Financial Performance - For the nine months ended September 30, 2023, revenue was $11,755, compared to $0 for the same period in 2022[243]. - Cardio's net loss for the nine months ended September 30, 2023, was $6,987,905, an increase of $4,704,977 from the prior year[242]. - Cardio's net loss for the three months ended September 30, 2023, was $1,932,382, compared to $1,150,875 for the same period in 2022, an increase of $781,507[226]. - Total other expenses for the nine months ended September 30, 2023, were $(1,287,444), compared to $(112,534) for the same period in 2022[248]. Expenses - Research and development expenses for the nine months ended September 30, 2023, were $137,690, up from $9,361 in the same period of 2022, reflecting an increase of $128,329[230]. - General and administrative expenses for the nine months ended September 30, 2023, were $5,444,920, compared to $2,083,460 for the same period in 2022, an increase of $3,361,460[246]. - Sales and marketing expenses for the nine months ended September 30, 2023, were $115,226, an increase of $49,653 from $65,573 in the same period of 2022[244]. - The company expects to incur additional annual expenses as a public company, including directors' and officers' liability insurance and increased legal and accounting costs[237]. Shareholder Actions - Cardio issued 231,092 common shares valued at $150,000 to independent directors during the nine months ended September 30, 2023[201]. - Stockholders approved the issuance of up to 20,363,637 shares of common stock upon conversion of $11.2 million in principal amount of convertible debentures[268]. - The first Convertible Debenture of $5.0 million has been fully converted into 10,622,119 shares, leaving 9,741,518 shares available for a second Convertible Debenture of $6.2 million[268]. - If unable to honor conversion requests, the company may need to repay outstanding principal and interest, impacting cash resources for operations and growth[268]. Liabilities - As of September 30, 2023, convertible notes payable amounted to $967,184, net of a debt discount of $732,816[208]. - The company has a liability of $928,500 owed to investment bankers due on October 25, 2023, reflecting a 30% decrease in liability to certain underwriters[222]. - Following the business combination, the company’s financial position reflects liabilities originally incurred by Mana, totaling $928,500[222]. Regulatory Compliance - The company received a Nasdaq deficiency letter indicating its common stock bid price closed below the $1.00 minimum requirement for continued listing[197]. - The company received a letter from Nasdaq indicating non-compliance with the minimum bid price requirement, with a compliance period until March 19, 2024[238]. - The FDA proposed regulations that could impose significant additional costs on the company if enacted, affecting laboratory developed tests[240]. - A proposed new FDA regulation on laboratory developed tests (LDTs) could classify them as medical devices, requiring adherence to a more stringent regulatory framework[269]. - Compliance with the proposed FDA regulation could be time-consuming and expensive, potentially diverting resources from other business aspects[269]. - The proposed regulation may hinder the company's ability to introduce new tests to the market in a timely manner, affecting competitive position and market share[269]. - Failure to comply with FDA regulations could result in legal actions, including fines and penalties, impacting financial performance[269]. Business Strategy - Cardio aims to develop blood-based products for stroke, heart failure, and diabetes, and expand testing processes to multiple laboratories[221]. - The company plans to pursue acquisitions in the telemedicine, AI, or remote patient monitoring sectors[221]. - Cardio's strategy includes building clinical and health economics evidence to obtain payer reimbursement for its tests[221]. Share Redemption - The company experienced a redemption rate of over 99%, with 6,465,452 shares redeemed for a total of $65,310,892 at approximately $10.10 per share[196].
Cardio Diagnostics (CDIO) - 2023 Q3 - Quarterly Report