What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2023-08-10 compared with 2023-05-11 · 87 added, 48 removed, 173 unchanged (44% of the section changed)

74 unchanged sentences

a unique, groundbreaking portable PCR device and proprietary test cups (the “Co-Dx PCR Home platform”) that have been designed

to bring affordable, reliable polymerase chain reaction (“PCR”) to patients in point-of-care and even at-home settings.

platform is subject to U.S.

Food and Drug Administration (“FDA”) review and is not available for sale at the time of this

There is no guarantee that our Co-Dx PCR Home platform will receive the necessary regulatory approvals for commercialization,

or that, if regulatory approval is received, we will be able to successfully commercialize this platform.

to bring affordable, reliable polymerase chain reaction (“PCR”) to patients in point-of-care and at-home settings.

This platform

is subject to U.S.

Food and Drug Administration (“FDA”) review and is not available for sale at the time of this filing.

There is no guarantee that our Co-Dx PCR Home platform will receive the necessary regulatory approvals for commercialization, or that,

if regulatory approval is received, we will be able to successfully commercialize this platform.

diagnostics systems enable dependable, low-cost, molecular testing for organisms and genetic diseases by automating or simplifying historically

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OF OPERATIONS

Three Months Ended March 31, 2023 Compared to the Three Months ended March 31, 2022

the three months ended March 31, 2023, we generated revenues of $601,957, compared to revenues of $22,699,044 for the three months ended

March 31, 2022.

The decrease in revenue of $22,097,087 was primarily due to lower sales of our Logix Smart COVID-19 test developed in

response to the COVID-19 pandemic.

recorded cost of revenues of $502,241 for the three months ended March 31, 2023, compared to $3,281,951 for the three months ended March

Three Months Ended June 30, 2023 Compared to the Three Months ended June 30, 2022

the three months ended June 30, 2023, we generated revenues of $197,806, compared to revenues of $5,023,226 for the three months ended

June 30, 2022.

The decrease in revenue of $4,825,420 was primarily due to lower sales of our Logix Smart COVID-19 test developed in response

to the COVID-19 pandemic.

recorded cost of revenues of $459,095 for the three months ended June 30, 2023, compared to $915,432 for the three months ended June

The decrease in revenues combined with a larger percentage of fixed product production costs, as well as costs related to expired

inventory, resulted in a lower cost of revenues and lower gross margin percentage.

incurred total operating expenses of $10,050,366 for the three months ended March 31, 2023, compared to total operating expenses of $9,592,934

for the three months ended March 31, 2022.

incurred total operating expenses of $11,733,150 for the three months ended June 30, 2023, compared to total operating expenses of $8,254,832

for the three months ended June 30, 2022.

The increase in operating expenses was primarily due to increased personnel expenses, including

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and variable compensation.

sales and marketing expenses for the three months ended March 31, 2023 were $1,706,331, compared to $2,652,148 for the three months ended

March 31, 2022.

sales and marketing expenses for the three months ended June 30, 2023 were $1,732,966, compared to $1,472,225 for the three months ended

June 30, 2022.

The increase was primarily a result of increased stock-based compensation expense and tradeshow expense, partially offset

by decreased variable compensation, such as bonuses and commissions, and decreased third-party sales commissions.

and administrative expenses increased from $2,468,421 for the three months ended June 30, 2022 to $3,713,895 for the three months ended

June 30, 2023.

The increase in general and administrative expenses was primarily due to increased insurance expense and professional,

legal, and advisory fees, increased stock-based compensation expense, and increased bad debt expense, partially offset by decreased variable

compensation expense.

research and development expenses increased from $3,889,844 for the three months ended June 30, 2022 to $5,981,043 for the three months

ended June 30, 2023.

The primary increase in expenses was a result of increases in personnel related expenses, increases in expenses

related to development and clinical trials of the Co-Dx PCR Home platform, and increased stock-based compensation expense.

Income (expense)

the three months ended June 30, 2023 we had total other income of $837,294, compared to total other income of $719,228 for the three

months ended June 30, 2022.

The primary components of other income include a change in the fair value of contingent consideration liabilities

recorded in conjunction with the acquisitions of IdMo and ACI and interest income and realized gains from investments in marketable securities.

Income (loss)

realized a net loss for the three months ended June 30, 2023 of $8,918,825,

compared to a net loss for the three months ended June 30, 2022 of $2,686,303.

The larger net loss was primarily the result of a decrease

in revenues, combined with an increase of operating expenses, partially offset by changes in the fair value of acquisition contingencies

and income related to investments in marketable securities.

Additionally, we recorded an income tax benefit of $2,238,,320 for the three

months ended June 30, 2023, compared to an income tax benefit of $741,507 for the three months ended June 30, 2022.

Six Months Ended June 30, 2023 Compared to the Six Months ended June 30, 2022

the six months ended June 30, 2023, we generated revenues of $799,763, compared to revenues of $27,722,270 for the six months ended June

The decrease in revenue of $26,922,507 was primarily due to lower sales of our Logix Smart COVID-19 test developed in response

to the COVID-19 pandemic.

recorded cost of revenues of $961,336 for the six months ended June 30, 2023, compared to $4,197,383 for the six months ended June 30,

The decrease in revenues combined with a larger percentage of fixed product production costs, as well as costs related to expired

inventory, resulted in a lower cost of revenues and lower gross margin percentage.

incurred total operating expenses of $21,783,516 for the six months ended June 30, 2023, compared to total operating expenses of $17,847,766

for the six months ended June 30, 2022.

The increase in operating expenses was primarily due to increased personnel expenses, including

stock-compensation expense, and additional investment in research and development.

These increases were partially offset by decreased

expenses experienced in conjunction with our decrease in revenues, such as third-party sales commissions reflected in sales and marketing

and variable compensation.

sales and marketing expenses for the six months ended June 30, 2023 were $3,439,297, compared to $4,124,373 for the six months ended

June 30, 2022.

The decrease was primarily a result of decreased variable compensation, such as bonuses and commissions, and decreased

third-party sales commissions, partially offset by increased stock-based compensation expense.

and administrative expenses increased slightly from $2,922,195 for the three months ended March 31, 2022 to $3,013,965 for the three

months ended March 31, 2023.

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

professional, legal, and advisory fees, as well as increased stock-based compensation expense, partially offset by decreased variable

third-party sales commissions, partially offset by increased stock-based compensation expense and tradeshow expense.

and administrative expenses increased from $5,390,616 for the six months ended June 30, 2022 to $6,727,860 for the six months ended June

The increase in general and administrative expenses was primarily due to increased insurance expense and professional, legal,

and advisory fees, increased stock-based compensation expense, and increased bad debt expense, partially offset by decreased variable

compensation expense.

research and development expenses increased from $3,771,327 for the three months ended March 31, 2022 to $5,014,060 for the three months

ended March 31, 2023.

The primary increase in expenses was a result of increases in personnel related expenses, increases in materials

and supplies expenses related to Co-Dx PCR Home platform development, and increased stock-based compensation expense.

research and development expenses increased from $7,661,171 for the six months ended June 30, 2022 to $10,995,103 for the six months

ended June 30, 2023.

The primary increase in expenses was a result of increases in personnel related expenses, increases in expenses

related to development and clinical trials of the Co-Dx PCR Home platform, and increased stock-based compensation expense.

Income (expense)

the three months ended March 31, 2023 we had total other income of $1,935,448, compared to total other income of $3,276,523 for the three

months ended March 31, 2022.

the six months ended June 30, 2023 we had total other income of $2,772,742, compared to total other income of $3,995,751 for the six

months ended June 30, 2022.

The primary components of other income include a change in the fair value of contingent consideration liabilities

recorded in conjunction with the acquisitions of IdMo and ACI and gains realized from investments in marketable securities.

recorded in conjunction with the acquisitions of IdMo and ACI and interest income and realized gains from investments in marketable securities.

Income (loss)

realized a net loss for the three months ended March 31, 2023 of $5,755,391, compared with net income for the three months ended March

realized a net loss for the six months ended June 30, 2023 of $14,674,216, compared with net income for the six months ended June 30,

2022 of $9,028,292.

The decrease in net income was primarily the result of a decrease in revenues, combined with an increase of

operating expenses, as well as changes in the fair value of acquisition contingencies.

Additionally, we recorded an income tax benefit

of $2,259,811 for the three months ended March 31, 2023, compared to income tax expense of $1,386,087 for the three months ended March

The larger net loss was primarily the result of a decrease in revenues, combined with an increase of operating expenses,

partially offset by changes in the fair value of acquisition contingencies and income related to investments in marketable securities.

Additionally, we recorded an income tax benefit of $4,498,131 for the six months ended June 30, 2023, compared to income tax expense

of $644,580 for the six months ended June 30, 2022.

and Capital Resources

March 31, 2023, we had cash and cash equivalents of $6,359,380.

June 30, 2023, we had cash and cash equivalents of $13,830,846.

Additionally, we had $55,307,146 of marketable investment securities

that could readily be converted into cash if needed.

Additionally, our total current assets of March 31, 2023, were $85,922,919 compared

Additionally, our total current assets of June 30, 2023, were $77,385,400 compared

to total current liabilities of $5,115,655.

cash used in operating activities during the three months ended March 31, 2023 was $5,499,435, compared to cash provided by operating

activities of $7,805,838 for the three months ended March 31, 2022.

The decrease in cash from operating activities was primarily due

to decreased revenues and the impact of non-cash items.

used $10,632,792 of cash in investing activities during the three months ended March 31, 2023, primarily from purchases of marketable

securities, offset by maturities of marketable investments, compared to cash from investing activities of $858,666 during the three months

ended March 31, 2022.

cash used in financing activities was $482,196 for the three months ended March 31, 2023, compared to net cash provided by financing

activities of $150,001 for the same period in the prior year.

This decrease is due to the repurchase of outstanding common shares during

the first quarter.

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

our inventories and receivables and pay our operating expenses.

cash used in operating activities during the six months ended June 30, 2023 was $10,708,797, compared to cash provided by operating activities

of $9,460,222 for the six months ended June 30, 2022.

The decrease in cash from operating activities was primarily due to decreased revenues

and the impact of non-cash items.

cash provided by investing activities during the six months ended June 30, 2023 was $2,603,770, primarily from maturities of marketable

investment securities, compared to cash used in investing activities of $9,600,444 during the six months ended June 30, 2022.

cash used in financing activities was $1,037,930 for the six months ended June 30, 2023, compared to net cash used in financing activities

of $2,421,607 for the same period in the prior year.

This decrease is due to the repurchase of fewer outstanding common shares during

the first six months of the year, compared to the same period of the prior year.

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

and production of inventory and to pay our operating expenses.

We have increased our work force primarily in the area of research and

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the repurchase program and may suspend or discontinue it at any time without prior notice.

As of March 31, 2023 we have repurchased 4,190,670

As of June 30, 2023 we have repurchased 4,559,479

outstanding common shares under the repurchase program for a total of $15.2 million.

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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 2. Management’s Discussion and Analysis