What changed in this filing

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Item 1. Financial Statements

2021-08-12 compared with 2021-05-13 · 299 added, 524 removed, 203 unchanged (80% of the section changed)

2 unchanged sentences

CONSOLIDATED BALANCE SHEETS

March 31, 2021

June 30, 2021

December 31, 2020

8 unchanged sentences

Investment in joint venture

Liabilities and stockholders’

Liabilities and stockholders’ equity

Current liabilities

11 unchanged sentences

Commitments and contingencies (Note 9)

Stockholders’

Stockholders’ equity

Convertible preferred stock, $ 0.001 par value;

5,000,000 shares authorized;

0 shares issued

and outstanding as of March 31, 2021 and December 31, 2020

0 shares issued and outstanding as of June 30, 2021 and December 31, 2020

Common stock, $ 0.001 par value;

100,000,000 shares authorized;

28,665,714 and 28,558,033

shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively

28,889,890 and 28,558,033 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively

Additional paid-in capital

Accumulated earnings

Total stockholders’

Total liabilities and stockholders’

Total stockholders’ equity

Total liabilities and stockholders’ equity

accompanying notes to unaudited condensed consolidated financial statements

1 unchanged sentence

CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Cost of revenue

5 unchanged sentences

Total operating expenses

Income (loss) from operations

Income from operations

Other income (expense)

2 unchanged sentences

Total other income (expense)

Income (loss) before income taxes

Income before income taxes

Income tax provision

Net income (loss)

$ (1,065,193 )

Earnings (loss) per common share:

Earnings per common share:

Weighted average shares outstanding:

2 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities

Net income (loss)

$ (1,065,193 )

Adjustments to reconcile net income (loss) to cash used in operating activities:

Adjustments to reconcile net income to cash used in operating activities:

Depreciation and amortization

5 unchanged sentences

Accounts receivable

Prepaid and other assets

( 5,742,883 )

Prepaid expenses

( 2,527,983 )

( 10,030,838 )

Deferred revenue

11 unchanged sentences

Payment of offering costs

( 1,457,922 )

Net cash provided by financing activities

5 unchanged sentences

Income taxes paid

Supplemental disclosure of non-cash investing and financing transactions

Inventory moved to property, plant and equipment

accompanying notes to unaudited condensed consolidated financial statements

– DIAGNOSTICS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’

the Three Months ending March 31, 2021 and 2020

Convertible Preferred Stock

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Preferred Stock

Additional Paid-in

Accumulated Earnings

Total Stockholders’

Balance as of December 31, 2020

Public offering, net of offering costs of $1,457,922

Public offering, net of offering costs of $1,457,922, shares

Common stock issued for warrant exercises

Common stock issued for warrant exercises, shares

Common stock issued for option exercises

Common stock issued for option and warrant exercises

Common stock issued for option and warrant exercises, shares

Stock-based compensation

Conversion of preferred stock to common

Conversion of preferred stock to common, shares

Balance as of March 31, 2021

Common stock issued for option exercises

Stock-based compensation

Balance as of June 30, 2021

Balance as of December 31, 2019

4 unchanged sentences

Conversion of preferred stock to common

( 1,065,193 )

Balance as of March 31, 2020

$ ( 26,033,007 )

Common stock issued for option and warrant exercises

Stock-based compensation expense

Net income (loss)

Balance as of June 30, 2020

$ ( 11,027,998 )

accompanying notes to unaudited condensed consolidated financial statements

3 unchanged sentences

Co-Diagnostics,

Inc., a Utah corporation (the “Company”

or “CDI”), is developing robust and innovative molecular tools

for detection of infectious diseases, liquid biopsy for cancer screening, and agricultural applications.

The Company develops,

manufactures and sells reagents used for diagnostic tests that function via the detection and/or analysis of nucleic acid molecules

(DNA or RNA).

In connection with the sale of these tests, the Company may sell diagnostic equipment and supplies from other manufacturers.

Inc., a Utah corporation (the “Company” or “CDI”), is developing robust and innovative molecular tools for detection

of infectious diseases, liquid biopsy for cancer screening, and agricultural applications.

The Company develops, manufactures and sells

reagents used for diagnostic tests that function via the detection and/or analysis of nucleic acid molecules (DNA or RNA).

In connection

with the sale of these tests, the Company may sell diagnostic equipment and supplies from other manufacturers.

Condensed Consolidated Financial Statements

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 for interim financial information and with the instructions to Form

10-Q as they are prescribed for smaller reporting companies.

Accordingly, they do not include all the information and footnotes

required by accounting principles generally accepted in the United States of America for complete financial statements.

opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary to make the financial statements

not misleading have been included.

Operating results for the three months ended March 31, 2021 are not necessarily indicative

of the results that may be expected for the year ending December 31, 2021.

These statements should be read in conjunction with

the Company’s audited financial statements and related notes for the year ended December 31, 2020, included in the Company’s

Annual Report on Form 10-K filed on March 25, 2021.

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 for interim financial information and with the instructions to Form 10-Q as they are

prescribed for smaller reporting companies.

Accordingly, they do not include all the information and footnotes required by accounting

principles generally accepted in the United States of America for complete financial statements.

In the opinion of management, all adjustments

(consisting of normal recurring accruals) considered necessary to make the financial statements not misleading have been included.

results for the three months ended June 30, 2021 are not necessarily indicative of the results that may be expected for the year ending

December 31, 2021.

These statements should be read in conjunction with the Company’s audited financial statements and related notes

for the year ended December 31, 2020, included in the Company’s Annual Report on Form 10-K filed on March 25, 2021.

2020 financial statement amounts have been reclassified to conform to 2021 presentations.

1 unchanged sentence

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 and regulatory 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.

Such estimates include receivables

and other long-lived assets, legal and regulatory 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.

2 – Summary of Significant Accounting Policies

and Cash Equivalents

and cash equivalents consist of cash on hand, money market funds and highly liquid investments with an original maturity date

of 90 days or less from the date of purchase.

The fair value of cash equivalents approximated their carrying value as of March

31, 2021 and December 31, 2020.

The Company has its cash and cash equivalents with a large creditworthy financial institution

and the balance exceeded federally insured limits.

The Company has not experienced any losses in such accounts, and management

believes the Company is not exposed to any significant credit risk on cash and cash equivalents.

and cash equivalents consist of cash on hand, money market funds and highly liquid investments with an original maturity date of 90 days

or less from the date of purchase.

The fair value of cash equivalents approximated their carrying value as of June 30, 2021 and December

The Company has its cash and cash equivalents with a large creditworthy financial institution and the balance exceeded federally

insured limits.

The Company has not experienced any losses in such accounts, and management believes the Company is not exposed to any

significant credit risk on cash and cash equivalents.

Investment Securities

Company’s marketable investment securities are comprised of investments in certificates of deposit.

The Company determines the

appropriate classification of its marketable investment securities at the time of purchase and re-evaluates such designation at

each balance sheet date.

appropriate classification of its marketable investment securities at the time of purchase and re-evaluates such designation at each

balance sheet date.

The Company has classified and accounted for its marketable investment securities as available-for-sale securities

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accounts receivable are recorded at the invoiced amount (net of allowance) and do not bear interest.

The Company maintains an

allowance for doubtful accounts for amounts the Company does not expect to collect.

In establishing the required allowance, management

considers historical losses, current market condition, customers’

financial condition, the age of receivables, and current

payment patterns.

The Company maintains an allowance

for doubtful accounts for amounts the Company does not expect to collect.

In establishing the required allowance, management considers

historical losses, current market condition, 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.

of trade receivables previously written off are recorded when collected.

At March 31, 2021, total accounts receivable was $12,988,627

with an allowance for uncollectable accounts of $871,500 resulting in a net amount of $12,117,127.

At December 31, 2020 total

accounts receivable was $12,928,633 with an allowance for uncollectable accounts of $791,800 resulting in a net amount of $12,136,833.

Recoveries of trade receivables previously

written off are recorded when collected.

At June 30, 2021, total accounts receivable was $ 13,686,152 with an allowance for uncollectable

accounts of $ 930,200 resulting in a net amount of $ 12,755,952 .

At December 31, 2020 total accounts receivable was $ 12,928,633 with an

allowance for uncollectable accounts of $ 791,800 resulting in a net amount of $ 12,136,833 .

Equity-Method

equity method investments are initially recorded at cost and are included in other long-term assets in the accompanying condensed

consolidated balance sheet.

We adjust the carrying value of our investment based on our share of the earnings or losses in the

periods which they are reported by the investee until the carrying amount is zero.

The earnings or losses are included in other

income (expense) in the accompanying condensed consolidated statements of operations.

equity method investments are initially recorded at cost and are included in other long-term assets in the accompanying condensed consolidated

balance sheet.

We adjust the carrying value of our investment based on our share of the earnings or losses in the periods which they

are reported by the investee until the carrying amount is zero.

The earnings or losses are included in other income (expense) in the

accompanying condensed consolidated statements of operations.

is stated at the lower of cost or net-realizable value.

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average cost in accordance with ASC 330-10-30-12.

At March 31, 2021, the Company had $6,197,608 in inventory, of which $925,560

was finished goods and $5,272,048 was raw materials.

At December 31, 2020, the Company had $7,995,189 in inventory, of which $598,881

was finished goods and $7,396,308 was raw materials.

The Company establishes reserves to reduce slow-moving, obsolete, or unusable

inventories to their estimated useful or scrap values.

At June 30, 2021, the Company had $ 4,120,704 in inventory, of which $ 659,737 was finished

goods and $ 3,460,967 was raw materials.

At December 31, 2020, the Company had $ 7,995,189 in inventory, of which $ 598,881 was finished

goods and $ 7,396,308 was raw materials.

The Company establishes reserves to reduce slow-moving, obsolete, or unusable inventories to

their estimated useful or scrap values.

and Equipment

and equipment are stated at cost less accumulated depreciation and amortization.

Depreciation is provided using the straight-line

method over the estimated useful lives of the property, generally from three to five years.

Repairs and maintenance costs are

expensed as incurred except when such repairs significantly add to the useful life or productive capacity of the asset, in which

case the repairs are capitalized.

Company reviews its long-lived assets, including property and equipment, for impairment whenever an event or change in facts and

circumstances indicates that their carrying amounts may not be recoverable.

Recoverability of these assets is measured by comparing

the carrying amount to the estimated undiscounted future cash flows expected to be generated.

If the carrying amount exceeds the

undiscounted cash flows, the assets are determined to be impaired and an impairment charge is recognized as the amount by which

the carrying amount exceeds fair value.

Depreciation is provided using the straight-line method

over the estimated useful lives of the property, generally from three to five years .

Repairs and maintenance costs are expensed as incurred

except when such repairs significantly add to the useful life or productive capacity of the asset, in which case the repairs are capitalized.

Company reviews its long-lived assets, including property and equipment, for impairment whenever an event or change in facts and circumstances

indicates that their carrying amounts may not be recoverable.

Recoverability of these assets is measured by comparing the carrying amount

to the estimated undiscounted future cash flows expected to be generated.

If the carrying amount exceeds the undiscounted cash flows,

the assets are determined to be impaired and an impairment charge is recognized as the amount by which the carrying amount exceeds fair

Company generates revenue from product sales and license sales.

The Company recognizes revenue when all of the following criteria

are satisfied:

The Company recognizes revenue when all of the following criteria are

(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.

(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;

(v) recognition of revenue when, or as the Company satisfies each performance obligation.

Company constrains revenue by giving consideration to factors that could otherwise lead to a probable reversal of revenue.

Company records any payments received from customers prior to the Company fulfilling its performance obligation(s) as deferred

records any payments received from customers prior to the Company fulfilling its performance obligation(s) as deferred revenue.

revenue primarily consists of payments received from customers prior to the Company fulfilling its performance obligation of providing

When this occurs, the Company records a contract liability as deferred revenue.

Deferred revenue is recognized as

revenue as the related performance obligations are satisfied.

Deferred revenue is recognized as revenue

as the related performance obligations are satisfied.

and Development

and development costs are expensed when incurred.

The Company expensed $2,217,063 and $400,022 of research and development costs

for the three months ended March 31, 2021 and 2020, respectively.

Company has granted stock-based awards, including restricted stock, stock options, stock warrants and restricted stock units (“RSUs”),

For the three and six months ended June 30, 2021, the Company expensed $ 4,669,160 and

$ 6,886,223 of research and development costs, respectively.

For the three and six months ended June 30, 2020, the Company expensed $ 750,249

and $ 1,150,271 , respectively.

Company has granted stock-based awards, including restricted stock, stock options, stock warrants and restricted stock units (“RSUs”),

to its employees, certain consultants and members of its board of directors.

The Company records stock-based compensation based

on the grant date fair value of the awards and recognizes the fair value of those awards as expense using the straight-line method

over the requisite service period of the award.

The Company estimates the grant date fair value of stock options using the Black-Scholes

option-pricing model.

When an award is forfeited prior to the vesting date, the Company recognizes an adjustment for the previously

recognized expense in the period of the forfeiture.

The Company records stock-based compensation based on the

grant date fair value of the awards and recognizes the fair value of those awards as expense using the straight-line method over the

requisite service period of the award.

The Company estimates the grant date fair value of stock options using the Black-Scholes option-pricing

When an award is forfeited prior to the vesting date, the Company recognizes an adjustment for the previously recognized expense

in the period of the forfeiture.

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.

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.

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.

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.

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

Judgments and tax strategies are subject to audit by various taxing authorities.

While the Company believes it has

no significant uncertain income tax positions in the consolidated financial statements, adverse determinations by these taxing

authorities could have a material adverse effect on the consolidated financial positions, result of operations, or cash flows.

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.

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.

While the Company believes it has no significant uncertain income

tax positions in the consolidated financial statements, adverse determinations by these taxing authorities could have a material adverse

effect on the consolidated financial positions, result of operations, or cash flows.

Concentrations

Risk and Significant Customers

Company had certain customers which are each responsible for generating 10% or more of the total revenue for the three months

ended March 31, 2021.

Three customers together accounted for approximately 57% of total revenue for the three months ended March

customers each accounted for more than 10% of accounts receivable at March 31, 2021.

These two customers together accounted for

approximately 61% of accounts receivable at March 31, 2021.

Company had certain customers which are each responsible for generating 10% or more of the total revenue for the three months ended June

Two customers together accounted for approximately 67 % of total revenue for the three months ended June 30, 2021.

customers each accounted for more than 10% of accounts receivable at June 30, 2021.

These two customers together accounted for approximately

48 % of accounts receivable at June 30, 2021.

Income (Loss) per Share

net income or loss per common share is computed by dividing net income or loss applicable to common shareholders by the weighted

average number of shares outstanding during each period.

net income or loss per share is computed by dividing net income or loss attributable to common stockholders by the weighted-average

number of shares of common stock outstanding during the period increased by common shares that could be issued upon conversion

or exercise of other outstanding securities to the extent those additional common shares would be dilutive.

The dilutive effect

of potentially dilutive securities is reflected in diluted net income or loss per share by application of the treasury stock method.

During periods when the Company is in a net loss position, basic net loss per share is the same as diluted net loss per share

as the effects of potentially dilutive securities are anti-dilutive.

net income or loss per common share is computed by dividing net income or loss applicable to common shareholders by the weighted average

number of shares outstanding during each period.

net income or loss per share is computed by dividing net income or loss attributable to common stockholders by the weighted-average number

of shares of common stock outstanding during the period increased by common shares that could be issued upon conversion or exercise of

other outstanding securities to the extent those additional common shares would be dilutive.

The dilutive effect of potentially dilutive

securities is reflected in diluted net income or loss per share by application of the treasury stock method.

During periods when the

Company is in a net loss position, basic net loss per share is the same as diluted net loss per share as the effects of potentially dilutive

securities are anti-dilutive.

Accounting Pronouncements

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.

an emerging growth company (“EGC”), the Company has elected to take advantage of the benefits of the extended transition

period provided for in Section 7(a)(2)(B) of the Securities Act of 1933, as amended, for complying with new or revised accounting

standards which allows the Company to defer adoption of certain accounting standards until those standards would otherwise apply

to private companies.

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.

an emerging growth company (“EGC”), the Company has elected to take advantage of the benefits of the extended transition

period provided for in Section 7(a)(2)(B) of the Securities Act of 1933, as amended, for complying with new or revised accounting standards

which allows the Company to defer adoption of certain accounting standards until those standards would otherwise apply to private companies.

February 2016, the FASB issued ASU No.

2016-02, Leases (Topic 842), which requires recognition of leased assets and liabilities

on the balance sheet and disclosing key information about leasing arrangements.

This update is effective for annual periods and

interim periods with those periods beginning after December 15, 2021, for public EGC companies like us.

The Company expects to

use the modified retrospective transition method with the option to recognize a cumulative-effect adjustment at the date of adoption.

The Company expects its balance sheet will be impacted as it records right-of-use assets and lease liabilities on its consolidated

balance sheet but does not expect the adoption of this standard will have a material impact on its consolidated statements of

operations and cash flows.

2016-02, Leases (Topic 842), which requires recognition of leased assets and liabilities on the

balance sheet and disclosing key information about leasing arrangements.

This update is effective for annual periods and interim periods

with those periods beginning after December 15, 2021, for public EGC companies like us.

The Company expects to use the modified retrospective

transition method with the option to recognize a cumulative-effect adjustment at the date of adoption.

The Company expects its balance

sheet will be impacted as it records right-of-use assets and lease liabilities on its consolidated balance sheet but does not expect

the adoption of this standard will have a material impact on its consolidated statements of operations and cash flows.

June 2016, the FASB issued ASU No.

2016-13, Financial Instruments-Credit Losses (Topic 326) (“ASU 2016-13”), which

requires the measurement and recognition of expected credit losses for certain financial instruments, which includes the Company’s

accounts receivable.

ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss methodology, which

will result in more timely recognition of credit losses.

The update is effective for annual periods and interim periods with those

periods beginning after December 15, 2021, for public EGC companies like us.

The standard requires a cumulative effect adjustment

to the balance sheet as of the beginning of the first early reporting period in which the guidance is effective.

The Company is

evaluating the impact of the adoption of ASU 2016-13 on its consolidated financial statements.

December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) (“ASU 2019-12”), which removes certain exceptions

for investments, intra-period allocations and interim calculations and adds guidance to reduce complexity in accounting for income

The Company adopted this standard on January 1, 2021 and it did not have a material impact on its consolidated financial

statements and related disclosures.

2016-13, Financial Instruments-Credit Losses (Topic 326) (“ASU 2016-13”), which requires

the measurement and recognition of expected credit losses for certain financial instruments, which includes the Company’s accounts

ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss methodology, which will result in

more timely recognition of credit losses.

The update is effective for annual periods and interim periods with those periods beginning

after December 15, 2021, for public EGC companies like us.

The standard requires a cumulative effect adjustment to the balance sheet

as of the beginning of the first early reporting period in which the guidance is effective.

The Company is evaluating the impact of the

adoption of ASU 2016-13 on its consolidated financial statements.

3 – Fair Value Measurements

Company measures and records certain financial assets 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.

Company’s financial instruments that are measured at fair value on a recurring basis consist of money market funds.

following three levels of inputs are used to measure the fair value of financial instruments:

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

Company’s financial instruments that are measured at fair value on a recurring basis consist of money market funds.

The following

three levels of inputs are used to measure the fair value of financial instruments:

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

1 unchanged sentence

Unobservable inputs that are not corroborated by market data.

Company’s financial instruments that are measured at fair value on a recurring basis consist of certificates of deposit.

The following table summarizes the assets measured at fair value on a recurring basis as of March 31, 2021 and December 31, 2020,

by level within the fair value hierarchy:

March 31, 2021

Company’s financial instruments that are measured at fair value on a recurring basis consist of certificates of deposit.

The following

table summarizes the assets measured at fair value on a recurring basis as of June 30, 2021 and December 31, 2020, by level within the

fair value hierarchy:

of Assets Measured at Fair Value on Recurring Basis

June 30, 2021

Marketable investment securities:

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following table sets forth revenue by geographic area:

Three Months Ended March 31,

of Revenue by Geographic Area

Three Months Ended June 30,

Six Months Ended June 30,

United States

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Rest of World

in the Company’s deferred revenue balance for the three months ended March 31, 2021 were as follows:

in the Company’s deferred revenue balance for the six months ended June 30, 2021 were as follows:

of Deferred Revenue

Balance as of December 31, 2020

1 unchanged sentence

Increase due to prepayments from customers

Balance as of March 31, 2021

Balance as of June 30, 2021

Company expects to perform its performance obligation and recognize the deferred revenue as revenue during the year ended December 31,

5 – Earnings Per Share

following table reconciles the numerator and the denominator used to calculate basic and diluted earnings per share for three

months ended March 31, 2021 and 2020:

Three Months Ended March 31,

following table reconciles the numerator and the denominator used to calculate basic and diluted earnings per share for three and six

months ended June 30, 2021 and 2020:

of Basic and Diluted Earnings Per Share

Three Months Ended June 30,

Six Months Ended June 30,

Net income (loss), as reported

$ (1,065,193 )

Weighted average shares, basic

3 unchanged sentences

Diluted earnings per share

a result of incurring a net loss for the three months ended March 31, 2020, no potentially dilutive securities are included in

the calculation of diluted earnings per share because such effect would be anti-dilutive.

The Company had potentially dilutive

securities as of March 31, 2020, consisting of:

(i) 2,121,817 options and (ii) 199,090 warrants.

the three and six months ended June 30, 2021, potentially dilutive securities of 931,341 and 146,133 were excluded from the calculation

because their effect would have been anti-dilutive.

No securities were excluded from the calculation for the three and six months ended

June 30, 2020.

6 – Stock-Based Compensation

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Co-Diagnostics, Inc.

2015 Long Term Incentive Plan (the “Incentive Plan”) reserves an aggregate of 6,000,000 shares

of common stock issuable upon the grant of awards under the Incentive Plan.

The number of awards available for issuance under

the Incentive Plan was 2,798,683 at March 31, 2021.

following table summarizes option activity during the three months ended March 31, 2021:

2015 Long Term Incentive Plan (the “Incentive Plan”) reserves an aggregate of 6,000,000 shares of common

stock issuable upon the grant of awards under the Incentive Plan.

The number of awards available for issuance under the Incentive Plan

was 2,798,683 at June 30, 2021.

following table summarizes option activity during the six months ended June 30, 2021:

of Option Activity

Number of Options

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Weighted Average Fair Value

Weighted Average Remaining Contractual Life (Years)

Weighted Average Remaining Contractual

Outstanding at December 31, 2020

Forfeited/Cancelled

Outstanding at March 31, 2021

Exercisable at March 31, 2021

total intrinsic value of options exercised during the three months ended March 31, 2021 was approximately $574,000.

The aggregate

intrinsic value of outstanding options at March 31, 2021 was $6,889,338.

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.

Outstanding at June 30, 2021

Exercisable at June 30, 2021

total intrinsic value of options exercised during the six months ended June 30, 2021 was approximately $ 1.3 million.

The aggregate intrinsic

value of outstanding options at June 30, 2021 was approximately $ 6.9 million.

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.

January 2021, the Company modified the exercise price of 100,000 of the options from $ 16.49 to $ 9.30 .

Due to the modification,

the Company will recognize incremental stock-based compensation cost of $65,000, Of this amount, the Company recognized approximately

$21,800 during the three months ended March 31, 2021.

of March 31, 2021, there were 296,667 of unvested options and $258,885 of unrecognized stock-based compensation expense.

Due to the modification, the Company

will recognize incremental stock-based compensation cost of $ 65,000 .

Of this amount, the Company has recognized approximately $ 45,000

and the remaining will be recognized over the remaining service period.

of June 30, 2021, there were 288,327 of unvested options and $ 186,144 of unrecognized stock-based compensation expense.

The unrecognized

stock-based compensation expense is expected to be recognized over 0.9 years.

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 three months ended March 31, 2021:

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 six months ended June 30, 2021:

of Outstanding Restricted Stock Units and Related Activity

Number of RSUs

Weighted Average Grant Date Fair Value

Outstanding at December 31, 2020

Weighted Average Grant Date Fair

Unvested at December 31, 2020

Forfeited/Cancelled

Outstanding at March 31, 2021

of March 31, 2021, there was approximately $8,900,000 of unrecognized stock-based compensation expense related to outstanding

RSUs which is expected to be recognized over a weighted-average period of 2.9 years.

Unvested at June 30, 2021

of June 30, 2021, there was approximately $ 7.8 million of unrecognized stock-based compensation expense related to outstanding RSUs which

is expected to be recognized over a weighted-average period of 2.7 years.

Company has issued warrants related to past financings and as compensation to third parties for services provided.

estimates the fair value of issued warrants on the date of issuance as determined using a Black-Scholes pricing model.

amortizes the fair value of issued warrants using a vesting schedule based on the terms and conditions of each warrant if granted

for services.

following table summarizes warrant activity during the three months ended March 31, 2021:

The Company estimates

the fair value of issued warrants on the date of issuance as determined using a Black-Scholes pricing model.

The Company amortizes the

fair value of issued warrants using a vesting schedule based on the terms and conditions of each warrant if granted for services.

following table summarizes warrant activity during the six months ended June 30, 2021:

of Warrant Activity

Number of Warrants

1 unchanged sentence

Weighted Average Fair Value

Weighted Average Remaining Contractual Life (Years)

Weighted Average Remaining Contractual

Outstanding at December 31, 2020

Forfeited/Cancelled

Outstanding at March 31, 2021

aggregate intrinsic value of outstanding warrants at March 31, 2021 was approximately $540,000.

Outstanding at June 30, 2021

aggregate intrinsic value of outstanding warrants at June 30, 2021 was approximately $ 450,000 .

All outstanding warrants are exercisable

at March 31, 2021 and there was no unrecognized stock-based compensation expense related to warrants.

at June 30, 2021 and there was no unrecognized stock-based compensation expense related to warrants.

Issued for Services

Company has issued restricted stock to third parties for services provided.

The grant date fair value of the restricted stock

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 stock awards.

The Company has issued 4,290 shares of restricted

stock for services during the three months ended March 31, 2021 and there was no unrecognized stock-based compensation expense

related to restricted stock issued.

The grant date fair value of the restricted stock 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 stock awards.

The Company has issued 5,548 shares of restricted stock for services during the

six months ended June 30, 2021 and there was no unrecognized stock-based compensation expense related to restricted stock issued.

Compensation Expense

Company recognized stock-based compensation expense related to the types of awards discussed above as follows:

Three Months Ended March 31,

of Recognized Stock-based Compensation Expense

Three Months Ended June 30,

Six Months Ended June 30,

Restricted stock units

Total stock-based compensation expense

the three months ended March 31, 2021, the Company recognized an expense from income taxes of $1,985,640, representing

7 – Income Taxes

the three months ended June 30, 2021, the Company recognized an expense from income taxes of $ 2,145,076 , representing an effective tax

rate of 18.0 %.

For the six months ended June 30, 2021, the Company recognized an expense from income taxes of $ 4,130,716 , representing

an effective tax rate of 18.9 %.

The Company’s effective tax rate will generally differ from the U.S.

Federal statutory

rate of 21.0% due to state taxes, permanent items, and discrete items.

For the three months ended March 31, 2020, no benefit from

income taxes was recorded due to the Company being in a full valuation allowance position, resulting in an effective tax rate

The Company’s effective tax rate will generally differ from the U.S.

Federal statutory rate of

21.0 % due to state taxes, permanent items, and discrete items.

For the three and six months ended June 30, 2020, no benefit from income

taxes was recorded due to the Company being in a full valuation allowance position, resulting in an effective tax rate of 0.0 %.

8 – Related Party Transactions

Company acquired the exclusive rights to the CoPrimer technology pursuant to an exclusive license agreement, dated April 2014

(the “Exclusive License Agreement”), between the Company and DNA Logix, Inc., which was assigned to Dr.

Brent Satterfield,

a former executive officer, prior to the Company’s acquisition of DNA Logix, Inc.

On March 1, 2017, the Company entered

into an amendment to its Exclusive License Agreement for its Cooperative Primers (“License”) technology with Dr.

The amendment provides in part that all accrued royalties under the License cease as of January 1, 2017, and the Company began

in January 2017 to pay to Dr.

Satterfield $700,000 of accrued royalties at the rate of $10,000 per month.

At March 31, 2021, the

aggregate balance of this related party liability was $120,000.

Company acquired the exclusive rights to the CoPrimer technology pursuant to an exclusive license agreement, dated April 2014 (the “Exclusive

License Agreement”), between the Company and DNA Logix, Inc., which was assigned to Dr.

Brent Satterfield, a former executive officer,

prior to the Company’s acquisition of DNA Logix, Inc.

On March 1, 2017, the Company entered into an amendment to its Exclusive

License Agreement for its Cooperative Primers (“License”) technology with Dr.

The amendment provides in part

that all accrued royalties under the License cease as of January 1, 2017, and the Company began in January 2017 to pay to Dr.

$ 700,000 of accrued royalties at the rate of $ 10,000 per month.

At June 30, 2021, the aggregate balance of this related party liability

was $ 90,000 .

9 – Commitments and Contingencies

Company’s offices are located at 2401 S.

Foothill Dr., Suite D, Salt Lake City, Utah 84109-1479.

2 unchanged sentences

for additional space.

The new aggregate space consists of approximately 13,687 square feet at a monthly rate of $28,825 and expires

in February 2024.

For the three months ended March 31, 2021 the Company expensed $86,588 for rent.

For the three months ended

March 31, 2020, the Company expensed $51,818 for rent.

The Company’s future minimum lease payments were as follows as of

March 31, 2021:

Year Ending March 31,

The new aggregate space consists of approximately 13,687 square feet at a monthly rate of $ 28,825 and expires in

February 2024 .

For the three and six months ended June 30, 2021 the Company expensed $ 86,588 and $ 173,175 for rent, respectively.

the three and six months ended June 30, 2020, the Company expensed $ 86,969 and $ 138,786 for rent, respectively.

The Company’s future

minimum lease payments were as follows as of June 30, 2021:

of Future Minimum Lease Payments

Year Ending December 31,

2021 (remainder)

Total lease payments

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.

July and September 2020, securities class action complaints were filed by certain stockholders of the Company against the Company

claiming that the Company promulgated false and misleading press releases to increase the price of our stock to improperly benefit

the officers and directors of the Company.

The plaintiffs demand compensatory damages sustained as a result of the Company’s

alleged wrongdoing in an amount to be proven at trial.

The Company believes these lawsuits are without merit and intends to defend

the cases vigorously.

The Company is unable to estimate a range of loss, if any, that could result were there to be an adverse

final decision in these cases.

As of the date of this report, the Company does not believe it is probable that these cases will

result in an unfavorable outcome;

however, if an unfavorable outcome were to occur in these cases, it is possible that the impact

could be material to the Company’s results of operations in the period(s) in which any such outcome becomes probable and

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.

July and September 2020, securities class action complaints were filed by certain stockholders of the Company against the Company claiming

that the Company promulgated false and misleading press releases to increase the price of our stock to improperly benefit the officers

and directors of the Company.

The plaintiffs demand compensatory damages sustained as a result of the Company’s alleged wrongdoing

in an amount to be proven at trial.

The Company believes these lawsuits are without merit and intends to defend the cases vigorously.

The Company is unable to estimate a range of loss, if any, that could result were there to be an adverse final decision in these cases.

As of the date of this report, the Company does not believe it is probable that these cases will result in an unfavorable outcome;

if an unfavorable outcome were to occur in these cases, it is possible that the impact could be material to the Company’s results

of operations in the period(s) in which any such outcome becomes probable and estimable.

10 – Subsequent Events

Company evaluated subsequent events pursuant to ASC Topic 855 and has determined that there are no events that need to be reported.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Note Regarding Forward-Looking Statements

Quarterly Report on Form 10-Q contains “forward-looking statements”

that involve risks and uncertainties.

All statements

other than statements of historical fact contained in this Quarterly Report and the documents incorporated by reference herein,

including statements regarding future events, our future financial performance, business strategy, and plans and objectives of

management for future operations, are forward-looking statements.

We have attempted to identify forward-looking statements by

terminology including “anticipates,”

“believes,”

“can,”

“continue,”

“could,”

“estimates,”

“expects,”

“intends,”

“may,”

“plans,”

“potential,”

“predicts,”

“should,”

or “will”

or the negative of these terms or other comparable terminology.

Although we do not make forward looking statements unless we believe we have a reasonable basis for doing so, we cannot guarantee

their accuracy.

These statements are only predictions and involve known and unknown risks, uncertainties and other factors and

the documents incorporated by reference herein, which may affect our or our industry’s actual results, levels of activity,

performance or achievements expressed or implied by these forward-looking statements.

Moreover, we operate in a highly regulated,

very competitive, and rapidly changing environment.

New risks emerge from time to time and it is not possible for us to predict

all risk factors, nor can we address the impact of all factors on our business or the extent to which any factor, or combination

of factors, may cause our actual results to differ materially from those contained in any forward-looking statements.

have based these forward-looking statements largely on our current expectations and projections about future events and financial

trends that we believe may affect our financial condition, results of operations, business strategy, short term and long-term

business operations, and financial needs.

These forward-looking statements are subject to certain risks and uncertainties that

could cause our actual results to differ materially from those reflected in the forward-looking statements.

Factors that could

cause or contribute to such differences include, but are not limited to, those discussed in this Quarterly Report, and in particular,

the risks discussed below and under the heading “Risk Factors”

in other documents we file with the SEC.

The following

discussion should be read in conjunction with the Annual Report on Form 10-K for the fiscal year ended December 31, 2020 filed

with the SEC on March 25, 2021 and the audited financial statements and notes included therein.

should not place undue reliance on any forward-looking statement, each of which applies only as of the date of this Quarterly

Except as required by law, we undertake no obligation to update or revise publicly any of the forward-looking statements

after the date of this Quarterly Report to conform our statements to actual results or changed expectations.

are advised, however, to consult any further disclosures we make on related subjects in our periodic and current reports filed

with the SEC.

You should understand that it is not possible to predict or identify all risk factors.

Consequently, you should

not consider this list to be a complete set of all potential risks or uncertainties.

factors that could cause actual results to differ materially from those in the forward-looking statements include, without limitation:

results of clinical trials and the regulatory approval process;

acceptance of any products that may be approved for commercialization;

ability to protect our intellectual property rights;

impact of any infringement actions or other litigation brought against us;

from other providers and products;

ability to develop and commercialize new and improved products and services;

in government regulation;

other factors (including the risks contained in the section entitled “Risk Factors”

in other documents we file

with the SEC) relating to our industry, our operations and results of operations.

one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results

may differ significantly from those anticipated, believed, estimated, expected, intended or planned.

or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict

We cannot guarantee future results, levels of activity, performance or achievements.

Except as required by applicable

law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform

these statements to actual results.

used in this Quarterly Report, the terms “we”, “us”, “our”, and “Co-Diagnostics”

means Co-Diagnostics, Inc., a Utah corporation and its consolidated subsidiaries (the “Company”), unless otherwise

following management’s discussion and analysis of financial condition and results of operations describes the principal

factors affecting the results of our operations, financial condition, and changes in financial condition.

This discussion should

be read in conjunction with the accompanying unaudited financial statements and notes thereto included elsewhere in this report.

The information contained in this discussion is subject to a number of risks and uncertainties.

We urge you to review carefully

the section of this report entitled “Cautionary Note Regarding Forward-Looking Statements”

for a summary of the risks

and uncertainties associated with an investment in our securities.

Co-Diagnostics,

Inc., a Utah corporation (the “Company”

or “CDI”), is developing robust and innovative molecular tools

for detection of infectious diseases, liquid biopsy for cancer screening, and agricultural applications.

We develop, manufacture

and sell reagents used for diagnostic tests that function via the detection and/or analysis of nucleic acid molecules (DNA or

In connection with the sale of our tests we may sell diagnostic equipment from other manufacturers as self-contained lab

systems (which we refer to as the “MDx Device”).

diagnostics systems enable very rapid, low-cost, molecular testing for organisms and genetic diseases by automating historically

complex procedures in both the development and administration of tests.

CDI’s technical advance involves a novel approach

to Polymerase Chain Reaction (“PCR”) test design of primer and probe structure (“CoPrimers”) that eliminates

one of the key vexing issues of PCR amplification, the exponential growth of primer-dimer pairs (false positives and false negatives)

which adversely interferes with identification of the target DNA/RNA.

believe our proprietary molecular diagnostics technology is paving the way for innovation in disease detection and life sciences

research through our enhanced detection of genetic material.

Because we own our platform, we believe we will be able to accomplish

this faster and more economically, allowing for significant margins while still positioning the Company to be a low-cost provider

of molecular diagnostics and screening services.

addition, continued development has demonstrated the unique properties of our CoPrimer technology that make it ideally suited

for a variety of applications where specificity is key to optimal results, including multiplexing several targets, enhanced Single

Nucleotide Polymorphism (“SNP”) detection and enrichment for next gen sequencing.

scientists use the complex mathematics of DNA/RNA test design, to engineer and optimize a DNA/RNA test and to automate algorithms

that rapidly screen millions of possible options to pinpoint the optimum design.

Satterfield, our founder, developed the Company’s

intellectual property consisting of the predictive mathematical algorithms and proprietary reagents used in the testing process,

which together represent a major advance in PCR testing systems.

CDI technologies are now protected by eight granted or pending

US and foreign patents, as well as certain trade secrets and copyrights.

Ownership of our proprietary platform permits us the

advantage of avoiding payment of patent royalties required by other PCR test systems, which enables the sale of diagnostic tests

at a lower price than competitors, while enabling us to maintain profit margins.

design our tests by identifying the optimal locations on the target gene for amplification and pair the location with the optimized

primer and probe structure to achieve outputs that meet the design input requirements identified from market research.

done by following planned and documented processes, procedures and validation protocols.

In other words, the data resulting from

our tests verify that we succeeded in designing what we intended at the outset.

Verification is a series of testing that concludes

that the product is ready to proceed to validation in an evaluation either in our lab or in an independent laboratory setting

using initial production tests to confirm that the product as designed meets the user needs.

addition to testing for infectious disease, the technology lends itself to identifying any section of a DNA or RNA strand that

describe any type of genetic trait, which creates a number of significant applications.

We, in conjunction with our customers,

are active in designing and licensing tests that identify genetic traits in plant and animal genomes.

We also have three multiplexed

tests developed to test mosquitos for the identification of diseases carried by the mosquitos to enable municipalities to concentrate

their efforts in spraying mosquito populations on the specific areas known to be breeding the mosquitos that carry deadly viruses.

we believe that testing for the COVID-19 virus is going to be a consideration for public health worldwide even after the current

pandemic has subsided, we have initiated a project to facilitate frequent testing in schools, businesses, the hospitality industry,

We believe this may be accomplished through the development of a low cost, easy to use by non-professionals, testing

device that can provide PCR quality test results in less than an hour.

This project is possible due to the facts that in 2020

we were able to successfully lyophilize our Logix Smart COVID-19 test reagents and additionally developed a saliva-based collection

system that does not require the RNA/DNA extraction.

While the final result is the same as if done through a lab-based IVD process,

it has the advantages of increased speed and ease of handling thanks to lyophilization.

We have engaged the services of a group

of professionals who have the expertise and track record to develop the hardware for such a device using our CoPrimers as the

reagent chemistry.

The device will be available to homes, offices, event facilities, and the travel industry at a cost that will

allow screening frequently to prevent spread of the COVID-19 virus and its variants in the future.

The device would also be available

to test for other pathogens detectable through saliva samples as we develop those tests and offer them to the marketplace.

OF OPERATIONS

Three Months Ended March 31, 2021 Compared to the Three Months ended March 31, 2020

the three months ended March 31, 2021, we generated revenues of $20,024,769 compared to revenues of $1,548,528 for the three months

ended March 31, 2020.

The increase in revenue of $18,476,241 was primarily due to sales of our LogixSmart COVID-19 test developed

in response to the current COVID-19 pandemic.

Of the total revenue in the three months ended March 31, 2021, $266,515 related

to the sale of third party manufactured equipment and consumables, which we sourced and sold to customers to facilitate the sales

of our COVID-19 test compared to $105,492 of revenue from the sales of such equipment for the three months ended March 31, 2020.

recorded cost of revenues of $3,272,565 for the three months ended March 31, 2021, compared to $481,740 for the three months ended

March 31, 2020.

This increase is due to the increase in revenue in 2021 due to the sale of our LogixSmart COVID-19 test.

total cost of sales during the three months ended March 31, 2021, $202,636 was from equipment sold to our customers compared to

$70,427 for equipment sold to customers for the three months ended March 31, 2020.

incurred total operating expenses of $6,417,303 for the three months ended March 31, 2021, compared to total operating expenses

of $2,148,737 for the three months ended March 31, 2020.

The increase in operating expenses was primarily due to the increase

in business activities experienced as a result of our increase in revenue and increased investment in research and development.

and administrative expenses increased $1,476,205, from $1,459,484 for the three months ended March 31, 2020 to $2,935,689 for

the three months ended March 31, 2021.

The increase in general and administrative expenses was primarily due to increased activity

to support the growth of our business.

The primary drivers of the increased expenses related to increases in compensation including

stock-based compensation, insurance expense, contributions to retirement plans and increased expenses for professional services.

sales and marketing expenses for the three months ended March 31, 2021 were $1,197,546, compared to $268,483 for the three months

ended March 31, 2020.

The increase of $929,063 was primarily a result of increased personnel related expenses, including commissions

paid to our sales team, and increased stock-based compensation due to the growth in revenue.

research and development expenses increased by $1,817,041, from $400,022 for the three months ended March 31, 2020 to $2,217,063

for the three months ended March 31, 2021.

The primary increase in expenses was research expenditures of greater than one million

dollars for our point-of-care device in addition to increases in salaries and related benefits, including stock-based compensation,

as we have added additional employees to our research and development team to increase our product development activities.

Additionally,

there has been an increase in professional and lab services utilized to further help us in our research and product development

Income (Expense)

the three months ended March 31, 2021 we had total other expense of $450,286, compared to total other income of $16,756 for the

three months ended March 31, 2020.

The decrease was due primarily due to recording a loss of $464,943 from our India joint venture

compared to income of $9,181 from our joint venture in the same period in 2020.

realized net income for the three months ended March 31, 2021 of $7,898,975, compared with a net loss for the three months

ended March 31, 2020 of $1,065,193.

The increase in net income of $8,964,168 was primarily the result of sales of our LogixSmart

COVID-19 test and resulting margins from those sales offset by increased operating expenses as discussed above.

Additionally,

we recorded income tax expense of $1,985,640 for the three months ended March 31, 2021.

and Capital Resources

March 31, 2021, we had cash and cash equivalents of $57,788,893 and marketable investment securities of $2,302,644 that could

readily be converted into cash if needed.

Additionally, our total current assets of March 31, 2021, were $79,436,997 compared

to total current liabilities of $5,748,255.

cash provided by operating activities during the three months ended March 31, 2021 was $12,269,955, compared to cash used

in operating activities of $1,335,528 for the three months ended March 31, 2020.

The increase in cash from operating activities

was primarily due to our increased revenue.

received $2,393,244 of cash from investing activities during the three months ended March 31, 2021 from maturity of marketable

investments and repayment of advances from our India joint venture as compared uses of cash of $250,370 during the three months

ended March 31, 2020.

cash provided by financing activities was $148,981 for the three months ended March 31, 2021 realized from the exercise

of options, compared to $18,062,083 for the same period in the prior year.

The decrease is primarily due to net proceeds of $18,012,083

received from a series of three registered direct offerings in January and February 2020 pursuant to our shelf registration in

addition to receiving $50,000 from the exercise of warrants and options for the three months ended March 31, 2020.

commencing sales of our Logix Smart COVID-19 test in March 2020, we have used our cash generated from those sales to fund the

increase in our inventories and receivables and pay our operating expenses.

We have increased our work force primarily in the

area of research and development to complete development of additional tests to enable us to use our distributor network to sell

other products throughout the world and remain profitable in the future.

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.

needed, we expect additional investment capital to come from (i) additional issuances of our common stock with existing and new

investors or (ii) the private placement of other securities with investors similar to those that have provided funding in the

We may not be able to secure such financing in a timely manner or on favorable terms, if at all.

October 30, 2020, we filed a Registration Statement on Form S-3 (File No:

333-249651) with the Securities and Exchange Commission

(the “SEC”).

The SEC declared the Form S-3 effective on November 5, 2020.

Pursuant to a prospectus supplement to the

Form S-3, we may offer and sell up to $100 million of the following securities separately or together, in one or more series or

classes and in amounts, at prices and on terms described in one or more offerings:

common stock;

preferred stock;

purchase our securities, each of which may be convertible into equity securities;

or units comprised of, or other combinations

of, the foregoing securities through underwriting syndicates managed or co-managed by one or more underwriters or dealers, through

agents or directly to purchasers.

Each time our securities are offered, we will provide a prospectus supplement to the Form S-3

containing more specific information about the particular offering.

We did not sell any securities pursuant to the Form S-3.

foregoing estimates, expectations and forward-looking statements are subject to change as we make strategic operating decisions

from time to time and as our revenue and expenses fluctuate from period to period.

Sheet Arrangements

have no off-balance sheet arrangements.

Quantitative and Qualitative Disclosures about Market Risk

required under Regulation S-K for “smaller reporting companies.”

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements