What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-03-31 compared with 2025-03-27 · 152 added, 103 removed, 169 unchanged (60% of the section changed)

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Inc., a Utah corporation (the “Company” 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.

Our diagnostics systems enable dependable, low-cost, molecular testing for organisms and

genetic diseases by automating or simplifying historically complex procedures in both the development and administration of tests.

technical advance involves a novel, proprietary approach to PCR test design of primer and probe structure (“Co-Primers ® ”)

that dramatically reduces one of the key vexing issues of PCR amplification:

the exponential growth of primer-dimer amplification (false

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

Using our proprietary test design system and reagents,

we have designed and obtained regulatory approval to sell PCR diagnostic tests for the detection of COVID-19, influenza, tuberculosis,

hepatitis B and C, human papillomavirus, malaria, chikungunya, dengue, and the Zika virus.

These initial diagnostic tests are cleared

for use in clinical labs only and not for point-of-care or at-home use.

are currently developing a unique, groundbreaking portable diagnostic device and test system designed for point-of-care and at-home use.

The system is comprised of our PCR instrument that we refer to as the Co-Dx™ PCR Pro™ instrument, our patent-pending diagnostic

test cup system and a mobile application to be installed on the user’s mobile device.

We refer to the system as the “Co-Dx™

PCR platform which has been designed to bring affordable, reliable polymerase chain reaction (“PCR”) testing to patients

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

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

of infectious diseases.

Our diagnostics systems enable dependable, low-cost, molecular testing for organisms and genetic diseases by

automating or simplifying historically complex procedures in both the development and administration of tests.

CODX’s technical

advance involves a novel, proprietary approach to polymerase chain reaction (“PCR”) test design of primer and probe structure

(“Co-Primers®”) that dramatically reduces one of the key vexing issues of PCR amplification:

the exponential growth of

primer-dimer amplification (false positives) which adversely interferes with identification of the target DNA/RNA.

Using our proprietary

test design system and reagents, we have designed and obtained regulatory approval to sell PCR diagnostic tests for the detection of

COVID-19, influenza, tuberculosis, hepatitis B and C, human papillomavirus, malaria, chikungunya, dengue, and the Zika virus.

These initial

diagnostic tests are cleared for use in clinical labs only and not for point-of-care or at-home use.

have developed a portable diagnostic device and test system designed for point-of-care and at-home use.

The system is comprised of our

PCR instrument that we refer to as the Co-Dx™ PCR Pro ®

instrument , our patent-pending diagnostic test cup system and a mobile

application to be installed on the user’s mobile device.

We refer to the system as the “Co-Dx™ PCR platform”

which has been designed to bring affordable, reliable polymerase chain reaction (“PCR”) testing to patients in point-of-care

and at-home settings.

The Co-Dx PCR platform is subject to U.S.

Food and Drug Administration (“FDA”) review

and is not available for sale at the time of this filing.

In June 2024, we completed our first U.S.

Food and Drug Administration (FDA)

application for 510(k) clearance for the Co-Dx™ PCR Pro™ instrument, the Co-Dx PCR COVID-19 Test, and the Co-Dx PCR mobile

app for over-the-counter (OTC) use.

Following productive engagement with the FDA related to the regulatory submission, the Company withdrew

its 510(k) application.

The decision to withdraw the submission was based on discussions with the FDA regarding the ability to detect

a potential deterioration of one component of the test, related to shelf-life stability.

Following dialogue with the FDA and exploring

the various courses of action available, we determined that the best long-term solution would be to submit a version of the test that

has been enhanced to address the matter raised in the 510(k) review process.

The Company plans to submit the next iteration of the Co-Dx

PCR COVID-19 test for 510(k) OTC clearance, following the collection of clinical evaluation data to support the new test’s performance.

A new submission also allows the Company to incorporate more recent Co-Dx PCR platform developments into the COVID-19 test, which the Company

believes will also help create greater operational and manufacturing efficiencies, such as consolidating manufacturing processes to utilize

the next generation of test kits and instruments across all tests on the at-home and point-of-care Co-Dx PCR platform.

There is no guarantee

that our Co-Dx PCR 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.

Food and Drug Administration (“FDA”) review and is not available

for sale at the time of this filing.

In June 2024, we completed our first FDA application for 510(k) clearance for the Co-Dx PCR Pro instrument, the Co-Dx PCR COVID-19 Test, and the Co-Dx PCR mobile app for over-the-counter (OTC) use.

Following engagement

with the FDA during the review process, the Company voluntarily withdrew the 510(k) submission after discussions regarding the analytical

approach for detecting potential degradation of a test component over its intended shelf life.

While the Company believes that the matter

identified during the review process could have been addressed through additional development and clinical validation activities, management

determined that the capital and time required to resubmit the COVID-19 test for 510(k) clearance would be more effectively deployed toward

development and clinical validation of the Co-Dx PCR Flu A/B, COVID-19, RSV multiplex test (“ABCR”).

Moving focus to this

test allows the Company to incorporate more recent Co-Dx PCR platform developments into the design and test manufacturing process.

believes that a multiplex test targeting influenza A/B, COVID-19, and RSV better aligns with current clinical demand for comprehensive

upper respiratory infection testing in point-of-care settings.

Accordingly, clinical performance studies for the ABCR test are currently

There is no guarantee that our Co-Dx PCR 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.

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

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Our Logix Smart® COVID-19 test was designed, developed, submitted

for regulatory approval and ready to be used as an in vitro diagnostic or IVD in countries that accept CE marking for regulatory clearance

for regulatory approval and ready to be used as an in vitro diagnostic (“IVD”) in countries that accept CE marking for regulatory clearance

in a period of just over 30 days.

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strains of SARS-CoV-2 or other viruses should they not be detectable using currently available tests.

addition, continued development has demonstrated the unique properties of our Co-Primers technology that we believe makes it ideally suited

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

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

addition, continued development has demonstrated the unique properties of our Co-Primers technology that we believe makes it ideally

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

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

scientists use the complex mathematics of DNA/RNA PCR test design to engineer and optimize PCR tests and to automate algorithms that

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Ownership of our proprietary platform permits us the advantage of avoiding payment of patent

royalties required by other PCR test systems, which may allow the sale of diagnostic PCR tests at a lower price than competitors, while

enabling us to maintain profit margins.

royalties required by other PCR test systems, which may allow for the sale of diagnostic PCR tests at a lower price than competitors,

while enabling us to maintain profit margins.

proprietary test design process involves identifying the optimal locations on the target genes for amplification and pairing the locations

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product is ready to proceed to validation in an evaluation either in our laboratory or in an independent laboratory setting using initial

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

our proprietary test design system and reagents, we have designed and obtained regulatory approval in the European Community and in India

to sell PCR diagnostic tests for the detection of COVID-19, influenza, tuberculosis, hepatitis B and C, human papillomavirus, malaria,

chikungunya, dengue, and the Zika virus.

In the United States, we obtained Emergency Use Authorization (“EUA”) for our Logix

Smart ® COVID-19 detection test from the FDA, and we sell that test to qualified labs.

In addition, our COVID-19 detection test and certain of our other suite of COVID-19 products have been cleared for sale in countries

such as the United Kingdom, Australia, India, and Mexico by the regulatory bodies in those countries and have been registered for sale

in many more countries.

In connection with the sale of our tests we may sell diagnostic equipment from other manufacturers, including

an OEM’s PCR instrument which we refer to here as the “Co-Dx Box”.

In addition to testing for infectious disease, Co-Primers technology lends

itself to identifying any section of a DNA or RNA strand that describes any type of genetic trait, which creates several significant applications.

We, in conjunction with our customers, have designed and licensed tests that identify genetic traits in plant and animal genomes.

have commercialized three multiplexed tests to test mosquitos for the presence of diseases they carry, which enables municipalities to

concentrate their efforts in managing mosquito populations in specific areas where mosquitos carrying deadly viruses are known to breed.

production tests to confirm that the product as designed meets the user’s needs.

our proprietary test design system and reagents, we have designed and obtained regulatory clearance in the European Community and in

India (along with our joint venture, CoSara) to sell PCR diagnostic tests for the detection of COVID-19, influenza, tuberculosis, hepatitis

B and C, human papillomavirus, malaria, chikungunya, dengue, and the Zika virus.

In the United States, we obtained Emergency Use Authorization

(“EUA”) for our Logix Smart® COVID-19 detection test from the FDA, and we sell that test to qualified labs.

our COVID-19 detection test and certain of our other suite of COVID-19 products have been cleared for sale in countries such as the United

Kingdom, Australia, India, and Mexico by the regulatory bodies in those countries and have been registered for sale in many more countries.

In connection with the sale of our tests we may sell diagnostic equipment from other manufacturers, including an OEM’s PCR instrument

which we refer to here as the “Co-Dx Box™”.

addition to testing for infectious diseases, Co-Primers technology lends itself to identifying any section of a DNA or RNA strand that

describes any type of genetic trait, which creates several significant applications.

We, in conjunction with our customers, have designed

tests that identify genetic traits in plant and animal genomes.

We also have commercialized three multiplexed tests to test mosquitos

for the presence of diseases they carry, which enables municipalities to concentrate their efforts in managing mosquito populations in

specific areas where mosquitos carrying deadly viruses are known to breed.

OF OPERATIONS

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Depreciation and amortization

Impairment charges

Total operating expenses

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(40,081,310 )

(10,084,042 )

Interest income, net

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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, net

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(37,581,640 )

(10,930,274 )

Income tax provision (benefit)

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of revenues decreased by $0.8 million from $1.0 million for the year ended December 31, 2024 to $0.2 million for the year ended December

Included within cost of revenues is a decrease of approximately $0.1 million for the year ended December 31, 2024, and an increase

Included within cost of revenues is a decrease of approximately $0.1 million for the year ended December 31, 2025, and a decrease

of approximately $0.1 million for the year ended December 31, 2024, related to reserves against certain raw materials and finished goods

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the year ended December 31, 2024.

The decrease in operating expenses was primarily due to decreased stock-based compensation expense,

bad debt expense and expense related to development of and clinical trials for the Co-Dx PCR platform.

These decreases were partially

offset by increased personnel related and legal expenses.

The increase in operating expenses was primarily due to the impairment charge recognized for in-process research and development intangible assets, partially offset by decreased legal expenses, stock-based compensation

expense, and personnel related expenses.

and marketing expenses for the year ended December 31, 2025, were $2.4 million compared to $4.5 million for the year ended December 31,

The decrease of $2.4 million was primarily a result of decreased stock-based compensation expense, tradeshow and travel expenses,

consulting and professional services expenses, and personnel related expenses.

and administrative expenses for the year ended December 31, 2024 were $16.2 million compared to $14.3 million for the year ended December

The increase of $1.9 million was primarily due to increased legal expenses, partially offset by decreases in stock-based compensation

expense, bad debt expense, consulting and professional services expense, and insurance expense.

The decrease of $2.1 million primarily a result of decreased stock-based compensation expense, tradeshow and travel expenses, consulting

and professional services expenses, and personnel related expenses.

and administrative expenses for the year ended December 31, 2025, were $9.1 million compared to $16.2 million for the year ended

December 31, 2024.

The decrease of $7.1 million was primarily due to decreases in legal expense, stock-based compensation expense

and consulting and professional services expense, partially offset by increased expenses related to transaction advisory services

and development expenses for the year ended December 31, 2025, were $19.1 million compared to $21.0 million for the year ended December

The decrease of $2.0 million was primarily a result of decreased expenses related to development of and clinical trials for

the Co-Dx PCR platform and stock-based compensation expense, partially offset by increases in personnel expense and professional services

The decrease of $1.8 million was primarily a result of decreased expenses related to development of the Co-Dx PCR platform,

personnel related expenses, and stock-based compensation expense, partially offset by increases in expenses related to clinical

trials for the Co-Dx PCR platform and professional services expense.

During the year ended December 31, 2025, the Company

recognized impairment charges of $18.9 million related to in-process research and development intangible assets recorded in conjunction

with the acquisitions of Idaho Molecular, Inc.

and Advanced Conceptions, Inc.

income was $1.7 million for the year ended December 31, 2025, compared to other income of $2.5 million for the year ended December 31,

The decrease in other income of $2.1 million was primarily due to a change in the fair value of contingent consideration liabilities,

an increased loss related to the Company’s joint venture investment, and decreased realized gains from investments in marketable

realized a net loss for the year ended December 31, 2024 of $37.6 million compared to $35.3 million for the year ended December 31, 2023.

The larger net loss of $2.3 million was primarily the result of decreases in grant revenue, changes in the fair value of acquisition

contingencies, and decreases in realized gains from investments in marketable securities, partially offset by a decrease in operating

Additionally, we recorded income tax expense of $0.1 million during the year ended December 31, 2024, compared to an income

tax benefit of $2.8 million for the year ended December 31, 2023.

The primary reason for the change in the provision for income taxes

is a result of the Company now recording a full valuation allowance.

The decrease in other income of $0.8 million was primarily due to decreases in interest income and realized gains from investments

in marketable securities.

We realized a net loss for the year ended December

31, 2025 of $46.9 million compared to $37.6 million for the year ended December 31, 2024.

The larger net loss of $9.3 million was primarily

the result of the recognition of intangible asset impairment charges and decreases in grant revenues, partially offset by decreases in

operating expenses.

Additionally, we recorded an income tax benefit of $1.6 million during the year ended

December 31, 2025, compared to an income tax expense of $0.1 million for the year ended December 31, 2024.

The current year income tax

benefit relates primarily to new United States tax legislation which was signed into law during 2025 which resulted in the Company being

eligible for certain federal and state tax refunds related to prior years.

AND CAPITAL RESOURCES

December 31, 2024, we had cash and cash equivalents of $2.9 million and marketable investment securities of $26.8 million.

our marketable investment securities an important part of our liquidity and focus such investments in securities that can readily be

converted into cash if needed.

Additionally, our total current assets at December 31, 2024, were $32.3 million compared to total current

liabilities of $7.3 million.

December 31, 2025, we had cash and cash equivalents of $11.9 million.

Additionally, our total current assets at December 31, 2025, were

$13.7 million compared to total current liabilities of $3.5 million.

cash used in operating activities during the year ended December 31, 2025 was $29.1 million, compared to net cash used in operating activities

of $29.2 million for the year ended December 31, 2024.

The increase in cash used in operating activities was primarily due to decreases

in revenue, grant funding, and realized gains on investments, and increases in cash-payable operating expenses.

The slight decrease in cash used in operating activities was primarily due to

lower operating expenses, primarily legal expenses, offset by decreases in grant revenue, net interest income, and realized gains on

cash provided by investing activities was $26.3 million for the year ended December 31, 2025, compared to net cash provided by investing

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The increase in cash provided by investing activities is primarily

due to interest and realized gains related to marketable investment securities, as well as the redemption of certain investments as they

cash provided by financing activities was $0.1 million for the year ended December 31, 2024, compared to $1.4 million of cash used in

financing activities for the year ended December 31, 2023.

due to the timing of the redemption of certain investments as they matured.

cash provided by financing activities was $11.8 million for the year ended December 31, 2025, compared to $0.1 million of cash provided

by financing activities for the year ended December 31, 2024.

The cash provided by financing activities during 2025 relates to issuances

of common stock, compared to cash used in financing activities for repurchases of outstanding common shares during 2023.

of common stock under the ATM and through registered direct offerings.

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

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capital to come from additional issuances of our common stock or other equity-based securities with existing and new investors similar

to those that have provided funding in the past.

We have entered into an Equity Distribution Agreement (the “ATM Agreement”)

with Piper Sandler & Co.

(“Piper Sandler”), pursuant to which we may offer and sell shares of our common stock having

an aggregate offering price of up to $17,111,650 from time to time through Piper Sandler acting as our agent, under our prospectus supplement

dated October 18, 2024.

As of December 31, 2024, we have sold 314,707 shares of common stock under the ATM Agreement resulting in net

proceeds to the Company of $0.2 million.

to those that have provided funding in the past or debt financing.

September 2025, the Company completed a registered direct offering of 320,634 shares of its common stock to two institutional investors

at an offering price of $12.00 per share, resulting in gross proceeds of approximately $3.8 million before deducting placement agent fees

and other offering expenses.

The shares were offered and sold pursuant to the Company’s effective shelf Registration Statement

on Form S-3 (File No.

Maxim Group LLC acted as placement agent for the transaction.

The Company intends to use the net proceeds

from the offering for working capital and general corporate purposes.

See Note 16 – Registered Direct Offerings to the consolidated financial statements for additional information regarding this transaction.

October 2025, the Company terminated its Amended and Restated Equity Distribution Agreement with Piper Sandler & Co.

and Clear Street,

LLC, under which it had previously sold an aggregate of 151,675 shares of common stock for net proceeds of approximately $1.7 million.

Concurrently, the Company entered into a new Equity Distribution Agreement with Maxim Group LLC to establish an at-the-market (“ATM”)

equity offering program, under which the Company may offer and sell shares of its common stock having an aggregate offering price of

up to $10.0 million from time to time.

In October 2025, the Company filed a prospectus supplement with the SEC relating to the new ATM

program, registering up to approximately $4.1 million of shares under the shelf registration statement.

The Company expects that any

proceeds from sales under the new ATM program, if utilized, would provide additional financial flexibility to support its working capital

requirements and general corporate purposes.

As of December

31, 2025, the Company had sold 31,667 shares of common stock under the Agreement, resulting in net proceeds to the Company of approximately

There can be no assurance as to the timing or amount of any further sales under the new

See Note 15 – At the Market Agreement to the consolidated financial statements for additional information

regarding this transaction.

October 2025 the Company completed a second registered direct offering of 400,076 shares of

its common stock and 24,167 pre-funded common stock purchase warrants to two institutional investors at offering prices of $16.50 per

share and $16.497 per pre-funded warrant, resulting in gross proceeds of approximately $7.0 million before deducting placement agent

fees and other offering expenses.

The shares were offered and sold pursuant to the Company’s effective shelf Registration Statement

on Form S-3 (File No.

Maxim Group LLC acted as placement agent for the transaction.

The Company intends to use the net proceeds

from the offering for working capital and general corporate purposes.

See Note 16 – Registered Direct Offerings to the consolidated financial statements for additional information regarding this transaction.

On January 1, 2026, we effected a 1-for-30 reverse

The Reverse Stock Split reduced the number of shares of common stock outstanding from approximately 62.9 million shares to

approximately 2.1 million shares.

Although this Reverse Stock Split allowed us to regain compliance with Nasdaq’s continued listing

requirements, there can be no assurance that we will maintain compliance with all applicable listing standards in the future.

we are seeking to obtain additional equity and/or debt financing, such funding is not assured and may not be available to us on favorable

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would increase.

During the fourth quarter of 2025, we identified impairment

indicators for our in-process research and development intangible assets, primarily due to a significant and sustained decline in our

stock price and market capitalization compared to the assets’ net book value.

We remeasured the fair value of these assets and recognized

non-cash impairment charges of $18.9 million.

This amount is reflected as impairment charges in the consolidated statements of operations

and comprehensive loss for 2025.

We did not recognize any impairment charges during 2024.

periodically review inventory for both potential obsolescence and potential declines in anticipated selling prices.

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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-K

Item 7. Management’s Discussion and Analysis