Cardio Diagnostics Holdings, Inc. (CDIO) - Q1 2026 Filing Summary
Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended March 31, 2026. Cardio Diagnostics Holdings, Inc. is a medical technology company developing AI-driven DNA biomarker testing for cardiovascular disease. The company operates as a single segment focused on product testing, primarily offering the Epi+Gen CHD and PrecisionCHD tests. All financial data presented reflects a 1-for-30 reverse stock split effective May 12, 2025.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 |
|---|---|---|
| Revenue | $2,680 | $940 |
| Net Loss | $(1,788,158) | $(1,635,064) |
| Loss Per Share (Basic & Diluted) | $(0.63) | $(0.97) |
| Cash and Cash Equivalents (End of Period) | $7,077,021 | $9,688,719 |
| Total Assets | $9,559,371 | $7,766,415 |
| Total Liabilities | $655,972 | $793,061 |
| Stockholders' Equity | $8,903,399 | $6,973,354 |
| Net Cash Used in Operating Activities | $(1,562,212) | $(1,400,101) |
| Net Cash Provided by Financing Activities | $3,592,299 | $3,308,748 |
Material Changes vs. Prior Period
- Revenue Growth: Revenue increased 185% to $2,680 from $940, attributed to new provider onboarding and increased usage by existing clients.
- Net Loss Expansion: Net loss increased by $153,094 (9.4%) primarily due to a significant rise in General and Administrative (G&A) expenses.
- Expense Drivers: G&A expenses rose $177,196, driven largely by a $178,242 increase in franchise taxes, higher investor relations costs, and increased software/web computing fees.
- Amortization Decline: Amortization expense dropped significantly to $5,532 from $45,438 as certain intangible assets were fully amortized in the prior year.
- Liquidity Improvement: Cash balances increased by $1.97 million, funded primarily by $3.69 million in net proceeds from an At-the-Market (ATM) equity offering.
Outlook, Risks, and Management Commentary
- Capital Needs: Management states an ongoing need to raise additional capital to fund operations, as the company has incurred losses since inception and does not foresee significant cash flow from operations in the near term. Future funding will likely rely on the ATM offering or new equity/debt issuances.
- Commercialization Strategy: The company is focusing on expanding adoption among providers and employers, completing the setup of its internal high-complexity CLIA lab to reduce costs, and pursuing international expansion in India.
- Regulatory Environment: The FDA rescinded its May 2024 rule regulating Laboratory Developed Tests (LDTs) as medical devices in September 2025, reverting oversight to CLIA standards.
- Internal Controls: Management identified a material weakness in internal controls over financial reporting due to inadequate segregation of duties. Remediation plans, including approval matrices and automation, are in progress but not yet fully implemented.
- Legal Contingencies: The company faces potential claims regarding success fees from terminated agreements with Boustead Securities and Benchmark Company, as well as a demand letter regarding a mootness fee from a securities law firm. No lawsuits have been filed to date.
Investor Verification Checklist
- Cash Runway: Verify the sufficiency of the $7.1 million cash balance against the burn rate of ~$1.56 million per quarter to assess the timeline for the next capital raise.
- Revenue Sustainability: Confirm the durability of the revenue increase given the historically long sales cycles (up to 24 months) and the minimal absolute revenue base.
- Internal Control Remediation: Monitor the progress of remediation for the material weakness in segregation of duties to ensure future financial reporting reliability.
- Equity Dilution: Track the remaining capacity under the ATM Sales Agreement ($5.3 million remaining) and the potential dilution impact of future financing.
- Legal Exposure: Watch for any formal litigation arising from the disputed fee claims with Boustead Securities, Benchmark, or the securities law firm.