What changed in this filing

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Item 1. Financial Statements

2022-08-11 compared with 2022-05-12 · 201 added, 123 removed, 497 unchanged (39% of the section changed)

3 unchanged sentences

BALANCE SHEETS

March 31, 2022

June 30, 2022

December 31, 2021

31 unchanged sentences

Stockholders’ equity

Convertible preferred stock, $ 0.001

Convertible preferred stock, $ 0.001 par value;

5,000,000 shares authorized;

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

Common stock, $ 0.001 par value;

0 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively

Common stock, $ 0.001

100,000,000 shares authorized;

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

shares issued and 33,780,992 shares

outstanding as of June 30, 2022 and 33,819,862

shares issued and outstanding as of December 31, 2021

Treasury stock, at cost;

532,440 and 0 shares held as of June 30, 2022 and December 31, 2021, respectively

( 2,599,478 )

Additional paid-in capital

8 unchanged sentences

STATEMENTS OF OPERATIONS

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Cost of revenue

6 unchanged sentences

Income from operations

( 4,147,038 )

Other income (expense)

2 unchanged sentences

Gain on remeasurement of acquisition contingencies

(Loss) on equity method investment in joint venture

Gain (loss) on equity method investment in joint venture

Total other income (expense)

Income before income taxes

Income (loss) before income taxes

( 3,427,810 )

Income tax provision

Net income (loss)

$ ( 2,686,303 )

Earnings per common share:

4 unchanged sentences

STATEMENTS OF CASH FLOWS

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities

16 unchanged sentences

Income taxes payable

( 1,918,510 )

Accounts payable, accrued expenses and other liabilities

( 1,702,718 )

Net cash provided by operating activities

2 unchanged sentences

Proceeds from maturities of marketable investment securities

Purchases of marketable securities

( 9,951,550 )

Investment in joint venture

Net cash provided by investing activities

Net cash provided by (used in) investing activities

( 9,600,444 )

Cash flows from financing activities

Proceeds from exercise of options and warrants

Net cash provided by financing activities

Repurchases of common stock

( 2,599,478 )

Net cash provided by (used in) financing activities

( 2,421,607 )

Net increase in cash and cash equivalents

( 2,561,829 )

Cash and cash equivalents at beginning of period

6 unchanged sentences

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

Business acquisition measurement period adjustments

accompanying notes to unaudited consolidated financial statements

4 unchanged sentences

Additional Paid-in

Accumulated Earnings

Total Stockholders’

6 unchanged sentences

$ 147,714,792

Common stock issued for option exercises

Common stock issued for warrant exercises

Stock-based compensation

Common stock issued for acquisitions

Repurchases of common stock

( 2,599,478 )

( 2,686,303 )

Balance as of June 30, 2022

$ ( 2,599,478 )

$ 144,470,940

Convertible Preferred Stock

Additional Paid-in

Accumulated Earnings

Total Stockholders’

3 unchanged sentences

Balance as of March 31, 2021

Common stock issued for option exercises

Stock-based compensation

Balance as of June 30, 2021

accompanying notes to unaudited consolidated financial statements

4 unchanged sentences

Co-Diagnostics,

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

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.

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

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

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

8 unchanged sentences

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,

Operating results for the three and six months ended June 30, 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, 2022.

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 March 31, 2022 and December

The fair value of cash equivalents approximated their carrying value as of June 30, 2022 and December

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

3 unchanged sentences

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 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.

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

treasury bills.

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

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

At June 30, 2022, total accounts receivable was $ 12,941,010 with an allowance for uncollectable

accounts of $ 681,001 resulting in a net amount of $ 12,260,009 .

11 unchanged sentences

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

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

At June 30, 2022, the Company had $ 4,705,921 in inventory, of which $ 3,927,698 was

finished goods and $ 778,223 was raw materials.

67 unchanged sentences

and development costs are expensed when incurred.

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 .

For the three and six months ended June 30, 2022, the Company expensed $ 3,889,844 and

$ 7,661,171 of research and development costs, respectively.

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

and $ 6,886,223 , respectively.

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

37 unchanged sentences

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.

Company had certain customers which are each responsible for generating 10 %

or more of the total revenue for the three and six months ended June 30, 2022.

One customer accounted for approximately 55 %

of total revenue for the three months ended June 30, 2022, and two customers together accounted for approximately 46 %

of total revenue for the six months ended June 30, 2022.

Two customers together accounted for approximately 68 %

of total revenue for the three months ended June 30, 2021, and three customers together accounted for approximately 56 %

of total revenue for the six months ended June 30, 2021.

customers accounted for more than 10 % of accounts receivable at June 30, 2022 and two customers accounted for more than 10 % of accounts

receivable at December 31, 2021.

These customers together accounted for approximately 75 % and 66 % of accounts receivable at June, 2022

and December 31, 2021, respectively.

Accounting Pronouncements

21 unchanged sentences

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;

Consequently, results for the three and six months ended June 30, 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 .

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

3 unchanged sentences

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.

the acquisition, all outstanding ACI and Idaho Molecular common stock was initially 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.

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

the quarter ended June 30, 2022, the Company finalized negotiations that were ongoing as of December 31, 2021, with one remaining shareholder

of ACI, which resulted in an increase to the purchase consideration of $ 580,135 .

Additionally, there was an increase of $ 101,593 in the

estimated tax liabilities that resulted from the acquisition.

Due to the change in purchase consideration and estimated tax liabilities,

a measurement period adjustment was recorded, resulting in an increase to goodwill of $ 681,728 .

the resolution with the remaining shareholder, the total number of shares exchanged as purchase consideration was approximately 3.3 million

Additionally, the updated purchase consideration includes contingent consideration of up to approximately 1.4 million shares

and 465,000 warrants to purchase shares of the Company’s common stock.

addition, the adjustments to the provisional purchase consideration amount resulted in an increase in the gain on remeasurement of acquisition

contingencies of $ 78,617 , of which $ 64,587 relates to the quarter ended March 31, 2022.

4 – Goodwill and Intangible Assets

1 unchanged sentence

acquired in business combinations.

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

March 31, 2022:

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

June 30, 2022:

Balance as of December 31, 2021

Measurement period adjustments

Balance as of March 31, 2022

Balance as of June 30, 2022

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

of Intangible Assets, Net

June 30, 2022

Weighted-Average

4 unchanged sentences

$ ( 213,333 )

December 31, 2021

Weighted-Average

3 unchanged sentences

Total intangible assets

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

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

following table summarizes the assets measured at fair value on a recurring basis as of June 30, 2022, and December 31, 2021, by level

within the fair value hierarchy:

Schedule of Fair Value Assets and Liabilities

March 31, 2022

June 30, 2022

Cash equivalents

Marketable securities (U.S.

treasury bills)

Total assets measured at fair value

Contingent consideration - common stock

7 unchanged sentences

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.

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

treasury bills.

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

1 unchanged sentence

Fair value as of December 31, 2021

Change in contingent purchase consideration for measurement period adjustments

Change in fair value of contingent consideration issued for business acquisitions

( 4,192,712 )

Fair value as of March 31, 2022

Fair value as of June 30, 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.

stock as of June 30, 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:

option with terms consistent with the terms of the warrants as of June 30, 2022.

Prior to the probability adjustments, the warrants were

valued based on the following inputs:

Schedule of Contingent Consideration Common Stock and Warrants

June 30, 2022

December 31, 2021

3 unchanged sentences

Summary of Revenue by Geographic Area

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

United States

3 unchanged sentences

Rest of World

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

in the Company’s deferred revenue balance for the six months ended June 30, 2022 were as follows:

Schedule of Deferred Revenue

1 unchanged sentence

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

Balance as of March 31, 2022

Balance as of June 30, 2022

7 – 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, 2022:

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, 2022:

Schedule of Basic and Diluted Earnings Per Share

Three Months Ended March 31,

Net income, as reported

Three Months Ended June 30,

Six Months Ended June 30,

Net income (loss), as reported

$ ( 2,686,303 )

Weighted average shares, basic

3 unchanged sentences

Diluted earnings per share

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.

the three and six months ended June 30, 2022, potentially dilutive securities of 1,391,156

and 1,155,136

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

For the three and six months ended June 30,

2021, potentially dilutive securities of 931,341

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

The computation of basic and diluted earnings

per share for the three and six months ended June 30, 2022 also excludes the approximately 1.4

million shares of common stock and approximately 465,000

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

8 – Stock-Based Compensation

4 unchanged sentences

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:

the Incentive Plan was 1,091,766 at June 30, 2022.

following table summarizes option activity during the six months ended June 30, 2022:

Schedule of Option Activity

5 unchanged sentences

Forfeited/Cancelled

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 March 31, 2022 was approximately $ 4.5 million.

Outstanding at June 30, 2022

Exercisable at June 30, 2022

total intrinsic value of options exercised during the six months ended June 30, 2022 was approximately $ 0.4 million.

The aggregate intrinsic

value of outstanding options at June 30, 2022 was approximately $ 3.7 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.

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.

of June 30, 2022, there were no unvested options and no unrecognized stock-based compensation expense related to options.

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 three months ended March 31, 2022:

RSUs and related activity for the six months ended June, 2022:

Schedule of Outstanding Restricted Stock Units and Related Activity

3 unchanged sentences

Forfeited/Cancelled

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

Unvested at June 30, 2022

of June 30, 2022, there was approximately $ 13.6 million of unrecognized stock-based compensation expense related to outstanding RSUs

which is expected to be recognized over a weighted-average period of 2.2 years.

3 unchanged sentences

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:

following table summarizes warrant activity during the six months ended June 30, 2022:

Schedule of Warrant Activity

4 unchanged sentences

Outstanding at December 31, 2021

Issued for adjustments to contingent purchase consideration

Forfeited/Cancelled

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.

Outstanding at June 30, 2022

intrinsic value of warrants exercised during the six months ended June 30, 2022 and 2021 was approximately $ 0.3 million and $ 0 , respectively.

The aggregate intrinsic value of outstanding warrants at June 30, 2022 was approximately $ 0.1 million.

total number of warrants exercisable at June 30, 2022 are 20,000 .

The ability to exercise the approximately 465,000 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.

5 unchanged sentences

The Company issued 0 and 5,548 shares of restricted stock for services during

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

the six months ended June 30, 2022 and 2021, respectively.

There was no unrecognized stock-based compensation expense related to restricted

3 unchanged sentences

Schedule of Recognized Stock-based Compensation Expense

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Restricted stock units

1 unchanged sentence

9 – Income Taxes

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 %.

For the three months ended June 30, 2022, the Company recognized a benefit from income taxes of $ 741,507 , representing an effective tax rate of 21.6 %.

For the six months ended June 30, 2022, the Company recognized expense from income taxes of $ 644,580 , representing an effective tax rate of 6.7 %.

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, 2021, the Company recognized expense from income taxes

of $ 1,985,640 .

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

For the three and six months ended June 30, 2021, the Company recognized expense from income taxes of $ 2,145,076 and $ 4,130,716 , respectively.

10 – Related Party Transactions

7 unchanged sentences

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 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.

$ 700,000 of accrued royalties at the rate of $ 10,000 per month through December 2021.

At June 30, 2022 and 2021, the aggregate balance

of this related party liability was $ 0 and $ 90,000 , respectively.

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

The Company expenses

2 unchanged sentences

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:

the three and six months ended June 30, 2022, components of lease expense are summarized as follows:

of Lease Expense

Three Months Ended March 31, 2022

Three Months Ended June 30, 2022

Six Months Ended June 30, 2022

Operating lease costs

2 unchanged sentences

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 June 30, 2022, the maturities of the Company’s lease liabilities are as follows:

of Maturities on Company Lease Liabilities

Year Ending December 31,

2022 (remainder)

6 unchanged sentences

of Other Information Related to Operating Lease

Three Months Ended March 31, 2022

Three Months Ended June 30, 2022

Six Months Ended June 30, 2022

Cash paid for operating leases included in operating cash flows

30 unchanged sentences

regulatory requirements, and general market conditions.

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

accounting purposes, common stock repurchased under the stock repurchase program is recorded based upon the transaction date of the applicable

Such repurchased shares are held in treasury and are presented using the cost method.

These shares are not retired and are considered

issued but not outstanding.

The following table shows the changes in treasury stock for the periods presented:

of Treasury Stock

Six Months Ended

June 30, 2022

Balance, beginning of period

Repurchases of common stock

Balance, end of period

14 – Subsequent Events

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

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

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