What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-05-12 compared with 2021-11-12 · 335 added, 239 removed, 285 unchanged (67% of the section changed)

1 unchanged sentence

– DIAGNOSTICS, INC.

CONSOLIDATED BALANCE SHEETS

September 30, 2021

AND SUBSIDIARIES

BALANCE SHEETS

March 31, 2022

December 31, 2021

3 unchanged sentences

Accounts receivable, net

Prepaid expenses

Prepaid expenses and other current assets

Note receivable

Total current assets

Property and equipment, net

Operating lease right-of-use asset

Intangible assets, net

Investment in joint venture

Deferred tax asset

Note receivable

$ 171,151,845

$ 160,034,282

Liabilities and stockholders’ equity

2 unchanged sentences

Accrued expenses, current

Accrued expenses (related party), current

Operating lease liability, current

Contingent consideration liabilities, current

Income taxes payable

2 unchanged sentences

Long-term liabilities

Accrued expenses, noncurrent

Accrued expenses (related party), noncurrent

Income taxes payable

Deferred tax liability

Operating lease liability

Contingent consideration liabilities

Total long-term liabilities

2 unchanged sentences

Stockholders’ equity

Convertible preferred stock, $ 0.001 par value;

Convertible preferred stock, $ 0.001

shares authorized;

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

shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively

Common stock, $ 0.001 par value;

100,000,000 shares authorized;

28,894,890 and 28,558,033 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively

33,984,068 and 33,819,862 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively

Additional paid-in capital

3 unchanged sentences

$ 171,151,845

accompanying notes to unaudited condensed consolidated financial statements

$ 160,034,282

accompanying notes to unaudited consolidated financial statements

– DIAGNOSTICS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended September 30,

Nine Months Ended September 30,

AND SUBSIDIARIES

STATEMENTS OF OPERATIONS

Three Months Ended March 31,

Cost of revenue

8 unchanged sentences

Interest income

Gain (loss) on equity method investment in joint venture

Loss on disposition of assets

Gain on remeasurement of acquisition contingencies

(Loss) on equity method investment in joint venture

Total other income (expense)

Income before income taxes

Income tax provision (benefit)

( 2,914,781 )

Income tax provision

Earnings per common share:

Weighted average shares outstanding:

accompanying notes to unaudited condensed consolidated financial statements

accompanying notes to unaudited consolidated financial statements

– DIAGNOSTICS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended September 30,

AND SUBSIDIARIES

STATEMENTS OF CASH FLOWS

Three Months Ended March 31,

Cash flows from operating activities

2 unchanged sentences

Stock-based compensation expense

Loss (gain) from equity method investment

Change in fair value of acquisition contingencies

( 3,379,890 )

Non-cash lease expense

Loss from equity method investment

Loss on disposition of assets

Deferred income taxes

3 unchanged sentences

Accounts receivable

( 2,608,777 )

( 10,509,035 )

Prepaid expenses

2 unchanged sentences

Income taxes payable

Accounts payable and accrued expenses

Accounts payable, accrued expenses and other liabilities

Net cash provided by operating activities

1 unchanged sentence

Purchases of property and equipment

Purchases of marketable investment securities

( 9,310,000 )

Proceeds from maturities of marketable investment securities

Investment in joint venture

Net cash provided by (used in) investing activities

( 7,070,183 )

Net cash provided by investing activities

Cash flows from financing activities

Proceeds from sale of common stock

Proceeds from exercise of options and warrants

Payment of offering costs

( 1,457,922 )

Net cash provided by financing activities

7 unchanged sentences

Inventory moved to property, plant and equipment

accompanying notes to unaudited condensed consolidated financial statements

Right-of-use assets obtained in exchange for new operating lease liabilities

accompanying notes to unaudited consolidated financial statements

– DIAGNOSTICS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

AND SUBSIDIARIES

STATEMENTS OF STOCKHOLDERS’ EQUITY

Convertible Preferred Stock

3 unchanged sentences

Balance as of December 31, 2021

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

$ 134,475,098

Common stock issued for option exercises

Common stock issued for option and warrant exercises

Common stock issued for option and warrant exercises, shares

Common stock issued for warrant exercises

Stock-based compensation

Conversion of preferred stock to common

Conversion of preferred stock to common, shares

Balance as of March 31, 2022

Common stock issued for option exercises

Stock-based compensation

Balance as of June 30, 2021

Common stock issued for option exercises

Stock-based compensation

Balance as of September 30, 2021

$ 147,714,791

Convertible Preferred Stock

Additional Paid-in

Accumulated Earnings

Total Stockholders’

Balance as of December 31, 2020

$ ( 24,967,814 )

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

Common stock issued for warrant exercises

Stock-based compensation expense

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

Balance as of June 30, 2020

$ ( 11,027,998 )

Common stock issued for option exercises

Stock-based compensation

Stock-based compensation expense

Net income (loss)

Balance as of September 30, 2020

accompanying notes to unaudited condensed consolidated financial statements

Balance as of March 31, 2021

accompanying notes to unaudited consolidated financial statements

– DIAGNOSTICS, INC.

TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AND SUBSIDIARIES

TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1 – Overview and Basis of Presentation

Co-Diagnostics,

Inc., a Utah corporation (the “Company” or “Co-Dx”), 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 and emerging growth 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.

Operating results for the three months ended September 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.

Inc., a Utah corporation (the “Company”, “Co-Dx” or “CODX”), develops, manufactures and sells

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

robust and innovative molecular tools for detection of infectious diseases, liquid biopsy for cancer screening, and agricultural applications.

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”).

We are also developing a unique, groundbreaking portable PCR testing platform (the “Co-Dx

PCR home testing platform”) designed to bring affordable, reliable gold-standard polymerase chain reaction (“PCR”)

to patients in point-of-care and even at-home settings.

Consolidated Financial Statements

accompanying unaudited 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 and emerging growth 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

Operating results for the three months ended March 31, 2022 are not necessarily indicative of the results that may be expected

for the year ending December 31, 2022.

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

and related notes for the year ended December 31, 2021, included in the Company’s Annual Report on Form 10-K filed on March 24,

preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates

9 unchanged sentences

or less from the date of purchase.

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

December 31, 2020.

The Company has its cash and cash equivalents with large creditworthy financial institutions 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.

The fair value of cash equivalents approximated their carrying value as of March 31, 2022 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

1 unchanged sentence

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.

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

as the Company may sell these securities at any time for use in its current operations or for other purposes, even prior to maturity.

As a result, the Company classifies its marketable investment securities, including securities with stated maturities beyond twelve months,

within current assets in the condensed consolidated balance sheets.

appropriate classification of its marketable investment securities at the time of purchase and reevaluates such designation at each balance

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

Company may sell these securities at any time for use in its current operations or for other purposes, even prior to maturity.

the Company classifies its marketable investment securities, including securities with stated maturities beyond twelve months, within

current assets in the consolidated balance sheets.

Any unrealized gains or losses are immaterial.

7 unchanged sentences

written off are recorded when collected.

At September 30, 2021, total accounts receivable was $ 15,347,499 with an allowance for uncollectable

At March 31, 2022, total accounts receivable was $ 22,379,861 with an allowance for uncollectable

accounts of $ 717,458 resulting in a net amount of $ 21,662,403 .

2 unchanged sentences

Equity-Method

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

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

balance sheet.

2 unchanged sentences

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

accompanying condensed consolidated statements of operations.

accompanying consolidated statements of operations.

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

1 unchanged sentence

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

At September 30, 2021, the Company had $ 3,302,925 in inventory, of which $ 925,620 was

finished goods and $ 2,377,305 was raw materials.

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

At March 31, 2022, the Company had $ 4,901,057 in inventory, of which $ 4,119,549 was

finished goods and $ 781,508 was raw materials.

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

to their estimated useful or scrap values.

At December 31, 2021, the Company had $ 2,004,169 in inventory, of which $ 983,088 was finished

goods and $ 1,021,081 was raw materials.

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

their estimated useful or scrap values.

and Equipment

10 unchanged sentences

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

estimate the fair value of assets acquired and liabilities assumed in a business combination.

Goodwill as of the acquisition date is

measured as the excess of consideration transferred over the net of the acquisition date fair values of the assets acquired and the liabilities

Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets.

Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and

unpredictable, and as a result, actual results may differ from estimates.

described in “Recently Adopted Accounting Standards” below, the Company adopted ASC 842, Leases (“ASC 842”) effective

January 1, 2022.

Under ASC 842, the Company determines if an arrangement is or contains a lease at inception by assessing whether the

arrangement contains an identified asset and whether it has the right to control the identified asset.

Right-of-use (ROU) assets represent

the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation

to make lease payments arising from the lease.

Lease liabilities are recognized at the lease commencement date based on the present value

of future lease payments over the lease term.

ROU assets are based on the measurement of the lease liability and also include any lease

payments made prior to or on lease commencement and exclude lease incentives and initial direct costs incurred, as applicable.

the implicit rate in the Company’s leases is generally unknown, the Company uses its incremental borrowing rate based on the information

available at the lease commencement date in determining the present value of future lease payments.

The Company considers its credit

risk, term of the lease, total lease payments and adjusts for the impacts of collateral, as necessary, when calculating its incremental

borrowing rates.

The Company evaluates renewal options at lease inception and on an ongoing basis and includes renewal options that it

is reasonably certain to exercise in its expected lease terms when classifying leases and measuring lease liabilities.

Lease costs for

the Company’s operating leases are recognized on a straight-line basis within operating expenses and cost of revenue over the reasonably

assured lease term.

Company has elected to not separate lease and non-lease components for leases of office space and, as a result, accounts for any lease

and non-lease components for office space as a single lease component, to the extent they are fixed.

Non-lease components that are not

fixed are expensed as incurred as variable lease payments.

The Company’s office leases typically include non-lease components such

as common-area maintenance costs.

The Company has also elected to not apply the recognition requirement to any leases within its existing

classes of assets with a term of 12 months or less.

Company generates revenue from product sales and license sales.

15 unchanged sentences

and development costs are expensed when incurred.

For the three and nine months ended September 30, 2021, the Company expensed $ 5,893,350

and $ 12,779,573 of research and development costs, respectively.

For the three and nine months ended September 30, 2020, the Company

expensed $ 921,889 and $ 2,072,160 , respectively.

For the three months ended March 31, 2022, the Company expensed $ 3,771,327 of research

and development costs, respectively.

For the three months ended March 31, 2021, the Company expensed $ 2,217,063 .

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

24 unchanged sentences

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 and nine months

ended September 30, 2021.

Two customers together accounted for approximately 55 % and 49 %, respectively, of total revenue for the three

and nine months ended September 30, 2021.

customers each accounted for more than 10% of accounts receivable at September 30, 2021 and December 31, 2020.

These two customers together

accounted for approximately 52 % and 48 % of accounts receivable at September 30, 2021 and December 31, 2020, respectively.

Income per Share

9 unchanged sentences

securities are anti-dilutive.

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

Three customers together accounted for approximately 54 % and 57 % of total revenue for the three months ended March 31, 2022

and March 31, 2021, respectively.

customers each accounted for more than 10% of accounts receivable at March 31, 2022 and December 31, 2021.

These two customers together

accounted for approximately 62 % and 66 % of accounts receivable at March 31, 2022 and December 31, 2021, respectively.

Accounting Pronouncements

3 unchanged sentences

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.

Adopted Accounting Standards

June 2016, the FASB issued ASU No.

3 unchanged sentences

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.

The Company adopted ASU 2016-13 on January 1, 2022.

The adoption did not have an impact on

the Company’s financial statements.

February 2016, the FASB issued ASU No.

2016-02, Leases (Topic 842) (“ASU 2016-02”), which requires a lessee to recognize

most leases on the balance sheet as lease liabilities with corresponding right-of-use assets.

The objective of ASU 2016-02 is to increase

transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing

key information about leasing arrangements.

The recognized lease liabilities and lease assets represent the obligation to make payments

and the right to use or control the use of a specified asset for the lease term, respectively.

January 1, 2022, the Company adopted Topic 842 using the modified retrospective approach with the effective date as the date of initial

Consequently, results for the three months ended March 31, 2022 are presented under Topic 842.

No prior period amounts were

adjusted and continue to be reported in accordance with previous lease guidance, ASC Topic 840, Leases.

The Company elected the practical

expedients available under the provisions of the new standard, including not reassessing whether expired or existing contracts are or

contain leases;

not reassessing the classification of expired or existing leases;

and not reassessing the initial direct cost for any

existing leases.

Upon adoption, the Company recognized an operating lease liability of $ 626,699 and a corresponding operating right-of-use

asset of $ 681,327 .

3 – Business Combinations

December 31, 2021, the Company completed its acquisition of Advanced Conceptions, Inc.

(“ACI”) and Idaho Molecular Inc.

which were related entities developing, with the Company, an at-home/point-of-care medical diagnostic device.

Upon the completion of

the acquisition, all outstanding ACI and Idaho Molecular common stock was exchanged for approximately 3.2 million shares of the Company’s

common stock and contingent consideration that includes up to approximately 1.4 million shares and approximately 456,000 warrants to

purchase shares of the Company’s common stock.

The contingent consideration is based on the achievement of certain milestones,

which include regulatory approval for identified products, as well as production and net revenue targets.

Upon the completion of the

acquisition, both ACI and IdMo became 100 % wholly-owned subsidiaries of the Company.

4 – Goodwill and Intangible Assets

represents the excess of purchase price and related costs over the value assigned to net tangible and identifiable intangible assets

acquired in business combinations.

The following table presents the changes in the carrying amount of goodwill for the three months ended

March 31, 2022:

Balance as of December 31, 2021

Measurement period adjustments

Balance as of March 31, 2022

following table presents details of the Company’s intangible assets, excluding goodwill:

of Intangible Assets, Net

Weighted-Average

Useful Life (1)

In-process research and development

Non-competition agreements

Total intangible assets

$ ( 106,667 )

Weighted-Average

Useful Life (1)

In-process research and development

Non-competition agreements

Total intangible assets

(1) Based on weighted-average useful life established as of the acquisition date.

5 – Fair Value Measurements

8 unchanged sentences

Unobservable inputs that are not corroborated by market data.

following table summarizes the assets measured at fair value on a recurring basis as of March 31, 2022, and December 31, 2021, by level

within the fair value hierarchy:

Schedule of Fair Value Assets and Liabilities

March 31, 2022

Contingent consideration - common stock

Contingent consideration - warrants

Total liabilities measured at fair value

December 31, 2021

Marketable securities (certificates of deposit)

Total assets measured at fair value

Contingent consideration - common stock

Contingent consideration - warrants

Total liabilities measured at fair value

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 September 30, 2021, and December 31, 2020, by level within

the fair value hierarchy:

of Assets Measured at Fair Value on Recurring Basis

September 30, 2021

Marketable investment securities:

Certificates of deposit

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

Schedule of Changes in Fair Value Measurement

Fair value as of December 31, 2021

Change in fair value of contingent consideration issued for business acquisitions

( 3,379,890 )

Fair value as of March 31, 2022

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 March 31, 2022.

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 March 31, 2022.

Prior to the probability adjustments, the warrants

were valued based on the following inputs:

Schedule of Contingent Consideration Common Stock and Warrants

December 31, 2021

Marketable investment securities:

Certificates of deposit

Risk-free rate

Expected term

following table sets forth revenue by geographic area:

of Revenue by Geographic Area

Three Months Ended September 30,

Nine Months Ended September 30,

Summary of Revenue by Geographic Area

Three Months Ended March 31,

United States

3 unchanged sentences

Rest of World

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

of Deferred Revenue

in the Company’s deferred revenue balance for the three months ended March 31, 2022 were as follows:

Schedule of Deferred Revenue

Balance as of December 31, 2021

Revenue recognized included in deferred revenue balance at the beginning of the period

Increase due to prepayments from customers

Balance as of September 30, 2021

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

Balance as of March 31, 2022

7 – Earnings Per Share

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

months ended September 30, 2021 and 2020:

of Basic and Diluted Earnings Per Share

Three Months Ended September 30,

Nine Months Ended September 30,

Net income (loss), as reported

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

ended March 31, 2022:

Schedule of Basic and Diluted Earnings Per Share

Three Months Ended March 31,

Net income, as reported

Weighted average shares, basic

3 unchanged sentences

Diluted earnings per share

the three and nine months ended September 30, 2021, potentially dilutive securities of 50,000 and 147,436 were excluded from the calculation

because their effect would have been anti-dilutive.

For the three and nine months ended September 30, 2020, potentially dilutive securities

of 50,000 were excluded from the calculation because their effect would have been anti-dilutive.

the three months ended March 31, 2022, potentially dilutive securities of 1,271,304 were excluded from the calculation because their

effect would have been anti-dilutive.

For the three months ended March 31, 2021, potentially dilutive securities of 2,320,907 were excluded

from the calculation because their effect would have been anti-dilutive.

The computation of diluted earnings per share for the three

months ended March 31, 2022 also excludes the approximately 1.4 million shares of common stock and approximately 456,000 warrants to

purchase shares of common stock that are contingent upon the achievement of certain milestones.

8 – Stock-Based Compensation

1 unchanged sentence

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 2,064,933 at September 30, 2021.

following table summarizes option activity during the nine months ended September 30, 2021:

of Option Activity

Amended and Restated 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 2,095,266 at March 31, 2022.

following table summarizes option activity during the three months ended March 31, 2022:

Schedule of Option Activity

Number of Options

4 unchanged sentences

Forfeited/Cancelled

Outstanding at September 30, 2021

Exercisable at September 30, 2021

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

Outstanding at March 31, 2022

Exercisable at March 31, 2022

total intrinsic value of options exercised during the three months ended March 31, 2022 was approximately $ 0.3 million.

The aggregate

intrinsic value of outstanding options at September 30, 2021 was approximately $ 8.5 million.

intrinsic value of outstanding options at March 31, 2022 was approximately $ 4.5 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

1 unchanged sentence

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 has recognized approximately $ 50,000

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

of September 30, 2021, there were 16,666

of unvested options and $ 119,897 of unrecognized

stock-based compensation expense.

The unrecognized stock-based compensation expense is expected to be recognized over 0.7 years.

of March 31, 2022, there were 16,666 of unvested options and $ 37,241 of unrecognized stock-based compensation expense.

The unrecognized

stock-based compensation expense is expected to be recognized over 0.2 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

1 unchanged sentence

The following table sets forth the outstanding

RSUs and related activity for the nine months ended September 30, 2021:

of Outstanding Restricted Stock Units and Related Activity

RSUs and related activity for the three months ended March 31, 2022:

Schedule of Outstanding Restricted Stock Units and Related Activity

Number of RSUs

2 unchanged sentences

Forfeited/Cancelled

Unvested at September 30, 2021

of September 30, 2021, there was approximately $ 13.5 million of unrecognized stock-based compensation expense related to outstanding

RSUs which is expected to be recognized over a weighted-average period of 2.5 years.

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

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 nine months ended September 30, 2021:

of Warrant Activity

Unvested at March 31, 2022

of March 31, 2022, there was approximately $ 10.3 million of unrecognized stock-based compensation expense related to outstanding RSUs

which is expected to be recognized over a weighted-average period of 2.1 years.

Company has issued warrants related to financings, acquisitions 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.

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 three months ended March 31, 2022:

Schedule of Warrant Activity

Number of Warrants

4 unchanged sentences

Forfeited/Cancelled

Outstanding at September 30, 2021

aggregate intrinsic value of outstanding warrants at September 30, 2021 was approximately $ 553,000 .

All outstanding warrants are exercisable

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

Outstanding at March 31, 2022

intrinsic value of warrants exercised during the three months ended March 31, 2022 and 2021 was approximately $ 0.3 million and $ 0 , respectively.

The aggregate intrinsic value of outstanding warrants at March 31, 2022 was approximately $ 0.1 million.

total number of warrants exercisable at March 31, 2022 are 20,000 .

The ability to exercise the approximately 456,000 warrants issued

in connection with acquisitions in the prior year is contingent upon the achievement of certain development and revenue milestones on

or before January 1, 2027.

There was no unrecognized stock-based compensation expense related to warrants.

Issued for Services

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amortized over the vesting period of the stock awards.

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

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

The Company issued 0 and 4,290 shares of restricted stock for services during

the three months ended March 31, 2022 and 2021, respectively.

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:

of Recognized Stock-based Compensation Expenses

Three Months Ended September 30,

Nine Months Ended September 30,

Schedule of Recognized Stock-based Compensation Expense

Three Months Ended March 31,

Restricted stock units

1 unchanged sentence

9 – Income Taxes

the three months ended September 30, 2021, the Company recognized an expense from income taxes of $ 2,100,594 , representing an effective

tax rate of 15.5 %.

For the nine months ended September 30, 2021, the Company recognized an expense from income taxes of $ 6,231,310 , representing

an effective tax rate of 17.6 %.

the three months ended March 31, 2022, the Company recognized expense from income taxes of $ 1,386,087 , representing an effective tax

rate of 10.6 %.

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 nine months ended September 30, 2020, the Company recognized

a benefit from income taxes of $ 2,914,781 .

Federal statutory rate of 21.0 % due to state

taxes, permanent items, and discrete items.

For the three months ended March 31, 2021, the Company recognized expense from income taxes

of $ 1,985,640 .

10 – Related Party Transactions

8 unchanged sentences

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

At September 30, 2021 and 2020, the aggregate balance of this related

party liability was $ 30,000 and $ 120,000 , respectively.

9 – Commitments and Contingencies

Company’s offices are located at 2401 S.

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

In February 2020, the Company

entered into a 4 -year

lease agreement for its office space and in March 2020, the Company entered into an addendum with our landlord 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

For the three and nine months ended September 30, 2021, the Company expensed $ 86,588 and $ 259,763 for rent, respectively.

three and nine months ended September 30, 2020, the Company expensed $ 86,588 and $ 225,374 for rent, respectively.

The Company’s

future minimum lease payments were as follows as of September 30, 2021:

of Future Minimum Lease Payments

Year Ending December 31,

At March 31, 2022 and 2021, the aggregate balance of this related party

liability was $ 0 and $ 120,000 , respectively.

Company leases office space under a non-cancelable operating lease and leases cancellable with one month notice.

The Company expenses

the cancellable leases in the period incurred in accordance with the practical expedient elected.

As such, one lease makes up the entirety

of the right-of-use asset and lease liability disclosed.

the three months ended March 31, 2022, components of lease expense are summarized as follows:

of Lease Expense

Three Months Ended March 31, 2022

Operating lease costs

Short-term lease costs

Total lease costs

lease costs under month-to-month lease agreements are paid to related parties.

of March 31, 2022, the maturities of the Company’s lease liabilities are as follows:

of Maturities on Company Lease Liabilities

2022 (remainder)

Total lease payments

imputed interest

Present value of operating lease liabilities

current portion

Long-term portion

information related to operating leases was as follows:

of Other Information Related to Operating Lease

Three Months Ended March 31, 2022

Cash paid for operating leases included in operating cash flows

Remaining lease term of operating leases

Discount rate of operating leases

previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021, future lease payments under ASC 840 for

operating leases were as follows:

Schedule of Future Minimum Lease Payments

Year Ending December 31,

Total lease payments

12 – Commitments and Contingencies

for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sources are recorded when it is probable

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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.

Company is currently a defendant in five different securities class action complaints that were filed by certain stockholders of 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

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

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

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 estimable.

13 – Share Repurchase Program

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 amount 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.

Company has not made any repurchases under the share purchase program since its implementation.

14 – Subsequent Events

1 unchanged sentence

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