Cardio Diagnostics Holdings, Inc. (CDIO) - 10-Q Summary
Business Context and Reporting Period
This summary covers the quarterly period ended June 30, 2026. Cardio Diagnostics Holdings, Inc. is a medical technology company developing AI-driven DNA biomarker testing for cardiovascular disease prevention and early detection. The company operates a single segment focused on product testing, primarily offering the Epi+Gen CHD and PrecisionCHD tests. The financial statements reflect a 1-for-30 reverse stock split effective May 12, 2025.
Key Financial Metrics
| Metric | Q2 2026 (3 Months) | Q2 2025 (3 Months) | YTD 2026 (6 Months) | YTD 2025 (6 Months) |
|---|---|---|---|---|
| Revenue | $5,360 | $7,475 | $8,040 | $8,415 |
| Net Loss | $(1,501,468) | $(1,683,199) | $(3,289,626) | $(3,318,263) |
| Loss Per Share (Basic/Diluted) | $(0.51) | $(0.97) | $(1.13) | $(1.94) |
| Cash and Equivalents (End of Period) | $5,586,697 (as of June 30, 2026) | |||
| Total Assets | ||||
| Total Liabilities | $499,780 | |||
| Stockholders' Equity | $7,426,283 | |||
| Operating Cash Flow (YTD) | $(2,904,576) | $(2,971,566) |
Debt and Liquidity: The company has no long-term debt. Current liabilities include a finance agreement payable of $67,448 related to D&O insurance premiums. The company maintains a cash balance of approximately $5.6 million, with no lines of credit.
Material Changes vs. Prior Period
- Revenue Decline: Revenue decreased 28% in Q2 2026 compared to Q2 2025 ($5,360 vs. $7,475), attributed to the conclusion of a specific testing initiative with Family Medicine Specialists. YTD revenue remained relatively flat.
- Expense Reduction: Net loss narrowed slightly in both Q2 and YTD periods. This was driven by reductions in General and Administrative (G&A) expenses (down $151,501 in Q2) and Research & Development (R&D) expenses (down $15,607 in Q2), primarily due to lower legal, consulting, and lab processing costs.
- Capital Raise: During the six months ended June 30, 2026, the company raised approximately $3.7 million in net proceeds through an At-the-Market (ATM) issuance agreement, selling 1,133,418 shares.
- Amortization: Amortization expense decreased significantly year-over-year ($11,125 vs. $53,923 for YTD) as certain intangible assets were fully amortized in 2025.
Outlook, Risks, and Management Commentary
- Nasdaq Listing Risk: The company faces a critical risk regarding its Nasdaq listing. A new SEC rule adopted in July 2026 requires a minimum Market Value of Listed Securities (MVLS) of $5 million. As of August 6, 2026, the company's MVLS was approximately $4.91 million. Failure to meet this standard could result in immediate delisting and a move to the OTC market, severely impacting liquidity and capital raising ability.
- Reimbursement Progress: The company secured its first coverage by Atlas Healthcare Physicians (AHP) in May 2026. It continues to pursue broader payer coverage and has established the ability to submit out-of-network claims to commercial payers.
- Operational Milestones: The company completed the setup of its new high-complexity CLIA lab, reducing reliance on third-party processors. It also initiated international expansion in India with partners Aimil Ltd. and Dr. LalPathLabs.
- Liquidity Needs: Management expects to continue incurring losses and negative operating cash flows. Future operations depend on raising additional capital, primarily through the ATM offering, though market volatility presents challenges.
- 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.
Investor Verification Checklist
- Nasdaq Compliance: Verify the current Market Value of Listed Securities (MVLS) and the status of the SEC stay on the new $5 million listing rule.
- Cash Runway: Assess the burn rate against the $5.6 million cash balance to determine the runway without further capital raises.
- Reimbursement Pipeline: Monitor the progress of payer coverage negotiations beyond the initial AHP agreement to validate revenue growth potential.
- Legal Contingencies: Review the status of potential claims from Boustead Securities, The Benchmark Company, and Northland Securities, which could impact liquidity if litigated.
- Internal Control Remediation: Confirm the timeline for fully implementing the remediation plan for the material weakness in financial reporting controls.