(310) 274-2036
(Registrant's Telephone Number, Including Area Code)

N/A8899 Beverly Boulevard, Suite 619, Los Angeles, CA    90048
(Former name, former address and former fiscal year, if changed since last report)

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).     YES  ¨     NO  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
YES   ¨        NO   x

APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: As of September 30, 2008,March 31, 2009, 203,360,271 shares of the issuer's common stock, par value of $0.001 per share, were outstanding.

Note: PDF provided as a courtesy

Cardo Medical, Inc.

TABLE OF CONTENTSCARDO MEDICAL, INC.

PART I — FINANCIAL INFORMATION

ITEM 1 — CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Cardo Medical, Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)

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

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Cardo Medical, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except share amounts)

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

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Cardo Medical, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Unaudited)
Nine months ended September 30, 2008CASH FLOWS
(in thousands, except share amounts)thousands)

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

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Cardo Medical, Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

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

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CARDO MEDICAL, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 2008MARCH 31, 2009 AND
FOR THE THREE AND NINE MONTH PERIODS ENDED
SEPTEMBER 30,MARCH 31, 2009 AND 2008 AND 2007

NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Business

Cardo Medical, Inc. ("Cardo" or the "Company") is an early-stage orthopedic medical device company specializing in designing, developing and marketing reconstructive joint devices and spinal surgical devices. Reconstructive joint devices are used to replace knee, hip and other joints that have deteriorated through disease or injury. Spinal surgical devices involve products to stabilize the spine for fusion and reconstructive procedures. Within these areas, Cardo intends to focus on the higher-growth sectors of the orthopedic industry, such as advanced minimally invasive instrumentation and bone-conserving high-performance implants. Cardo is focused on developing surgical devices that will enable surgeons to bridge the gap between soft tissue-driven sports medicine techniques and classical reconstructive surgical procedures.

Basis of Presentation

The accompanying unaudited condensed consolidated unaudited financial information of Cardo as of September 30, 2008March 31, 2009 and for the three and nine months ended September 30,March 31, 2009 and 2008 and 2007 has been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, such financial information includes all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation of the Company's financial position at such date and the operating results and cash flows for such periods. Operating results for the three and nine month periodsperiod ended September 30, 2008March 31, 2009 are not necessarily indicative of the results that may be expected for the entire year.

Certain information and footnote disclosure normally included in financial statements in accordance with generally accepted accounting principles have been omitted pursuant to the rules of the US Securities and Exchange Commission. These unaudited financial statements should be read in conjunction with our unauditedaudited financial statements for the period ended June 30,December 31, 2008 included in our Form 8-K10-K filed on September 9, 2008.March 31, 2009.

The consolidated balance sheet at December 31, 20072008 has been derived from the audited financial statements at that date, but does not include all of the information and footnotes required by generally accepted accounting principles in the United States for complete financial statements.

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Principles of Consolidation

The consolidated financial statements include the accounts of Cardo, Accelerated Innovation, Inc. ("Accelerated"), Uni-Knee LLC ("Uni") and Cervical Xpand LLC ("Cervical"). All significant intercompany transactions have been eliminated in consolidation. The non-controlling and minority interests in these companies is represented by a single balance in the consolidated balance sheets. As

Liquidity and Capital Resources

At May 15, 2009, we have $845 thousand in cash which is not projected to meet all of December 31, 2007,our working capital needs for the total non-controlling interest balance of $633,685 is comprised of $76,372 for minority interest in Uni, ($42,825) in Cervical and $600,138 in Accelerated. As of September 30, 2008 (unaudited), the non-controlling interest balance amounted to $0, asnext twelve months. The fact that the Company by then had acquiredwill sustain losses in 2009 and still requires outside sources of additional capital to sustain operations has created an uncertainty about the minority interests in Uni,Company's ability to continue as a going concern.

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Management intends to use borrowings and Cervicalsecurities sales to mitigate the effects of our use of that cash. However, we cannot assure you that debt or equity financing, if and when required, will be available. Our ability to continue as a going concern is dependent upon receiving additional funds either through the issuance of debt or through common and/or preferred stock and the non-controlling interest in Accelerated.

Forsuccess of management's plan to expand sales. Although we may obtain external financing through the period from August 29, 2008sales of our own securities, there can be no assurance that such financing will be available, or if available, that any such financing would be on terms acceptable to September 30, 2008, theus. If we are unable to fund our cash flow needs, we may have to reduce or stop planned growth or scale back operations and reduce staff. The condensed consolidated financial statements alsodo not include any adjustments that may result from the accountsoutcome of clickNsettle.com, Inc., with whom the company completed a reverse takeover on that date.this uncertainty.

Income Taxes

Prior to June 17, 2008, Cardo and its subsidiaries were flow through entities from an income tax standpoint. Income generated in these entities was not taxed at the entity level, but rather, the income passed directly through to the owners' individual income tax returns. As a result, there is no provision for income tax for any period prior to this date.

On June 17, 2008, Cardo made an election with the Internal Revenue Service to be taxed as a corporation, meaning that any taxable income generated by Cardo and subsidiaries will be taxed at the Cardo level.

Accordingly, on June 17, 2008, the Company adopted the guidelines specified in SFAS No. 109, "Accounting for Income Taxes." In accordance with SFAS No. 109, deferred tax assets and liabilities are recognized to reflect the estimated future tax effects, calculated at currently effective tax rates, of future deductible or taxable amounts attributable to events that have been recognized on a cumulative basis in the financial statements. A valuation allowance related to a deferred tax asset is recorded when it is more likely than not that some portion of the deferred tax asset will not be realized. Deferred tax assets and liabilities are adjusted for the effects of the changes in tax laws and rates of the date of enactment.

Also on June 17, 2008, the Company adopted Financial Accounting Standards Board ("FASB") Interpretation No. 48, Accounting for Uncertainty in Income Taxes-An Interpretation of FASB Statement No. 109 ("FIN 48"). FIN 48 seeks to reduce the diversity in practice associated with certain aspects of measurement and recognition in accounting for income taxes. FIN 48 prescribes a recognition threshold and measurement requirement for the financial statement recognition of a tax position that has been taken or is expected to be taken on a tax return and also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. Under FIN 48 the Company may only recognize or continue to recognize tax positions that meet a "more likely than not" threshold.

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On August 29, 2008, Cardo consummated a reverse takeover of clickNsettle.com, Inc. ("CKST") (See Note 4), thereby adopting CKST as the taxpaying entity. Cardo, in its capacity as the operating company taking over CKST's income tax positions in addition to its own positions after June 17, 2008, has estimated its annual effective tax rate to be zero. This is based on an expectation that the combined entity will generate net operating losses in 2009, and it is expected that those losses will not be recovered using future taxable income. Therefore, no provision for income tax has been recorded for the three month period ended March 31, 2009.

Net Loss Per Share

The Company uses SFAS No. 128, "Earnings Per Share" for calculating the basic and diluted loss per share. The basic loss per share is calculated by dividing the net loss attributable to common shareholders by the weighted average number of common shares outstanding. Diluted loss per share is computed similar to basic loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential shares had been issued and if the additional shares were dilutive. Common equivalent shares are excluded from the computation of net loss per share if their effect is anti-dilutive.

For the three months and nine months ended September 30, 2008,March 31, 2009, 2,398,400 potentially dilutive shares were excluded from the shares used to calculate diluted earnings per share as their inclusion would reduce net loss per share, respectively. There were no potentially dilutive shares excluded for any period in 2007.

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Concentrations and Other Risks

The Company had five customers that accounted for 68.8% of accounts receivable as of March 31, 2009. As of September 30,March 31, 2008, the Company had three customers that accounted for 78.6% of accounts receivable. The Company had four customers that accounted for 82%74.2% of sales during the quarter ended March 31, 2009. During the quarter ended March 31, 2008, the Company had one customer that accounted for 61.5% of sales.

Recent Accounting Pronouncements

Accounting standards promulgated by the FASB change periodically. Changes in such standards may have an impact on the Company's future financial position. The following are a summary of recent accounting developments.

In May 2008,April 2009, the FASB issued SFASFSP No. 162,FAS 157-4, "Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly" ("FSP 157-4"). FSP 157-4 does not change the definition of fair value as detailed in FAS 157, but provides additional guidance for estimating fair value in accordance with FAS 157 when the volume and level of activity for the asset or liability have significantly decreased. The Hierarchyprovisions of Generally Accepted Accounting Principles. SFAS No, 162 identifies the sources of accounting principlesFSP 157-4 are effective for interim and the frameworkannual reporting periods ending after June 15, 2009, with early adoption permitted for selecting the principles toperiods ending after March 15, 2009. If early adoption is elected for either FAS 115-2 or FAS 107-1 and APB 28-1, FSP 157-4 must also be used in the preparation of financial statements for nongovernmental entities that are presented in conformity with generally accepted accounting principles in the United States. SFAS 162 will be effective 60 days following the SEC's approval. The Company doesadopted early. We do not expect that this statementFSP 157- 4 will result in a change in current practice.have any effect on our consolidated financial statements.

In December 2007,April 2009, the Financial Accounting Standards BoardFASB issued FSP No. FAS 115-2 and FAS 124-2, "Recognition and Presentation of Other-Than- Temporary Impairments" ("FASB") issued SFAS No. 161, "Disclosures about Derivative InstrumentsFSP 115-2 and Hedging Activities-an amendmentFAS 124-2"). FSP 115-2 and FAS 124-2 amends the other-than-temporary impairment guidance in U.S. GAAP for debt securities and provides additional disclosure requirements for other-than-temporary impairments for debt and equity securities. FSP 115-2 and FAS 124-2 address the determination as to when an investment is considered impaired, whether that impairment is other than temporary, and the measurement of FASB Statement No. 133." This standard requires companies to provide enhanced disclosures about (a) howan impairment loss. The provisions of FSP 115-2 and why an entity uses derivative instruments, (b) how derivative instruments and related hedged itemsFAS 124-2 are accounted for under Statement 133 and its related interpretations, and (c) how derivative instruments and related hedged items affect an entity's financial position, financial performance, and cash flows. This statement is effective for financial statements issued for fiscal yearsinterim and interimannual reporting periods beginningending after NovemberJune 15, 2008,2009, with early application encouraged. The Company hasadoption permitted for periods ending after March 15, 2009. If early adoption is elected for either FAS 157-4 or FAS 107-1 and APB 28-1, FSP 115-2 and FAS 124-2 must also be adopted the provisions of SFAS No. 161, but since the Company doesearly. We do not expect that FSP 115-2 and FAS 124-2 will have any derivative instruments or hedging activities,effect on our consolidated financial statements. Other recent accounting pronouncements issued by the adoption did not have any impact onFASB (including its financial position, resultsEmerging Issues Task Force), the American Institute of operations or cash flows.

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In December 2007,Certified Public Accountants, and the United States Securities and Exchange Commission issued Staff Accounting Bulletin No. 110 ("SAB 110") regarding the use of a "simplified" method, as discussed in SAB No. 107 ("SAB 107"), in developing an estimate of expected term of "plain vanilla" share options in accordance with Statement of Financial Accounting Standards No. 123 (revised 2004), Share-Based Payment. In particular, the staff indicated in SAB 107 that it will accept a company's election to use the simplified method, regardless of whether the company has sufficient information to make more refined estimates of expected term. At the time SAB 107 was issued, the staffdid not or are not believed that more detailed external information about employee exercise behavior (e.g., employee exercise patterns by industry and/or other categories of companies) would, over time, become readily available to companies. Therefore, the staff stated in SAB 107 that it would not expect a company to use the simplified method for share option grants after December 31, 2007. The staff understands that such detailed information about employee exercise behavior may not be widely available by December 31, 2007. Accordingly, the staff will continue to accept, under certain circumstances, the use of the simplified method beyond December 31, 2007. The Company currently does not have stock options outstanding, but it will follow the guidance in SAB 110 if it grants any options in the future. Adoption of this standard is not expectedmanagement to have a material impact on the Company.Company's present or future financial statements.

In December 2007,April 2009, the FASB issued SFASFSP No. 160, "Noncontrolling Interests in ConsolidatedFAS 107-1 and APB 28-1, "Interim Disclosures about Fair Value of Financial Statements-an amendment of ARB No. 51." This Statement amends ARB 51 to establish accountingInstruments" ("FSP 107-1 and reporting standards forAPB 28-1"). FSP 107-1 and APB 28-1 require that disclosures about the noncontrolling interest in a subsidiary and for the deconsolidationfair value of a subsidiary. It clarifies that a noncontrolling interest in a subsidiarycompany's financial instruments be made whenever summarized financial information for interim reporting periods is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. Before this Statement was issued, limited guidance existed for reporting noncontrolling interests. As a result, considerable diversity in practice existed. So-called minority interests were reported in the consolidated statementmade. The provisions of financial position as liabilities or in the mezzanine section between liabilities and equity. This Statement improves comparability by eliminating that diversity. This Statement isFSP 107-1 are effective for fiscal years, and interim reporting periods within those fiscal years, beginning on orending after DecemberJune 15, 2008 (that is, January 1, 2009, with early adoption permitted for entities with calendar year-ends). Earlier adoption is prohibited. The effective date of this Statement is the same as that of the related Statement 141 (revised 2007). The Company will adopt this Statement beginning January 1,periods ending after March 15, 2009. It is not believed that this will have a material impact on the Company's financial position, results of operations or cash flows.

In December 2007, the FASB, issued SFAS No. 141 (revised 2007), "Business Combinations." This Statement replaces FASB Statement No. 141, "Business Combinations," but retains the fundamental requirements in Statement 141. This Statement establishes principles and requirements for how the acquirer: (a) recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquire; (b) recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase; and (c) determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. This Statement applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. An entity may not apply it before that date. The effective date of this Statement is the same as that of the related FASB Statement No. 160, "Noncontrolling Interests in Consolidated Financial

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Statements." The Company will adopt this Statement beginning January 1, 2009. It is not believed that this will have a material impact on the Company's financial position, results of operations or cash flows.

In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for Financial Assets and Liabilities—Including an Amendment of SFAS 115." This standard permits an entity to choose to measure many financial instruments and certain other items at fair value. This option is available to all entities. Most of the provisions in SFAS No. 159 are elective; however, an amendment to SFAS No. 115 "Accounting for Certain Investments in Debt and Equity Securities" applies to all entities with available for sale or trading securities. Some requirements apply differently to entities that do not report net income. SFAS No. 159 is effective as of the beginning of an entity's first fiscal year that begins after November 15, 2007. Early adoption is permitted as of the beginning of the previous fiscal year provided that the entity makes that choice in the first 120 days of that fiscal year and also elects to apply the provisions of FAS 157 "Fair Value Measurements." We adopted SFAS No. 159 beginning January 1, 2008 and it had no impact on our financial statements.

Effective January 1, 2007, the Company adopted FSP No. FIN 48-1, "Definition of Settlement in FASB Interpretation No. 48," (FSP FIN 48-1). FSP FIN 48-1 was issued May 2, 2007 and amends FIN 48 to provide guidance on how an entity should determine whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits. The term "effectively settled" replaces the term "ultimately settled" when used to describe recognition, and the terms "settlement" or "settled" replace the terms "ultimate settlement" or "ultimately settled" when used to describe measurement of a tax position under FIN 48. FSP FIN 48-1 clarifies that a tax position can be effectively settled upon the completion of an examination by a taxing authority without being legally extinguished. For tax positions considered effectively settled, an entity would recognize the full amount of tax benefit, even if the tax position is not considered more likely than not to be sustained based solely on the basis of its technical merits and the statute of limitations remains open. As the Company does not have any open tax returns the adoption of FSP FIN 48-1 did107-1 and APB 28-1 may be made only if FSP FAS 157-4, "Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly" and FSP FAS 115-2 and FAS 124-2 "Recognition and Presentation of Other-Than-Temporary Impairments" are also adopted early. We do not expect that FSP 107-1 and APB 28- 1 will have an impactany effect on the accompanyingour consolidated financial statements.

In September 2006, the FASB issued FAS 157, "Fair Value Measurements." This Statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. This Statement applies under other accounting pronouncements that require or permit fair value measurements, the FASB having previously concluded in those accounting pronouncements that fair value is the relevant measurement attribute. Accordingly, this Statement does not require any new fair value measurements. However, for some entities, the application of this Statement will change current practice. This Statement is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. Earlier application is encouraged, provided that the reporting entity has not yet issued financial statements for that fiscal year, including financial statements for an interim period within that fiscal year. The Company adopted this Statement January 1, 2008, and it did not have an impact on the Company's financial position, results of operations or cash flows.

96

Effective January 1, 2007, the Company adopted FASB Interpretation No. 48, "Accounting for Uncertainty in Income Taxes- an interpretation of FASB Statement No. 109," which clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements in accordance with SFAS No. 109, "Accounting for Income Taxes."   This interpretation prescribes a comprehensive model for how a company should recognize, measure, present and disclose in its financial statements uncertain tax positions that it has taken or expects to take on a tax return, including a decision whether to file or not to file a return in a particular jurisdiction.  Under the Interpretation, the financial statements must reflect expected future tax consequences of these positions presuming the taxing authorities full knowledge of the position and all relevant facts.  The Interpretation also revises disclosure requirements and introduces a prescriptive annual, tabular roll-forward of the unrecognized tax benefits.  This Interpretation is effective for fiscal years beginning after December 15, 2006, including the Company's 2008 fiscal year, although early adoption is permitted.  The Company does not have any open tax returns, consequently, the adoption of this Interpretation had no impact on the Company's financial statements.

NOTE 2 - INVENTORY

Inventory at March 31, 2009 and December 31, 2007 and September 30, 2008 consisted of the following.

NOTE 3 - COMMITMENTS AND CONTRACTUAL OBLIGATIONS

Employment Agreement

On February 25, 2008, the Company presented an offer letter to a key employee pursuant to which the employee was to be granted a 1.25% share of the Company's outstanding membership interests to be issued upon a proposed private placement of securities. The membership interest was to vest over a five year period commencing one year from the issuance date, with acceleration upon a change in control of the Company. The offer letter was not signed by the Company, but was returned to the Company executed by the employee.

The private placement was consummated on June 18, 2008. As a result, the Company had a potential commitment to issue the employee membership interests with an estimated fair value of $562,500. As of June 30, 2008, the estimated fair value of the vested portion of these membership interests amounted to $35,156.

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On August 27, 2008, the Company granted the employee options to purchase membership interests in Cardo Medical LLC, which immediately converted to options to purchase shares in Cardo Medical, Inc.

On September 5, 2008, the Company and the employee agreed that the February 25, 2008 offer letter was void and of no effect.

In accordance with Statement of Financial Accounting Standards No. 123(R), the Company has performed analyses of the original grant of a 1.25% share of the Company's membership interests, the subsequent grant of options to buy membership interests and thirdly the conversion of that option grant to a new option to buy shares in the newly merged public company. As a result of those analyses, the exchanges of instruments have been determined to be modifications of the previous grants. Accordingly, on the date of the modifications, the Company compared the fair value of the original grants to the fair value of the new grants. As the fair values of the new grants were not greater than the fair values of the new grants, no incremental compensation cost was recorded.

Put Option Derivative

On June 18, 2008, the Company entered into a Unit Purchase Agreement and a Merger Agreement. Those agreements specified that if Cardo did not consummate this merger prior to August 31, 2008, the investors who were party to the Unit Purchase Agreement had the right ("Put Option") to cause Cardo to repurchase their units for the amount of their original investment, plus the amount of any liability for taxes the investors (or their equity holders or other beneficial owners) may have incurred based upon Cardo's income.

That Put Option was valued at $283,555, and it was recorded as a liability on the books of Cardo.

On August 29, 2008, Cardo completed the merger pursuant to the terms of the Merger Agreement. As a result, the Put Option was cancelled and the amount originally recorded as a liability was reclassified to equity.

NOTE 4 - REVERSE MERGER

On August 29, 2008 Cardo completed a reverse takeover of clickNsettle.com, Inc., a publicly traded company ("CKST"). Under the terms of the Merger Agreement, at the closing of the Merger, each Cardo unit issued and outstanding was converted into and exchanged for the right to receive 667,204.70995 shares of common stock of CKST. All options to buy units of Cardo were also converted into and exchanged for options to purchase shares of CKST at the same exchange rate as the shares.

Accordingly, all current and historic share and option quantities in the accompanying financial statements and notes thereto have been presented at the new higher share count, after conversion.

As a result of the Merger, CKST's shareholders and option holders own approximately 5.5% of the combined company on a fully diluted basis (or 11,298,979 shares of common stock outstanding and underlying options); the members of Cardo, excluding the new investors who

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participated in the private placement in June 2008, own approximately 64.8% of the combined company on a fully diluted basis (or 133,440,942 shares of common stock), the new investors own approximately 28.5% of the combined company on a fully diluted basis (or 58,641,701 shares of common stock), and option holders of Cardo have rights to own approximately 1.2% of the combined company on a fully diluted basis (or 2,398,400 shares of common stock underlying those options). As of September 30, 2008, none of the shares issuable as part of the reverse merger had been issued.

NOTE 53 - SHARE BASED PAYMENT

On August 29, 2008, the Company issued options to certain employees and Board members to purchase membership units in Cardo. On the same day, Cardo completed the reverse merger transaction, described above (see Note 4), in which, the options converted to shares in clickNsettle.com, Inc.

In accordance with SFAS No. 123(R), the Company has conducted an analysis of the fair value of the options immediately prior to the reverse merger, and immediately after the reverse merger and has concluded that there is no change in value as a result of the reverse merger. Therefore, no additional compensation cost will be recognized related to the reverse merger.

Furthermore, as described in Note 4 above, all share quantities in these financial statements have been cast to reflect the impact of the reverse merger. Therefore, the following disclosure uses those figures after the reverse merger.

The options granted give the grantees the right to purchase up to 2,398,400 shares of its common stock at an exercise price of $0.23 per share. The options vest 20% each year over a five year period and expire after ten years. The weighted average grant date fair value of options granted was $0.13 per option, for a total fair value of $299,844,$300,000 , which will be reflected as an operating expense over the vesting period of the options. The total expense recognized for the nine months and three months ended September 30, 2008March 31, 2009 in the accompanying consolidated statements of operations amounted to $11,103.$31,000 (unaudited).

The fair value of each option award is estimated on the date of grant using the Black-Scholes option valuation model that uses the assumptions noted in the following table. Because the Black-Scholes option valuation model incorporate ranges of assumptions for inputs, those ranges are disclosed. Expected volatilities are based on the Dow Jones Index of small cap medical equipment manufacturers, as well as another index of smaller publicly traded companies that we feel are similar to Cardo. As there is no history of option lives at Cardo, the expected term of options granted is the midpoint between the vesting periods and the contractual life of the options. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The forfeiture rate is based on an analysis of the nature of the recipients' jobs and relationships to the Company.

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The following is a summary of the assumptions used.

A summary of option activity as of September 30, 2008,March 31, 2009, and changes during the period then ended is presented below.

NOTE 64 - INCOME TAXESSEGMENT INFORMATION

Under Accounting Principles Board Opinion No. 28,Interim Financial Reporting,Our businesses are currently organized into the Companyfollowing two reportable segments; reconstructive products (the "Reconstructive Division") and spine products (the "Spine Division"). The Reconstructive Division segment is requiredcomprised of activity relating to adjustthe Company's unicompartmental knee, patella-femoral products, and reconstructive knee products. The Spine Division segment is comprised of the spinal lumbar fusion system and cervical plate and screw systems.

These reportable segments are based on the nature of the products offered. Management evaluates performance and allocates resources based on several factors, of which the primary financial measure is segment operating results. Due to the distinct nature of the products in the Company's Reconstructive Division, and the fact that it has a more developed market for its effective tax rate each quarterproducts, it is considered by management as a separate segment. The Company's Spine Division is still in the process of developing the market and obtaining instrumentation necessary to sell the products in greater quantities. As a result, the Spine Division is considered by management as a separate segment. The accounting policies of the reportable segments are the same as those described in Note 1.

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As of March 31, 2009, the Company's Reconstructive Division includes $1,233 of goodwill and $4,840 in other intangible assets relating to the Company's unicompartmental knee product. These amounts are expected to be consistent with the estimated annual effective tax rate. The Company is also required to record the tax impact of certain discrete items, unusual or infrequently occurring, including changes in judgment about valuation allowances and effects of changes in tax laws or rates, in the interim period in which they occur. In addition, jurisdictions with a projected loss for the year or a year-to-date loss where no tax benefit can be recognized are excluded from the estimated annual effective tax rate. The impact

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of such an exclusion could result in a higher or lower effective tax rate during a particular quarter, based upon the mix and timing of actual earnings versus annual projections.

Cardo, in its capacity as the operating company taking over CKST's income tax positions in addition to its own positions after June 17, 2008 (see Note 1), has estimated its annual effective tax rate to be zero. This is based on an expectation that the combined entity will generate net operating losses in 2008, and it is not more likely than not that those losses will be recovered using future taxable income. Therefore, no provisiondeductible for income tax has been recorded aspurposes.

The following table sets forth financial information by reportable segment (in thousands):

All of and for September 30, 2008.the Company's net sales were attributable to activity in the United States. There were no long-lived assets held in foreign countries.

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ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The discussion and analysis of our financial condition and results of operations are based on our financial statements, which we have prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported revenues and expenses during the reporting periods. On an ongoing basis, we evaluate estimates and judgments, including those described in greater detail below. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

The following discussion and analysis excludes the impact of CKST'sclickNsettle.com, Inc. ("CKST")'s financial condition and results of operations prior to the Merger on August 29, 2008 because they were not material in relation to the financial information for any of the periods presented below.

All amounts, other that share amounts, are stated in thousands.

As used in this "Management's Discussion and Analysis of Financial Condition and Results of Operation of Cardo," except where the context otherwise requires, the term "we," "us," "our" or "Cardo" refers to the business of Cardo Medical, LLCInc.

The following discussion should be read together with the information contained in the financial statements and related notes included elsewhere in this Form 10-Q.

Overview

Cardo Medical, Inc. is an early-stage orthopedic medical device company specializing in designing, developing and marketing reconstructive joint devices and spinal surgical devices. Reconstructive joint devices are used to replace knee, hip and other joints that have deteriorated through disease or injury. Spinal surgical devices involve products to stabilize the spine for fusion and reconstructive procedures. Within these areas, Cardo intends to focus on the higher-growth sectors of the orthopedic industry, such as advanced minimally invasive instrumentation and bone-conserving high-performance implants. Cardo is focused on developing surgical devices that will enable surgeons to bridge the gap between soft tissue-driven sports medicine techniques and classical reconstructive surgical procedures. Cardo commercializes its reconstructive joint devices through its Cardo Orthopedics division and its consolidated subsidiaries, Accelerated Innovation,spine devices through its Cardo Spine division. The Company launched and commenced sales of its first product in late 2006, which was a high-performance, uni-compartmental knee replacement. The Company commenced sales of its reconstructive and spine products in 2008.

On June 18, 2008, Cardo entered into a Merger Agreement and Plan of Reorganization with CKST and Cardo Acquisition, LLC, Cervical Xpand, LLCa California limited liability company and Uni-Knee, LLC, afterwholly-owned subsidiary of CKST. Upon the transferconsummation of the medical device businesstransactions contemplated by Accin on May 21, 2007;the Merger Agreement, CKST acquired Cardo through a merger of Cardo with Cardo Acquisition, with Cardo continuing as the surviving entity in the Merger and the term "Accin" refersa wholly-owned subsidiary of CKST. Pursuant to the business of Accin Corporation and these consolidated subsidiaries, prior to the transferMerger Agreement, all of the medical device business by Accinissued and outstanding units of Cardo's membership interests were converted into the right to receive shares of the common stock of CKST.

We are headquartered in Los Angeles, California. In connection with the consummation of the Merger, CKST proposed to its shareholders an amendment to its Amended and Restated Certificate of Incorporation to change its name from "clickNsettle.com, Inc." to "Cardo Medical, Inc." CKST's trading symbol was "CKST.OB," which has changed to "CDOM.OB" in connection with the name change. CDOM's common stock is quoted on May 21, 2007.the National Association of Securities Dealers, Inc.'s, Over-the-Counter Bulletin Board, or the OTC Bulletin Board.

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Critical Accounting Policies

Use of Estimates

Financial statements prepared in accordance with accounting principles generally accepted in the United States require management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Among other things, management makes estimates relating to allowances for doubtful accounts, excess and obsolete inventory items, the estimated depreciable lives of property and equipment, the impairment of goodwill and other intangible assets, share-based payment, deferred tax assets and the allocation of the purchase price paid for the minority interests in Uni, Cervical and Accelerated. Given the short operating history of Cardo actual results could differ from those estimates.

Income Taxes

Prior to June 17,On August 29, 2008, Cardo and its subsidiaries were flow through entities from an income tax standpoint. Income generated in these entities was not taxed atconsummated a reverse takeover of clickNsettle.com, Inc. ("CKST") thereby adopting CKST as the entity level, but rather, the income passed directly through to the owners' individual income tax returns. As a result, there is no provision for income tax for any period prior to this date.

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On June 17, 2008, Cardo made an election with the Internal Revenue Service to be taxed as a corporation, meaning that any taxable income generated by Cardo and subsidiaries will be taxed at the Cardo level.taxpaying entity.

Accordingly, on June 17, 2008, the Company adopted the guidelines specified in SFAS No. 109, "Accounting for Income Taxes." In accordance with SFAS No. 109, deferred tax assets and liabilities are recognized to reflect the estimated future tax effects, calculated at currently effective tax rates, of future deductible or taxable amounts attributable to events that have been recognized on a cumulative basis in the financial statements. A valuation allowance related to a deferred tax asset is recorded when it is more likely than not that some portion of the deferred tax asset will not be realized. The estimated value of the deferred tax assets are subject to significant change based on the company's future profitability. Deferred tax assets and liabilities are adjusted for the effects of the changes in tax laws and rates of the date of enactment.

Also on June 17, 2008, the Company adopted Financial Accounting Standards Board ("FASB") Interpretation No. 48, Accounting for Uncertainty in Income Taxes-An Interpretation of FASB Statement No. 109 ("FIN 48"). FIN 48 seeks to reduce the diversity in practice associated with certain aspects of measurement and recognition in accounting for income taxes. FIN 48 prescribes a recognition threshold and measurement requirement for the financial statement recognition of a tax position that has been taken or is expected to be taken on a tax return and also provides guidance on de- recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. Under FIN 48 the Company may only recognize or continue to recognize tax positions that meet a "more likely than not" threshold. The company's tax position, based on the FIN 48 analysis is unlikely to change.

On August 29, 2008, Cardo consummated a reverse takeoverWe periodically evaluate the likelihood of clickNsettle.com, Inc. ("CKST") (See Note 4), thereby adopting CKST as the taxpaying entity.realization of deferred tax assets, and adjust the carrying amount of the deferred tax assets by the valuation allowance to the extent the future realization of the deferred tax assets is not judged to be more likely than not. We consider many factors when assessing the likelihood of future realization of our deferred tax assets, including our recent cumulative earnings experience by taxing jurisdiction, expectations of future taxable income or loss, the carryforward periods available to us for tax reporting purposes, and other relevant factors.

Revenue Recognition

TheIn accordance with SEC Staff Accounting Bulletin ("SAB") Topic 13, the Company recognizes revenuesrevenue when there isit's realizable and earned. The company considers revenue to be realizable and earned when all of the four criteria in SAB Topic 13 are met: persuasive evidence of an arrangement productexists, delivery and acceptancehas occurred or services have occurred,been rendered, the salesseller's price to the buyer is fixed andor determinable, and collectability of the resulting receivable is reasonably assured.

The Persuasive evidence of the arrangements occurs when the Company records revenues when title andreceives a signed contract from the risk of loss pass tohospital in which the customer. Generally, these conditions occursurgery will be performed. Within that contract is the price at which the hospital will buy the device. Delivery occurs on the day of surgery when the device is implanted by the surgeon. Collectability is reasonably assured as we have continuing relationships with the hospitals and we can pursue collections if necessary. As the company does not accept returns and does not have any post-sale obligations, the date thatof revenue recognition is generally on the surgery takes place atday of the hospital.surgery.

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Intangible and Long-Lived Assets

In accordance with Statement of Financial Accounting Standards ("SFAS") No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets," the Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that their net book value may not be recoverable. When such factors and circumstances exist, the Company compares the projected undiscounted future cash flows associated with the related asset or group of assets over their estimated useful lives against their respective carrying amount. Impairment, if any, is based on the excess of the carrying amount over the fair value, based on market value when available, or discounted expected cash flows, of those assets and is recorded in the period in which the determination is made. The Company's management currently believes there is no impairment of its long-lived assets. There can be no assurance, however, that

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market conditions will not change or demand for the Company's products will continue. Either of these could result in future impairment of long-lived assets. The first step of the company's goodwill impairment test compares the fair value of a reporting unit with its carrying amount, including goodwill. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired, thus the second step of the impairment test is unnecessary. If the carrying amount of a reporting unit exceeds its fair value, the second step of the goodwill impairment test shall be performed to measure the amount of impairment loss, if any. The second step of the goodwill impairment test compares the implied fair value of reporting unit goodwill with the carrying amount of that goodwill. If the carrying amount of reporting unit goodwill exceeds the implied fair value of that goodwill, an impairment loss shall be recognized in an amount equal to that excess. The loss recognized cannot exceed the carrying amount of goodwill. After a goodwill impairment loss is recognized, the adjusted carrying amount of goodwill shall be its new accounting basis. Subsequent reversal of a previously recognized goodwill impairment loss is prohibited once the measurement of that loss is completed. The testing for impairment needs to be conducted at the reporting unit, or component level, which is one level below the operating unit. In Cardo's case, the operating units are the Reconstructive and Spine product lines. The reporting units are one level below that. In the case of the Reconstructive Division, the reporting units are the knee and hip products. For the Spine Division, the reporting units are the licensed and internally developed products with the assistance of an independent valuation firm and in accordance with SFAS No. 142.

Property and Equipment

Property and equipment are recorded at historical cost and depreciated on a straight-line basis over their estimated useful lives, which range from three to five years. This estimate is based on the useful life of the individual items. When items are retired or disposed of, income is charged or credited for the difference between the net book value of the asset and the proceeds realized thereon. Ordinary maintenance and repairs are charged to expense as incurred, and replacements and betterments are capitalized. This estimate is unlikely to experience any differences from what is reflected in the financial statements.

Share Based Payment

The Company accounts for its share-based compensation under the provisions of FASB Statement No. 123(R),Share-Based Payment, ("SFAS 123R").

In order to determine compensation on options issued to consultants, and employees' options, the fair value of each option granted is estimated on the date of grant using the Black-Scholes option-pricing model. The Company estimates the requisite service period used in the Black-Scholes calculation based on an analysis of vesting and exercisability conditions, explicit, implicit, and/or derived service periods, and the probability of the satisfaction of any performance or service conditions. The Company also considers whether the requisite service has been rendered when recognizing compensation costscosts. The fair value of each option award is estimated on the date of grant using the Black-Scholes option valuation model. Because the Black-Scholes option valuation model incorporate ranges of assumptions for inputs, those ranges are disclosed. Expected volatilities are based on the Dow Jones Index of small cap medical equipment manufacturers, as well as another index of smaller publicly traded companies that we feel are similar to Cardo. As there is no history of option lives at Cardo, the expected term of options granted is the midpoint between the vesting periods and the contractual life of the options. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The forfeiture rate is based on an analysis of the nature of the recipients' jobs and relationships to the Company.

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Inventory

Inventory is stated at the lower of cost or net realizable value.value as determined by assessing the gross profit less selling costs of each inventory item. Cost is determined on a first-in, first-out basis; and the inventory is comprised of work in process and finished goods. Work in process consists of fabrication costs paid relating to items not physically received. Finished goods are completed knee, spine and hip replacement products ready for sales to customers.

At each balance sheet date, the Company evaluates its ending inventories for excess quantities and obsolescence. This evaluation includes an analysis of sales levels by product type. Among other factors, the Company considers current product configurations, historical and forecasted demand, market conditions and product life cycles when determining the net realizable value of the inventory. Provisions are made to reduce excess or obsolete inventories to their estimated net realizable values. Once established, write-downs are considered permanent adjustments to the cost basis of the excess or obsolete inventory. The Company did not have any inventory considered by management to be excess or obsolete as of December 31, 20072008 and September 30, 2008March 31, 2009 (unaudited). Based on the forecasted sales amounts we do not see any changes in net realizable value in the near future.

Recent Accounting Pronouncements

In May 2008, the FASB issued SFAS No. 162, The Hierarchy of Generally Accepted Accounting Principles. SFAS No, 162 identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements for nongovernmental entities that are presented in conformity with generally accepted accounting

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principles in the United States. SFAS 162 will be effective 60 days following the SEC's approval. The Company does not expect that this statement will result in a change in current practice.

In December 2007,standards promulgated by the Financial Accounting Standards Board ("FASB") change periodically. Changes in such standards may have an impact on the Company's future financial position. The following are a summary of recent accounting developments.

In April 2009, the FASB issued SFASFSP No. 161, "Disclosures about Derivative InstrumentsFAS 157-4, "Determining Fair Value When the Volume and Hedging Activities-an amendmentLevel of FASB Statement No. 133." This standard requires companies to provide enhanced disclosures about (a) howActivity for the Asset or Liability Have Significantly Decreased and why an entity uses derivative instruments, (b) how derivative instrumentsIdentifying Transactions That Are Not Orderly" ("FSP 157-4"). FSP 157-4 does not change the definition of fair value as detailed in FAS 157, but provides additional guidance for estimating fair value in accordance with FAS 157 when the volume and related hedged itemslevel of activity for the asset or liability have significantly decreased. The provisions of FSP 157-4 are accounted for under Statement 133 and its related interpretations, and (c) how derivative instruments and related hedged items affect an entity's financial position, financial performance, and cash flows. This statement is effective for financial statements issued for fiscal yearsinterim and interimannual reporting periods beginningending after NovemberJune 15, 2008,2009, with early application encouraged.adoption permitted for periods ending after March 15, 2009. If early adoption is elected for either FAS 115-2 or FAS 107-1 and APB 28-1, FSP 157-4 must also be adopted early. We do not expect that FSP 157-4 will have any effect on our consolidated financial statements.

In April 2009, the FASB issued FSP No. FAS 115-2 and FAS 124-2, "Recognition and Presentation of Other-Than-Temporary Impairments" ("FSP 115-2 and FAS 124-2"). FSP 115-2 and FAS 124-2 amends the other-than-temporary impairment guidance in U.S. GAAP for debt securities and provides additional disclosure requirements for other-than-temporary impairments for debt and equity securities. FSP 115-2 and FAS 124-2 address the determination as to when an investment is considered impaired, whether that impairment is other than temporary, and the measurement of an impairment loss. The Company has adopted the provisions of SFAS No. 161, but since the Company doesFSP 115-2 and FAS 124-2 are effective for interim and annual reporting periods ending after June 15, 2009, with early adoption permitted for periods ending after March 15, 2009. If early adoption is elected for either FAS 157-4 or FAS 107-1 and APB 28-1, FSP 115-2 and FAS 124-2 must also be adopted early. We do not expect that FSP 115-2 and FAS 124-2 will have any derivative instruments or hedging activities,effect on our consolidated financial statements. Other recent accounting pronouncements issued by the adoption did not have any impact onFASB (including its financial position, resultsEmerging Issues Task Force), the American Institute of operations or cash flows.

In December 2007,Certified Public Accountants, and the United States Securities and Exchange Commission issued Staff Accounting Bulletin No. 110 ("SAB 110") regarding the use of a "simplified" method, as discussed in SAB No. 107 ("SAB 107"), in developing an estimate of expected term of "plain vanilla" share options in accordance with Statement of Financial Accounting Standards No. 123 (revised 2004), Share-Based Payment. In particular, the staff indicated in SAB 107 that it will accept a company's election to use the simplified method, regardless of whether the company has sufficient information to make more refined estimates of expected term. At the time SAB 107 was issued, the staffdid not or are not believed that more detailed external information about employee exercise behavior (e.g., employee exercise patterns by industry and/or other categories of companies) would, over time, become readily available to companies. Therefore, the staff stated in SAB 107 that it would not expect a company to use the simplified method for share option grants after December 31, 2007. The staff understands that such detailed information about employee exercise behavior may not be widely available by December 31, 2007. Accordingly, the staff will continue to accept, under certain circumstances, the use of the simplified method beyond December 31, 2007. The Company currently does not have stock options outstanding, but it will follow the guidance in SAB 110 if it grants any options in the future. Adoption of this standard is not expectedmanagement to have a material impact on the Company.Company's present or future financial statements.

In December 2007,April 2009, the FASB issued SFASFSP No. 160, "Noncontrolling Interests in ConsolidatedFAS 107-1 and APB 28-1, "Interim Disclosures about Fair Value of Financial Statements-an amendment of ARB No. 51." This Statement amends ARB 51 to establish accountingInstruments" ("FSP 107-1 and reporting standards forAPB 28-1"). FSP 107-1 and APB 28-1 require that disclosures about the noncontrolling interest in a subsidiary and for the deconsolidationfair value of a subsidiary. It clarifies that a noncontrolling interest in a subsidiarycompany's financial instruments be made whenever summarized financial information for interim reporting periods is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. Before this Statement was issued, limited guidance existed for reporting noncontrolling interests. As a result, considerable diversity in practice existed. So-called minority interests were reported in the consolidated statementmade. The provisions of financial position as liabilities or in the mezzanine section between liabilities and equity. This Statement improves comparability by eliminating that diversity. This Statement isFSP 107-1 are effective for fiscal years, and interim reporting periods within those fiscal years, beginning on orending after DecemberJune 15, 2008 (that is, January 1, 2009, with early adoption permitted for entities with calendar year-ends). Earlier adoption is prohibited. The effective date of this Statement is the same as that of the related Statement 141 (revised 2007).

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The Company will adopt this Statement beginning January 1,periods ending after March 15, 2009. It is not believed that this will have a material impact on the Company's financial position, results of operations or cash flows.

In December 2007, the FASB, issued SFAS No. 141 (revised 2007), "Business Combinations." This Statement replaces FASB Statement No. 141, "Business Combinations," but retains the fundamental requirements in Statement 141. This Statement establishes principles and requirements for how the acquirer: (a) recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquire; (b) recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase; and (c) determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. This Statement applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. An entity may not apply it before that date. The effective date of this Statement is the same as that of the related FASB Statement No. 160, "Noncontrolling Interests in Consolidated Financial Statements." The Company will adopt this Statement beginning January 1, 2009. It is not believed that this will have a material impact on the Company's financial position, results of operations or cash flows.

In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for Financial Assets and Liabilities—Including an Amendment of SFAS 115." This standard permits an entity to choose to measure many financial instruments and certain other items at fair value. This option is available to all entities. Most of the provisions in SFAS No. 159 are elective; however, an amendment to SFAS No. 115 "Accounting for Certain Investments in Debt and Equity Securities" applies to all entities with available for sale or trading securities. Some requirements apply differently to entities that do not report net income. SFAS No. 159 is effective as of the beginning of an entity's first fiscal year that begins after November 15, 2007. Early adoption is permitted as of the beginning of the previous fiscal year provided that the entity makes that choice in the first 120 days of that fiscal year and also elects to apply the provisions of FAS 157 "Fair Value Measurements." We adopted SFAS No. 159 beginning January 1, 2008 and it had no impact on our financial statements.

Effective January 1, 2007, the Company adopted FSP No. FIN 48-1, "Definition of Settlement in FASB Interpretation No. 48," (FSP FIN 48-1). FSP FIN 48-1 was issued May 2, 2007 and amends FIN 48 to provide guidance on how an entity should determine whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits. The term "effectively settled" replaces the term "ultimately settled" when used to describe recognition, and the terms "settlement" or "settled" replace the terms "ultimate settlement" or "ultimately settled" when used to describe measurement of a tax position under FIN 48. FSP FIN 48-1 clarifies that a tax position can be effectively settled upon the completion of an examination by a taxing authority without being legally extinguished. For tax positions considered effectively settled, an entity would recognize the full amount of tax benefit, even if the tax position is not considered more likely than not to be sustained based solely on the basis of its technical merits and the statute of limitations remains open. As the Company does not have any open tax returns the adoption of FSP FIN 48-1 did107-1 and APB 28-1 may be made only if FSP FAS 157-4, "Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly" and FSP FAS 115-2 and FAS 124-2 "Recognition and Presentation of Other-Than-Temporary Impairments" are also adopted early. We do not expect that FSP 107-1 and APB 28-1 will have an impactany effect on the accompanyingour consolidated financial statements.

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In September 2006, the FASB issued FAS 157, "Fair Value Measurements." This Statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. This Statement applies under other accounting pronouncements that require or permit fair value measurements, the FASB having previously concluded in those accounting pronouncements that fair value is the relevant measurement attribute. Accordingly, this Statement does not require any new fair value measurements. However, for some entities, the application of this Statement will change current practice. This Statement is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. Earlier application is encouraged, provided that the reporting entity has not yet issued financial statements for that fiscal year, including financial statements for an interim period within that fiscal year. The Company adopted this Statement January 1, 2008, and it did not have an impact on the Company's financial position, results of operations or cash flows.

Effective January 1, 2007, the Company adopted FASB Interpretation No. 48, "Accounting for Uncertainty in Income Taxes- an interpretation of FASB Statement No. 109," which clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements in accordance with SFAS No. 109, "Accounting for Income Taxes."   This interpretation prescribes a comprehensive model for how a company should recognize, measure, present and disclose in its financial statements uncertain tax positions that it has taken or expects to take on a tax return, including a decision whether to file or not to file a return in a particular jurisdiction.  Under the Interpretation, the financial statements must reflect expected future tax consequences of these positions presuming the taxing authorities full knowledge of the position and all relevant facts.  The Interpretation also revises disclosure requirements and introduces a prescriptive annual, tabular roll-forward of the unrecognized tax benefits.  This Interpretation is effective for fiscal years beginning after December 15, 2006, including the Company's 2008 fiscal year, although early adoption is permitted.  The Company does not have any open tax returns, consequently, the adoption of this Interpretation had no impact on the Company's financial statements.

Overview

Cardo Medical LLC was formed as a California limited liability company in April 2007. On August 29, 2008 it completed a reverse takeover of clickNsettle.com, Inc., a publicly traded company ("CKST"), and changed the name of CKST to Cardo Medical, Inc. In accordance with rules governing reverse merger accounting, since Cardo was the operating entity and CKST was the shell it merged into, the accounts of Cardo Medical LLC are carried forward as the acquiring entity. Accordingly, financial information in this section for periods before August 29, 2008 is for Cardo Medical LLC, not for CKST. "Cardo" in this section is used to describe both Cardo Medical LLC prior to the merger on August 29, 2008, and the combined entities of Cardo Medical LLC and clickNsettle.com, Inc. (renamed Cardo Medical, Inc.) after the merger.

Cardo is an orthopedic medical device company specializing in designing, developing and marketing reconstructive joint devices and spinal surgical devices.

Reconstructive joint devices are used to replace knee, hip and other joints that have deteriorated through disease or injury. Spinal surgical devices involve products to stabilize the spine for

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fusion and reconstructive procedures. Within these areas, we intend to focus on the higher-growth sectors of the orthopedic industry, such as advanced minimally invasive instrumentation and bone conserving high-performance implants. We are also focused on developing surgical techniques that bridge the gap between soft tissue-driven sports medicine techniques and classical reconstructive surgical procedures.

We initiated sales of our Align 360 unicompartmental knee device in 2007. We have received Section 510(k) approval from the Food and Drug Administration for our uniquely instrumented patello-femoral arthroplasty as well as for our total hip replacement system and our bipolar and monopolar hip systems. We also have received Section 510(k) approvals for our spinal lumbar fusion system and our cervical plate and screw systems. Most recently, we received 510(k) approval of our Align 360 Total Knee System. The Align 360 Total Knee System is planned for commercial release during the second quarter of 2009.

Results of Operations for the Nine Months Ended September 30, 2008 (Cardo) (Unaudited) as Compared to the Nine Months Ended September 30, 2007 (Accin and Cardo on a combined basis)

The following is a comparison of the consolidated results of operations for Cardo for the nine months ended September 30, 2008 (unaudited) and Accin and Cardo for the nine months ended September 30, 2007 (unaudited, including the combined results of operations of Accin and Cardo):

Revenues

Net sales for the nine months ended September 30, 2008 increased by $469,000, or 101.1%, as compared to the same period in 2007. Accin, the company from which Cardo acquired its medical device business, launched and commenced sales of its first product in December 2006, which was a high-performance, unicompartmental knee replacement product. As doctors became more familiar with our new product, they began using it more often. As a result, our sales of the knee product for the nine months ended September 30, 2008 were $363,000 higher than during the same period in 2007. In addition, during 2008, we began sales of licensed products, which sales amounted to $105,000 during the nine months ended September 30, 2008.

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Costs of Sales

Costs of sales for the nine months ended September 30, 2008 increased by $67,000, or 92.8%, as compared to the same period in 2007 due to our sales escalating during 2008. Our costs of sales in 2008 also included $22,000 attributable to sales of licensed products and $45,000 was attributed to our knee product, which commenced during the nine months ended September 30, 2008. Our gross profit percentage for 2008 was 85.1%, representing an increase from 84.4% in 2007. This increase was primarily a result of lower per unit production costs during 2008. We incur greater production costs the first time that a product is developed as a result of product set-up costs. Over time, the average cost decreases, which results in a higher gross profit percentage.

Research and Development Expenses

Research and development expenses for the nine months ended September 30, 2008 increased by $1,175,000, or 1,035.8%, from the same period in 2007. The increase was primarily due to $937,500 of in-process research and development expenses acquired in connection with the purchase of the non-controlling interest in Accelerated Innovation, LLC in June 2008. The acquired in-process research and development related to a total knee system under development is expected to be completed in the fourth quarter of 2008. In addition, we increased prototype expenses in 2008 for production of our hip replacement prototypes. There were no expenditures for these items in 2007.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the nine months ended September 30, 2008 increased by $2,191,000, or 336.6%, as compared to the same period in 2007. During 2008, we incurred $1,184,000 in selling, general and administrative expenses relating primarily to legal and accounting fees associated with the Merger which we did not incur in 2007, as well as increased salary and payroll related expenses of $431,000 relating to new employees hired in 2008. In addition, we incurred increased depreciation expense in 2008 of $93,000 as a result of increased capital expenditures for instrumentation and other equipment necessary to support our growth. We also incurred amortization expense of $175,000 in 2008 as a result of intangible assets acquired in connection with the purchase of the non-controlling interest in Accelerated Innovation, LLC in June 2008, as well as amortization of $38,000 for license fees paid in late 2007 and 2008. Finally, during 2008, our incentive compensation and sales commission expenses increased by $116,000 as a result of the increase in sales during the period.

Interest Income (Expense)

Net interest expense for the nine months ended September 30, 2008 amounted to $37,000, which consisted of interest expense of $48,000 relating to a note payable of $1,200,000 issued in February 2008, offset by interest income of $12,000. During the nine months ended September 30, 2007, our interest income amounted to $24,000. We had no interest expense in 2007, as we had no outstanding debt.

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Results of Operations for the Three Months Ended September 30, 2008March 31, 2009 as Compared to the Three Months Ended September 30, 2007.March 31, 2008.

The following is a comparison of the consolidated results of operations for Cardo for the three months ended September 30, 2008March 31, 2009 (unaudited) and the three months ended September 30, 2007March 31, 2008 (unaudited) (in thousands):

Revenues

Net sales for the three months ended September 30, 2008March 31, 2009 increased by $146,000,$127, or 55.1%41.6%, as compared to the same period in 2007. Due to2008. The wider acceptance of our knee product by orthopedic surgeons has resulted in higher sales of this product increased in 2008.2009. As a result, for the three months ended September 30, 2008 ourMarch 31, 2009 sales of thisour knee product was $119,000$110 higher than the same period in 2007. In addition, during 2008, we began sales of2008. Our licensed products whichaccounted for $68 of sales amounted to $26,000 during the three months ended September 30, 2008.March 31, 2009.

Costs of Sales

Costs of sales for the three months ended September 30, 2008March 31, 2009 increased by $25,000,$37, or 61.0%82.2%, as compared to the same period in 2007 as a result of the sales escalation in 2008. Our costs of sales in 20082009 included $9,000$19 attributable to sales of licensed products which commenced during 2008. Ourand $57 related to our knee product contributed $16,000 to this increase in costs of sales during 2008..product. Our gross profit percentage for 20082009 was 83.9%81.0%, representing a decrease from 84.5%85.2% in 2007.2008. This decrease was based on lower product sales price in the product mix changing in 2008, during which the company added spine and hip products.first quarter of 2009.

Research and Development Expenses

Research and development expenses for the three months ended September 30, 2008 increasedMarch 31, 2009 decreased by $78,000,$87, or 120.2%65.4%, from the same period in 2007.2008. The increasedecrease was primarily due to increased prototypedecreased research expenses related to our knee and licensed products in 2008 for production of our hip replacement prototypes. There were no expenditures for these items in 2007.2009.

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Selling, General and Administrative Expenses

Selling, general and administrative expenses for the three months ended September 30, 2008March 31, 2009 increased by $1,163,000,$1,129, or 414.4%277.4%, as compared to the same period in 2007.2008. During 2008,2009, we incurred $599,000 in selling, general and administrative expenses relating primarily to legal and accounting fees associated with the Merger which we did not incur in 2007, as well ashad increased salary and payroll related expenses of $324,000 relating$610 as compared to new employees hired in 2008. In addition, we incurred increased depreciation expensethe same period in 2008, this is based on the hiring of $20,000 as a result of increased capital expenditures for instrumentation and other equipment necessarymore employees to support our growth.grow the business. We also incurred higher amortization and depreciation expense of $175,000$213 over the same period in 2008 as a resultbased on the acquisition of intangible assets acquired in connection withadditional instrumentation and the purchase of the non-controlling interest in Accelerated Innovation, LLC in June 2008, as well as amortization of $38,000 for license fees paid in late 2007 and 2008. Finally, during 2008, our incentive compensation and sales commission expenses increased by $116,000 as a result of the increase in sales during the period.

Interest Income

Net interest income for the three months ended September 30, 2008March 31, 2009 amounted to $5,000,$8, which decreased by $9,000is an increase of $24 from 2007.the same period in 2008. In the first quarter of 2008, we had interest expense from notes payable, we have no notes payable in the first quarter 2009. Our average daily cash balances outstanding were higher during 2007,the three months ended March 31, 2009 over the same period in 2008, which consequently generated more interest income.

Segment Information

Our businesses are currently organized into the following two reportable segments; reconstructive products (the "Reconstructive Division") and spine products (the "Spine Division"). The Reconstructive Division segment is comprised of activity relating to the Company's unicompartmental knee, patella-femoral products, and reconstructive knee products. The Spine Division segment is comprised of the spinal lumbar fusion system and cervical plate and screw systems.

These reportable segments are based on the nature of the products offered. Management evaluates performance and allocates resources based on several factors, of which the primary financial measure is segment operating results. Due to the distinct nature of the products in the Company's Reconstructive Division, and the fact that it has a more developed market for its products, it is considered by management as a separate segment. The Company's Spine Division is still in the process of developing the market and obtaining instrumentation necessary to sell the products in greater quantities. As a result, the Spine Division is considered by management as a separate segment. The accounting policies of the reportable segments are the same as those described in Note 1.

As of March 31, 2009, the Company's Reconstructive Division includes $1,233 of goodwill and $4,840 in other intangible assets relating to the Company's unicompartmental knee product. These amounts are expected to be deductible for income tax purposes.

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The following table sets forth financial information by reportable segment (in thousands):

All of the Company's net sales were attributable to activity in the United States. There were no long-lived assets held in foreign countries.

Liquidity and Capital Resources

Net cash used in operating activities was $1,967,000$983 for the ninethree months ended September 30, 2008March 31, 2009 in contrast to $350,000$277 from April 6, 2007, inception, through September 30, 2007.the same period in 2008. The main usesuse of cash included merger expenses, research and development costs andwas related to salaries.

Net cash used in investing activities was $432 for the three months ended March 31, 2009 in contrast to net cash used by investing activities was $1,130,000 forof $1,303 from the nine months ended September 30, 2008same period in contrast to an increase of cash from investing activities of $329,000 from April 6, 2007, inception, through September 30, 2007.2008. The cash used by investment activities during the ninethree months ended September 30, 2008March 31, 2009 primarily was attributable to the purchase of Cervical, Uni, Accelerated Innovation offset by the cash received from the reverse mergeradditional instrumentation for use in conjunction with ClicknSettle.our products.

Our net cash provided by financing activities was $6,775,000$0 for the ninethree months ended September 30, 2008March 31, 2009 in contrast to $1,250,000 from April 6, 2007, inception, through September 30, 2007 respectively, reflecting the proceeds$1,200 from the Frost led group investment. This was offset by the purchase of Accin's ownership interest.

Over the next 12 months, we intend to use our capital to accelerate our research and product development, to add internal sales and financing personnel, to increase in-house vendor-related operations, and for working capital.

In May 2007, we raised an aggregate of $5,000,000same period in capital contributions as the initial capitalization in connection with the formation of Cardo. Thereafter, also in May 2007, Accin contributed substantially all of its business, properties and assets, including its majority interests in Cervical Xpand and Uni-Knee, to Accelerated, and we contributed $3,750,000 to Accelerated, which amount was distributed to Accin. This resulted in Cardo owing a 37.5% ownership interest in Accelerated, and Accin owning a 62.5% ownership interest with an option to acquire

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the ownership interest from Accin for a purchase price of $6,250,000. After the capital contribution to Accelerated, Cardo had remaining cash of $1,250,000.

In February 2008, Cardo borrowed $1,200,000 from the trustee of a member of Cardo to partially finance the acquisition of the minority interests of Cervical Xpand and Uni-Knee for an aggregate purchase price of $3,486,690. This $1,200,000 million was repaid in July 2008.

On June 19, 2008, simultaneously with the signing of the Merger Agreement, Frost Gamma Investments Trust and other investors invested $9,500,000 in Cardo in exchange for units of Cardo's membership interests. Dr. Phillip Frost, Chairman and Chief Executive Officer of Opko Health, Inc. (formerly known as eXegenics Inc.), is the trustee and beneficiary of Frost Gamma Investments Trust. Certain other investors invested an additional $3,475,000 in Cardo before the consummation of the Merger. Proceeds from these investments were used to close on the acquisition of the outstanding equity interests of Accelerated, Cervical Xpand and Uni-Knee, and to enable Cardo to accelerate its research and product development. Following the acquisitions, Cardo directly owns 100% of the equity interests of Accelerated Innovation, Cervical Xpand and Uni-Knee, as described above. Of these investment amounts, $2,100,000 remains available for use by us to accelerate our research and product development.

To achieve our growth objectives, we are considering different strategies, including growth through acquisitions. As a result, we are evaluating and we will continue to evaluate other companies and businesses for potential synergies that would add value to our existing operations.

At November 13, 2008,May 15, 2009, we have $3,900,000$845 thousand in cash which is not projected to meet all of our working capital needs for the next twelve months. The fact that the Company sustained losses in 2008 and 2009 and still requires outside sources of additional capital to sustain operations has created an uncertainty about the Company's ability to continue as a going concern.

We have available to us an approximate aggregate of $845 thousand in cash and cash equivalents, which will not be sufficient for us to meet our anticipated cash requirements for the next 12 months. Management intends to use borrowings and securities sales to mitigate the effects of our use of that cash. However, we cannot assure you that

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debt or equity financing, if and when required, will be available. Our ability to continue as a going concern is dependent upon receiving additional funds either through the issuance of debt or through common and/or preferred stock and the success of management's plan to expand sales. Although we may obtain external financing through the sales of our own securities, there can be no assurance that such financing will be available, or if available, that any such financing would be on terms acceptable to us. If we are unable to fund our cash flow needs, we may have to reduce or stop planned growth or scale back operations and reduce staff.

Forward-Looking Statements

Some of the statements in this Quarterly Report on Form 10-Q are "forward-looking statements," as that term is defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements do not relate strictly to historical or current matters. Rather, forward-looking statements are predictive in nature and may depend upon or refer to future events, activities or conditions. Although we believe that these statements are based upon reasonable assumptions, we cannot provide any assurances regarding future results. We undertake no obligation to revise or update any forward-looking statements, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise. Because forward-looking statements relate to matters that have not yet occurred, these statements are inherently subject to risks and uncertainties. Many factors could cause our actual activities or results to differ materially from the activities and results anticipated in forward-looking statements.

These factors include the following:

• We will need to raise additional funds in the future to fund our operations and research, and these funds may not be available on acceptable terms, if at all.
• We expect to incur significant losses, either directly or indirectly through the companies in which we develop our products, for at least the next several years, and we cannot assure you that we will ever be profitable.

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• We have a limited number of products currently available for sale and there is a high risk that our research and development efforts might not successfully generate any viable product candidates in the future.
• We may need to raise additional funds in the future to fund our operations and research, and these funds may not be available on acceptable terms, if at all.
• Cost containment measures, pressure from our competitors and availability of medical reimbursement may impact our ability to sell our products at prices necessary to expand our operations and reach profitability.
• The market for orthopedic, knee and hip surgery devices is large and growing at a significant rate.
• Sales of our products will depend on the availability of adequate reimbursement from third-party payors (such as governmental programs, for example, Medicare and Medicaid, private insurance plans and managed care programs) both in terms of the sales volumes and prices for our products.
• Legislative or administrative reforms to the United States or international reimbursement systems in a manner that significantly reduces reimbursement for procedures using our medical devices or denies coverage for those procedures could have a material adverse effect on our business, financial condition or results of operations.
• We must convince orthopedic and spine surgeons that our products are an attractive alternative to existing surgical treatments of orthopedic and spine disorders.
• We generally do not have long-term contracts with our customers.
• Our business plan relies on certain assumptions about the market for our products, which, if incorrect, may adversely affect our business and profitability.
• We expect to face significant competition as a result of the rapid technological changes in the medical devices industry, which could have an adverse effect on our business, financial condition or results of operations.
• Hospitals, surgeons, distributors and agents may have existing relationships with other medical device companies that make it difficult for us to establish new relationships with them. As a result, we may not be able to sell and market our products effectively.
• Our manufacturers may be unsuccessful in manufacturing products at the levels required to meet future market demand.
• We rely on single source manufacturers, which could impair our ability to meet demand for delivering our products in a timely manner or within our budget.

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• If a natural or man-made disaster strikes a facility in which our products are manufactured, we could be unable to deliver our products for a substantial amount of time and our sales could decline.
• Our growth will depend on developing new products or product enhancements, requiring significant research and development, clinical trials and regulatory approvals, all of which are expensive and time-consuming and may not result in a commercially viable product.
• If we choose to grow our business by acquiring new and complementary businesses, products or technologies, we may be unable to complete these acquisitions or successfully integrate them in a cost-effective and non-disruptive manner.
• We rely on our independent sales distributors and sales representatives to market and sell our products.
• We are dependent on the services of Andrew A. Brooks, M.D. and Mikhail Kvitnitsky, and the loss of either of them could harm our business.
• Failure to attract and retain skilled personnel and cultivate key academic collaborations will delay product development programs and business development efforts.
• If conflicts arise between collaborators or advisors and us, any of these parties may act in its self-interest, which may be adverse to our interests.interests and the interests of our stockholders.
• If we fail to properly manage our anticipated growth, our business could suffer.
• If we fail to upgrade our management information systems, or if those systems do not operate as expected, we could experience significant disruption of our business and product developments and our results could suffer.

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• If we decide to market and sell our devices and products internationally, we would be subject to various risks relating to our international activities, which could negatively impact our business and financial results.
• We are subject to substantial governmental regulation that could change and thus force us to make modifications to how we develop, manufacture and price our products.
• Federal regulatory reforms may adversely affect our ability to sell our products profitably.
• We have not yet collected long-term clinical data to support the safety of our products, and our products may, therefore, prove to be less safe and effective than initially thought.
• The FDA requires us to obtain new Section 510(k) clearances or premarket approvals for modifications to our approved products. Otherwise, we may have to cease marketing, or to recall, the modified products until clearances are obtained.
• If we or our third-party manufacturers fail to comply with the FDA's Quality System Regulations, the manufacture of our products could be interrupted and our product sales and operating results could suffer.
• We are subject to various complex laws and regulations. Compliance with these laws and regulations is costly and time-consuming, and failure to comply with them can have adverse consequences on our business.
• Some proponents have advocated the creation of a national database or registry that tracks how patients with artificial joints fare. Any requirement for surgeons to participate in such a registry may adversely affect our ability to sell our products profitably.
• We are an early-stage orthopedic medical device company with a limited operating history and our business may not become profitable.
• We acquired all of the ownership interests in an existing entity that may have undisclosed liabilities.
• Cardo's acquisition of Accin's assets in May 2007 may make it difficult for you to evaluate our historical and future performance.
• Our quarterly financial results are likely to fluctuate significantly because our sales prospects are uncertain.
• If we cannot adequately protect our patents and other intellectual property rights, we may lose market share to our competitors and be unable to operate our business profitably.
• Changes to intellectual property laws may negatively impact our ability to protect our intellectual property.
• Our commercial success depends significantly on our ability to operate without infringing the patents and other proprietary rights of third parties.
• The medical device industry is characterized by patent and other intellectual property litigation, and we could become subject to litigation that could be costly, result in diverting management's time and efforts, require us to pay damages, and/or prevent us from marketing our existing or future products.
• Patent infringement lawsuits brought against us could have a material adverse affect on our ability to develop and sell our products and to operate profitably.

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• We may be subject to damages resulting from claims that we or our employees or consultants have wrongfully used or disclosed alleged trade secrets of their former employers.

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• Some countries may require us to grant compulsory licenses to third parties. These licenses could be extended to include some of our products or potential product, which may limit our potential revenue opportunities.
• Fluctuations in the cost and availability of insurance could adversely affect our profitability or our risk management profile.
• Potential future product liability claims and other litigation, including contract litigation, may adversely affect our business, reputation and ability to attract and retain customers.
• Any claims relating to our making improper payments to physicians for consulting services, or other potential violations of regulations governing interactions between us and healthcare providers, could be time-consuming and costly.
• Our common stock may be thinly traded.
• We expect that the price of our common stock will fluctuate substantially, potentially adversely affecting the ability of investors to sell their shares.
• We may become involved in securities class action litigation that could divert management's attention and harm its business.
• Securities analysts may elect not to report on our common stock or may issue negative reports that adversely affect the price of our common stock.
• Because we acquired Cardo by means of a reverse merger, we may not be able to attract the attention of major brokerage firms.
• Anti-takeover provisions in our charter documents and Delaware law may discourage or prevent a change in control, even if an acquisition would be beneficial to our shareholders, which could affect our stock price adversely and prevent attempts by our shareholders to replace or remove our current management.
• Because our common stock may be a "penny stock," it may be more difficult for investors to sell shares of our common stock, and the market price of our common stock may be adversely affected.
• A significant number of shares will become eligible for future sale by our shareholders and the sale of those shares could adversely affect the stock price.
• Directors, executive officers, principal shareholders and affiliated entities own a significant percentage of our capital stock, and they may make decisions that you do not consider to be in the best interests of our shareholders.
• Our stock price could decline as a result of our failure to meet reporting and other regulatory requirements.
• If we do not implement necessary improvements to our internal control over financial reporting in an efficient and timely manner, or if we discover additional deficiencies and weaknesses in existing systems and controls, we could be subject to regulatory enforcement and investors may lose confidence in our ability to operate in compliance with existing internal control rules and regulations, either of which could result in a decline in our share price.
• Our status as a public company may make it more difficult to attract and retain officers and directors.
• Compliance with changing regulations concerning corporate governance and public disclosure may result in additional expenses.
• We do not intend to pay cash dividends. Any return on investment may be limited to the value of our common stock, if any.

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• Shareholders may experience significant dilution if future equity offerings are used to fund operations or acquire complementary businesses.
• Our Certificate of Incorporation grants our Board of Directors the power to designate and issue additional shares of common and/or preferred stock.

Additional information concerning these factors can be found in our filings with the SEC. Forward-looking statements in this Quarterly Report on Form 10-Q should be evaluated in light of these important factors.

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ITEM 4 - EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

UnderDisclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in company reports filed or submitted under the supervisionSecurities Exchange Act of 1934 is recorded, processed, summarized and withreported, within the participationtime periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in company reports filed or submitted under the Securities Exchange Act of our1934 is accumulated and communicated to management, including our principalchief executive officer and principalchief financial officer, we conductedas appropriate to allow timely decisions regarding required disclosure. As required by Rules 13a-15 and 15d-15 under the Securities Exchange Act of 1934, our chief executive officer and chief financial officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as such term is definedin Exchange Act Rules 13a-15(e)of March 31, 2009. Based upon their evaluation, and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as of September 30, 2008, the enda result of the period covered by this quarterly report. Based on their evaluation, our principal executive officer and principalmaterial weakness in internal control over financial officerreporting as discussed below, they concluded that, due to the existence of material weaknesses, our disclosure controls and procedures arewere not effective as of September 30, 2008.

March 31, 2009. Management assessed the effectiveness of the Company's internal control over financial reporting as of March 31, 2009. In making this assessment, management used the criteria set forth in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. As a result of our assessment, our Chief Financial Officer identified material weaknesses which were reported in internal control over financial reporting in September 2008, related to (1) adequate qualified staff necessary to effectively apply the process, and (2) methods and practices employed to report unusual transactions such as our Current Reportreverse merger. Based on Form 8-K, filedthis assessment, management concluded that the Company's internal control over financial reporting was not effective as of March 31, 2009. Our management has discussed the material weakness described above with the Securities and Exchange Commission on September 9, 2008, under Item 1A. Risk Factors and Item 2. Financial Information - Management's Discussion and Analysis of Financial Condition and Results of Operation of Cardo.Except as set forth below, there have been no changes to the identified material weaknesses.

our audit committee. In an effort to mitigate and remediate some of thesethe identified material weaknesses, management hired additional accounting staff during the quarter ended September 30, 2008. In addition, we have starteddocumented our process and procedures governing our internal reporting. We also plan to implement standards and procedures, upgrading and establishing controls over the accounting systemfurther changes to ensure we have appropriate internal control over financial reporting.

Based on the evaluation, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, other than the change described above, there have been no other changes in our internal control over financial reporting, duringincluding (1) a re-evaluation of our last fiscal quarter, identified in connection with that evaluation, that has materially affected, or is reasonably likelystaffing needs, and (2) analysis of unusual transactions as they are occurring to materially affect, our internal control over financial reporting.allow adequate time for multiple levels of review.

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PART II - OTHER INFORMATION

Item 1 Legal Proceedings

Item 2 Unregistered Sales of Equity Securities and Use of Proceeds

Item 3 Defaults Upon Senior Securities

Item 4 Submission of Matters to a Vote of Security Holders

On September 16, 2008, the holders of approximately 60% of the Company's common stock approved an Amendment to the Company's Amended and Restated Certificate of Incorporation to change the Company's name from "clickNsettle.com, Inc." to "Cardo Medical, Inc." The action was taken by written consent in lieu of a special meeting of the Company's stockholders in accordance with the relevant sections of the Delaware General Corporate Law. The Amendment required the approval of an aggregate of greater than one-half of the Company's issued and outstanding common stock. The Amendment was previously approved by our Board of Directors on September 12, 2008.

Item 5 Other Information

On August 27, 2008, the managers of Cardo Medical, LLC granted Derrick Romine, Chief Financial Officer of the Company, an option to purchase .704431 units with an exercise price per unit of $147,625.00. The vesting schedule provides that twenty percent (20%) of the option will vest upon the first anniversary of the date of grant and an additional twenty (20%) will vest upon each anniversary of the date of grant thereafter. The option and the rights to purchase the units covered by the option will expire on the close of business on the tenth anniversary of the date of grant.

Upon the termination of Mr. Romine's services by the Company without "cause", or by Mr. Romine for "good reason", as such terms are defined in the Option Agreement, at any time on or prior to September 4, 2010, fifty percent (50%) of Mr. Romine's unvested options shall become fully exercisable as of the date of termination of his service for such reason (the "Termination Date") and, together with any vested options then held by Mr. Romine at the Termination Date, to the extent exercisable on the Termination Date, shall remain in full force and effect and may be exercised pursuant to the provisions of the Option Agreement at any time until the earlier of the end of the fixed term thereof and the expiration of ninety (90) days following the Termination Date (except that this ninety (90)-day period will be extended to twelve (12) months from the Termination Date if Mr. Romine dies during this ninety (90)-day period), and all options then held by Mr. Romine, to the extent not then presently exercisable, shall terminate as of the Termination Date and shall not be exercisable thereafter.

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In connection with the merger that was completed on August 29, 2008, the option automatically converted to an option to purchase 470,000 shares of common stock of clickNsettle.com, Inc. at an exercise price of $0.22126 per share.

Item 6    Exhibits

Exhibits

The following exhibits are filed as part of, or incorporated by reference into this Report:

* This Exhibit is a management contract or compensatory plan or arrangement.

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SIGNATURES

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

Date: November 14, 2008May 15, 2009

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INDEX TO EXHIBITS

*   This Exhibit is a management contract or compensatory plan or arrangement.

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