10-K: Cardio Diagnostics Reports 2025 Losses Amid Strategic Shift

Cardio Diagnostics Holdings, Inc. reported a reduced net loss in 2025 compared to 2024, despite a decline in revenue, as it continues to focus on commercializing its AI-driven cardiovascular diagnostic tests and expanding market reach.

Summary

• Net loss for the year ended December 31, 2025, decreased to $6,498,167 from $8,383,453 in 2024, primarily due to a decrease in General and Administrative expenses.
• Revenue declined to $14,825 in 2025 from $34,890 in 2024, attributed to the conclusion of a Family Medicine Specialists testing initiative.
• The company completed a 1-for-30 reverse stock split effective May 12, 2025, to regain compliance with Nasdaq's minimum bid price requirement.
• Cardio Diagnostics continues to leverage its 'At-the-Market' (ATM) Sales Agreement, selling 292,495 shares for $3,900,492 in 2025 and an additional 1,133,418 shares for $3,788,174 post-December 31, 2025.
• The FDA formally rescinded its May 2024 rule regulating Laboratory Developed Tests (LDTs) as medical devices on September 19, 2025, reverting oversight to CLIA, which is favorable for Cardio Diagnostics' current tests.
• The company has a limited operating history, has not generated significant revenues, and has an accumulated deficit of $29,250,000 as of December 31, 2025.
• Key products include Epi+Gen CHD (three-year symptomatic CHD risk assessment) and PrecisionCHD (early detection of CHD), both epigenetics-based clinical blood tests.
• The company launched HeartRisk, a cardiovascular disease risk intelligence platform, in February 2024.
• Cardio Diagnostics secured CPT PLA reimbursement codes (0439U for Epi+Gen CHD, 0440U for PrecisionCHD) and final CMS gapfill payment rates of $854 for both tests in 2025.
• A material weakness in internal control over financial reporting due to inadequate segregation of duties was identified, with remediation plans in progress.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this as a challenging period for Cardio Diagnostics, marked by declining revenue and continued losses, despite some positive regulatory developments and strategic initiatives. The heavy reliance on equity financing and significant accumulated deficit indicate ongoing financial vulnerability.

Positives

• Net loss decreased by $1,885,286 in 2025 compared to 2024, primarily due to reduced General and Administrative expenses.
• The FDA formally rescinded its May 2024 rule regulating LDTs as medical devices, which is favorable for Cardio Diagnostics' current business model.
• The company successfully regained compliance with Nasdaq's minimum bid price requirement following a 1-for-30 reverse stock split.
• Secured CPT PLA codes (0439U and 0440U) and a final CMS gapfill payment rate of $854 for both Epi+Gen CHD and PrecisionCHD tests in 2025.
• Continued expansion into additional markets domestically and internationally, including India, and partnerships with organizations like YMCA.
• Progress in setting up its laboratory facility as a high complexity testing laboratory in compliance with CLIA.

Negatives

• Revenue decreased significantly to $14,825 in 2025 from $34,890 in 2024, primarily due to the conclusion of a prior testing initiative.
• The company has a limited operating history and has not generated significant revenues, incurring operating losses since inception with an accumulated deficit of $29,250,000.
• Sales and partnership cycles are long, in some instances up to 24 months, and are expected to continue to be long, especially with current economic uncertainty.
• The company has an ongoing need to raise additional capital to fund operations and growth, relying heavily on 'At-the-Market' offerings.
• Cash at December 31, 2025, decreased to $5,110,630 from $7,827,487 at December 31, 2024.
• A material weakness in internal control over financial reporting was identified due to inadequate segregation of duties.
• The exercise prices of outstanding warrants ($53.40 to $345 per share) are significantly higher than the current stock price ($4.76 on March 11, 2026), making warrant exercise unlikely and reducing potential cash proceeds.

Risks

• Limited operating history makes it difficult to reliably predict future growth and operating results, with no assurance of generating significant revenues or operating profit.
• The healthcare commercialization process for novel diagnostic technologies is lengthy, spanning multiple years or even a decade, from initial development to widespread utilization and revenue generation.
• The market for epigenetic tests is new and unproven, and may decline or experience limited growth, adversely affecting the ability to realize the business plan's potential.
• Estimates of market opportunity and forecasts of market growth may prove inaccurate, and the business may fail to grow at similar rates even if the market grows.
• Inability to enhance or introduce new products that achieve market acceptance and keep pace with technological developments could harm the business.
• Future growth could be harmed by the loss of key personnel, including Meeshanthini Dogan, Robert Philibert, and Timur Dogan.
• Intense competition from large, well-capitalized technology companies and existing diagnostic methods could limit market share.
• Reliance on a limited number of suppliers, contract manufacturers, and logistics providers for tests.
• Inability to scale operations successfully or manage growth as the organization expands.
• The company's technologies and products leverage AI and machine learning, which are subject to risks including accuracy, bias, toxicity, privacy, security, and data provenance.
• Interruptions or performance problems associated with technology and infrastructure may adversely affect business and operating results.
• Security breaches of solutions, networks, or computer systems, or unauthorized access to customer data, could harm reputation and business.
• Inaccurate or incomplete information provided to customers could harm business reputation and financial condition.
• Proprietary applications may not operate properly, damaging reputation or diverting resources.
• Failure to keep pace with technological changes could make solutions less competitive.
• Market and economic conditions, including inflation and geopolitical issues, may negatively impact business, financial condition, and stock price.
• Potential losses or liability not covered by insurance, given the inherent risks in providing testing services that assist clinical decision-making.
• The license agreement with the University of Iowa Research Foundation includes a non-exclusive license of technical information that could grant unaffiliated third parties access to derivative work, potentially leading to competitive products.
• Incurring substantial costs in protecting or defending intellectual property rights, with no guarantee of success in litigation.
• Assertions by third parties of infringement or other violations of intellectual property rights could result in significant costs and harm the business.
• Reliance on open-source software or other similar licensed technologies, which could become unavailable or subject the company to increased costs, delays, or litigation.
• Intellectual property licensed from UIRF may be subject to federal regulations under the Bayh-Dole Act, potentially limiting exclusive rights or requiring domestic manufacturing.
• Failure to comply with federal and state laws and government regulations in the heavily regulated healthcare industry could result in penalties or significant operational changes.
• If the FDA were to begin actively regulating LDTs or software, substantial costs and delays could be incurred to obtain premarket clearance or approval.
• Inadequate coverage and reimbursement from third-party payors would limit the ability to expand access to tests and overall commercial success.
• Failure of products to achieve market acceptance, including listing in physician guidelines or favorable peer-reviewed publications, could limit adoption.
• Use and disclosure of personally identifiable information is subject to federal and state privacy and security regulations, with non-compliance leading to significant liability or reputational harm.
• A pandemic, epidemic, or outbreak of an infectious disease could adversely affect the business.
• Changes in accounting standards and subjective assumptions, estimates, and judgments by management could significantly affect financial results.
• The company's status as an emerging growth company and smaller reporting company, taking advantage of certain exemptions, could make its securities less attractive to investors.
• Stock price volatility, influenced by numerous factors beyond control, could lead to significant declines.
• An active trading market for common stock may not be created or sustained.
• Future sales of common stock in the public market could cause the share price to decline significantly due to dilution from registered shares and warrants.
• If securities or industry analysts do not publish research or publish inaccurate/unfavorable research, the trading price or volume could decline.
• Delaware law and provisions in the Charter and Bylaws could make a merger, tender offer, or proxy contest difficult, depressing the trading price.
• The Bylaws designate specific exclusive forums for disputes, potentially limiting stockholders' ability to obtain a favorable judicial forum.
• No intention to pay dividends for the foreseeable future, requiring stockholders to rely on stock price appreciation for gains.
• The company may issue additional shares of common stock or other equity securities without stockholder approval, diluting ownership interests and depressing the market price.
• The company may redeem Public Warrants and Sponsor Warrants prior to their exercise at a disadvantageous time, making them worthless.
• Exercise of warrants is dependent on the trading price of common stock, which is currently significantly below exercise prices, making exercise unlikely.
• Financial reporting obligations as a public company are expensive and time-consuming, diverting management's attention.
• Failure to comply with Sarbanes-Oxley rules related to accounting controls and procedures, or discovery of material weaknesses, could significantly decline stock price and make capital raising difficult.
• Inability to comply with Nasdaq's continued listing standards, including minimum bid price and market value of listed securities, could lead to delisting.

Future Outlook

The company expects sales and partnership cycles to remain long, especially with current economic uncertainty. It anticipates an ongoing need to raise additional capital to fund operations and grow the business, primarily through the ATM Offering, provided market conditions are favorable. The company does not foresee generating significant cash flows from operations in the near term and expects to finance operations through additional equity and/or convertible debt. It will lose emerging growth company status on December 31, 2026, which will subject it to additional reporting requirements, but expects to continue benefiting from smaller reporting company and non-accelerated filer exemptions.

Management Comments

• "Cardio aims to become one of the leading medical technology companies for enabling improved prevention, early detection and treatment of cardiovascular disease."
• "Cardio is transforming the approach to cardiovascular disease from reactive to proactive and hope to accelerate the adoption of Precision Medicine for all."
• "We believe that incorporating Cardios solutions into routine practice in primary care and prevention efforts can help alter the trajectory that nearly one in two Americans is expected to develop some form of cardiovascular disease by 2035."
• "Cardio expects that sales and partnership cycles will continue to be long, especially with the current economic uncertainty."
• "We believe our long-term value as a company will be greater if we focus on longer-term growth over short-term results."
• "We are unable to predict when we will become profitable, and it is possible that we may never become profitable."
• "Given the current differential between the trading price of our Common Stock and the Warrant exercise prices and the volatility of our stock price, we are not making strategic business decisions based on an expectation that we will receive any cash from the exercise of warrants."

Industry Context

StockSavvy.ai notes that Cardio Diagnostics operates within the rapidly growing cardiovascular diagnostic testing market, projected to reach $12.41 billion by 2027 with a CAGR of 7.94%. The company's focus on AI-driven multi-omics and epigenetics-based tests positions it in an innovative, albeit new and unproven, segment. The rescission of the FDA's LDT regulation is a significant positive, reducing immediate regulatory hurdles compared to competitors who might face stricter oversight. However, the industry is intensely competitive, with established players like Cleerly and Prevencio, and traditional methods (FRS, PCE, imaging) holding substantial market share and financial backing. Cardio's challenge lies in achieving broad market acceptance and payor coverage, which typically takes years, against a backdrop of rising chronic disease costs and a shift towards value-based care and telemedicine, which are tailwinds for its remote-deployable solutions.

Comparison to Industry Standards

• Epi+Gen CHD demonstrated 76% and 78% sensitivity for men and women, respectively, for three-year CHD risk, which is approximately 1.7 times and 2.4 times more sensitive than the Framingham Risk Score (FRS) and ASCVD Pooled Cohort Equation (PCE) (average sensitivity 44% for men, 32% for women).
• PrecisionCHD showed an overall average sensitivity of 79% and specificity of 76% for detecting coronary heart disease, with 80% sensitivity for men and 76% for women. This is approximately 1.4 times and 1.3 times more sensitive than exercise ECG (58% sensitivity) for men and women, respectively.
• Unlike genetic biomarkers, the DNA methylation (epigenetic) biomarkers in Cardio's products are dynamic, allowing for potential use in monitoring intervention effectiveness, a feature not typically found in static genetic tests or traditional lipid-based risk assessments.
• The company's digital PCR-based methods are believed to be more scalable testing solutions compared to Luminex bead platforms used by competitors like Prevencio (HART CADhs or CVE tests).

Corporate Governance

Legal Proceedings

• Dispute with Boustead Securities, LLC regarding alleged future compensation rights from a terminated Placement Agent Agreement. Cardio disputes the claims, and no legal proceedings have been instigated.
• Allegation by The Benchmark Company, LLC of owed damages due to a right of first refusal not being honored in connection with a convertible debenture transaction. No legal proceedings have been instigated.
• Demand letter from a plaintiffs securities law firm alleging omitted material information in the S-4 Registration Statement. Cardio denies the claims, and no lawsuit has been filed.
• Claim by Northland Securities, Inc. for a $150,000 fee related to a financing agreement. Northland has since advised they would not proceed with the claim, and no legal proceedings have been instituted.

Related Party Transactions

• Cardio has an exclusive, worldwide patent license of the Core Technology from the University of Iowa Research Foundation (UIRF). Meeshanthini Dogan (CEO) and Robert Philibert (CMO) may benefit from UIRF's Inventions Policy (25% of income from earnings) as co-inventors.
• Timur Dogan (CTO) is the spouse of Meeshanthini Dogan (CEO).
• Warren Hosseinion (Non-Executive Chairman) is a 10% owner of Altitude Capital Group LLC, the placement agent for the February 2024 private placement. He did not receive direct compensation for this role, but his ownership creates a potential conflict of interest. Policies are in place for independent board review of such transactions.
• Upon the closing of the Business Combination, 3,639 shares of Common Stock were issued to UIRF in accordance with Equity Rights under the Exclusive License Agreement.
• Approximately $1,300 in total royalty fees (2% of annual net sales) have been paid to UIRF under the exclusive license to date.

Stakeholder Impact

• **Shareholders**: Face significant dilution risk from ongoing ATM offerings and potential future capital raises. The reverse stock split aimed to maintain Nasdaq listing, but stock price volatility remains a concern. Continued operating losses and reliance on external financing pose risks to investment value. The low likelihood of warrant exercise means less cash for the company and potentially worthless warrants for holders.
• **Employees**: The company is investing in research and development personnel and aims to attract and retain highly skilled professionals. However, the limited operating history and financial losses could impact long-term job security and compensation stability. Stock-based compensation is a significant component of executive compensation.
• **Customers (Patients, Clinicians, Health Systems, Employers, Payors)**: The company's AI-driven epigenetic tests (Epi+Gen CHD, PrecisionCHD) offer potentially superior sensitivity for cardiovascular disease risk assessment and detection compared to current methods. The rescission of FDA LDT regulation is favorable for continued access to these tests. However, the lengthy process to secure broad payor coverage may limit widespread adoption and affordability for some patients.
• **Creditors**: The company has no lines of credit or other bank financing arrangements and relies on equity raises. The finance agreement for D&O insurance premiums is a short-term obligation. The accumulated deficit and ongoing losses indicate a higher risk profile for potential creditors.
• **Regulatory Authorities**: The company operates in a heavily regulated industry and is subject to ongoing scrutiny regarding CLIA compliance, state licensing, and potential future FDA oversight of LDTs. The identified material weakness in internal controls highlights areas needing improvement for regulatory compliance.

Next Steps

• Leverage CPT PLA codes and expand reimbursement efforts with both government and commercial payors.
• Develop additional products, including clinical tests for stroke, congestive heart failure, and diabetes.
• Expand clinical and health economics evidence portfolio to demonstrate product value and increase reach.
• Offer laboratory services via the CLIA laboratory.
• Expand adoption of products across key channels, including health systems and self-insured employers.
• Explore additional market opportunities in the US and partner-led international expansions (e.g., India, including local manufacturing).
• Scale internal operations capabilities to improve efficiency and reduce cost of goods sold.
• Pursue potential strategic partnership(s) and/or acquisition(s) of synergistic companies.
• Continue to build evidence base for evaluating an FDA regulatory pathway for broader access to tests.
• Invest in efforts to educate healthcare stakeholders on technology, tests, and value propositions.
• Remediate the material weakness in internal control over financial reporting related to inadequate segregation of duties through approval matrices and automation.

Key Dates

Recommendation

Cardio Diagnostics is an early-stage company with innovative, epigenetics-based diagnostic technology for cardiovascular disease, operating in a growing market. The rescission of the FDA's LDT rule is a significant positive, reducing a major regulatory overhang. However, the company faces substantial challenges, including declining revenue, persistent operating losses, a significant accumulated deficit, and heavy reliance on dilutive equity financing. While the technology shows promise and has secured CPT PLA codes, achieving broad market acceptance and widespread payor reimbursement is a lengthy and uncertain process. The stock price is highly volatile, and outstanding warrants are significantly out-of-the-money. A 'hold' recommendation acknowledges the long-term potential of its differentiated technology and recent positive regulatory news, but also reflects the considerable financial risks, operational hurdles, and the need for sustained execution and capital to reach profitability. Investors should monitor progress on commercial adoption, reimbursement, and internal control remediation closely.

Keywords

Cardiovascular Disease, Epigenetics, AI-driven Diagnostics, Precision Medicine, Coronary Heart Disease, Epi+Gen CHD, PrecisionCHD, LDTs, SEC Filing, 10-K, Medical Technology, Healthcare, Biomarkers, Nasdaq, Reverse Stock Split, Capital Raise, Risk Assessment, Diagnostic Testing