Cardio Diagnostics (US:CDIO)2024-05-15 20:30Financial Performance - Cardio generated revenue of $15,928 for the three months ended March 31, 2024, compared to $0 for the same period in 2023[134]. - Net loss for the three months ended March 31, 2024, was $4,163,584, an increase of $3,130,966 from a net loss of $1,032,618 in the same period in 2023[133]. - General and administrative expenses increased to $4,123,941 for the three months ended March 31, 2024, from $1,562,128 in the same period in 2023, primarily due to stock compensation expenses[137]. - Research and development expenses decreased to $10,840 for the three months ended March 31, 2024, from $86,665 in the same period in 2023, due to fewer laboratory runs[136]. - The company incurred a net loss of $4,163,584 for the three months ended March 31, 2024, with an accumulated deficit of $18,531,964[156]. - Cash at March 31, 2024, totaled $1,563,139, an increase of $279,616 from $1,283,523 at December 31, 2023[151]. - Net cash used in operating activities for Q1 2024 was $1,233,050, a decrease from $1,649,067 in Q1 2023[152]. - Cash provided by financing activities for Q1 2024 was $1,582,607, down from $4,291,990 in Q1 2023[155]. - Cash used in investing activities for Q1 2024 was $69,941, compared to $52,674 in Q1 2023[154]. - The company anticipates ongoing losses and negative cash flows from operations for the foreseeable future[146]. - There is substantial doubt about the company's ability to continue as a going concern without additional capital[156]. Product Development - Cardio launched its second product, PrecisionCHD™, in March 2023, following the initial launch of Epi+Gen CHD™ in 2021[125]. - The company plans to develop additional products for stroke, congestive heart failure, and diabetes, and expand its clinical evidence portfolio[131]. - Cardio published a peer-reviewed study indicating that PrecisionCHD™ could save payers over $113 million annually[126]. - Cardio's two proprietary laboratory analysis codes became effective on April 1, 2024, enhancing reimbursement opportunities for its tests[126]. Financing and Capital Structure - Cardio entered into an At-the-Market Issuance Sales Agreement allowing for the sale of up to $17 million in shares of Common Stock[128]. - As of May 15, 2024, Cardio sold 1,543,698 shares under the Sales Agreement, resulting in proceeds of approximately $1,729,464[129]. - The company expects to fund working capital requirements through existing funds and further issuances of securities[149]. - The company has no lines of credit or bank financing arrangements, relying instead on equity financing[149]. - The exercise prices of outstanding warrants range from $1.78 to $11.50 per share, with the last reported trading price at $0.8140[150]. Internal Controls and Compliance - The company has not made any changes in its internal control over financial reporting that materially affected its reporting during the three months ended March 31, 2024[178]. - The company concluded that its disclosure controls and procedures are not effective, necessitating additional analysis to ensure compliance with U.S. generally accepted accounting principles[175]. - Disclosure controls and procedures are designed to ensure timely reporting of required information, but cannot guarantee absolute assurance against errors or fraud[177]. - The company acknowledges that resource constraints affect the design of disclosure controls and procedures, which must balance benefits against costs[177]. Fair Value Measurement - The fair value of certain financial instruments, including cash and cash equivalents, approximates their carrying amounts due to their short-term nature[171]. - The company uses the Black-Scholes option pricing model to estimate the fair value of stock options and warrants, which involves subjective assumptions that can materially affect the fair value estimate[174]. - ASC 820 establishes a fair value hierarchy that requires maximizing observable inputs and minimizing unobservable inputs when measuring fair value[172]. - The estimated fair value of financial instruments is based on historical cost, which approximates fair value for short- and long-term credit obligations[171]. - The company recognizes stock-based compensation expense over the related service period for awards expected to vest[173]. - The company is classified as a "smaller reporting company" and is not required to provide certain market risk disclosures[175].