FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549



   X    ____ Quarterly  report pursuant to Section 13 or 15 (d) of the
        Securities  Exchange  Act of 1934.  For the  quarterly  period
        ended September 30, 1996.

        Transition  report  pursuant  to  Section  13 or  15(d) of the
        Securities  Exchange Act of 1934.  For the  transition  period
        from       to .     

                             Commission File Number
                                     0-26992

                        CARDIOVASCULAR DIAGNOSTICS, INC.
             (Exact Name of Registrant as Specified in its Charter)


     North Carolina                                      56-1493744
(State or other jurisdiction of Incorporation   (IRS Employer Identification
 or organization)                                            Number)

5301 Departure Drive
Raleigh, North Carolina                                       27604
(Address of Principal Executive Office)                    (Zip Code)

Registrant's Telephone Number, Including Area Code        919-954-9871


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or such shorter period that the registrant was required
to file such reports),  and (2) has been subject to such filing requirements for
the past 90 days. YES   X    NO  ______

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.


        Class                              Outstanding as of November 7, 1996
Common Stock, par value $.001                           6,659,645


<PAGE>



                        CARDIOVASCULAR DIAGNOSTICS, INC.

                               INDEX TO FORM 10-Q




                                                                           PAGE
PART I.   FINANCIAL INFORMATION

          Item 1.  Financial Statements

          Consolidated Balance Sheets as of September 30, 1996 (unaudited)
          and December 31, 1995                                               3

          Consolidated  Statements  of  Operations  for the Three Months
          Ended  September  30,  1996 and 1995  and  Nine  Months  Ended
          September 30, 1996 and 1995 (unaudited)                             4

          Consolidated Statements of Cash Flows for the Nine Months Ended
          September 30, 1996 and 1995 (unaudited)                             5

          Notes to Unaudited Consolidated Financial Statements                6


          Item 2.  Management's Discussion and Analysis of Financial
                   Condition and Results of Operations                        7


PART II. OTHER INFORMATION

          Item 5.  Other Information                                          10
          Item 6.  Exhibits and Reports on Form 8-K                           10


          SIGNATURES                                                          11



                                       2


<PAGE>

                        CARDIOVASCULAR DIAGNOSTICS, INC.
                          Consolidated Balance Sheets
                     (In thousands, except per share data)

<TABLE>
<CAPTION>

                                                                               September 30,      December 31,
                                                                                   1996               1995
                                                                            ----------------   ------------------
ASSETS                                                                         (unaudited)

<S>                                                                           <C>                <C>
Current assets:
    Cash and cash equivalents                                                 $       1,907      $        16,237
    Investments                                                                       8,414                    0
    Accounts receivable                                                               1,228                  803
    Inventories                                                                       2,131                1,305
    Other current assets                                                                247                  159
                                                                            ----------------   ------------------
          Total current assets                                                       13,927               18,504

Property and equipment, net                                                           4,119                3,496
Intangible assets, net                                                                1,708                1,810
Other assets                                                                            317                  175
                                                                            ----------------   ------------------
         Total assets                                                          $     20,071      $        23,985
                                                                            ================   ==================

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
    Accounts payable                                                           $         719     $           953
    Accrued expenses                                                                     153                 337
    Warranty reserve                                                                      45                  50
    Current portion of long-term debt                                                      4                 283
    Current portion of capital lease obligations                                          26                  54
                                                                            ----------------   ------------------
          Total current liabilities                                                      947               1,677
                                                                            ----------------   ------------------

Long term debt, less current portion                                                      54                 457
Capital lease obligations, less current portion                                           22                  38
Deferred gain on sale-leaseback                                                            0                   4
                                                                            ----------------   ------------------
          Total non-current liabilities                                                   76                 499
                                                                            ----------------   ------------------
          Total liabilities                                                            1,023               2,176
                                                                            ----------------   ------------------

Shareholders' equity:
    Common stock, $.001 par value; authorized 10,000,000 shares;
    6,574,486 and 6,447,562 issued and outstanding at
    September 30, 1996 and December 31, 1995, respectively.                                7                   6
Additional paid-in capital                                                            33,691              32,672
Unrealized gain on investments                                                             3                   0
Cumulative translation adjustment                                                        (49)                 (6)
Accumulated deficit                                                                  (14,568)            (10,819)
Unearned compensation                                                                    (36)                (44)
                                                                            ----------------   ------------------
         Total shareholders' equity                                                   19,048              21,809
                                                                            ----------------   ------------------

         Total liabilities and shareholders' equity                            $      20,071      $       23,985
                                                                            ================   ==================
</TABLE>

See accompanying notes.

                                       3

<PAGE>

                       CARDIOVASCULAR DIAGNOSTICS, INC.
                     Consolidated Statements of Operations
                     (In thousands, except per share data)
                                  (Unaudited)

<TABLE>
<CAPTION>


                                                         Three Months Ended               Nine Months Ended
                                    September 30,          September 30,          September 30,          September 30,
                                        1996                   1995                    1996                   1995
                                  ------------------     -----------------      ------------------    ------------------

<S>                                 <C>                   <C>                     <C>                     <C>       
Net sales                           $     1,572           $     1,402             $     4,796             $    3,822
Cost of goods sold                        1,257                 1,130                   3,748                  2,872
                                  ---------------        --------------          ----------------       ----------------
Gross profit                                315                   272                   1,048                    950
                                  ---------------        --------------          ----------------       ----------------

Operating expenses:
Administration and finance                 699                   456                    2,141                  1,356
Sales and marketing                        475                   302                    1,466                    789
Research and development                   578                   366                    1,664                  1,291
                                  ---------------        --------------          ----------------       ----------------
Total operating expenses                 1,752                 1,124                    5,271                  3,436
                                  ---------------        --------------          ----------------       ----------------

Operating loss                          (1,437)                 (852)                  (4,223)                (2,486)
                                  ---------------        --------------          ----------------       ----------------

Other income(expense):
Interest expense                            (1)                  (15)                     (11)                   (33)
Interest income                            147                    17                      514                     71
Grant/royalty income                         0                    92                       29                    351
                                  ---------------         -------------          ----------------       ----------------
Total other income (expense)               146                    94                      532                    389
                                  ---------------         -------------          ----------------       ----------------

Net loss before taxes                   (1,291)                 (758)                  (3,691)                (2,097)
Provision for income taxes                 (20)                  (23)                     (58)                   (61)
                                  ===============         =============          ================       ================
Net loss                               ($1,311)                ($781)                 ($3,749)               ($2,158)
                                  ===============         =============          ================       ================

Loss per share                          ($0.20)               ($0.15)                  ($0.57)                ($0.41)
                                  ===============         =============          ================       ================

</TABLE>


See accompanying notes.

                                       4

<PAGE>


                       CARDIOVASCULAR DIAGNOSTICS, INC.
                     Consolidated Statements of Cash Flows
                                 (In thousands)
                                  (Unaudited)


<TABLE>
<CAPTION>

                                                                                    September 30,         September 30,
                                                                                        1996                  1995
                                                                                ----------------    --------------------
<S>                                                                                   <C>                 <C>
Cash flows from operating activities:
Net loss                                                                                ($3,749)             ($2,158)
Adjustments to reconcile net loss to net cash
    used in operating activities:
    Depreciation and amortization                                                           526                  385
    Amortization of intangible assets                                                       138                  154
    Amortization of deferred gain on sale-lease back                                         (4)                 (13)
    Amortization of unearned compensation                                                     8                  116
    Amortization of investment discounts                                                   (223)                   0
    Loss on disposal of fixed assets                                                          0                    7
    Provision for income taxes                                                                0                    7
    Change in assets and liabilities:
        Receivables                                                                        (425)                (362)
        Inventories                                                                        (826)                (720)
        Other assets                                                                       (203)                (315)
        Accounts payable and accrued expenses                                              (418)                 780
        Warranty reserve                                                                     (5)                   0
        Deferred revenue and gains                                                            0                  (25)
                                                                                ----------------    --------------------
              Net cash used in operating activities                                      (5,181)              (2,144)
                                                                                ----------------    --------------------

Cash flows from investing activities:
    Payments for purchase of property and equipment                                      (1,145)              (1,790)
    Costs incurred to obtain patents                                                        (67)                (132)
    Purchase of investments                                                             (10,688)                   0
    Investment maturities                                                                 2,500                    0
                                                                                ----------------    --------------------
            Net cash used in investing activities                                        (9,400)              (1,922)
                                                                                ----------------    --------------------

Cash flows from financing activities:
    Principal payments on long-term debt and capital lease obligations                     (726)                (131)
    Proceeds from issuance of long-term debt                                                  0                  500
    Net proceeds from issuance of stock                                                   1,020                1,285
                                                                                ----------------    --------------------
           Net cash provided by financing activities                                        294                1,654
                                                                                ----------------    --------------------

Effect of exchange rates on cash                                                            (43)                   3
          Net decrease in cash and cash equivalents                                     (14,330)              (2,409)
Cash and cash equivalents at beginning of period                                         16,237                3,206
                                                                                ----------------    --------------------
Cash and cash equivalents at end of period                                       $        1,907           $      797
                                                                                ================    ====================
</TABLE>

See accompanying notes.
                                       5

<PAGE>


                        CARDIOVASCULAR DIAGNOSTICS, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)

Note 1.  Basis of Presentation

Cardiovascular  Diagnostics,  Inc.  ("CVDI")  is the  parent  company  of  Coeur
Laboratories,  Inc. ("Coeur") and Cardiovascular Diagnostics Europe, BV ("CDE").
The "Company"  refers  collectively  to CVDI,  Coeur and CDE. All CVDI financial
reporting  is  consolidated  including  the  accounts  of  Coeur  and  CDE.  All
significant   intercompany  activity  has  been  eliminated.   The  consolidated
financial  statements included herein as of any date other than December 31 have
been  prepared  by  the  Company  without  audit,  pursuant  to  the  rules  and
regulations of the Securities and Exchange Commission.  Financial information as
of December 31 has been derived  from the audited  financial  statements  of the
Company,  but does not include all  disclosures  required by generally  accepted
accounting principles. In the opinion of management,  the accompanying unaudited
consolidated  financial  statements include all adjustments  (consisting only of
normal  recurring  adjustments)  necessary  to present  fairly the  consolidated
financial  position,  results of operations  and cash flows of the Company.  For
further information  regarding the Company's accounting  policies,  refer to the
Consolidated  Financial  Statements  and related notes included in the Company's
Annual Report on Form 10-K for the year ended December 31, 1995. Results for the
interim  period are not  necessarily  indicative  of the  results  for any other
interim period or for the full fiscal year.

Note 2.  Income Taxes Paid

No Federal  income tax  provision  or benefit has been  provided  for income tax
purposes,  as the Company has not  realized net income for the nine months ended
September 30, 1996 and has net operating  loss  carryforwards  to offset any net
income  when  realized.  Coeur made state  income tax  payments in the amount of
$57,543 for the nine months ended September 30, 1996.

Note 3.  Cash Equivalents

The Company  considers  all highly liquid  investments  with a maturity of three
months or less at the time of purchase to be cash equivalents.


                                        6
<PAGE>


Item 2.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations

Introduction

This Management's  Discussion and Analysis of Financial Condition and Results of
Operations contains forward-looking  statements. The actual results might differ
materially from those projected in the  forward-looking  statements.  Additional
information  concerning  factors that could cause actual  results to  materially
differ from those in the forward-looking statements is described below under the
heading  "Factors  That May  Affect  Future  Results"  and is  contained  in the
Company's other SEC filings,  including its Registration  Statement on Form S-1,
copies of which are available upon request from the Company.

The  following  discussion  should  be read in  conjunction  with the  unaudited
Consolidated  Financial Statements and Notes thereto appearing elsewhere in this
report.  Unless the context indicates  otherwise,  all references to the Company
include   Cardiovascular   Diagnostics,   Inc.  and  its   subsidiaries,   Coeur
Laboratories, Inc. and Cardiovascular Diagnostics Europe, BV.

In May  1995,  the  Company  began  commercial  marketing  of  its  Thrombolytic
Assessment  System  ("TAS(TM)"),  consisting of a compact, portable analyzer and
disposable  test cards which are inserted into the analyzer to perform a variety
of hemostasis tests. Coeur currently manufactures and sells a line of disposable
syringes  used in  angiography  injectors,  as  well  as a line of  angiographic
procedure kit manifolds (collectively, "Imaging Products").

Results of Operations

Three Months Ended September 30, 1996 vs. September 30, 1995

Net sales for the three  months ended  September  30, 1996 were  $1,572,000,  an
increase of 12% or  $169,000,  as  compared to the same period in 1995.  The net
increase reflects  increased TAS sales of $306,000 1995 to 1996, offset by lower
Imaging  Product sales of  $1,143,000 in 1996 as compared to $1,280,000  for the
same period in 1995. The lower Imaging Product sales were a result of production
delays  experienced in the third quarter due to a raw material supplier problems
which created a sales backlog. The Company believes that this situation has been
resolved and the backlog was filled in October.

Cost of  goods  sold  increased  $127,000  or 11%  from  September  30,  1995 to
September 30, 1996, as a direct result of increased sales of TAS products. Gross
profit  increased  16% for the  three-month  period ended  September 30, 1996 as
compared to the same period in 1995.

Total operating expenses increased $628,000 for the three months ended September
30, 1996 as compared to the same period in 1995. This increase was primarily due
to increased  staffing,  as headcount  increased to 85 employees as of September
30, 1996 from 61 employees as of September 30, 1995.

Administration and finance expenses increased $243,000, or 53%, due to increased
staffing,  as well as  additional  expenses,  such as those  related  to being a
public company.

Sales and marketing  expenses for the three months ended September 30, 1996 were
$173,000 greater than the same period in 1995, reflecting increased staffing and
travel  expenses,  as well as  increased  advertising  expenses  to  expand  the
marketing efforts related to TAS products.


                                        7

<PAGE>

Research and  development  expenses were  $212,000  greater for the three months
ended September 30, 1996 than for the same period in 1995. This increase was due
to  additional  engineering  support for  continued  product  and  manufacturing
development.

Interest income  increased  $130,000 for the three-month  period ended September
30,  1996  from the  three-month  period  ended  September  30,  1995 due to the
investment of the funds  received from the Company's  initial  public  offering,
which was  consummated  in December  1995.  Grant and royalty  income  decreased
$92,000  from the  three-month  period in 1996 as compared to the same period in
1995. During the three-month  period ended September 30, 1996 there was no grant
or royalty income.

Nine Months Ended September 30, 1996 vs. September 30, 1995

Net sales for the nine  months  ended  September  30, 1996 were  $4,796,000,  an
increase  of  25%  or  $974,000,  as  compared  to  the  same  period  in  1995.
Approximately  $929,000 of the increase from 1995 to 1996 was generated from TAS
sales,  which did not  commence on a commercial  basis until May 1995.  Sales of
Imaging Products for the nine months ended September 30, 1996 were $3,558,000 as
compared to $3,513,000 for the nine months ended September 30, 1995.

Cost of  goods  sold  increased  $876,000  or 31%  from  September  30,  1995 to
September  30, 1996,  primarily as a result of increased  sales of TAS products.
Gross  profit  increased  10% for the nine months  ended  September  30, 1996 as
compared to the same period in 1995 however,  the gross profit margin  decreased
3%.

Total  operating  expenses  increased  $1,835,000  for  the  nine  months  ended
September  30, 1996 as compared to the same period in 1995.  This  increase  was
primarily due to increased  staffing,  expansion of the  facilities,  additional
sales  and  marketing  expenses,   and  continued  validation  of  manufacturing
processes.

Administration and finance expenses increased $785,000 for the nine months ended
September  30, 1996 as compared  to the same period in 1995,  due to  additional
staffing,  increased  rent and  associated  expenses  incurred with the facility
expansion and associated expenses for a public company.

Sales and marketing  expenses for the nine months ended  September 30, 1996 were
$677,000  greater  than  the  same  period  in 1995.  This  increase  was due to
additional  staffing,  associated travel expenses and advertising as the Company
expanded marketing efforts related to TAS products.



Research and development  expenses for the nine-month period ended September 30,
1996 increasesd $373,000 due to additional  staffing,  increased efforts for new
test card  development,  and 510(k)  submissions  and associated  field/clinical
trials.

Interest income increased  $443,000 for the nine months ended September 30, 1996
from the nine months  ended  September  30, 1995 due to the  investments  of the
funds received from the Company's initial public offering, which was consummated
in December 1995. Grant and royalty income decreased $322,000 in the nine months
ended  September  30,  1996,  as  compared  to the same  period in  1995
primarily  as a  result  of the Company  changing its  focus from  research
and development to commercialization.


                                        8

<PAGE>

Liquidity and Capital Resources

In December 1995, the Company completed its initial public offering,  generating
net  proceeds of  approximately  $16,700,000.  In January  1996,  an  additional
100,000  shares were  purchased by the  underwriters  to cover  over-allotments,
which resulted in the Company receiving additional net proceeds of approximately
$1,000,000.

From  December  31,  1995 to  September  30,  1996,  cash and  cash  equivalents
decreased  $14,336,000.  A portion  of this  decrease  was due to  purchases  of
Treasury Bills and Treasury Notes of  $10,688,000  during the nine-month  period
ended September 30, 1996. These  investments have maturity dates greater than 90
days  and  accordingly  have  been  classified  as  investments.   In  addition,
utilization of cash for  operations was  $5,181,000,  capital  expenditures  for
property and equipment  were  $1,145,000 and repayment of debt  obligations  was
$726,000.

Accounts  receivable  increased $425,000 from December 31, 1995 to September 30,
1996 due to the increase in TAS sales during 1996.

The Company  expects to incur  additional  operating  losses  during  1996.  The
Company's working capital  requirements  will depend on many factors,  primarily
the  amount of time for  hospitals  to  complete  evaluations  of TAS and decide
whether or not to purchase  TAS  analyzers  and test  cards.  In  addition,  the
Company  expects to incur costs  associated  with  clinical  trials for new test
cards.  The Company may acquire other products,  technologies or businesses that
complement  the Company's  existing and planned  products,  although the Company
currently has no understanding, commitment or agreement with respect to any such
acquisitions.

Management  believes that its existing capital resources and the cash flows from
operations will be adequate to satisfy its planned capital  requirements through
at least 1997.

Factors That May Affect Future Results

A number of  uncertainties  exist that may affect the Company's future operating
results and stock price,  including  managed  care,  FDA  regulations  and other
regulatory  guidelines  affecting  the  Company.  The market price of the Common
Stock could be subject to significant  fluctuations in response to variations in
the Company's quarterly operating results, as well as other factors which may be
unrelated  to the  Company's  performance.  The stock market in recent years has
experienced extreme price and volume fluctuations that often have been unrelated
or disproportionate to the operating performance of or announcements  concerning
public companies.  Such broad fluctuations may adversely affect the market price
of the Company's  Common Stock.  Securities of issuers having  relative  limited
capitalization  or securities  recently issued in an initial public offering are
particularly susceptible to volatility based on short-term trading strategies of
certain investors.

                                        9
<PAGE>

Part II. OTHER INFORMATION

Item 5.  Other Information-Subsequent Event

On October  18,  1996,  CVDI  signed an  exclusive,  five-year  development  and
distribution  agreement with Dade  International,  a world leader in coagulation
reagent  sales.  Under this  agreement,  Dade will have the right to  distribute
CVDI's  Thrombolytic  Assessment System (TAS) technology under a joint Dade/CVDI
label  to  hospitals  and  non-hospital   laboratories.   The  two  most  common
coagulation tests  manufactured by CVDI, the prothrombin time (PT) and activated
partial  thromboplastin  time (aPTT),  will be  exclusively  sold by Dade in the
United States, Canada, Mexico and certain Latin American countries. In addition,
Dade  intends  to  cooperate  and  fund  development  of  additional  tests  for
distribution.  Dade's share of the U.S.  reagent market is estimated at over 50%
and it currently has sole source hemostasis  contracts with Columbia/HCA,  Tenet
and Kaiser.

Dade  International  is  headquartered  in Deerfield,  Illinois.  Dade has 5,500
employees in sales, research and manufacturing operations in 15 countries.  Dade
provides products,  systems and services for microbiology,  clinical  chemistry,
clinical  laboratory quality control and cardiac  immunodiagnostics,  as well as
hemostasis.


Item 6.  Exhibits and Reports on Form 8-K

(a)      Exhibits
         10.19  Distribution  Agreement,  dated  October  18,  1996,  with  Dade
                International*
         11.1   Statement  regarding  computation of loss per share
         27.1   Financial Data Schedule

(b)      No reports on Form 8-K were filed during the period.

*Confidential treatment requested


                                       10

<PAGE>



                                   SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


                        CARDIOVASCULAR DIAGNOSTICS, INC.



Date:    November 13, 1996      By:/s/ B. Denise Hobbs
                                  -------------------
                                  B. Denise Hobbs
                                  Treasurer
                                  (Principal Financial and Accounting Officer)


                                       11