What changed in this filing

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Item 1. Financial Statements

2022-11-10 compared with 2022-08-11 · 159 added, 140 removed, 558 unchanged (35% of the section changed)

3 unchanged sentences

BALANCE SHEETS

June 30, 2022

September 30, 2022

December 31, 2021

3 unchanged sentences

Accounts receivable, net

Income taxes receivable

Prepaid expenses and other current assets

28 unchanged sentences

5,000,000 shares authorized;

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

Common stock, $ 0.001

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

Common stock, $ 0.001 par value;

100,000,000 shares authorized;

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

34,332,182 shares issued and 30,917,856 shares outstanding as of September 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

3,414,326 and 0 shares held as of September 30, 2022 and December 31, 2021, respectively

( 12,994,373 )

9 unchanged sentences

STATEMENTS OF OPERATIONS

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Cost of revenue

5 unchanged sentences

Total operating expenses

Income from operations

Income (loss) from operations

( 6,535,615 )

1 unchanged sentence

Interest income

(Loss) on disposition of assets

Gain (loss) on disposition of assets

Gain on remeasurement of acquisition contingencies

Gain (loss) on equity method investment in joint venture

Loss on equity method investment in joint venture

Total other income (expense)

1 unchanged sentence

( 3,475,700 )

Income tax provision

Income tax provision (benefit)

( 2,114,638 )

( 1,470,058 )

Net income (loss)

6 unchanged sentences

STATEMENTS OF CASH FLOWS

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from operating activities

12 unchanged sentences

Accounts receivable

( 2,608,777 )

Prepaid expenses

4 unchanged sentences

Accounts payable, accrued expenses and other liabilities

( 1,702,718 )

Net cash provided by operating activities

1 unchanged sentence

Purchases of property and equipment

( 1,134,208 )

Proceeds from maturities of marketable investment securities

36 unchanged sentences

Common stock issued for option exercises

Common stock issued for warrant exercises

Stock-based compensation

8 unchanged sentences

$ 144,470,940

Stock-based compensation

Repurchases of common stock

( 10,394,895 )

( 1,361,062 )

Balance as of September 30, 2022

$ ( 12,994,373 )

$ 134,945,417

Convertible Preferred Stock

8 unchanged sentences

Balance as of June 30, 2021

Common stock issued for option exercises

Stock-based compensation

Balance as of September 30, 2021

$ 100,158,354

accompanying notes to unaudited consolidated financial statements

11 unchanged sentences

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.

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

Consolidated Financial Statements

6 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 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.

Operating results for the three and nine months ended September 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 June 30, 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.

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

December 31, 2021.

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

16 unchanged sentences

written off are recorded when collected.

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

At September 30, 2022, total accounts receivable was $ 8,969,317 with an allowance for uncollectable

accounts of $ 1,007,653 resulting in a net amount of $ 7,961,664 .

At December 31, 2021, total accounts receivable was $ 21,508,779 with an

allowance for uncollectable accounts of $ 669,597 resulting in a net amount of $ 20,839,182 .

At December 31, 2021, total accounts receivable was $ 21,508,779 with

an allowance for uncollectable accounts of $ 669,597 resulting in a net amount of $ 20,839,182 .

Equity-Method

8 unchanged sentences

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

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.

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.

At September 30, 2022, the Company had $ 5,441,726 in inventory, of which $ 1,283,850

was finished goods and $ 4,157,876 was raw materials.

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

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.

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

56 unchanged sentences

and development costs are expensed when incurred.

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.

For the three and nine months ended September 30, 2022, the Company expensed $ 5,037,461

and $ 12,698,632 of research and development costs, respectively.

For the three and nine months ended September 30, 2021, the Company

expensed $ 5,893,350 and $ 12,779,573 , 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 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

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, 2022.

One customer accounted for approximately 52 % of total revenue for the three months ended September 30, 2022,

and two customers together accounted for approximately 47 % of total revenue for the nine months ended September 30, 2022.

Two customers

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

accounted for approximately 49 % of total revenue for the nine months ended September 30, 2021.

customers accounted for more than 10 % of accounts receivable at September 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

These customers together accounted for approximately 67 % and 66 % of accounts receivable at September

30, 2022 and December 31, 2021, respectively.

22 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 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

Consequently, results for the three and nine months ended September 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;

25 unchanged sentences

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.

contingencies of $ 78,617 .

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 six months ended

June 30, 2022:

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

September 30, 2022:

Balance as of December 31, 2021

Measurement period adjustments

Balance as of June 30, 2022

Balance as of September 30, 2022

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

of Intangible Assets, Net

June 30, 2022

September 30, 2022

Weighted-Average

21 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 June 30, 2022, and December 31, 2021, by level

within the fair value hierarchy:

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

level within the fair value hierarchy:

Schedule of Fair Value Assets and Liabilities

June 30, 2022

September 30, 2022

Cash equivalents

12 unchanged sentences

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

treasury bills.

treasury bills as of December 31, 2021 and September 30, 2022, respectively.

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

4 unchanged sentences

( 7,079,446 )

Fair value as of June 30, 2022

Fair value as of September 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 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 June 30, 2022.

Prior to the probability adjustments, the warrants were

valued based on the following inputs:

stock as of September 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 September 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

September 30, 2022

December 31, 2021

3 unchanged sentences

Summary of Revenue by Geographic Area

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

United States

3 unchanged sentences

Rest of World

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

in the Company’s deferred revenue balance for the nine months ended September 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 June 30, 2022

Balance as of September 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 and six

months ended June 30, 2022:

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, 2022:

Schedule of Basic and Diluted Earnings Per Share

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Net income (loss), as reported

5 unchanged sentences

Diluted earnings per share

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.

the three and nine months ended September 30, 2022, potentially dilutive securities of 2,631,642 and 1,385,869 were excluded from the

calculation because their effect would have been anti-dilutive.

For 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.

The computation

of basic and diluted earnings per share for the three and nine months ended September 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

Incentive Plans

Co-Diagnostics, Inc.

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.

Company’s board of directors adopted, and shareholders approved, the Co-Diagnostics, Inc.

Amended and Restated 2015 Long Term Incentive

Plan (the “Incentive Plan”) providing for the issuance of stock-based incentive awards to employees, officers, consultants,

directors and independent contractors.

On August 31, 2022 the shareholders approved an increase in the number of awards available for

issuance under the Incentive Plan to an aggregate of 12,000,000 shares of common stock.

The number of awards available for issuance under

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

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

the Incentive Plan was 6,210,790 at September 30, 2022.

following table summarizes option activity during the nine months ended September 30, 2022:

Schedule of Option Activity

Number of Options

Weighted Average Exercise Price

Weighted Average

Weighted Average Fair Value

Weighted Average Remaining Contractual Life (Years)

Outstanding at December 31, 2021

Forfeited/Cancelled

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.

Outstanding at September 30, 2022

Exercisable at September 30, 2022

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

The aggregate

intrinsic value of outstanding options at September 30, 2022 was approximately $ 1.4 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 June 30, 2022, there were no unvested options and no unrecognized stock-based compensation expense related to options.

of September 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 six months ended June, 2022:

RSUs and related activity for the nine months ended September 30, 2022:

Schedule of Outstanding Restricted Stock Units and Related Activity

3 unchanged sentences

Forfeited/Cancelled

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.

Unvested at September 30, 2022

of September 30, 2022, there was approximately $ 17.1 million of unrecognized stock-based compensation expense related to outstanding

RSUs which is expected to be recognized over a weighted-average period of 2.4 years.

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

2 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 six months ended June 30, 2022:

following table summarizes warrant activity during the nine months ended September 30, 2022:

Schedule of Warrant Activity

Number of Warrants

Weighted Average Exercise Price

Exercise Price

Weighted Average Fair Value

Weighted Average Remaining Contractual Life (Years)

Outstanding at December 31, 2021

1 unchanged sentence

Forfeited/Cancelled

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.

Outstanding at September 30, 2022

intrinsic value of warrants exercised during the nine months ended September 30, 2022 and 2021 was approximately $ 0.3 million and $ 0 ,

respectively.

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

total number of warrants exercisable at September 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 six months ended June 30, 2022 and 2021, respectively.

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

stock issued.

the nine months ended September 30, 2022 and 2021, respectively.

There was no unrecognized stock-based compensation expense related to

restricted stock issued.

Compensation Expense

1 unchanged sentence

Schedule of Recognized Stock-based Compensation Expense

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Restricted stock units

1 unchanged sentence

9 – Income Taxes

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 three months ended September 30, 2022, the Company recognized a benefit from income taxes of $ 2,114,638 , representing an effective

tax rate of 43.8 %.

For the nine months ended September 30, 2022, the Company recognized a benefit from income taxes of $ 1,470,058 , representing

an effective tax rate of 30.0 %.

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, 2021, the Company recognized expense from income taxes of $ 2,145,076 and $ 4,130,716 , respectively.

Federal statutory rate of

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

For the three and nine months ended September 30, 2021, the Company recognized

expense from income taxes of $ 2,100,594 and $ 6,231,310 , respectively.

10 – Related Party Transactions

8 unchanged sentences

$ 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

At September 30, 2022 and 2021, the aggregate balance

of this related party liability was $ 0 and $ 30,000 , respectively.

4 unchanged sentences

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

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

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

of Lease Expense

Three Months Ended June 30, 2022

Six Months Ended June 30, 2022

Three Months Ended September 30, 2022

Nine Months Ended September 30, 2022

Operating lease costs

2 unchanged sentences

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

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

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

of Maturities on Company Lease Liabilities

8 unchanged sentences

of Other Information Related to Operating Lease

Three Months Ended June 30, 2022

Six Months Ended June 30, 2022

Three Months Ended September 30, 2022

Nine Months Ended September 30, 2022

Cash paid for operating leases included in operating cash flows

24 unchanged sentences

to $ 30.0 million of CODX common stock.

The repurchase program does not obligate the Company to acquire any particular amount of common

The repurchase program does not obligate the Company to acquire any particular number of common

shares, and the repurchase program may be suspended or discontinued at any time at the Company’s discretion.

9 unchanged sentences

of Treasury Stock

Six Months Ended

June 30, 2022

Nine Months Ended

September 30, 2022

Balance, beginning of period

2 unchanged sentences

14 – Subsequent Events

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

Company evaluated subsequent events pursuant to ASC Topic 855 and 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