Co-Diagnostics Inc

Previous wording

We are currently developing a unique, groundbreaking portable diagnostic device and test system designed for point-of-care and at-home use. The system is comprised of our PCR instrument that we refer to as the Co-Dx™ PCR Pro™ instrument, our proprietary diagnostic test cup system and a mobile application to be installed on the user’s mobile device. We refer to the system as the “Co-Dx™ PCR platform that is being designed to bring affordable, reliable polymerase chain reaction (“PCR”) testing to patients in point-of-care and at-home settings. The Co-Dx PCR platform is subject to U.S. Food and Drug Administration (“FDA”) review and is not available for sale at the time of this filing. In December 2023, we submitted the Co-Dx PCR platform for review by the U.S. Food and Drug Administration (FDA) for Emergency Use Authorization (EUA). The submission included the PCR Pro instrument, Co-Dx PCR COVID-19 detection test cups, and mobile app, all designed for use in point-of-care and at-home settings. There is no guarantee that our Co-Dx PCR platform will receive the necessary regulatory approvals for commercialization, or that, if regulatory approval is received, we will be able to successfully commercialize this platform.

Current wording

We are currently developing a unique, groundbreaking portable diagnostic device and test system designed for point-of-care and at-home use. The system is comprised of our PCR instrument that we refer to as the Co-Dx™ PCR Pro™ instrument, our proprietary diagnostic test cup system and a mobile application to be installed on the user’s mobile device. We refer to the system as the “Co-Dx™ PCR platform that is being designed to bring affordable, reliable polymerase chain reaction (“PCR”) testing to patients in point-of-care and at-home settings. The Co-Dx PCR platform is subject to U.S. Food and Drug Administration (“FDA”) review and is not available for sale at the time of this filing. In June 2024, we completed our first U.S. Food and Drug Administration (FDA) application for 510(k) clearance for the Co-Dx™ PCR Pro™ instrument, and the Co-Dx PCR COVID-19 Test for over-the-counter (OTC) use. We have received acknowledgement from the FDA that the 510(k) application was received and is under review. Additionally, in December 2023, we submitted the Co-Dx PCR platform for review by the U.S. Food and Drug Administration (FDA) for Emergency Use Authorization (EUA). There is no guarantee that our Co-Dx PCR platform will receive the necessary regulatory approvals for commercialization, or that, if regulatory approval is received, we will be able to successfully commercialize this platform.

Previous wording

For the three months ended March 31, 2024, we generated revenues of $467,854, compared to revenues of $601,957 for the three months ended March 31, 2023. Grant revenue accounted for $215,109 of revenue for the three months ended March 31, 2024, compared to $0 for the three months ended March 31, 2023. The decrease in total revenue of $134,103 was primarily due to lower sales of our Logix Smart COVID-19 throughout the world.

Current wording

For the three months ended June 30, 2024, we generated revenues of $2,656,840, compared to revenues of $197,806 for the three months ended June 30, 2023. Grant revenue accounted for $2,495,738 of revenue for the three months ended June 30, 2024, compared to $0 for the three months ended June 30, 2023. The increase in grant revenue was primarily due to the achievement of certain milestones under various grants the Company was awarded.

Previous wording

We incurred total operating expenses of $10,492,736 for the three months ended March 31, 2024, compared to total operating expenses of $10,050,366 for the three months ended March 31, 2023. The increase in operating expenses was primarily due to increased personnel expenses and additional investment in research and development. These increases were partially offset by decreased stock compensation expense.

Current wording

We incurred total operating expenses of $10,124,654 for the three months ended June 30, 2024, compared to total operating expenses of $11,733,150 for the three months ended June 30, 2023. The decrease in operating expenses was primarily due to decreased stock-based compensation expense, bad debt expense, and expense related to clinical trials for the Co-Dx PCR platform. These decreases were partially offset by increased legal expenses.

Previous wording

Our sales and marketing expenses for the three months ended March 31, 2024 were $1,563,682, compared to $1,706,331 for the three months ended March 31, 2023. The decrease was primarily a result of decreased stock-based compensation expense, partially offset by increased tradeshow and travel expenses.

Current wording

Our sales and marketing expenses for the three months ended June 30, 2024 were $1,041,243, compared to $1,732,966 for the three months ended June 30, 2023. The decrease was primarily a result of decreased stock-based compensation expense, tradeshow and travel expenses, and website development expenses.

Previous wording

General and administrative expenses remained materially consistent at $2,918,803 for the three months ended March 31, 2024, compared to $3,013,965 for the three months ended March 31, 2023. The decrease in general and administrative expenses was primarily due to decreases in stock compensation, insurance expense, and professional services expenses, partially offset by increased legal expenses.

Current wording

General and administrative expenses were $3,132,385 for the three months ended June 30, 2024, compared to $3,713,895 for the three months ended June 30, 2023. The decrease in general and administrative expenses was primarily due to decreases in stock-based compensation expense, bad debt expense, and insurance expense, partially offset by increased legal and professional services expenses.

Previous wording

For the three months ended March 31, 2024 we had total other income of $970,108, compared to total other income of $1,935,448 for the three months ended March 31, 2023. The primary components of other income include a change in the fair value of contingent consideration liabilities and interest income and realized gains from investments in marketable securities.

Current wording

For the three months ended June 30, 2024 we had total other income of $101,234, compared to total other income of $837,294 for the three months ended June 30, 2023. The decrease in other income is primarily due to a change in the fair value of contingent consideration liabilities and decreased realized gains from investments in marketable securities, partially offset by increased interest income.

Previous wording

We realized a net loss for the three months ended March 31, 2024 of $9,312,043, compared to a net loss for the three months ended March 31, 2023 of $5,755,391. The larger net loss was primarily the result of an increase in operating expenses, as well as changes in the fair value of acquisition contingencies and income related to investments in marketable securities. Additionally, we recorded income tax expense of $22,764 for the three months ended March 31, 2024, compared to an income tax benefit of $2,259,811 for the three months ended March 31, 2023. The primary reason for the change in the provision for income taxes is a result of the Company now being in a full valuation allowance.

Current wording

We realized a net loss for the three months ended June 30, 2024 of $7,599,318, compared to a net loss for the three months ended June 30, 2023 of $8,918,825. The smaller net loss was primarily the result of an increase in grant revenue, combined with a decrease in operating expenses, as well as changes in the fair value of acquisition contingencies and income related to investments in marketable securities. Additionally, we recorded income tax expense of $20,590 for the three months ended June 30, 2024, compared to an income tax benefit of $2,238,320 for the three months ended June 30, 2023. The primary reason for the change in the provision for income taxes is a result of the Company now being in a full valuation allowance.

Previous wording

Our research and development expenses increased to $5,679,678 for the three months ended March 31, 2024, compared to $5,014,060 for the three months ended March 31, 2023. The primary increase in expenses was a result of increases in personnel related expenses and expenses related to development of the Co-Dx PCR platform.

Current wording

Our research and development expenses were $11,292,369 for the six months ended June 30, 2024, compared to $10,995,103 for the six months ended June 30, 2023. The primary increase in expenses was a result of increased personnel related expenses, partially offset by decreased expenses related to clinical trials for the Co-Dx PCR platform and stock-based compensation expense.

Previous wording

At March 31, 2024, we had cash and cash equivalents of $23,099,251. Additionally, we had $26,864,435 of marketable investment securities that could readily be converted into cash if needed. Additionally, our total current assets of March 31, 2024, were $53,698,833 compared to total current liabilities of $5,269,652.

Current wording

At June 30, 2024, we had cash and cash equivalents of $13,858,866. Additionally, we had $31,020,811 of marketable investment securities that could readily be converted into cash if needed. Additionally, our total current assets of June 30, 2024, were $48,219,239 compared to total current liabilities of $5,305,385.

Previous wording

Net cash used in operating activities during the three months ended March 31, 2024 was $8,490,334, compared to $5,917,517 for the three months ended March 31, 2023. The decrease in cash from operating activities was primarily due to decreased revenues and increased operating expenses, and the impact of non-cash items.

Current wording

Net cash used in operating activities during the six months ended June 30, 2024 was $13,694,532, compared to $11,538,068 for the six months ended June 30, 2023. The increase in cash used in operating activities was primarily due to increased operating expenses and the impact of non-cash items.

Previous wording

Net cash provided by investing activities during the three months ended March 31, 2024 was $16,672,707, primarily from maturities of marketable investment securities, compared to cash used in investing activities of $10,214,710 during the three months ended March 31, 2023.

Current wording

Net cash provided by investing activities during the six months ended June 30, 2024 was $12,636,520, primarily from maturities of marketable investment securities, compared to $3,433,041 during the six months ended June 30, 2023.

Previous wording

Net cash used in financing activities was $0 for the three months ended March 31, 2024, compared to net cash used in financing activities of $482,196 for the same period in the prior year. This is due to the repurchase of outstanding common shares during the prior period, compared to no such repurchases in the current period.

Current wording

Net cash used in financing activities was $0 for the six months ended June 30, 2024, compared to $1,037,930 for the same period in the prior year. This is due to the repurchase of outstanding common shares during the prior period, compared to no such repurchases in the current period.

Previous wording

We believe that our existing capital resources and the cash generated from future sales will be sufficient to meet our projected operating requirements for the next 12 months. However, our available capital resources may be consumed more rapidly than currently expected and we may need or want to raise additional financing for strategic opportunities. It is anticipated that the Company will continue to generate operating losses and use cash in operations in the near term. If needed, we expect additional investment capital to come from additional issuances of our common stock or other equity-based securities with existing and new investors similar to those that have provided funding in the past. On March 16, 2023, the Company entered into an Equity Distribution Agreement with Piper Sandler & Co. (“Piper”), pursuant to which we may sell from time to time, shares of our common stock, having an aggregate offering price of up to $50.0 million through Piper, as agent. No shares have been sold under the distribution agreement as of March 31, 2024. We may not be able to secure such financing in a timely manner or on favorable terms, if at all.

Current wording

We believe that our existing capital resources and the cash generated from future sales will be sufficient to meet our projected operating requirements for the next 12 months. However, our available capital resources may be consumed more rapidly than currently expected and we may need or want to raise additional financing for strategic opportunities. It is anticipated that the Company will continue to generate operating losses and use cash in operations in the near term. If needed, we expect additional investment capital to come from additional issuances of our common stock or other equity-based securities with existing and new investors similar to those that have provided funding in the past. On March 16, 2023, the Company entered into an Equity Distribution Agreement with Piper Sandler & Co. (“Piper”), pursuant to which we may sell from time to time, shares of our common stock, having an aggregate offering price of up to $50.0 million through Piper, as agent. No shares have been sold under the distribution agreement as of June 30, 2024. We may not be able to secure financing in a timely manner or on favorable terms, if at all.