financial statements

present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2023 and 2022, and the

results of its operations and its cash flows for the years ended December 31, 2023 and 2022, in conformity with accounting principles

generally accepted in the United States of America.

Going Concern

The accompanying consolidated financial statements

have been prepared assuming that the Company will continue as a going concern.

As disclosed in Note 1 to the consolidated financial statements, the

Company has generated only nominal revenue in the past two years.

The Company had a net loss of $8,376,834 for the year ended December

31, 2023 and an accumulated deficit of $14,368,380 at December 31, 2023.

These factors, among others, raise substantial doubt about the

ability of the Company to continue as a going concern.

Management’s plans regarding these matters are disclosed in Note 1 to the

consolidated financial statements.

The consolidated financial statements do not include any adjustments that might result from the outcome

of this uncertainty.

Basis for Opinion

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a reasonable basis for our opinion.

/s/ Prager Metis CPA’s LLC

Metis CPA’s LLC

We have served as the Company’s auditor since

Hackensack, New Jersey

March 31, 2023

DIAGNOSTICS HOLDINGS, INC.

BALANCE SHEETS

April 1, 2024

CARDIO DIAGNOSTICS HOLDINGS,

CONSOLIDATED BALANCE SHEETS

Current assets

Deposit for acquisition

Accounts receivable

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Long-term assets

Property and equipment, net

Right of use assets, net

Intangible assets, net

Liabilities and Shareholders’ Equity

Patent and trademark costs, net

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities

Accounts payable and accrued expenses

Lease liability – current

Finance agreement payable

Total current liabilities

Long-term liabilities

Lease liability

Total liabilities

Stockholder’s equity

Preferred stock, $ 0.00001 par value;

Stockholders’ equity

Preferred stock,

$ .00001 par value;

authorized – 100,000,000 shares;

0 shares issued and outstanding as of December 31, 2022 and 2021, respectively

0 shares issued and outstanding as of December 31, 2023 and 2022,

Common stock, $ .00001 par value;

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Total stockholders’ equity

Total liabilities and stockholders’ equity

See accompanying notes to the consolidated financial statements.

DIAGNOSTICS HOLDINGS, INC.

STATEMENTS OF OPERATIONS

ENDED DECEMBER 31,

Total liabilities and

stockholders’ equity

See accompanying notes to the consolidated

financial statements.

CARDIO DIAGNOSTICS HOLDINGS,

CONSOLIDATED STATEMENTS

OF OPERATIONS

YEARS ENDED DECEMBER 31,

Operating expenses

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( 7,242,459 )

Other expenses

( 4,548,451 )

Other income (expenses)

Change in fair value of derivative liability

Interest income

Interest expense

( 6,735,013 )

Gain on extinguishment of debt

Acquisition related expense

Loss fom operations before provision for income taxes

Total other income (expenses)

( 1,134,375 )

Loss before provision for income taxes

( 8,376,834 )

( 4,660,985 )

Provision for income taxes

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Net loss per common share

Weighted average common shares outstanding - basic and fully diluted

See accompanying notes to the consolidated financial statements.

DIAGNOSTICS HOLDINGS, INC.

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

ENDED DECEMBER 31, 2022 AND 2021

Balances, December 31, 2020

$ ( 710,113 )

Common stock issued for cash

Placement agent fee

Stock-based compensation

SAFE agreements converted to common stock

Adjustment to patent deposits contributed by shareholders

Weighted average common shares

outstanding – basic and fully diluted

See accompanying notes to

the consolidated financial statements.

CARDIO DIAGNOSTICS HOLDINGS,

CONSOLIDATED STATEMENTS

OF CHANGES IN STOCKHOLDERS’ EQUITY

YEARS ENDED DECEMBER 31,

2023 AND 2022

Balances, December 31, 2021

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( 5,991,546 )

See accompanying notes to the consolidated financial statements.

Warrants converted to common stock

Placement agent fee

Restricted stock awards vested

Notes payable converted to common stock

Compensation for vested stock options

Adjustment to liabilities assumed in merger with Mana

( 8,376,834 )

Balances, December 31, 2023

$ ( 14,368,380 )

See accompanying notes to the consolidated

financial statements.

CARDIO DIAGNOSTICS HOLDINGS, INC.

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Stock-based compensation expense

Adjustment to patent deposits contributed by shareholders

Non-cash interest expense

Change in fair value of derivative liability

( 5,406,220 )

Gain on extinguishment of debt

Changes in operating assets and liabilities:

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Accounts payable and accrued expenses

Lease liability

NET CASH USED IN OPERATING ACTIVITIES

( 5,672,175 )

( 5,090,968 )

CASH FLOWS FROM INVESTING ACTIVITIES:

Deposit for acquisition

Purchases of property and equipment

Cash acquired from acquisition

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Payments for notes receivable

Patent costs incurred

Payments for lease

Patent and trademark costs incurred

NET CASH USED IN INVESTING ACTIVITIES

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Proceeds from sale of common stock

Proceeds from stock to be issued

Proceeds from convertible notes payable

Proceeds from exercise of warrants

Payments of finance agreement

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NET CASH PROVIDED BY FINANCING ACTIVITIES

NET INCREASE IN CASH

NET INCREASE (DECREASE) IN CASH

( 2,833,998 )

CASH – BEGINNING OF YEAR

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Liabilities assumed in acquisition

Debt discount related to derivative liability

Notes payable converted to common stock

Adjustment to liabilities assumed in acquisition

Financing agreement entered into for prepaid insurance

Common stock issued for SAFE agreements

CARDIO DIAGNOSTICS HOLDINGS,

Notes to Consolidated

Right of use asset added for operating lease

See accompanying notes to the consolidated

financial statements.

Years Ended December 31,

2022 and 2021

CARDIO DIAGNOSTICS HOLDINGS, INC.

Notes to Consolidated Financial Statements

Years Ended December 31, 2023 and 2022

Note 1 – Organization and Basis of Presentation

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The Company was incorporated as Mana Capital Acquisition Corp.

under the laws of the state of Delaware on May 19, 2021

and Legacy Cardio was formed on January 16, 2017 as an Iowa limited liability company (Cardio Diagnostics, LLC) and was subsequently

incorporated as a Delaware C-Corp on September 6, 2019.

The Company was formed to develop and commercialize a patent-pending Artificial

Intelligence (“AI”)-driven DNA biomarker testing technology (“Core Technology”) for cardiovascular disease invented

at the University of Iowa by the Founders, with the goal of becoming one of the leading medical technology companies for enabling precision

prevention, early detection and treatment of cardiovascular disease.

The Company is transforming the approach to cardiovascular disease

from reactive to proactive.

The Core Technology is being incorporated into a series of products for major types of cardiovascular disease

and associated co-morbidities including coronary heart disease (CHD), stroke, heart failure and diabetes.

(“Mana”) under the laws of the state of Delaware

on May 19, 2021, and Legacy Cardio was formed on January 16, 2017 as an Iowa limited liability company (Cardio Diagnostics, LLC) and was

subsequently incorporated as a Delaware C-Corp on September 6, 2019.

The Company was formed to develop and commercialize a patent-pending

Artificial Intelligence (“AI”)-driven DNA biomarker testing technology (“Core Technology”) for cardiovascular

disease invented at the University of Iowa by the Founders, with the goal of becoming one of the leading medical technology companies

for enabling precision prevention, early detection and treatment of cardiovascular disease.

The Company is transforming the approach to

cardiovascular disease from reactive to proactive.

The Core Technology is being incorporated into a series of products for major types

of cardiovascular disease and associated co-morbidities including coronary heart disease (CHD), stroke, heart failure and diabetes.

Business Combination

On October 25, 2022, pursuant to a Merger Agreement,

Mana Capital Acquisition Corp.

(“Mana”), a special purpose acquisition company incorporated under the laws of the state of

Delaware merged with and into the Company, with the Company surviving the merger as a wholly-owned subsidiary of Mana Capital.

to the merger, Mana changed its name to Cardio Diagnostics Holdings Inc.

On May 27, 2022,

Mana, Mana Merger Sub, Inc.

(“Merger Sub”), a wholly-owned direct subsidiary of Mana, Meeshanthini Dogan, the Shareholders’

Representative, and Legacy Cardio entered into the Business Combination Agreement (the “Merger Agreement”).

October 25, 2022, pursuant to the Merger Agreement, Legacy Cardio merged with and into Merger Sub, with Legacy Cardio surviving as the

wholly-owned subsidiary of Mana.

Subsequent to the merger, Mana changed its name to Cardio Diagnostics Holdings, Inc.

Going Concern

The accompanying consolidated

financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction

of liabilities in the normal course of business.

The Company has generated only nominal revenue in the past two years.

Company had a net loss of $ 8,376,834 for the year ended December 31, 2023 and an accumulated deficit of $ 14,368,380

at December 31, 2023.

These factors, among others, raise substantial doubt about the ability of the Company to continue as a going

concern for a reasonable period of time.

The Company’s continuation as a going concern is dependent upon its

ability to obtain necessary equity financing and ultimately from generating revenues to continue operations.

expects that working capital requirements will continue to be funded through a combination of its existing funds and further

issuances of securities.

Working capital requirements are expected to increase in line with the growth of the business.

Existing working capital, further advances and debt instruments, and anticipated cash flow are expected to be adequate to fund

operations over the next twelve months.

The Company has no lines of credit or other bank financing arrangements.

issuances of equity or convertible debt securities will result in dilution to current stockholders.

Further, such securities might

have rights, preferences or privileges senior to common stock.

Additional financing may not be available upon acceptable terms, or

If adequate funds are not available or are not available on acceptable terms, the Company may not be able to take advantage

of prospective new business endeavors or opportunities, which could significantly and materially restrict business operations.

The consolidated financial statements

do not include any adjustments that might result from the outcome of this uncertainty relating to the recoverability and

classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company

be unable to continue as a going concern.

Note 2 – Merger Agreement and Reverse Recapitalization

in Note 1, on October 25, 2022, the Company and Mana entered into the Merger Agreement, which has been accounted for as a reverse recapitalization

in accordance with GAAP.

Pursuant to the Merger Agreement, the Company acquired cash of $ 4,021 and assumed liabilities of $ 928,500 from

The liabilities assumed of $928,500 are payable to two investment bankers and due on October 25, 2023.

discussed in Note 1, on October 25, 2022, the Company (formerly known as Mana) and Legacy Cardio entered into the Merger Agreement,

which has been accounted for as a reverse recapitalization in accordance with GAAP.

Pursuant to the Merger Agreement, the Company

acquired cash of $ 4,021

and assumed liabilities of $ 928,500

The liabilities assumed of $ 928,500

are payable to two investment bankers and due on October 25, 2023.

The assumed liabilities

decreased to $ 854,475 , after net of an early payment discount of $ 74,025 issued by one of the two investment bankers on March 22,

On March 27, 2023, the Company accepted the early payment discount and paid Ladenburg the net balance due and

payable of $ 419,475 .

On October 24, 2023, the Company paid the remaining post-merger liabilities balance of $ 435,000 to

common stock had a redemption right in connection with the business combination.

Mana’s stockholders exercised their right to redeem

6,465,452 shares of common stock, which constituted approximately 99.5 % of the shares with redemption rights, for cash at a redemption

price of approximately $ 10.10 per share, for an aggregate redemption amount of $ 65,310,892 .

In accounting for the reverse recapitalization,

the Company’s legacy issued and outstanding 1,976,749 common shares were reversed and the Mana common shares totaling 9,514,743

Mana’s stockholders exercised their right to

redeem 6,465,452

shares of common stock, which constituted approximately 99.5 %

of the shares with redemption rights, for cash at a redemption price of approximately $ 10.10

per share, for an aggregate redemption amount of $ 65,310,892 .

In accounting for the reverse recapitalization, the Company’s legacy issued and outstanding 1,976,749

shares of common stock were reversed and the Mana shares of common stock totaling 9,514,743

were recorded, as described in Note 10.

Transactions costs incurred in connection with the recapitalization totaled $ 1,535,035 and were

recorded as a reduction to additional paid in capital.

Transactions costs incurred in connection with the recapitalization totaled $ 1,535,035

and were recorded as a reduction to additional paid in capital.

As additional consideration for the transaction, Cardio

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The consolidated financial statements include the

accounts of the Company and its wholly-owned subsidiary Cardio Diagnostics, LLC.

All intercompany accounts and transactions

have been eliminated.

accounts of the Company and its wholly-owned subsidiary, Legacy Cardio.

All intercompany accounts and transactions have been

Use of Estimates in the Preparation of Financial

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a framework for measuring fair value and expands disclosure of fair value measurements.

The estimated fair value of certain financial

instruments, including cash and cash equivalents, accounts payable and accrued expenses are carried at historical cost basis, which approximates

their fair values because of the short-term nature of these instruments.

The carrying amounts of our short- and long-term credit obligations

approximate fair value because the effective yields on these obligations, which include contractual interest rates taken together with

other features such as concurrent issuances of warrants and/or embedded conversion options, are comparable to rates of returns for instruments

of similar credit risk.

The estimated fair value of certain

financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued expenses are carried

at historical cost basis, which approximates their fair values because of the short-term nature of these instruments.

amounts of our short- and long-term credit obligations approximate fair value because the effective yields on these obligations,

which include contractual interest rates taken together with other features such as concurrent issuances of warrants and/or embedded

conversion options, are comparable to rates of returns for instruments of similar credit risk.

ASC 820 defines fair value as the exchange

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are unobservable (for example cash flow modeling inputs based on assumptions)

The estimated fair value of the derivative

liability was calculated using the Black-Scholes option pricing model.

The Company uses Level 3 inputs to value its derivative liabilities.

The following table provides a reconciliation of the beginning and ending balances for the major classes of assets and liabilities measured

at fair value using significant unobservable inputs (Level 3) and reflects gains and losses for the years ended December 31, 2023 and

Schedule of fair value measurements

Balance of derivative liabilities – beginning of year

( 3,786,452 )

Change in fair value recognized in operations

( 5,406,220 )

Balance of derivative liabilities – end of

The following

table represents the Company’s derivative instruments that are measured at fair value on a recurring basis as of December 31, 2023,

for each fair value hierarchy level:

Schedule of fair value hierarchy level

December 31, 2023

Derivative Liabilities

Convertible Instruments

The Company evaluates and accounts for conversion

options embedded in convertible instruments in accordance with ASC 815, Derivatives and Hedging Activities.

Applicable GAAP requires companies to bifurcate

conversion options from their host instruments and account for them as free standing derivative financial instruments according to certain

The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument

are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies

both the embedded derivative instrument and the host contract is not re-measured at fair value under other GAAP with changes in fair value

reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered

a derivative instrument.

The Company accounts for convertible

instruments (when it has been determined that the embedded conversion options should not be bifurcated from their host

instruments) as follows:

The Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion

options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the

commitment date of the note transaction and the effective conversion price embedded in the note.

Debt discounts under these

arrangements are amortized over the term of the related debt to their stated date of redemption.

The Company accounts for the conversion of convertible

debt when a conversion option has been bifurcated using the general extinguishment standards.

The debt and equity linked derivatives are

removed at their carrying amounts and the shares issued are measured at their then-current fair value, with any difference recorded as

a gain or loss on extinguishment of the two separate accounting liabilities.

Revenue Recognition

The Company will host its product,

Epi+Gen CHD™ on InTeleLab’s Elicity platform (“the Lab”).

The Lab collects payments from patients upon completion of

eligibility screening.

Patients then send their samples to MOgene, a high complexity CLIA lab, which perform the biomarker assessments.

Upon receipt of the raw biomarker data from MOgene, the Company performs all quality control, analytical assessments and report generation

and shares test reports with the Elicity healthcare provider via the Elicity platform.

Revenue is recognized upon receipt of payments

from the Lab for each test at the end of each month.

The Company will account for revenue under (“ASU”)

2014-09, “Revenue from Contracts with Customers (Topic 606)”, using the modified retrospective method.

The modified retrospective

adoption used by the Company did not result in a material cumulative effect adjustment to the opening balance of accumulated deficit.

The Company offers its products, Epi+Gen CHD and

PrecisionCHD, via telemedicine providers, provider organizations such as concierge practices, longevity clinics, and risk-bearing

provider organizations, and employer organizations.

The Company is continuing to expand its markets and payment optionality, and

therefore, other organization types not listed below may be added, and from time-to-time, there may be additional payment

• Telemedicine

For telemedicine, the telemedicine provider

collects payments from patients upon completion of eligibility screening and test order.

Patients then send their samples to the lab

for biomarker assessments.

The Company performs all quality control, analytical assessments and report generation and shares test

reports with the ordering healthcare provider.

Revenue is recognized upon invoicing the telemedicine providers.

Telemedicine providers are invoiced at the end of each month for all tests completed since prior invoicing.

• Provider organizations

For provider organizations, the cost of each

test is negotiated prior to testing commencing.

Pricing is determined based largely on the provider organization type and testing

volume commitment.

Upon ordering a test, a patient’s sample is sent to the lab for biomarker assessments.

The Company performs

all quality control, analytical assessments and report generation and shares test reports with the ordering healthcare provider.

Revenue is recognized upon invoicing the provider organization.

The provider organization is invoiced the agreed upon pricing at the

end of each month for all samples accepted or tests completed since prior invoicing.

• Employer organizations

For employer organizations, the cost of each test is negotiated prior to testing

Pricing is determined based largely on testing volume commitment.

Patient samples are sent to the lab for biomarker

The Company performs all quality control, analytical assessments and report generation and shares test reports with the

ordering healthcare provider.

Revenue is recognized upon invoicing the employer organization.

The employer organization is

invoiced the agreed upon pricing once a heart disease fair is completed or all testing is completed.

The Company accounts for revenue under Accounting

Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers (Topic 606)”, using the modified retrospective

The modified retrospective adoption used by the Company did not result in a material cumulative effect adjustment to the opening

balance of accumulated deficit.

The Company determines the measurement of revenue

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Research and Development

Research and development costs are expensed as incurred.

Research and development costs charged to operations for the years ended December 31, 2022 and 2021 were $ 40,448 and $ 31,468 , respectively.

Research and development costs are expensed

Research and development costs charged to operations for the years ended December 31, 2023 and 2022 were $ 145,182 and $ 40,448 ,

respectively.

Advertising Costs

The Company expenses advertising costs as incurred.

The Company expenses advertising costs

Advertising costs of $ 158,514 and $ 92,700 were charged to operations for the years ended December 31, 2023 and 2022, respectively.

Cash and Cash Equivalents

Cash and cash equivalents are comprised of cash

and highly liquid investments with original maturities of 90 days or less at the date of purchase.

The Company does no t have any cash

equivalents as of December 31, 2022 and 2021.

Cash and cash equivalents are comprised of

cash and highly liquid investments with original maturities of 90 days or less at the date of purchase.

The Company does no t

have any cash equivalents as of December 31, 2023 and 2022.

Cash is maintained at a major financial institution.

Accounts held at U.S.

financial institutions

are insured by the FDIC up to $ 250,000 .

The Company is exposed to credit risk in the event of default by the financial institutions or

the issuers of these investments to the extent the amounts on deposit or invested are in excess of amounts that are insured.

The Company accounts for patents in accordance with

ASC 350-30, General Intangibles Other than Goodwill .

The Company capitalizes patent costs representing legal fees associated with

filing patent applications and amortize them on a straight-line basis.

The Company are in the process of evaluating its patents' estimated

useful life and will begin amortizing the patents when they are brought to the market or otherwise commercialized.

Long-Lived Assets

The Company assesses the valuation of components of

its property and equipment and other long-lived assets whenever events or circumstances dictate that the carrying value might not be recoverable.

The Company bases its evaluation on indicators such as the nature of the assets, the future economic benefit of the assets, any historical

or future profitability measurements and other external market conditions or factors that may be present.

If such factors indicate that

the carrying amount of an asset or asset group may not be recoverable, the Company determines whether an impairment has occurred by analyzing

an estimate of undiscounted future cash flows at the lowest level for which identifiable cash flows exist.

If the estimate of undiscounted

cash flows during the estimated useful life of the asset is less than the carrying value of the asset, the Company recognizes a loss for

the difference between the carrying value of the asset and its estimated fair value, generally measured by the present value of the estimated

financial institutions are insured by the FDIC up to $ 250,000 .

The Company is exposed to credit risk in the event of default by the financial institutions or the issuers of these investments to the

extent the amounts on deposit or invested are in excess of amounts that are insured.

Accounts Receivable

Accounts receivable is stated

at invoiced amount, net of an allowance for doubtful accounts and bear no interest.

An allowance for losses is established through

a provision for losses charged to expenses.

Receivables are charged against the allowance for losses when management believes collectability

The allowance (if any) is an amount that management believes will be adequate to absorb estimated losses on existing receivables,

based on evaluation of the collectability of the accounts and prior loss experience.

Property and Equipment

Property and equipment are stated at cost.

Maintenance and repairs are charged to expense when incurred.

When property and equipment are retired or otherwise disposed of, the related

cost and accumulated depreciation are removed from the respective accounts and any gain or loss is credited or charged to income.

for both financial reporting and income tax purposes is computed using combinations of the straight line and accelerated methods over

the estimated lives of the respective assets as follows:

Schedule of estimated lives

Office and computer

Furniture and fixtures

Intangible Assets

Intangible assets are acquired individually

or as part of a group of assets, and are initially recorded at cost.

The cost of a group of assets acquired in a transaction is allocated

to the individual assets based on their relative fair values.

Intangible assets are carried at cost less accumulated amortization and

any recorded impairment.

Intangible assets with finite useful lives are amortized using a straight-line method over the period of estimated

The estimated useful life of the Company’s intangible assets (Know-how license) is 5 years .

The Company evaluates intangible

assets for impairment whenever events or changes in circumstances indicate that the assets might be impaired.

Patent and Trademark Costs

The Company accounts for patents in accordance with ASC 350-30, the Company

accounts for patents in accordance with ASC 350-30, General Intangibles Other than Goodwill .

The Company capitalizes patent

costs representing legal fees associated with filing patent applications and amortize them on a straight-line basis.

The Company evaluates its patents’ estimated useful life and begins amortizing the patents when they are brought to

the market or otherwise commercialized.

of Long-Lived Assets

In accordance with ASC 360-10-35, the Company assesses the valuation of components

of its long-lived assets whenever events or circumstances dictate that the carrying value might not be recoverable.

The Company bases

its evaluation on indicators such as the nature of the assets, the future economic benefit of the assets, any historical or future profitability

measurements and other external market conditions or factors that may be present.

If such factors indicate that the carrying amount of

an asset or asset group may not be recoverable, the Company determines whether an impairment has occurred by analyzing an estimate of

undiscounted future cash flows at the lowest level for which identifiable cash flows exist.

If the estimate of undiscounted cash flows

during the estimated useful life of the asset is less than the carrying value of the asset, the Company recognizes a loss for the difference

between the carrying value of the asset and its estimated fair value, generally measured by the present value of the estimated cash flows.

The Company accounts for leases under ASC 842,

The Company determines if an arrangement is a lease or contains a lease at inception of the arrangement.

Operating lease liabilities are recognized based on the present value of the remaining lease payments, discounted using the discount rate

for the lease at the commencement date.

As the rate implicit in the lease is not readily determinable for the operating lease, the Company

generally uses an incremental borrowing rate based on information available at the commencement date to determine the present value of

future lease payments.

Operating lease right-of-use assets (“ROU assets”) represent the Company’s right to control the

use of an identified asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising

from the lease.

ROU assets are generally recognized based on the amount of the initial measurement of the lease liability.

Lease expense

is recognized on a straight-line basis over the lease term.

The Company elected to keep leases with an initial term of 12 months or less

off the balance sheet.

ROU assets are reviewed for impairment when

indicators of impairment are present.

ROU assets from operating and finance leases are subject to the impairment guidance in ASC 360,

Property, Plant, and Equipment, as ROU assets are long-lived nonfinancial assets.

ROU assets are tested for impairment individually or

as part of an asset group if the cash flows related to the ROU assets are not independent from the cash flows of other assets and liabilities.

An asset group is the unit of accounting for long-lived assets to be held and used, which represents the lowest level for which identifiable

cash flows are largely independent of the cash flows of other groups of assets and liabilities.

Stock-Based Compensation

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grant and recognition of compensation expense over the related service period for awards expected to vest.

The Company uses

the Black-Scholes option pricing model to estimate the fair value of its stock options and warrants.

The Black-Scholes option pricing

model requires the input of highly subjective assumptions including the expected stock price volatility of the Company’s common

stock, the risk free interest rate at the date of grant, the expected vesting term of the grant, expected dividends, and an assumption

related to forfeitures of such grants.

Changes in these subjective input assumptions can materially affect the fair value estimate

of the Company’s stock options and warrants.

The Company uses the Black-Scholes

option pricing model to estimate the fair value of its stock options and warrants.

The Black-Scholes option pricing model requires the

input of highly subjective assumptions including the expected stock price volatility of the Company’s common stock, the risk free

interest rate at the date of grant, the expected vesting term of the grant, expected dividends, and an assumption related to forfeitures

of such grants.

Changes in these subjective input assumptions can materially affect the fair value estimate of the Company’s stock

options and warrants.

The Company accounts for income taxes using the asset

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740, Income Taxes.

Under this method, deferred tax assets and liabilities

are determined based on differences between financial reporting and tax bases of assets and liabilities, and are measured using the enacted

tax rates and laws that are expected to be in effect when the differences are expected to reverse.

Under this method, deferred tax assets and liabilities are determined

based on differences between financial reporting and tax bases of assets and liabilities, and are measured using the enacted tax rates

and laws that are expected to be in effect when the differences are expected to reverse.

The Company applies the provisions of ASC Topic No.

740 for the financial statement recognition, measurement and disclosure of uncertain tax positions recognized in the Company’s financial

In accordance with this provision, tax positions must meet a more-likely-than-not recognition threshold and measurement

attribute for the financial statement recognition and measurement of a tax position.

In accordance with this provision, tax positions must meet a more-likely-than-not recognition threshold and measurement attribute

for the financial statement recognition and measurement of a tax position.

Recent Accounting Pronouncements

We have reviewed other recent accounting pronouncements

and concluded they are either not applicable to the business, or no material effect is expected on the condensed consolidated financial

statements as a result of future adoption.

and concluded they are either not applicable to the business, or no material effect is expected on the consolidated financial statements

as a result of future adoption.

Note 4 – Property and Equipment

Property and equipment are carried at cost

and consist of the following at December 31, 2023 and 2022:

Schedule of property and equipment

Office and computer equipment

Furniture and fixtures

Leasehold improvements

Accumulated depreciation

Leasehold improvements of $ 482,170

represent costs of the buildout of the leased laboratory in Iowa City, Iowa that was completed in January 2024.

Depreciation expense of $ 3,790

and $ 0 was charged to operations for the years ended

December 31, 2023 and 2022, respectively.

Note 5 – Intangible Assets

The following tables provide detail associated with the Company’s

acquired identifiable intangible assets:

The following table provides detail associated with the Company’s

acquired identifiable intangible assets at December 31, 2023 and 2022:

Schedule of intangible assets

As of December 31, 2022

Amortized intangible assets:

Know-how license

Amortization expense charged to operations was $ 16,000

for the years ended December 31, 2022 and 2021, respectively.

Note 5 – Patent Costs

As of December 31, 2022, the Company has three pending

patent applications.

The initial patent applications consist of a US patent and international patents filed in six countries.

The US patent

was granted on August 16, 2022.

The EU patent was granted on March 31, 2021.

The validation of the EU patent in each of the six countries

Legal fees associated with the patents totaled $ 321,308 and $ 245,154 as of December 31, 2022 and 2021, respectively and are

presented in the balance sheet as patent costs.

Accumulated amortization

Amortization expense charged to operations

was $ 16,000 for the years ended December 31, 2023 and 2022, respectively.

Note 6 – Patent and Trademark

As of December 31, 2023, in the first family of patents and patent

applications owned solely by UIRF and is exclusively licensed by Cardio, there are five granted patents (US, EU, China, Australia and

Hong Kong) and other pending patent applications.

The Company has pending patent applications in patent families two, three, four and

Legal fees associated with the patents and trademark totaled $ 515,402 and $ 321,308 ,

net of accumulated amortization of $ 3,182 and $ 0 as of December 31, 2023 and 2022, respectively and are presented in the balance sheet

as patent and trademark costs.

Amortization expense charged to operations was $ 3,182 for the year ended December 31, 2023.

Note 7 – Operating Leases

The Company determines if a contract is, or

contains, a lease at contract inception.

Operating leases are included in operating lease right-of-use (“ROU”) assets, current

portion of operating lease liabilities and operating lease liabilities, net of current portion in the Company’s consolidated balance sheets.

Finance leases are included in property and equipment, current portion of finance lease obligations and finance lease obligations, net

of current portion in the Company’s consolidated balance sheets.

ROU assets represent the right to use an underlying

asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease.

ROU assets and

lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term.

ROU assets include initial direct costs incurred by the lessee as well as any lease payments made at or before the commencement date and

exclude lease incentives.

The Company used the implicit rate in the lease in determining the present value of lease payments.

include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option.

with a term of one year or less are generally not included in ROU assets and corresponding operating lease liabilities.

In 2023, the Company entered into a lease

agreement for office space in Chicago, Illinois, commencing on August 1, 2023 for a term of three years and four months and expiring on

November 30, 2026.

The monthly rent for August to November 2023 was abated and the Company started to make monthly rental installments

from December 2023 of $12,847.

The monthly rental payment increases by approximately 2% every August starting from 2024.

On July 20, 2023, the Company entered into

another lease agreement for laboratory in Iowa City, Iowa, commencing on August 1, 2023 for a term of five years and four months and expiring

on November 30, 2028.

The monthly rent for August to November 2023 was abated and the Company agreed to pay a monthly rent of $ 8,505 ( $ 102,060

annually) commencing December 1, 2023.

In addition, the landlord agreed to provide the Company with a one-time Tenant Improvement Allowance

(“TIA”) in the amount of up to, but not exceeding $50 per rentable square foot of the premises for a maximum allowance of

Pursuant to ASC Topic 842 Leases, the Company

accounted for both leases as operating leases and accounted for the TIA as a lease incentive, which was estimated to be payable on December

The Company received the TIA from landlord in maximum amount of $ 253,000 on January 16, 2024 and recorded a reimbursement receivable

from landlord of $ 253,000 as of December 31, 2023, which was included in Prepaid expenses and other current assets on the consolidated

balance sheets.

During the year ended December 31, 2023, the

Company recorded ROU assets of $ 663,875 and operating lease liabilities of $ 642,523 at lease commencement date.

The discount rate used

to determine the present value is the incremental borrowing rate, estimated to be 4.57 % for Chicago lease and 4.24 % for Iowa City lease,

respectively, as the interest rate implicit in our lease is not readily determinable.

As of December 31, 2023, operating lease ROU

assets and operating lease liabilities are recorded on the consolidated balance sheets as follows:

Schedule of operating lease ROU assets and operating lease liabilities

Operating Lease:

Operating lease right-of-use assets, net

Current portion of operating lease liabilities

Operating lease liabilities, net of current portion

As of December 31, 2023, the weighted-average

remaining lease terms of the two operating leases were 2.9

years and 4.9

years, respectively.

The following table summarizes maturities

of operating lease liabilities based on lease terms as of December 31:

Schedule of future minimum payments due

Total lease payments

Imputed interest

Present value of lease liabilities

At December 31, 2023, the Company had the

following future minimum payments due under the non-cancelable lease:

Total minimum lease payments

Consolidated rental expense for all operating

leases was $ 138,266 and $ 53,344 for the years ended December 31, 2023 and 2022, respectively.

The following table summarizes the cash paid

and related right-of-use operating lease recognized for the year ended December 31, 2023.

Schedule of cash paid and related right-of-use operating lease

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows from operating leases

Right-of-use lease assets obtained in the exchange for lease liabilities:

Operating leases

Note 8 – Finance Agreement Payable

On October 31, 2022, the Company entered into an agreement with a premium

financing company to finance its Directors and Officers insurance premiums for 12-month policies effective October 25, 2022.

financed of $ 1,037,706 is payable in 11 monthly installments plus interest at a rate of 6.216 % through September 28, 2023 .

Finance agreement

payable was $ 849,032 at December 31, 2022.

$ 926,658 has been recorded in prepaid expenses and is being amortized over the life of the

On October 25, 2023, the Company entered

into an agreement with a premium financing company to finance its Directors and Officers insurance premiums for 12-month policies effective

October 25, 2023.

The amount financed of $ 467,500 is payable in 10 monthly installments plus interest at a rate of 8.95 % through August

Finance agreement payable was $ 374,000 and $ 849,032 at December 31, 2023 and 2022, respectively.

$ 449,041 has been recorded

in prepaid expenses and is being amortized over the life of the policy.

Note 9 – Earnings (Loss) Per Common

The Company calculates net income (loss) per common

share in accordance with ASC 260 “ Earnings Per Share ” (“ASC 260”).

Basic and diluted net earnings (loss)

per common share was determined by dividing net earnings (loss) applicable to common stockholders by the weighted average number of common

shares outstanding during the period.

The Company’s potentially dilutive shares, which include outstanding common stock options,

common stock warrants, and convertible debt have not been included in the computation of diluted net loss per share for the years ended

December 31, 2022 and 2021 as the result would be anti-dilutive.

The Company calculates net income (loss)

per common share in accordance with ASC 260 “ Earnings Per Share ” (“ASC 260”).

Basic and diluted net earnings

(loss) per common share was determined by dividing net earnings (loss) applicable to common stockholders by the weighted average number

of common shares outstanding during the period.

The Company’s potentially dilutive shares, which include outstanding common stock

options, common stock warrants, and convertible debt have not been included in the computation of diluted net loss per share for the years

ended December 31, 2023 and 2022 as the result would be anti-dilutive.

Schedule of anti dilutive earning per share

4 unchanged sentences

Stock Transactions

the Business Combination Agreement on October 25, 2022, the Company issued the following securities:

Holders of conversion

rights issued as a component of units in Mana’s initial public offering (the “Public Rights”) were issued an aggregate

of 928,571 shares of the Company’s common stock;

Holders of existing

shares of common stock of Legacy Cardio and the holder of equity rights of Legacy Cardio (together, the “Legacy Cardio Stockholders”)

received an aggregate of 6,883,306 shares of the Company’s Common Stock, calculated based on the exchange

to the Business Combination Agreement on October 25, 2022, the Company issued the following securities:

of conversion rights issued as a component of units in Mana’s initial public offering (the “Public Rights”) were issued

an aggregate of 928,571 shares of the Company’s common stock.

of existing shares of common stock of Legacy Cardio and the holder of equity rights of Legacy Cardio (together, the “Legacy Cardio

Stockholders”) received an aggregate of 6,883,306 shares of the Company’s Common Stock, calculated based on the exchange

ratio of 3.427259 pursuant to the Merger Agreement (the “Exchange Ratio”) for each share of Legacy Cardio Common

1 unchanged sentence

Closing Merger Consideration, as defined in the Merger Agreement.

The Legacy Cardio

Stockholders received, in addition, an aggregate of 43,334 shares of the Company’s Common Stock (“Conversion Shares”)

upon conversion of an aggregate of $ 433,334 in principal amount of promissory notes issued by Mana to Legacy Cardio in connection with

its loan of such amount in order to extend Mana’s duration through October 26, 2022 (the “Extension Notes”), which Conversion

Shares were distributed to the Legacy Cardio Stockholders in proportion to their respective interest in Legacy Cardio.

stockholders (excluding Mana Capital, LLC, the SPAC sponsor (the “Sponsor”), and Mana’s former officers and directors)

Legacy Cardio Stockholders received, in addition, an aggregate of 43,334 shares of the Company’s Common Stock (“Conversion

Shares”) upon conversion of an aggregate of $ 433,334 in principal amount of promissory notes issued by Mana to Legacy Cardio in

connection with its loan of such amount in order to extend Mana’s duration through October 26, 2022 (the “Extension Notes”),

which Conversion Shares were distributed to the Legacy Cardio Stockholders in proportion to their respective interest in Legacy Cardio.

public stockholders (excluding Mana Capital, LLC, the SPAC sponsor (the “Sponsor”), and Mana’s former officers and directors)

own 34,548 shares of the Company’s Common Stock and the Sponsor, Mana’s former officers and directors and certain permitted

11 unchanged sentences

Stock Appreciation Rights, Performance Units and Performance Shares.

The 2022 Plan,

as approved, permits the issuance of up to 3,256,383 shares of Common Stock (the “Share Reserve”) upon exercise or conversion

of grants and awards made from time to time to officers, directors, employees and consultants, however that the Share Reserve will increase

on January 1st of each calendar year and ending on and including January 1, 2027 (each, an “Evergreen Date”), in an amount

equal to the lesser of (i) 7% of the total number of shares of Common Stock outstanding on the December 31st immediately preceding the

applicable Evergreen Date and (ii) such lesser number of shares of Common Stock as determined to be appropriate by the Compensation Committee,

which administers the 2022 Plan, in its sole discretion.

The 2022 Plan, as approved, permits the issuance

of up to 3,265,516

shares of Common Stock (the “Share Reserve”) upon exercise or conversion of grants and awards made from time to time

to officers, directors, employees and consultants, however that the Share Reserve will increase on January 1 st of each calendar

year and ending on and including January 1, 2027 (each, an “Evergreen Date”), in an amount equal to the lesser of (i) 7%

of the total number of shares of Common Stock outstanding on the December 31 st immediately preceding the applicable Evergreen

Date and (ii) such lesser number of shares of Common Stock as determined to be appropriate by the Compensation Committee, which administers

the 2022 Plan, in its sole discretion.

There was no increase in the Share Reserve on January 1, 2023.

Common Stock Issued

The Company sold 744,425 common shares to various

investors for proceeds totaling $ 11,986,036 during the year ended December 31, 2022.

The Company paid the placement agent $ 1,198,604 in

cash and issued 214,998 warrants.

In connection with a private offering memorandum

that the Company issued through a placement agent on April 12, 2021, the Company sold 91,761 common shares valued at $13.35 per share

to various investors for proceeds totaling $ 1,225,000 during the year ended December 31, 2021.

On March 2, 2023, a shareholder exercised warrants

in exchange for 100,000 common shares for proceeds of $ 390,000 .

During the year ended December 31, 2023,

the Company issued 52,375 common shares to a consultant for services pursuant to vesting of Restricted Stock Units granted, valued at

During the year ended December 31, 2023,

the Company issued 251,172 common shares to the board of directors for services pursuant to vesting of Restricted Stock Units granted,

valued at $ 200,000 .

In connection with the convertible notes payable

(see Note 11 below) the noteholders converted $ 5,000,000 of principal balance to 10,622,119 shares of common stock during the year ended

December 31, 2023.

The number of shares of common stock issued was determined based on the terms of the convertible notes.

The Company sold post-merger 2,484,872 (or 725,032

pre-merger) common shares to various investors for proceeds totaling $ 11,986,036

during the year ended December 31, 2022.

The Company paid the placement agent $ 1,198,604

in cash and issued 23,596 warrants.

On March 10, 2021, the Company issued 50,450 common

shares to various consultants for services, valued at $ 60,000 .

On March 15, 2021, the investors

converted their SAFE agreements to 39,786 common shares, valued at $ 451,471 .

On October 1, 2019, the Company issued warrants to

a seed funding firm equivalent to 2% of the fully-diluted equity of the Company, or 22,500 common shares at the time of issuance.

warrant is exercisable on the earlier of the closing date of the next Qualified Equity Financing occurring after the issuance of the warrant,

and immediately before a Change of Control.

The exercise price is the price per share of the shares sold to investors in the next Qualified

Equity Financing, or if the warrant becomes exercisable in connection with a Change in Control before the next Qualified Equity Financing,

the greater of the quotient obtained by dividing $ 150,000 by the Pre-financing Capitalization, and the price per share paid by investors

in the then-most recent Qualified Equity Financing, if any.

The warrant will expire upon the earlier of the consummation of any Change

of Control, or 15 years after the issuance of the warrant.

In April and May 2022, the Company issued fully

in cash and issued 214,998

The Company issued post-merger 66,465 (or 19,393

pre-merger) common shares to an investor in settlement of a cashless exercise of a warrant agreement.

On October 1, 2019, the Company issued

warrants to a seed funding firm equivalent to 2% of the fully-diluted equity of the Company, or 22,500 common shares at the time of issuance.

The warrant is exercisable on the earlier of the closing date of the next Qualified Equity Financing occurring after the issuance of the

warrant, and immediately before a Change of Control.

The exercise price is the price per share of the shares sold to investors in the

next Qualified Equity Financing, or if the warrant becomes exercisable in connection with a Change in Control before the next Qualified

Equity Financing, the greater of the quotient obtained by dividing $ 150,000 by the Pre-financing Capitalization, and the price per share

paid by investors in the then-most recent Qualified Equity Financing, if any.

The warrant will expire upon the earlier of the consummation

of any Change of Control, or 15 years after the issuance of the warrant.

In April 2022, the Company issued fully

vested warrants to investors as part of private placement subscription agreements pursuant to which the Company issued common stock.

Each shareholder received warrants to purchase 50% of the common stock issued at an exercise price of $ 3.90

per share with an expiration date of June

From May 23, 2022 through September 2022, the

Company issued fully vested warrants to investors as part of an additional private placement subscription agreements pursuant to

which the Company issued common stock.

Each shareholder received warrants to purchase 50% of the common stock issued at an exercise

price of $ 6.21

per share with an expiration date of five years from the date of issue.

shareholder received warrants to purchase 50% of the common stock issued at an exercise price of $ 3.90 per share with an expiration date

of June 30, 2027 .

As of May 23, 2022, the Company issued

fully vested warrants to investors as part of an additional private placement subscription agreements pursuant to which the Company issued

common stock.

Each shareholder received warrants to purchase 50% of the common stock issued at an exercise price of $ 6.21 per share with

an expiration date of five years from the date of issue.

All of the warrants issued by Legacy Cardio

were exchanged in the Business Combination for warrants of the Company based on the merger exchange ratio.

Warrant activity during the years ended December

2022 and 2021 follows:

31, 2023 and 2022 was as follows:

Schedule of warrant activity

Average Remaining

Average Exercise Price

Contractual Life (Years)

Warrants outstanding at December 31, 2020

Warrants granted

Exercise Price

Warrants outstanding at December 31, 2021

4 unchanged sentences

Warrants outstanding at December 31, 2022

In May 2022, the Legacy Cardio granted 513,413

stock options to officers, directors and employees pursuant to the Cardio Diagnostics, Inc.

Warrants exercised

Warrants outstanding at December 31, 2023

On May 6, 2022, Legacy Cardio granted 513,413 stock

options to the board of directors pursuant to the Cardio Diagnostics, Inc.

2022 Equity Incentive Plan.

options granted under this legacy plan were exchanged for options under the 2022 Plan adopted by the Company’s stockholders on

October 25, 2022, and based on the exchange ratio for the merger, resulted in a total of 1,759,599

options issued upon closing.

Each exchanged option has an exercise price of $ 3.90

per share with an expiration date of May

The exchanged options fully vested upon the merger with Mana.

9 - Income Taxes

The reconciliation between income tax expense computed

by applying the federal statutory corporate tax rate and actual income tax expense (benefit) for the year ended December 31, 2022 is as

All of the options granted under

this legacy plan were exchanged for options under the Company’s 2022 Plan adopted by the Company’s stockholders on October

25, 2022, and based on the exchange ratio for the merger, resulted in a total of 1,759,599 options issued upon closing.

Each exchanged

option has an exercise price of $ 3.90 per share with an expiration date of May 6, 2032 .

The exchanged options fully vested upon closing

of the merger.

Option activity during the years ended

December 31, 2023 and 2022 was as follows:

Schedule of option activity

Exercise Price

Options outstanding at December 31, 2021

Options outstanding at December 31, 2022

Options outstanding at

December 31, 2023

Note 11 – Convertible Notes Payable

On March 8, 2023, the Company entered into a securities

purchase agreement (“Securities Purchase Agreement”) with YA II PN, Ltd., an investment fund managed by Yorkville Advisors

Global, LP (“Yorkville”) under which the Company agreed to sell and issue to Yorkville convertible debentures (“Convertible

Debentures”) in a gross aggregate principal amount of up to $ 11.2 million (“Subscription Amount”).

The Convertible Debentures

are convertible into shares of common stock of the Company and are subject to various contingencies being satisfied as set forth in the

Securities Purchase Agreement.

The notes are convertible at any time through the maturity date, which, in each case, is one year from

the date of issuance.

The conversion price shall be determined on the basis of 92 % of the two lowest VWAP (Volume Weighted Average Prices)

of the Common Stock during the prior seven trading day period, initially with a floor conversion price of $ 0.55 , but subsequently lowered

by mutual agreement of the parties to $ 0.20 .

On March 8, 2023, the Company issued and

sold to Yorkville a Convertible Debenture in the principal amount of $ 5.0 million, for which it received $ 4.5 million, with a $ 500,000

original issue discount (“OID”).

Interest on the outstanding principal balance accrues at a rate of 0 % and will increase to

15 % upon an Event of Default for so long as it remains uncured.

The Company recorded a debt discount

related to identified embedded derivatives relating to the conversion features (see Note 12) based on fair values as of the

inception date of the Note.

The calculated debt discount, including the OID, equaled the face of the Note and is being amortized over

the term of the note.

Yorkville fully converted the initial $ 5,000,000 Convertible

Debenture into an aggregate of 10,622,119 common shares during the year ended December 31, 2023.

On January 4, 2024, the Company and Yorkville terminated

the Securities Purchase Agreement dated as of March 8, 2023, as amended, by the mutual consent of the parties, effective as of January

The First Convertible Debenture has been fully converted, and as of January 4, 2024, the obligation of the Company to issue

and sell, and Yorkville’s obligation to purchase, the Second Convertible Debenture has been terminated.

At the time of termination,

there were no outstanding borrowings, advance notices or shares of Common Stock to be issued under the Securities Purchase Agreement.

In addition, there were no fees due by the Company or Yorkville in connection with the termination of the Securities Purchase Agreement.

Note 12 – Derivative Liability

The Company has determined that the conversion

feature embedded in the convertible notes described in Note 11 contain a potential variable conversion amount which constitutes a derivative

which has been bifurcated from the note and recorded as a derivative liability at fair value, with a corresponding discount recorded to

the associated debt.

The excess of the derivative value over the face amount of the note is recorded immediately to interest expense at

inception, which aggregated $4,692,672.

The Company used the Binomial Black-Scholes Option Pricing model to value the conversion features.

The Company used Level 3 inputs for its

valuation methodology for the conversion option liability in determining the fair value using a Black-Scholes option-pricing model with

the following assumption inputs:

Schedule of option liability

Annual dividend yield

Expected life (years)

Risk-free interest rate

4.89 % - 5.59 %

Expected volatility

164 % - 187 %

Exercise price

$ 0.19 - $ 3.53

$ 0.22 - $ 5.32

Based upon ASC 840-15-25 (EITF Issue 00-19, paragraph

11) the Company has adopted a sequencing approach regarding the application of ASC 815-40 to its outstanding convertible notes.

to the sequencing approach, the Company evaluates its contracts based upon earliest issuance date.

Note 13 – Income Taxes

The reconciliation between income tax expense

computed by applying the federal statutory corporate tax rate and actual income tax expense (benefit) for the year ended December 31,

2023 is as follows:

Schedule of effective income tax rate reconciliation

1 unchanged sentence

federal income tax rate

State income taxes, net of

federal income tax benefit

Tax effect of expenses that are not

deductible for income tax purposes:

Amortization of debt discount

Change in fair value of derivative liability

Change in Valuation Allowance

Effective tax rate

At December 31, the significant components of

the deferred tax assets (liabilities) are summarized below:

At December 31, the significant components

of the deferred tax assets (liabilities) are summarized below:

Schedule of deferred income tax assets

6 unchanged sentences

( 4,711,190 )

( 1,800,060 )

Net deferred tax assets

As of December 31, 2022, the Company had federal net

operating loss carryforwards of approximately $ 5.3 million which may be carried forward indefinitely, and state net operating loss carryforwards

of approximately $ 5.3 million which expire at various dates from 2040 through 2042.

These net operating loss carryforwards may be used

to offset future taxable income and thereby reduce the Company’s U.S.

As of December 31, 2023, the Company had

federal net operating loss carryforwards of approximately $ 11.5

million which may be carried forward indefinitely, and state net operating loss carryforwards of approximately $ 11.5

million (Iowa) and $ 10.9 million (Illinois), respectively which expire at various dates from 2040 through 2043.

These net operating loss

carryforwards may be used to offset future taxable income and thereby reduce the Company’s U.S.

federal income taxes.

The net operating losses may be subject

to limitation under Internal Revenue Code Section 382 should there be a greater than 50 % change in ownership as determined under the regulations.

In assessing the realization of deferred tax assets,

management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized.

realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary

differences become deductible.

Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income

and tax planning strategies in making this assessment.

Based on the assessment, management has established a full valuation allowance

against all of the deferred tax assets for every period because it is more likely than not that all of the deferred tax assets will not

In accordance with ASC 740, a valuation allowance

must be established if it is more likely than not that the deferred tax assets will not be realized.

This assessment is based upon consideration

of available positive and negative evidence, which includes, among other things, the Company’s most recent results of operations

and expected future profitability.

Based on the Company’s cumulative losses in recent years, a full valuation allowance against

the Company’s deferred tax assets as of December 31, 2022 has been established as Management believes that the Company will not

more likely than not realize the benefit of those deferred tax assets.

Therefore, no tax provision has been recorded for the year ended

December 31, 2022.

The Company complies with the provisions of ASC 740-10

in accounting for its uncertain tax positions.

ASC 740-10 addresses the determination of whether tax benefits claimed or expected to be

claimed on a tax return should be recorded in the financial statements.

Under ASC 740-10, the Company may recognize the tax benefit from

an uncertain tax position only if it is more likely that not that the tax position will be sustained on examination by the taxing authorities,

based on the technical merits of the position.

Management has determined that the Company has no significant uncertain tax positions requiring

recognition under ASC 740-10.

The Company is subject to income tax in the U.S.,

and certain state jurisdictions.

operating losses may be subject to limitation under Internal Revenue Code Section 382 should there be a greater than 50 %

change in ownership as determined under the regulations.

In assessing the realization of deferred

tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized.

The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which

those temporary differences become deductible.

Management considers the scheduled reversal of deferred tax liabilities, projected future

taxable income and tax planning strategies in making this assessment.

Based on the assessment, management has established a full valuation

allowance against all of the deferred tax assets for every period because it is more likely than not that all of the deferred tax assets

will not be realized.

In accordance with ASC 740, a valuation

allowance must be established if it is more likely than not that the deferred tax assets will not be realized.

This assessment is based

upon consideration of available positive and negative evidence, which includes, among other things, the Company’s most recent results

of operations and expected future profitability.

Based on the Company’s cumulative losses in recent years, a full valuation allowance

against the Company’s deferred tax assets as of December 31, 2023 has been established as Management believes that the Company will

not more likely than not realize the benefit of those deferred tax assets.

Therefore, no tax provision has been recorded for the year

ended December 31, 2023.

The Company complies with the provisions

of ASC 740-10 in accounting for its uncertain tax positions.

ASC 740-10 addresses the determination of whether tax benefits claimed or

expected to be claimed on a tax return should be recorded in the financial statements.

Under ASC 740-10, the Company may recognize the

tax benefit from an uncertain tax position only if it is more likely that not that the tax position will be sustained on examination by

the taxing authorities, based on the technical merits of the position.

Management has determined that the Company has no significant uncertain

tax positions requiring recognition under ASC 740-10.

The Company is subject to income tax in

the U.S., and certain state jurisdictions.

The Company has not been audited by the U.S.

Internal Revenue Service, or any states in connection with

income taxes.

The Company’s tax years generally remain open to examination for all federal and state income tax matters until its

net operating loss carryforwards are utilized and the applicable statutes of limitation have expired.

Internal Revenue Service, or any states in connection

with income taxes.

The Company’s tax years generally remain open to examination for all federal and state income tax matters until

its net operating loss carryforwards are utilized and the applicable statutes of limitation have expired.

The federal and state tax authorities

2 unchanged sentences

of limitations.

The Company recognizes interest and penalties related

to unrecognized tax benefits, if incurred, as a component of income tax expense.

No interest or penalties have been recorded for the years

ended December 31, 2022 and 2021, respectively.

On March 27, 2020, the Coronavirus Aid, Relief, and

Economic Security Act (CARES Act) was enacted in response to the COVID-19 pandemic.

The CARES Act, among other things, permits NOL carryovers

and carrybacks to offset 100% of taxable income for taxable years beginning before 2021.

In addition, the CARES Act allows NOL’s

incurred in 2018, 2019, and 2020 to be carried back to each of the five preceding taxable years to generate a refund of previously paid

income taxes.

The Company is currently evaluating the impact of the CARES Act, but at present does not expect that the NOL carryback provision

of the CARES Act would result in a material cash benefit to us.

The Company recognizes interest and penalties

related to unrecognized tax benefits, if incurred, as a component of income tax expense.

No interest or penalties have been recorded for

the years ended December 31, 2023 and 2022, respectively.

On March 27, 2020, the Coronavirus Aid,

Relief, and Economic Security Act (CARES Act) was enacted in response to the COVID-19 pandemic.

The CARES Act, among other things, permits

NOL carryovers and carrybacks to offset 100% of taxable income for taxable years beginning before 2021.

In addition, the CARES Act allows

NOLs incurred in 2018, 2019, and 2020 to be carried back to each of the five preceding taxable years to generate a refund of previously

paid income taxes.

The Company is currently evaluating the impact of the CARES Act, but at present does not expect that the NOL carryback

provision of the CARES Act would result in a material cash benefit to us.

Note 14 – Commitments and Contingencies

Deposit For Acquisition

On April 14, 2021, the Company deposited $ 250,000

with an escrow agent in connection with a planned business acquisition.

The Company subsequently decided to terminate the acquisition

and recorded expenses of $ 112,534 in connection with the termination and is presented as other expenses in the consolidated statements

of operations.

The remaining escrow balance of $ 137,466 was returned to the Company on July 26, 2022.

Prior Relationship of Cardio with Boustead

Securities, LLC

Prior Relationship of Cardio with

Boustead Securities, LLC

At the commencement of efforts to pursue what

ultimately ended in the terminated business acquisition referred to above under “Deposit for Acquisition,” Legacy Cardio entered

into a Placement Agent and Advisory Services Agreement (the “Placement Agent Agreement”), dated April 12, 2021, with Boustead

Securities, LLC ("Boustead Securities”).

This agreement was terminated in April 2022, when Legacy Cardio terminated the underlying

agreement and plan of merger and the accompanying escrow agreement relating to that proposed business acquisition after efforts to complete

the transaction failed, despite several extensions of the closing deadline.

ultimately ended in a terminated business acquisition, Legacy Cardio entered into a Placement Agent and Advisory Services Agreement (the

“Placement Agent Agreement”), dated April 12, 2021, with Boustead Securities, LLC (“Boustead Securities”).

agreement was terminated in April 2022, when Legacy Cardio terminated the underlying agreement and plan of merger and the accompanying

escrow agreement relating to that proposed business acquisition after efforts to complete the transaction failed, despite several extensions

of the closing deadline.

Under the terminated Placement Agent Agreement,

20 unchanged sentences

adverse impact on its financial condition.

The Benchmark Company, LLC Right of First

As noted in Note 1, the Company

completed a business combination with Mana on October 25, 2022.

In connection with the proposed business combination, by agreement dated

May 13, 2022, Mana engaged The Benchmark Company, LLC (“Benchmark”) as its M&A advisor.

Upon closing of the business combination,

The Benchmark Company, LLC Right

of First Refusal

As noted in Note 1, the Company completed

the business combination on October 25, 2022.

In connection with the proposed business combination, by agreement dated May 13, 2022, Mana

engaged The Benchmark Company, LLC (“Benchmark”) as its M&A advisor.

Upon closing of the business combination, Legacy

Cardio assumed the contractual engagement entered into by Mana.

On November 14, 2022, Cardio and Benchmark entered into Amendment No.

On November 14, 2022, the Company and Benchmark entered into Amendment

1 Engagement Letter (the “Amendment Engagement”).

Pursuant to the Amendment Engagement, Benchmark has been granted a right

of first refusal to act as lead or joint-lead investment banker, lead or joint-lead book-runner and/or lead or joint-lead placement agent

for all future public and private equity and debt offerings through October 25, 2023.

In this regard, the Company and Benchmark are in

discussions regarding the convertible debenture financing the Company entered into in March 2023 whether Benchmark might have any rights

arising from the Company having entered into the convertible debenture financing in March 2023.

No legal proceedings have been instigated,

and the parties are continuing to discuss a resolution to this matter.

Pursuant to the Amendment Engagement, the parties agreed that the Company

would pay Benchmark $230,000 at the closing of the business combination and an additional $435,000 on October 25, 2023.

Both of those

payments have been made in full.

In addition, the Amendment Engagement provided that Benchmark has been granted a right of first refusal

to act as lead or joint-lead investment banker, lead or joint-lead book-runner and/or lead or joint-lead placement agent for all future

public and private equity and debt offerings through October 25, 2023.

Based on the right of first refusal, Benchmark alleges that it

is owed damages because the Company entered into the Yorkville Convertible Debenture Transaction (see Note 11) without first offering

Benchmark the right to serve as the lead or joint-lead placement agent for the transaction.

The Company is evaluating the claim.

proceedings have been instigated.

Demand Letter and Potential Mootness

On June 25, 2022, a plaintiffs’

securities law firm sent a demand letter to the Company alleging that the Company’s Registration Statement on Form S-4 filed

(the “S-4 Registration Statement”) with the Securities and Exchange Commission (“SEC”) on May 31, 2022

omitted material information with respect to the Business Combination and demanding that the Company and its Board of Directors

immediately provide corrective disclosures in an amendment or supplement to the Registration Statement.

Subsequent thereto, the

Company filed amendments to the S-4 Registration Statement on July 27, 2022, August 23, 2022, September 15, 2022, October 4, 2022

and October 5, 2022 in which it responded to various comments of the SEC staff and otherwise updated its disclosure.

2023, the SEC completed its review and declared the S-4 registration statement on October 6, 2022.

On February 23, 2023 and February

27, 2023, plaintiffs’ securities law firm contacted the Company’s counsel asking who will be negotiating a mootness fee

relating to the purported claims set forth in the June 25, 2022 demand letter.

The Company vigorously

denies that the S-4 Registration Statement, as amended and declared effective, is

deficient in any respect.

The Company believes

that the claims asserted in the Demand Letter are without merit and that no further disclosure is required to supplement the S-4

Registration Statement under applicable laws.

securities law firm sent a demand letter to the Company alleging that the Company’s Registration Statement on Form S-4 filed (the

“S-4 Registration Statement”) with the Securities and Exchange Commission (“SEC”) on May 31, 2022 omitted material

information with respect to the Business Combination and demanding that the Company and its Board of Directors immediately provide corrective

disclosures in an amendment or supplement to the Registration Statement.

Subsequent thereto, the Company filed amendments to the S-4 Registration

Statement on July 27, 2022, August 23, 2022, September 15, 2022, October 4, 2022 and October 5, 2022 in which it responded to various

comments of the SEC staff and otherwise updated its disclosure.

In October 2022, the SEC completed its review and declared the S-4 registration

statement on October 6, 2022.

On February 23, 2023 and February 27, 2023, plaintiffs’ securities law firm contacted the Company’s

counsel asking who will be negotiating a mootness fee relating to the purported claims set forth in the June 25, 2022 demand letter.

Company vigorously denies that the S-4 Registration Statement, as amended and declared effective,

is deficient in any respect and that no additional supplemental disclosures are material or required.

The Company believes that the claims asserted in the Demand Letter are without merit and that no further disclosure is required to supplement

the S-4 Registration Statement under applicable laws.

As of the date of filing of this Annual Report on Form 10-K, no lawsuit has

been filed against the Company by that firm.

The firm has indicated its willingness to litigate the matter if a mutually

satisfactory resolution cannot be agreed upon;

however, Cardio believes that the final outcome will not have a material adverse

impact on its financial condition.

The Company cannot preclude the possibility that claims

or lawsuits brought relating to any alleged securities law violations or breaches of fiduciary duty could potentially require significant

time and resources to defend and/or settle and distract its management and board of directors from focusing on its business.

Note 11 - Related Party Transactions

The Company reimburses Behavioral Diagnostic,

LLC (“BDLLC”), a company owned by its Chief Medical Officer for salaries of the Company’s CEO and its senior data scientist,

who is the husband of the CEO.

Payments to BDLLC for salaries totaled $ 0 and $ 79,920 for the years ended December 31, 2022 and 2021, respectively.

The firm has indicated its willingness to litigate the matter if a mutually satisfactory

resolution cannot be agreed upon;

however, Cardio believes that the final outcome will not have a material adverse impact on its financial

The Company cannot preclude the possibility that claims or lawsuits brought relating to any alleged securities law violations

or breaches of fiduciary duty could potentially require significant time and resources to defend and/or settle and distract its management

and board of directors from focusing on its business.

Northland Securities, Inc.

In January 2024, following the Company’s

termination of its agreement with Yorkville and in connection with the Company’s recent at the market offering and/or its February

2024 private placement, a managing director of Northland Securities, Inc.

(“Northland”) contacted the Company claiming the

right to be paid a fee of approximately $ 150,000 pursuant to the agreement of March 1, 2023 between the Company and Northland regarding

the Yorkville financing.

Subsequently, the Company has been advised by another representative of Northland that Northland would not proceed

with any such claim.

The Company does not believe that it owes Northland any sum based on the termination of the Yorkville Securities

Purchase Agreement and the subsequent financing transactions.

The Company cannot preclude the possibility

that claims or lawsuits brought relating to any alleged securities law violations or breaches of fiduciary duty could potentially require

significant time and resources to defend and/or settle and distract its management and board of directors from focusing on its business.

Note 15 – Subsequent Events

The Company evaluated its December 31, 2022 consolidated

financial statements for subsequent events through the date the consolidated financial statements were issued.

Securities Issued

On March 2, 2023, a stockholder exercised warrants

for 100,000 common shares for total proceeds of $ 390,000 .

On March 8, 2023, the Company entered into a securities

purchase agreement (“Securities Purchase Agreement”) with YA II PN, Ltd., an investment fund managed by Yorkville Advisors

Global, LP (“Yorkville”) under which the Company agreed to sell and issue to Yorkville convertible debentures (“Convertible

Debentures”) in a gross aggregate principal amount of up to $ 11.2 million (“Subscription Amount”).

The Convertible Debentures

are convertible into common shares of the Company and are subject to various contingencies being satisfied as set forth in the Securities

Purchase Agreement.

The Company received 90 % of the proceeds, with a $ 5 million convertible debenture being entered into at the initial

closing of which the Company received $ 4.5 million.

Prepayment of Deferred Contractual Obligation

On March 27, 2023, the Company accepted an early pay discount offered

by one of its investment bankers with respect to a deferred payment obligation incurred by Mana in connection with its initial public

offering and paid that investment banker the net balance due and payable of $ 419,475 .

The Company evaluated its December 31,

2023 consolidated financial statements for subsequent events through the date the consolidated financial statements were issued.

Common Stock Issued

Private Placement

On February 2, 2024, the Company completed

entering into subscription agreements with 7 accredited investors (the “Subscription Agreements”), whereby the Company issued

a total of 561,793

units (“Units”), with each Unit consisting of (i) one share of the Company’s common stock, $ 0.00001 par value

(the “Common Stock”), and (ii) one six year Common Stock purchase warrant (the “Warrants”), having an exercise

price of $ 1.78

per share (the “Private Placement”).

The Private Placement resulted in the issuance to investors of 561,793 shares

of Common Stock and 561,793 Warrants.

The purchase price of the securities was $ 1.78 per Unit, resulting in gross proceeds to the Company

of $ 1,000,000

and paid a fee of $ 100,000 ,

before deducting placement agent fees (10% or $ 100,000 ) and other offering expenses.

The Company intends to use the net proceeds from

the Private Placement for working capital and general corporate purposes.

The Private Placement closed on February 2, 2024.

In connection with the Private Placement, the

Company entered into a Placement Agent Agreement with Altitude Capital Group, LLC, as placement agent (“Altitude Capital”

or the “Placement Agent”).

Pursuant to the Placement Agent Agreement, at closing, Altitude Capital was paid a cash commission

equal to 10% of the gross proceeds received by the Company, plus 20% warrant coverage, providing Altitude Capital with the right to purchase

112,353 shares of Common Stock at $ 1.78 per share through February 2, 2030 (the “Placement Agent Warrants”).

At-the-Market Issuance

On January 26, 2024, the Company entered into

an At-the-Market Issuance Sales Agreement (the “Sales Agreement”) with Craig-Hallum Capital Group LLC

(“Craig-Hallum”).

Pursuant to the Sales Agreement, the Company may sell, at its option, up to an aggregate of $ 17 million

in shares of its common stock through Craig-Hallum, as sales agent.

Sales of the common stock made pursuant to the Sales Agreement,

if any, will be made under the Company’s Registration Statement on Form S-3 filed on January 26, 2024 (File No.

333-276725) (the “Registration Statement”), which was declared effective by the Securities and Exchange Commission on

February 1, 2024.

made certain customary representations, warranties and covenants concerning the Company and the offering of the Shares.

Pursuant to the

terms of the Sales Agreement, the Company also provided the Sales Agent with customary indemnification rights, including indemnification

against certain liabilities under the Securities Act .

The Company will pay the Sales

Agent a commission in cash equal to 2.5% of the gross proceeds from the sale of the Shares under the Sales Agreement, if any.

the Company agreed to pay the costs of the Sales Agent’s legal counsel reasonably incurred in connection with entering into the

transactions contemplated by the Sales Agreement in an amount not to exceed $55,000.

Additionally, pursuant to the terms of the Sales

Agreement, the Company agreed to reimburse the Sales Agent’s for its legal fees incurred in connection with its ongoing diligence

requirements arising from the transactions contemplated by the Sales Agreement in an amount not to exceed $5,000 in the aggregate per

calendar quarter.

The offering of Shares will terminate upon the earlier of (i) the sale of the Shares under the Sales Agreement having

an aggregate offering price of $17 million or (ii) the termination of the Sales Agreement as permitted therein.

The Sales Agreement may

be terminated by the Company at any time upon five business days’ prior written notice to the Sales Agent.

The Sales Agent may terminate

the Sales Agreement at any time by providing written notice to the Company.

The Company and the Sales Agent may also terminate the Sales

Agreement by mutual agreement.

Company sold 487,083

common shares for gross proceeds totaling $ 877,869

under the Sales Agreement as of the date of this report.

The Company has paid Craig-Hallum

$ 21,947 in sales commissions.

Stock Option Granted

23, 2024, the Company authorized an additional 1,071,425 shares to the Equity Incentive Plan Reserve (the “2022 Plan”) and

granted 1,187,826 options to management, 1,166,826 of which vested immediately with the remaining 21,000 options subject to 50 % vesting

on June 30, 2024 and 100 % vesting on December 31, 2024.

Each option has an exercise price of $ 2.11 per share with an expiration date of

January 23, 2034 .

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data