Cardio Diagnostics Holdings, Inc. quarterly report, Q1 FY2022

Business context and reporting period

Filing entity: Mana Capital Acquisition Corp., not Cardio Diagnostics Holdings, Inc. This is its unaudited Form 10-Q for the quarter ended March 31, 2022. Mana was a shell company/SPAC formed to pursue a business combination; it had not begun operations and had no operating revenue. The filing describes its search as not limited to an industry or geography.

Financial results and position

Cash outside the Trust Account fell from $526,625 at December 31, 2021 to $380,615 at March 31, 2022. The Trust Account held approximately $65 million, principally for a business combination or public-share redemptions, and was not generally available for operating expenses. The filing reports no margin metric; it is not meaningful for this pre-operation SPAC.

Changes versus the prior comparable period

The filing text does not provide a Q1 2021 comparative income statement or cash-flow period. Balance-sheet comparisons are to December 31, 2021: cash declined by $146,010, current liabilities increased from $124,434 to $180,542, and equity declined from $682,732 to $460,069, primarily reflecting the quarter’s net loss. Trust Account investments increased from $65,000,484 to $65,004,901.

Outlook, risks and unusual items

• Management expects no operating revenue before completion of a business combination and expects to continue incurring acquisition-search and public-company costs. No transaction-specific guidance or target was disclosed in the provided text.
• The SPAC was required to complete a business combination within nine months of the IPO closing, extendable to as many as 21 months under the charter’s terms. If it fails, it must stop operations, redeem public shares and liquidate; warrants may expire worthless.
• Management stated that failure to complete a combination within the prescribed period raises substantial doubt about the company’s ability to continue as a going concern, while also stating that available funds were expected to cover working-capital needs through a combination or wind-up.
• Management said additional funding might be needed if search costs exceed estimates, Trust Account interest is lower than anticipated, or transaction/redemption needs require it. Financing could involve issuing securities or incurring debt; no third-party funding arrangement was in place.
• Management identified possible COVID-19 effects on the company and its target search, but said the specific impact was not determinable. About $130,000 of operating cash was above the FDIC insurance limit.
• Control matter: Management concluded disclosure controls and procedures were not effective at quarter-end; it performed additional analysis to support the financial statements. It reported no material change in internal control over financial reporting during the quarter.
• No legal proceedings or material changes to the previously disclosed risk factors were reported. The filing states no off-balance-sheet arrangements or long-term contractual obligations.

Important facts for investors to verify

• Confirm the filing identity: the supplied filing is for Mana Capital Acquisition Corp., not Cardio Diagnostics Holdings, Inc.
• Check the status and deadline of any business-combination search, and the conditions and timing for any permitted extension.
• Assess whether $380,615 of outside cash is sufficient for search and public-company costs, and whether sponsor or other financing may be required.
• Review the ineffective disclosure-controls conclusion and any remediation or subsequent developments.
• Verify public-share redemption terms, potential dilution from securities issued in a transaction, and the sponsor’s limited Trust Account indemnity.