Co-Diagnostics, Inc.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1 –Overview and Basis of Presentation

Description of Business

Co-Diagnostics, Inc., a Utah corporation (the “Company” or “CODX”), is a molecular diagnostics company that develops, manufactures and markets state-of-the-art diagnostics technologies. The Company’s technologies are utilized for tests that are designed using the detection and/or analysis of nucleic acid molecules (DNA or RNA). The Company also uses its proprietary technology to design specific tests for its Co-Dx™ PCR platform and to locate genetic markers for use in applications other than infectious disease. In connection with the sale of our tests we may sell diagnostic equipment from other manufacturers as self-contained lab systems.

Unaudited Condensed Consolidated Financial Statements

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information as they are prescribed for smaller reporting companies. As permitted under those rules and regulations, certain notes or other financial information normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. Accordingly, the accompanying unaudited condensed consolidated financial statements do not include all the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary to make the financial statements not misleading have been included. Operating results for the three and nine months ended September 30, 2026 are not necessarily indicative of the results that may be expected for the year ending December 31, 2026. These statements should be read in conjunction with the Company’s audited financial statements and related notes for the year ended December 31, 2025, included in the Company’s Annual Report on Form 10-K filed with the SEC on March 31, 2026. A summary of the Company’s significant accounting policies is set forth in Note 2 to the consolidated financial statements in its Annual Report on Form 10-K for the year ended December 31, 2025.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the accompanying notes. Such estimates include receivables and other long-lived assets, legal contingencies, income taxes, share based arrangements, and others. These estimates and assumptions are based on management’s best estimates and judgments. Actual amounts and results could differ from those estimates.

Liquidity and Going Concern

In accordance with Accounting Standards Codification (“ASC”) 205-40, Going Concern, (“ASC 205-40”) the Company evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date on which this Quarterly Report on Form 10-Q is filed. Based on the Company’s cash and cash equivalents as of September 30, 2026, the Company’s current and forecasted level of operations, and its forecasted cash flows, the Company’s ability to continue as a going concern is dependent upon its ability to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due, and to generate profitable operations in the future. Management plans to provide for the Company’s capital requirements through equity and/or debt financing, seeking additional grant funding, and through operational efficiencies. Our ability to obtain additional financing in equity capital markets is subject to several factors, including market and economic conditions, our performance and investor sentiment with respect to us and our industry. Accordingly, there can be no assurance that the Company will be able to raise a sufficient amount of additional capital to fund operations with terms acceptable to the Company, or at all. Because certain elements of management’s plans to mitigate the conditions that raised substantial doubt about the Company’s ability to continue as a going concern are outside of the Company’s control, including the ability to raise capital through equity or other financings, those elements cannot be considered probable according to ASC 205-40, and therefore cannot be considered in the evaluation of mitigating factors. As a result, management has concluded that substantial doubt exists about the Company’s ability to continue as a going concern for 12 months from the date these condensed consolidated financial statements are issued.

The condensed consolidated financial statements as of September 30, 2026 have been prepared under the assumption that the Company will continue as a going concern for the next 12 months after these financial statements are issued, and that contemplates the realization of assets and satisfaction of liabilities and commitments in the normal course of business. The Company’s ability to continue as a going concern is dependent upon its uncertain ability to obtain additional capital, reduce expenditures, and execute on its business plans. These consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Note 2 –Summary of Significant Accounting Policies

Reclassifications

Certain prior year amounts have been reclassified to conform with the current year’s presentation. These reclassifications have no impact on the previously reported results.

Operating Segments

The Company operates as one operating segment. Operating segments are defined as components of an entity for which separate financial information is regularly evaluated by the chief operating decision maker (“CODM”), which is the Company’s Chief Executive Officer, in deciding how to allocate resources and assess performance. The Company’s CODM evaluates financial information and resources and assesses the performance of these resources on a consolidated basis. There is no expense or asset information that is supplemental to information disclosed within the condensed consolidated financial statements, that is regularly provided to the CODM. The allocation of resources and assessment of performance of the operating segment is based on consolidated net loss and functional expenses as reported on our condensed consolidated statements of operations and comprehensive loss. Because the Company operates as one operating segment, financial segment information, including expense and asset information, can be found in the condensed consolidated financial statements. All material long-lived assets are located in the United States and India.

Accounts Receivable

Trade accounts receivable are recorded at the invoiced amount (net of allowance) and do not bear interest. The Company maintains an allowance for credit losses for amounts the Company does not expect to collect. In establishing the required allowance, management considers historical losses, current market conditions, customers’ financial condition, the age of receivables, and current payment patterns. Account balances are written off against the allowance once the receivable is deemed uncollectible. Recoveries of trade receivables previously written off are recorded when collected. At September 30, 2026 total accounts receivable was $94,258 with an allowance for credit losses of $42,430 resulting in a net amount of $51,828. At December 31, 2025 total accounts receivable was $230,752 with an allowance for credit losses of $40,377 resulting in a net amount of $190,375. At December 31, 2024 total accounts receivable was $242,625 with an allowance for credit losses of $110,055 resulting in a net amount of $132,570.

Inventory

Inventory is stated at the lower of cost or net-realizable value. Inventory cost is determined on a first-in first-out basis that approximates average cost in accordance with ASC 330-10-30-12. At September 30, 2026, the Company had $672,950 in net inventory, of which $169,877 was finished goods and $503,073 was raw materials. At December 31, 2025, the Company had $992,397 in net inventory, of which $512,186 was finished goods and $480,211 was raw materials. The Company establishes reserves to reduce low-moving, obsolete, or unusable inventories to their estimated useful or scrap values. The Company recognized $6,643 and $192,963 related to the change in inventory reserves during the three and nine months ended September 30, 2026, respectively, compared to $43,681 and $144,747 during the three and nine months ended September 30, 2025, respectively.

Revenue Recognition

The Company generates revenue from customers from product and license sales. The Company recognizes revenue from customers when all of the following criteria are satisfied: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when, or as the Company satisfies each performance obligation.

The Company constrains revenue by giving consideration to factors that could otherwise lead to a probable reversal of revenue. The Company records any payments received from customers prior to the Company fulfilling its performance obligation(s) as deferred revenue.

Income Taxes

The Company accounts for income taxes in accordance with the liability method of accounting for income taxes. Under this method, deferred income tax assets and deferred income tax liabilities represent the tax effect of temporary differences between financial reporting and tax reporting measured at enacted tax rates in effect for the year in which the differences are expected to reverse. The Company recognizes only the impact of tax positions that, based on their technical merits, are more likely than not to be sustained upon an audit by the taxing authority.

Valuation allowances are provided when it is more-likely-than-not that some or all of the deferred income tax assets may not be realized. In assessing the need for a valuation allowance, the Company has considered its historical levels of income, expectations of future taxable income and ongoing tax planning strategies.

Developing the provision for income taxes, including the effective tax rate and analysis of potential tax exposure items, if any, requires significant judgment and expertise in federal and state income tax laws, regulations and strategies, including the determination of deferred income tax assets and liabilities and any estimated valuation allowances deemed necessary to value deferred income tax assets. Judgments and tax strategies are subject to audit by various taxing authorities. The Company has uncertain income tax positions in the condensed consolidated financial statements, and adverse determinations by these taxing authorities could have a material adverse effect on the condensed consolidated financial position, results of operations, or cash flows.

Concentration Risk and Significant Customers

The Company had certain customers which were each responsible for generating 10% or more of the total revenue for the three and nine months ended September 30, 2026 and 2025. Five customers accounted for approximately 58% of product revenue recognized during the three months ended September 30, 2026. One customer accounted for approximately 15% of product revenue recognized during the nine months ended September 30, 2026. Three customers accounted for approximately 48% of product revenue recognized during the three months ended September 30, 2025.

One customer accounted for approximately 36% of accounts receivable as of September 30, 2026. Two customers accounted for approximately 82% of accounts receivable in the aggregate as of December 31, 2025.

Recently Issued Accounting Standards

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) that are adopted by the Company as of the specified effective date. If not discussed, management believes that the impact of recently issued standards, which are not yet effective, will not have a material impact on the Company’s financial statements upon adoption.

In November 2024, the FASB issued ASU 2024-03, Income Statement (Subtopic 220-40): Reporting Comprehensive Income - Expense Disaggregation Disclosures, which requires an entity to disclose on an annual and interim basis, disaggregated information about specific income statement expense categories. The guidance should be applied prospectively with the option to apply the standard retrospectively. The standard becomes effective for the Company for full year 2027 reporting. The Company is currently evaluating the impact of this new standard on its consolidated financial statements.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provides all entities with a practical expedient when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Topic 606. Early adoption is permitted and entities should apply the practical expedient, if elected, prospectively to financial statements issued for reporting periods after the effective date. The standard became effective for the Company for interim and full year 2026 reporting. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements.

In December 2025, the FASB issued ASU 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities, which provides authoritative guidance for the accounting and presentation of government grants received by business entities, distinguishing between grants related to assets and grants related to income. Early adoption is permitted and entities may apply the standard using a modified prospective, modified retrospective, or full retrospective transition approach, subject to the specific criteria outlined in the ASU. The standard becomes effective for the Company for full year 2029 reporting. The Company is currently evaluating the impact of this new standard on its consolidated financial statements.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements, which clarifies and improves the guidance in Accounting Standards Codification Topic 270, Interim Reporting. Early adoption is permitted and entities may apply the standard prospectively or retrospectively. The standard becomes effective for the Company for interim 2028 reporting. The Company is currently evaluating the impact of this new standard on its consolidated financial statements.

In December 2025, the FASB issued ASU 2025-12, Codification Improvements, which includes narrow-scope amendments to the FASB Accounting Standards Codification to clarify, correct errors, and make minor improvements to existing U.S. GAAP. This standard becomes effective for the Company for interim and full year 2027 reporting. As the amendments are not expected to introduce new recognition or measurement principles, the Company does not expect a material impact on its consolidated financial statements related to ASU 2025-12.

Note 3 –Cash, Cash Equivalents, and Financial Instruments

The following table shows the Company’s cash, cash equivalents, and marketable investment securities by significant investment category:

Note 4 –Fair Value Measurements

The Company measures and records certain financial assets and liabilities at fair value on a recurring basis. Fair value is based on the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The following three levels of inputs are used to measure the fair value of financial assets and liabilities:

Level 1: Quoted market prices in active markets for identical assets or liabilities.

Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data.

Level 3: Unobservable inputs that are not corroborated by market data.

The following table summarizes the assets and liabilities measured at fair value on a recurring basis as of September 30, 2026 and December 31, 2025, by level within the fair value hierarchy:

In connection with previous acquisitions, the Company recorded a liability for contingent consideration in the form of shares of common stock and warrants to purchase common stock, both to be issued when certain milestones are achieved. The fair value of contingent consideration is calculated using a discounted probability weighted valuation model. Discount rates used in such calculations are a significant assumption that are not observed in the market, and therefore, the resulting fair value represents a Level 3 measurement.

The changes for Level 3 items measured at fair value on a recurring basis are as follows:

The fair value of the contingent consideration is based on the fair value of the contingent consideration-common stock and contingent consideration-warrants. The fair value of the contingent consideration-common stock is equal to the probability-adjusted value of the Company’s common stock as of the valuation date. The fair value of the contingent consideration-warrants is equal to the probability adjusted value of a call option with terms consistent with the terms of the warrants as of the valuation date. Prior to the probability adjustments, the warrants were valued based on the following inputs:

Fair Value of Other Financial Instruments

The carrying amounts of certain financial instruments, including cash held in banks, accounts receivable, notes receivable, accounts payable, accrued liabilities, and other liabilities approximate fair value due to their short-term maturities and are excluded from the fair value tables above.

Note 5 –Intangible Assets, Net

Intangible assets, net consisted of the following:

Note 6 –Revenue

The following table sets forth revenue by geographic area:

Changes in the Company’s deferred revenue balance for the nine months ended September 30, 2026 were as follows:

Note 7 –Loss Per Share

All share and per-share data, including basic and diluted loss per share and weighted average shares outstanding, have been retroactively adjusted to reflect the 1-for-30 reverse stock split effected on January 1, 2026, as if the reverse stock split had occurred at the beginning of the earliest period presented.

The following table reconciles the numerator and the denominator used to calculate basic and diluted loss per share for three and nine months ended September 30, 2026 and 2025, respectively:

The underlying common shares that were issued upon exercise of the pre-funded warrants issued in the May 2026 Private Placement were included in the calculation of basic weighted average number of common shares outstanding as of the date of issuance of the pre-funded warrants as the underlying common shares were issuable for little to no consideration and there were no vesting conditions or contingencies associated with the warrants.

As a result of incurring a net loss for the three and nine months ended September 30, 2026 and 2025, respectively, no potentially dilutive securities are included in the calculation of diluted loss per share because such effect would be anti-dilutive. The Company had potentially dilutive securities as of September 30, 2026, consisting of: (i)179,659 restricted stock units, (ii)27,688 options, and (iii)5,012,756 warrants. The Company had potentially dilutive securities as of September 30, 2025, consisting of: (i)149,469 restricted stock units, (ii)32,353 options, and (iii)15,500 warrants.

Note 8 –Equity Transactions

Reverse Stock Split

On January 1, 2026, the Company effected a 1-for-30 reverse stock split of its common stock. The Reverse Stock Split did not change the par value of the Company’s common stock, which remains $0.001 per share, nor did it change the number of authorized shares of common stock.

Proportionate adjustments were made to the number of shares of common stock underlying the Company’s outstanding equity awards and warrants, as well as to the applicable exercise prices. All historical and per-share information has been retroactively adjusted to reflect the Reverse Stock Split.

At-the-Market Agreement

The Company previously maintained an Amended and Restated Equity Distribution Agreement (the “Prior ATM Agreement”) with Piper Sandler & Co. (“Piper Sandler”) and Clear Street, LLC (“Clear Street”), pursuant to which the Company could offer and sell shares of its common stock having an aggregate offering price of up to $17,111,650 from time to time through Piper Sandler and Clear Street, acting as sales agents, under a prospectus supplement dated October 18, 2024. As of December 31, 2025, the Company had sold 151,675 shares of common stock under the Prior ATM Agreement, resulting in net proceeds to the Company of $1,660,805. The Prior ATM Agreement was subsequently terminated, and no further sales will be made under that program.

On October 20, 2025, the Company entered into an Equity Distribution Agreement (the “Equity Distribution Agreement”) with Maxim Group LLC (“Maxim”) to establish an at-the-market (“ATM”) equity offering program. Pursuant to the Equity Distribution Agreement, the Company was authorized to offer and sell shares of its common stock, par value $0.001 per share, having an aggregate offering price of up to $10.0 million, from time to time through Maxim, acting as the Company’s sales agent. Under the terms of the Equity Distribution Agreement, the Company agreed to pay Maxim a commission equal to 3.0% of the gross proceeds from the sale of shares and to reimburse Maxim for certain legal and other out-of-pocket expenses. The shares were offered pursuant to the Company’s shelf registration statement on Form S-3 (File No. 333-270628), which expired on April 6, 2026. As of June 30, 2026, the Company had sold 1,539,101 shares of common stock under the Equity Distribution Agreement, resulting in net proceeds to the Company of approximately $4,593,234.

On May 12, 2026, the Company filed a new shelf registration statement on Form S-3 (File No. 333-295803), which was declared effective by the Securities and Exchange Commission on May 15, 2026. On July 27, 2026, the Company amended the Equity Distribution Agreement and filed a prospectus supplement under the new shelf registration statement pursuant to which the Company may offer and sell shares of its common stock having an aggregate offering price of up to approximately $7,901,383 through Maxim. Sales under the amended Equity Distribution Agreement, if any, may be made in transactions deemed to be “at-the-market” offerings under Rule 415 promulgated under the Securities Act of 1933, as amended. Maxim will be entitled to a commission equal to 3.0% of the gross sales price of shares sold. The approximately $7,901,383 offering amount reflects the maximum amount the Company was eligible to offer under General Instruction I.B.6 of Form S-3 as of the date of the prospectus supplement. As of September 30, 2026, the Company had sold 307,282 shares of common stock under the Equity Distribution Agreement, resulting in net proceeds to the Company of approximately $326,912.

Private Placement Transaction

On May 19, 2026, the Company entered into a private placement transaction (the “Private Placement”), pursuant to a Securities Purchase Agreement (the “Purchase Agreement”) with certain institutional and accredited investors (the “Purchasers”) for aggregate gross proceeds of $3.0 million, before deducting fees to the placement agent and other expenses payable by the Company in connection with the Private Placement. Maxim Group LLC (“Maxim”) acted as the exclusive placement agent for the Private Placement. The Company paid approximately $259,989 in fees to Maxim.

As part of the Private Placement, the Company agreed to issue (i)54,915 shares of the Company’s common stock (the “Shares”), par value $0.001 per share (“Common Stock”), (ii) pre-funded warrants to purchase 1,592,532 shares of Common Stock (the “Pre-Funded Warrants”) with an exercise price of $0.0001 per share, and (iii) warrants to purchase 3,294,894 shares of Common Stock (the “Common Warrants”), with an exercise price of $1.571 per share. The Common Warrants are exercisable immediately and expire five years from issuance. The Pre-Funded Warrants are exercisable immediately and terminate when exercised in full. During the three months ended September 30, 2026,400,000 of the Pre-Funded Warrants and 1,702,362 of the Common Warrants were exercised by the Purchasers.

Warrant Inducement

On July 30, 2026, the Company entered into warrant inducement agreements (the “Inducement Agreements”) with certain holders of common stock purchase warrants issued in connection with the Company’s May 2026 private placement. Pursuant to the Inducement Agreements, the holders agreed to exercise for cash existing warrants to purchase an aggregate of 1,702,362 shares of common stock at an exercise price of $1.571 per share. In consideration for those exercises, the Company issued new common stock purchase warrants (the “New Warrants”) to purchase an aggregate of 3,404,724 shares of common stock at an exercise price of $1.56 per share, representing two New Warrants for each existing warrant exercised.

The transaction closed in August 2026 and resulted in aggregate gross proceeds of approximately $2.67 million, before deducting placement agent fees and other transaction expenses. Maxim Group LLC acted as the exclusive placement agent. The Company paid approximately $237,209 in placement agent fees and expenses in connection with the transaction.

The New Warrants are exercisable only after the Company obtains the shareholder approval required under applicable Nasdaq rules and, once exercisable, will expire five years after the date such approval becomes effective. The New Warrants contain customary adjustments for stock splits and similar transactions, beneficial ownership limitations and provisions permitting cashless exercise under specified circumstances, including when an applicable resale registration statement is not effective or available.

In accordance with ASC 815-40,Derivatives and Hedging-Contracts in Entity’s own Equity, the Company determined that all the warrants issued in the Private Placement and warrant inducement met the conditions for equity classification and were included as a component of total stockholders’ equity.

Warrants

The Company has issued warrants related to acquisition and financing transactions.

The following table provides the weighted-average exercise price and remaining contractual life for each warrant outstanding as of September 30, 2026 and December 31, 2025:

The following table summarizes warrant activity for the nine months ended September 30, 2026:

As of September 30, 2026, the Company had 5,012,756 common stock purchase warrants outstanding, of which 3,404,724 were not exercisable pending receipt of shareholder approval required under applicable Nasdaq rules. The exercise of the 15,500 warrants issued in connection with acquisitions in prior years is contingent upon the achievement of certain development and revenue milestones on or before January 1, 2027.

Share Repurchase Program

In March 2022, the Company’s Board of Directors authorized a share repurchase program that would allow the Company to repurchase up to $30.0 million of CODX common stock. The repurchase program does not obligate the Company to acquire any particular number of common shares, and the repurchase program may be suspended or discontinued at any time at the Company’s discretion. The timing and amount of any share repurchases under the share repurchase program will be determined by Co-Diagnostics’ management at its discretion based on ongoing assessments of the capital needs of the business, the market price of the Company’s common stock, corporate and regulatory requirements, and general market conditions.

For accounting purposes, common stock repurchased under the stock repurchase program is recorded based upon the transaction date of the applicable trade. Such repurchased shares are held in treasury and are presented using the cost method. These shares are not retired and are considered issued but not outstanding. No shares were repurchased during the three and nine months ended September 30, 2026.

Note 9 –Stock-Based Compensation

Stock Incentive Plans

The Company’s board of directors adopted, and shareholders approved, the Co-Diagnostics, Inc. Amended and Restated 2015 Long Term Incentive Plan (the “2015 Incentive Plan”) providing for the issuance of stock-based incentive awards to employees, officers, consultants, directors and independent contractors. On August 31, 2022, the shareholders approved an increase in the number of awards available for issuance under the Incentive Plan to an aggregate of 400,000 shares of common stock.

The 2015 Incentive Plan expired on December 31, 2025. The Company’s board of directors adopted in March 2025, and in May 2025 shareholders approved, the Co-Diagnostics, Inc. 2025 Equity Incentive Plan (the “2025 Plan”) providing for the issuance of up to 223,333 shares of common stock plus any shares that become available in connection with the cancellation or forfeiture of awards issued under the 2015 Incentive Plan. The 2025 Plan provides for the award of stock-based incentive awards to employees, officers, consultants, directors and independent contractors. At September 30, 2026, the number of awards available for issuance under the 2025 Plan was 157,280, including unused awards which rolled over from the 2015 Incentive Plan upon its expiration.

Stock Options

The following table summarizes option activity during the nine months ended September 30, 2026:

The aggregate intrinsic value of outstanding options at September 30, 2026 and 2025 was approximately $0.

Stock-based compensation cost is measured at the grant date based on the fair value of the award granted and recognized as expense over the vesting period using the straight-line method. The Company uses the Black-Scholes model to value options granted. As of September 30, 2026, there were no unvested options andno unrecognized stock-based compensation expense related to options.

Restricted Stock Units

The grant date fair value of RSUs granted is determined using the closing market price of the Company’s common stock on the grant date with the associated compensation expense amortized over the vesting period of the awards. The following table sets forth the outstanding RSUs and related activity for the nine months ended September 30, 2026:

As of September 30, 2026, there was approximately $1,400,339 of unrecognized stock-based compensation expense related to outstanding RSUs which is expected to be recognized over a weighted-average period of 1.6 years.

Stock-Based Compensation Expense

The Company recognized stock-based compensation expense as follows:

Note 10 –Income Taxes

For the three months ended September 30, 2026, the Company recognized expense from income taxes of $500, representing an effective tax rate of 0.0%. For the nine months ended September 30, 2026, the Company recognized expense from income taxes of $20,188, representing an effective tax rate of 0.1%. The Company’s effective tax rate will generally differ from the U.S. Federal statutory rate of 21.0%, primarily due to the full valuation allowance as well as state taxes, permanent items, and discrete items. For the three and nine months ended September 30, 2025, the Company recognized a benefit from income taxes of $1,166,593 and $1,142,262, respectively.

Note 11 –Commitments and Contingencies

Lease Obligations

The Company leases administrative, R&D, sales and marketing and manufacturing facilities under non-cancellable operating leases.

The components of lease expense are summarized as follows:

As of September 30, 2026, the maturities of the Company’s lease liabilities are as follows:

Other information related to operating leases was as follows:

Litigation

Liabilities for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred.

Stadium Capital Securities Class Action

The Company and certain of its officers are defendants in a securities class action filed in the United States District Court for the Southern District of New York alleging that the Company made false or misleading statements regarding demand for its Logix Smart COVID-19 test, resulting in alleged losses to investors.

On August 14, 2026, the parties executed a definitive Stipulation and Agreement of Settlement providing for the resolution of the action for an aggregate settlement amount of $6.5 million. On August 17, 2026, the Court entered an order preliminarily approving the settlement. A hearing to consider final approval of the settlement is scheduled for December 8, 2026. There can be no assurance that the proposed settlement will be approved or become effective.

Under the terms of the settlement agreement, the defendants are required to pay, or cause to be paid, the settlement amount into an escrow account for distribution in accordance with the settlement agreement and applicable court orders. The settlement remains subject to final court approval and satisfaction of certain other conditions. If the settlement becomes effective, the claims asserted in the action will be dismissed with prejudice. The settlement does not constitute an admission of wrongdoing or liability by the Company or the other defendants. The settlement amount is expected to be funded through applicable insurance coverage.

Other Litigation

The Company is a party to a commercial lawsuit in the Third Judicial District Court, Salt Lake County, Utah, against Hukui Technology, Inc. In May 2026, the Company received an amended final judgment and favorable ruling in its litigation with Hukui Technology, Inc., in which the trial court found in favor of the Company on its declaratory judgment claim and on all remaining counterclaims, concluding that the Company had no payment obligations and that the defendants were not entitled to damages. Hukui Technology, Inc. subsequently appealed the judgment and has filed its opening appellate brief. The appeal remains pending.

The Company is also a defendant in an additional civil action involving claims arising from an alleged breach of contract.

The Company believes the claims asserted against it in these other proceedings are without merit and intends to continue defending them vigorously. The Company is unable to estimate a range of loss, if any, that could result from an adverse final decision in these proceedings. Based on currently available information, the Company does not believe an unfavorable outcome in these other proceedings is probable; however, an unfavorable outcome could have a material adverse effect on the Company’s financial condition or results of operations.

Note 12 –Related Party Transactions

The Company has a services agreement with CoSara Diagnostics Pvt Ltd (“CoSara”), one of the Company’s equity method investments, under which CoSara provides certain research and development consulting and support services. The Company recognized $203,547 and $692,072 of expense related to this agreement during the three and nine months ended September 30, 2026, respectively, compared to $192,958 and $615,425 of expense during the three and nine months ended September 30, 2025, respectively.

Note 13 –Subsequent Events

On October 9, 2026, the Company entered into a Loan Agreement (the “Loan Agreement”) with J.J. Astor & Co. (the “Lender”), pursuant to which the Lender agreed to provide loans to the Company in an aggregate principal funding amount of up to $3.1 million. At the initial closing, the Lender funded an initial loan of $2.1 million and the Company issued to the Lender a senior secured convertible installment promissory note having an original principal amount of $2.835 million (the “Initial Note”). Beginning 60 days after the date of the Loan Agreement, subject to the satisfaction of the conditions set forth in the Loan Agreement, the Company may elect to borrow an additional $1.0 million and issue an additional senior secured convertible installment promissory note having an original principal amount of $1.35 million (the “Additional Note” and, together with the Initial Note, the “Notes”). The original principal amounts of the Notes reflect a factor rate of 1.35 times the applicable funded amount. The Lender retained a 4% origination fee from the initial funded amount, resulting in initial net cash proceeds of approximately $2.0 million before other transaction expenses. Under the terms of the Loan Agreement and the Notes, the Company must maintain a minimum cash balance of $250,000 while the Notes are outstanding. The Company intends to use the net proceeds for general working capital purposes.

In connection with the transaction, the Company issued the Lender 600,000 shares of common stock as commitment shares (the “Commitment Shares”) at the closing date, subject to a make-whole provision, which provides that the company will issue make-whole shares if the Commitment Shares are sold on a day when the closing price of the Company’s stock is less than $0.218.

The Company, the Lender and Maxim also entered into an ATM Waterfall Distribution Agreement. Under that agreement, 100% of the net proceeds from sales under the ATM, after deduction only of the sales agent’s commissions, are to be remitted to a deposit account subject to a deposit account control agreement in favor of the Lender. The initial $1.0 million of such net proceeds is payable to the Lender. Thereafter, 80% of such net proceeds is applied to the Notes and 20% is released to the Company until the required weekly installment payments for the applicable week have been satisfied; for the remainder of that week, 25% is applied to the Notes and 75% is released to the Company. Following an event of default, 80% of such net proceeds is applied to the obligations under the Notes and 20% is released to the Company. Distributions to the Company are further limited if the market value of the registered, freely tradeable shares available under the ATM is less than 200% of the outstanding principal amount of the Notes. The ATM Waterfall Distribution Agreement remains in effect until all obligations under the Notes have been paid in full.

Subsequent to September 30, 2026, the Company has sold an additional 2,615,422 shares of common stock through the at-the-market program under the Equity Distribution Agreement, resulting in net proceeds of approximately $1.3 million.