SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                    FORM 10-Q


|X|   Quarterly report pursuant to Section 13 or 15(d) of the Securities
      Exchange Act of 1934. For the quarterly period ended September 30, 1997.

|_|   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                       (IRS Employer 
 Incorporation or organization)                   Identification Number)

5301 Departure Drive
Raleigh, North Carolina                                    27616
---------------------------------------           ---------------------
(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 October 30, 1997
-----------------------------               ----------------------------------
Common Stock, par value $.001                           6,745,843
<PAGE>

PART I. FINANCIAL INFORMATION
Item 1. Financial Statements

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

<TABLE>
<CAPTION>
                                                                    September 30,   December 31,
                                                                         1997          1996
                                                                    -------------   ------------
<S>                                                                   <C>            <C>     
ASSETS                                                                       (Unaudited)
Current assets:
    Cash and cash equivalents                                         $  2,403       $  2,716
    Short term investments, held to maturity                             1,756          5,973
    Accounts receivable                                                  1,972          1,292
    Inventories                                                          3,004          2,019
    Other current assets                                                    87            198
                                                                      --------       --------
          Total current assets                                           9,222         12,198

Property and equipment, net                                              4,556          4,236
Intangible assets, net                                                   1,584          1,700
Other assets                                                               246            217
                                                                      --------       --------
         Total assets                                                 $ 15,608       $ 18,351
                                                                      ========       ========

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
    Accounts payable                                                  $    531       $    377
    Accrued expenses                                                       161            220
    Current portion of capital lease obligations                            --             19
                                                                      --------       --------
          Total current liabilities                                        692            616
                                                                      --------       --------
Long term debt                                                              50             50
Capital lease obligations, less current portion                              9             17
                                                                      --------       --------
          Total non-current liabilities                                     59             67
                                                                      --------       --------
          Total liabilities                                                751            683
                                                                      --------       --------
Shareholders' equity:
    Common stock, $.001 par value; authorized 10,000,000 shares;
    6,745,843 and 6,663,986 issued and outstanding at
    September 30, 1997 and December 31, 1996, respectively                   7              7
Additional paid-in capital                                              33,790         33,682
Cumulative translation adjustments                                        (101)           (48)
Accumulated deficit                                                    (18,814)       (15,940)
Unearned compensation                                                      (25)           (33)
                                                                      --------       --------
         Total shareholders' equity                                     14,857         17,668
                                                                      --------       --------

         Total liabilities and shareholders' equity                   $ 15,608       $ 18,351
                                                                      ========       ========
</TABLE>

The accompanying notes are an integral part of the consolidated financial
statements.


                                       2
<PAGE>

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

<TABLE>
<CAPTION>
                                                Three Months Ended                 Nine months ended
                                         September 30,    September 30,     September 30,     September 30,
                                             1997             1996              1997              1996
                                         -----------       -----------       -----------       -----------
<S>                                      <C>               <C>               <C>               <C>        
Net sales                                $     1,677       $     1,572       $     5,720       $     4,796
Cost of goods sold                             1,484             1,257             4,434             3,748
                                         -----------       -----------       -----------       -----------
Gross profit                                     193               315             1,286             1,048

Operating expenses:
General and administrative                       809               699             2,451             2,141
Sales and marketing                              318               475               942             1,466
Research and development                         689               578             1,861             1,664
                                         -----------       -----------       -----------       -----------
Total operating expenses                       1,816             1,752             5,254             5,271

Litigation expenses                              110                --               231                --
                                         -----------       -----------       -----------       -----------
Operating loss                                (1,733)           (1,437)           (4,199)           (4,223)

Other income(expense):
Net interest income                               70               146               277               503
Grant/royalty income                             133                --               271                29
Development income                                95                --               820                --
                                         -----------       -----------       -----------       -----------
Total other income                               298               146             1,368               532
                                         -----------       -----------       -----------       -----------
Net loss before taxes                         (1,435)           (1,291)           (2,831)           (3,691)

Provision for income taxes                        14                20                43                58
                                         ===========       ===========       ===========       ===========
Net loss                                 ($    1,449)      ($    1,311)      ($    2,874)      ($    3,749)
                                         ===========       ===========       ===========       ===========

Loss per share                           ($     0.22)      ($     0.20)      ($     0.43)      ($     0.57)
Average weighted shares outstanding        6,733,452         6,570,287         6,725,959         6,555,948
</TABLE>

The accompanying notes are an integral part of the consolidated financial 
statements.
                                       3
<PAGE>

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

<TABLE>
<CAPTION>
                                                                           September 30,  September 30,
                                                                               1997          1996
                                                                           -------------  -------------
<S>                                                                         <C>            <C>      
Cash flows from operating activities:
Net loss                                                                    ($ 2,874)      ($ 3,749)
Adjustments to reconcile net loss to net cash
    used in operating activities:
    Depreciation                                                                 498            526
    Amortization                                                                 159            (81)
    Change in assets and liabilities:
        Receivables                                                             (680)          (425)
        Inventories                                                             (985)          (826)
        Other assets                                                              82           (203)
        Accounts payable and accrued expenses                                     95           (423)
                                                                            --------       --------
               Net cash used in operating activities                          (3,705)        (5,181)
                                                                            --------       --------

Cash flows from investing activities:
    Payments for purchase of property and equipment                             (818)        (1,145)
    Costs incurred to obtain patents                                             (35)           (67)
    Purchase of investments                                                   (5,827)       (10,688)
    Proceeds from maturities of investments                                   10,044          2,500
                                                                            --------       --------
            Net cash provided by (used in) investing activities                3,364         (9,400)
                                                                            --------       --------

Cash flows from financing activities:
    Principal payments on long-term debt and capital lease obligations           (27)          (726)
    Net proceeds from issuance of stock                                          108          1,020
                                                                            --------       --------
           Net cash provided by financing activities                              81            294
                                                                            --------       --------

Effect of exchange rates on cash                                                 (53)           (43)
          Net decrease in cash and cash equivalents                             (313)       (14,330)
Cash and cash equivalents at beginning of period                               2,716         16,237
                                                                            --------       --------
Cash and cash equivalents at end of period                                  $  2,403       $  1,907
                                                                            ========       ========
</TABLE>

The accompanying notes are an integral part of the consolidated financial
statements.


                                       4
<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 B.V. ("CDE").
The "Company" refers to CVDI and its subsidiaries. All CVDI financial reporting
is consolidated including the accounts of its subsidiaries. All significant
intercompany activity and balances have 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, 1996. Results for the
interim period are not necessarily indicative of the results which might be
achieved 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, because the Company has not realized net income for the quarter ended
September 30, 1997 and has net operating loss carryforwards to offset net income
when realized. Coeur made state income tax payments in the amount of $14,273,
which represents management's estimate of state income tax expense for the
quarter ended September 30, 1997.

Note 3. Cash Equivalents

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

Note 4. Inventory

Inventories consisted of the following:

                               September 30, 1997      December 31, 1996
                               ------------------      -----------------
         Raw materials            $2,519,157             $1,431,534
         Finished goods              485,372                587,264
                                  ----------             ----------
                                  $3,004,529             $2,018,798

Note 5. Legal Proceedings

As reported in its Quarterly Report on Form 10-Q for the period ended March 31,
1997, the Company filed suit on March 20, 1997, in the U. S. District Court,
Eastern District of North Carolina, Western Division in Raleigh, North Carolina,
against Boehringer Mannheim Corporation ("BMC") located in Indiana. The suit


                                       5
<PAGE>

charged BMC with misappropriation of CVDI's trade secrets by improper
disclosure, breach of contract, breach of fiduciary duty, unfair and deceptive
trade practices, and constructive fraud. In addition, CVDI requested a
declaratory judgment that neither the products nor activities of CVDI infringe
U.S. Patents 5,164,598 or 5,300,779, purportedly owned by BMC.
On April 9, 1997 BMC answered the claims made by CVDI and submitted a
counterclaim against CVDI. On November 10, 1997, the Court issued a Judgment and
Order granting CVDI's motion for judgment on the pleadings with respect to its
assertion that it has an implied license, until June 21, 1999, to the patents at
issue, and dismissed BMC's counterclaims. The Court also dismissed all of CVDI's
other claims.

Note 6. New Accounting Pronouncements

The Company will adopt Statement of Financial Accounting Standards No. 131
"Disclosures about Segments of an Enterprise and Related Information" ("SFAS No.
131") on December 31, 1997. SFAS No. 131 requires the Company to report selected
information about operating segments in interim financial reports issued to
shareholders. It also establishes standards for related disclosures about
products and services, geographic areas, and major customers. The Company has
yet to determine the impact, if any, of adoption of the new pronouncement.

The Company will adopt Statement of Financial Accounting Standards No. 130
"Reporting Comprehensive Income" ("SFAS No. 130") on December 31, 1997. SFAS No.
130 requires the Company to display an amount representing total comprehensive
income for the period in a financial statement which is displayed with the same
prominence as other financial statements. Upon adoption, all prior period data
presented will be restated to conform to the provisions of SFAS No. 130. The
Company has yet to determine the impact, if any, of adoption of the new
pronouncement.

The Company will adopt Statement of Financial Accounting Standards No. 128,
"Earnings Per Share" ("SFAS No. 128") on December 31, 1997. SFAS No. 128
requires the Company to change its method of computing, presenting and
disclosing earnings per share information. Upon adoption, all prior period data
presented will be restated to conform to the provisions of SFAS No. 128.


                                       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 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. ("CVDI") and its subsidiaries, Coeur
Laboratories, Inc.("Coeur") and Cardiovascular Diagnostics Europe, BV ("CDE").

In May 1995, the Company began commercial marketing of its Thrombolytic
Assessment System ("TAS"), 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, 1997 vs. September 30, 1996

Net sales for the three months ended September 30, 1997 were $1,677,000, an
increase of 7%, or $105,000, as compared to the same period in 1996. TAS sales
for the third quarter of 1997 were $428,000 compared to $429,000 in the third
quarter of 1996 and $747,000 for the second quarter of 1997. The Company
believes that third quarter 1997 TAS sales were negatively impacted by continued
delays in the sales cycles of new technologies in the evolving healthcare
market. In addition, calibration of the Company's test cards to the reagents
used by Dade, its North American distributor, was not completed until the third
quarter of 1997. Sales of Imaging Products for the period ended September 30,
1997 were approximately $1,249,000 as compared to approximately $1,143,000 for
the period ended September 30, 1996, a 9% increase. The increase in sales of
Imaging Products was due to a major customer securing a contract with Premier.

Cost of goods sold increased $226,000, or 18%, from September 30, 1996 to
September 30, 1997, which partially reflects the increase in sales of Imaging
Products. The gross profit decreased $121,000, or 38%, for the three-month
period ended September 30, 1997 as compared to the same period in 1996 due to
fixed costs associated with manufacturing low volumes of TAS products.

Total operating expenses increased slightly, 4%, or approximately $64,000, for
the quarter ended September 30, 1997 as compared to the same period in 1996.
This increase was attributable to an increase in research and development
expenses and increased facility expenses, partially offset by the decrease in
sales and marketing expenses.

General and administrative expenses increased $110,000, or 16%, from September
30, 1996 to September 30, 1997 due to increased administrative staffing costs
and increased facility expenses.

Sales and marketing expenses for the quarter ended September 30, 1997 were
$157,000, or 33%, less than the same period in 1996. This decrease was due to
the elimination of the direct sales force in late 1996, after the Company
shifted to a distributor-based sales strategy.


                                       7
<PAGE>

Research and development expenses were $111,000, or 19%, greater for the
three-month period ended September 30, 1997 than for the same period in 1996.
The Company expects research and development expenses, as compared to 1996, to
continue to increase during 1997 due to the clinical trials planned for
expanding the TAS test card menu.

The operating loss for the three months ended September 30, 1997 was $1,733,000
as compared to an operating loss of $1,438,000 for the same period in 1996. The
increase is due to BMC-related litigation expenses, and increased administrative
and research and development expenses.

Interest income decreased $77,000 for the three-month period ended September 30,
1997 from the three-month period ended September 30, 1996 due to decreased
investments as funds were used to support operations. Grant income increased
$133,000 from the three-month period ended September 30, 1997 from the same
period in 1996. The increase was due to the Company receiving a National
Institutes of Health award. During the quarter ended September 30, 1997, the
Company also received development income of $95,000 for the milestones met in
accordance with earlier collaboration agreements. During the same quarter in
1996 there was no development income.

Nine Months Ended September 30, 1997 vs. September 30, 1996

Net sales for the nine months ended September 30, 1997 were $5,720,000, an
increase of 19%, or $925,000, as compared to the same period in 1996. The
increase in sales were a direct result of increased TAS products sold to our
distributors, DADE, Avecor and Ortho. Sales of Imaging Products for the period
ended September 30, 1997 were approximately $3,262,000 as compared to
approximately $3,557,000 for the period ended September 30, 1996. The decrease
in sales of Imaging Products was primarily due to decreased manifold sales in
Europe during the first six months of 1997.

Cost of goods sold increased $686,000, or 18%, from September 30, 1996 to
September 30, 1997, which partially reflects the increase in sales of TAS
products. The gross profit increased $239,000, or 23%, for the nine-month period
ended September 30, 1997 as compared to the same period in 1996 and the profit
margin increased slightly from 21% to 22%. These improvements resulted from
implementation of raw material cost savings and efficiencies in manufacturing
during the first quarter due to increased sales of TAS products.

Total operating expenses decreased approximately $17,000, for the nine months
ended September 30, 1997 as compared to the same period in 1996. This decrease
was the overall effect of eliminating the direct sales force in late 1996 after
the DADE North American distribution agreement was signed, partially offset by
increased general and administrative and research and development expenses.

General and administrative expenses increased $311,000, or 15%, from September
30, 1996 to September 30, 1997 due to increased administrative staffing costs
and increased facility expenses.

Sales and marketing expenses for the nine months ended September 30, 1997 were
$524,000, or 36%, less than the same period in 1996. This decrease was due to
the elimination of the direct sales force in late 1996.

Research and development expenses were $197,000 greater for the period ended
September 30, 1997 than for the same period in 1996. This increase was due to
increased clinical trials and marketing evaluation expenses. The Company expects
research and development expenses to increase during 1997 due to the clinical
trials planned for expanding the TAS test card menu.


                                       8
<PAGE>

The operating loss for the nine months ended September 30, 1997 was $3,968,000
as compared to a loss of $4,223,000 for the same period in 1996. Included in the
operating loss for the nine months ended September 30, 1997 are BMC litigation
expenses of $231,000.

Interest income decreased $235,000 for the nine-month period ended September 30,
1997 from the nine-month period ended September 30, 1996 due to decreased
investments as funds were used to support operations. Grant and royalty income
increased $243,000 in the nine-month period ended September 30, 1997 from the
same period in 1996. Grant income increased $254,000 due to the Company
receiving an NIH award and royalty income decreased $11,000. During the nine
months ended September 30, 1997, the Company also received development income of
$820,000 for the milestones met in accordance with earlier collaboration
agreements. During the same period in 1996 there was no development income.

Liquidity and Capital Resources

From December 31, 1996 to September 30, 1997, cash and cash equivalents and
short term investments decreased $4,531,000. This decrease was due primarily to
the utilization of cash for operations of approximately $3,807,000 and capital
expenditures for property and equipment of $818,000.

Accounts receivable increased 53%, or $681,000, from December 31, 1996 to
September 30, 1997 due to the increase in TAS sales for the nine months ended
September 30, 1997. Accounts receivable have decreased $418,000 since June 30,
1997, reflecting collections on prior sales and lower TAS sales during the third
quarter.

The Company expects to incur additional operating losses during 1997. The
Company's working capital requirements will depend on many factors, primarily
the volume of subsequent orders of TAS products from the distributors. 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 1998.

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 relatively limited
capitalization are particularly susceptible to volatility based on short-term
trading strategies of certain investors.


                                       9
<PAGE>

Part II. OTHER INFORMATION

Item 1.  Legal Proceedings

As reported in its Quarterly Report on Form 10-Q for the period ended March 31,
1997, the Company filed suit on March 20, 1997, in the U. S. District Court,
Eastern District of North Carolina, Western Division in Raleigh, North Carolina,
against Boehringer Mannheim Corporation ("BMC") located in Indiana. The suit
charged BMC with misappropriation of CVDI's trade secrets by improper
disclosure, breach of contract, breach of fiduciary duty, unfair and deceptive
trade practices, and constructive fraud. In addition, CVDI requested a
declaratory judgment that neither the products nor activities of CVDI infringe
U.S. Patents 5,164,598 or 5,300,779, purportedly owned by BMC.
On April 9, 1997 BMC answered the claims made by CVDI and submitted a
counterclaim against CVDI. On November 10, 1997, the Court issued a Judgment and
Order granting CVDI's motion for judgment on the pleadings with respect to its
assertion that it has an implied license, until June 21, 1999, to the patents at
issue, and dismissed BMC's counterclaims. The Court also dismissed all of CVDI's
other claims.

Item 6.  Exhibits and Reports on Form 8-K

(a)      Exhibits
         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.


                                       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 14, 1997         By: /s/ B. Denise Hobbs
                                    ------------------------------------
                                    B. Denise Hobbs
                                    Treasurer
                                    (Principal Financial and Accounting Officer)


                                       11