Co-Diagnostics, Inc. 10-K

ITEM 1A. RISK FACTORS Risks Related to Our Business and Industry We have limited commercial history upon which to base our prospects and are not certain that we will achieve profitability in the future. We have a limited operating history. We began operations in April 2013. Our accumulated deficit was $80.4 million and $33.5 million as of December 31, 2025 and 2024, respectively. We do not have any way of predicting when or if we will achieve profitability in the future. Potential investors should be aware of the difficulties normally encountered by early commercial stage companies, many of which are beyond our control, including substantial risks and expenses in the course of developing new diagnostic tests, obtaining regulatory approval of clearance to commercialize such tests, establishing or entering new markets, organizing operations and marketing procedures. The likelihood of our success must be considered in light of these risks, expenses, complications and delays, and the competitive environment in which we operate. There is, therefore, nothing at this time upon which to base an assumption that our business plan will prove successful, and we may not be able to generate significant revenue, raise additional capital or operate profitably. We will continue to encounter risks and difficulties frequently experienced by early commercial stage companies, including scaling up our infrastructure and headcount, and may encounter unforeseen expenses, difficulties or delays in connection with our growth. In addition, as a result of the start-up nature of our business, we expect to continue to sustain substantial operating expenses and may not be able to continue generating sufficient revenues to cover expenditures. Any investment in our company is therefore highly speculative and could result in the loss of any investment. Our future success is dependent on our development of our Co-Dx PCR platform and securing regulatory approval for the platform including the PCR Pro instrument and related diagnostic tests, demand for infectious disease diagnostics and upon our ability to develop and market other commercially accepted diagnostic tests for our PCR platform. Our future success will depend, in part, on our development of our Co-Dx PCR platform and securing regulatory approval for the platform including the PCR Pro instrument and related diagnostic tests, our ability to develop and sell sufficient quantities of other diagnostics tests, and our ability to successfully and profitably market our Co-Dx PCR platform. Attracting new customers and distribution networks requires substantial time and expense. Any failure to obtain regulatory approval for our product candidates and to increase sales of our diagnostic tests in sufficient quantities to achieve profitability in a timely manner would adversely affect our operating results. Many factors could affect the market acceptance and commercial success of any of our diagnostic tests and devices, including: ● Our ability to develop additional infectious disease diagnostic tests for which there is a commercial market; ● Our ability to obtain regulatory clearance to commercialize our product candidates; ● our ability to convince our potential customers of the advantages and economic value of our tests over competing technologies and diagnostic tests; ● the breadth of our test menu relative to competitors; ● changes to policies, procedures or currently accepted best practices in clinical diagnostic testing; ● the extent and success of our marketing and sales efforts; and ● our ability to manufacture in quantity our commercial diagnostic tests and meet demand in a timely fashion. 13 The diagnostic market is highly competitive, and we may not be able to compete effectively against the larger, well-established companies that dominate this market or emerging and small innovative companies that may seek to obtain or increase their share of the market. The markets for diagnostic products are intensely competitive, and many of our competitors are much larger and have substantially more financial and human resources than we do. Many have long histories and strong reputations within the industry, and a relatively small number of companies dominate these markets. These companies enjoy significant competitive advantages over us, including: ● broad product offerings, which address the needs of health care providers in a wide range of applications; ● products that are supported by long-term clinical data; ● greater experience in, and resources for, launching, marketing, distributing and selling products, including strong sales forces and established distribution networks; ● extensive intellectual property portfolios and greater resources for patent protection; ● greater financial and other resources for product research and development; ● greater experience in obtaining and maintaining FDA and other regulatory clearances and approvals for products and product enhancements; ● established manufacturing operations and contract manufacturing relationships; ● significantly greater name recognition and widely recognized trademarks; and ● established relationships with healthcare providers and payers. Our products and any product candidates that we may introduce into the market may not enable us to overcome the competitive advantages of these large and dominant companies. In addition, even if we successfully introduce additional product candidates into the market, emerging and small innovative companies may seek to increase their market share and they may eventually possess competitive advantages, which could adversely impact our business. Our competitors may also employ pricing strategies that could adversely affect the pricing of our products. We depend on a limited number of third-party suppliers for key raw materials used in the manufacturing of our products, and the loss of these third-party suppliers or their inability to supply us with adequate raw materials could harm our business. We rely on a limited number of third-party suppliers for the raw materials required for the production of our diagnostic products and product candidates. Our dependence on a limited number of third-party suppliers involves several risks, including limited control over pricing, availability, quality, and delivery schedules for raw materials. We have no supply agreements in place with any of our suppliers and cannot be certain that our current suppliers will continue to provide us with the quantities of raw materials that we require or that satisfy our anticipated specifications and quality requirements. Any supply interruption in limited or single sourced raw materials could materially harm our ability to manufacture our products until a new source of supply, if any, could be identified and qualified. We may be unable to find a sufficient alternative supply channel within a reasonable time or on commercially reasonable terms. Any performance failure on the part of our suppliers could delay the production of our products and product candidates and delay the development and commercialization of our product candidates, including limiting supplies necessary for commercial sale, clinical trials and regulatory approvals, which could have a material adverse effect on our business. In order to be successful, we must expand our available product lines by commercializing new product candidates, but we may not be able to do so in a timely fashion and at expected costs, or at all. Although we are currently manufacturing diagnostic kits for commercialization, in order to be successful, we will need to expand our product lines to include other diagnostic products. To succeed in our commercialization efforts, we must effectively continue product development and testing, find new strategic partners, obtain regulatory clearances and approvals, and enhance our sales and marketing capabilities. Because of these uncertainties, there is no assurance that we will succeed in bringing any of our current or future product candidates to market. If we fail in bringing our product candidates to market, or experience delays in doing so, we will not generate revenues as planned and will need to curtail operations or seek additional financing earlier than otherwise anticipated. We are dependent on our senior management team, scientific team, and external advisors, and the loss of any of them could harm our business, including by adversely affecting our ability to effectuate our business strategy. The members of our current senior management team may not be able to successfully implement our strategy. In addition, we have not entered into employment agreements with any of the members of our senior management team. There are no assurances that the services of any of these individuals will be available to us for any specified period of time. The successful integration of our senior management team, the loss of members of our senior management team, scientific team and key external advisors, or our inability to attract or retain other qualified personnel or advisors could have a material adverse effect on our business, financial condition and results of operations. We may not have a sufficient number of qualified personnel to effectuate our business strategy, which could have a material adverse effect on our business, financial condition and results of operations. 14 If we experience significant disruptions in our information technology systems, our business, results of operations and financial condition could be adversely affected. The efficient operation of our business depends on our information technology systems. We rely on our information technology systems to effectively manage our sales and marketing, accounting and financial functions; manufacturing processes; inventory; scientific and product development functions; and our research and development functions. As such, our information technology systems are vulnerable to damage or interruption including from earthquakes, fires, floods and other natural disasters; terrorist attacks and attacks by computer viruses or hackers; power losses; and computer systems, or Internet, telecommunications or data network failures. The failure of our information technology systems to perform as we anticipate or our failure to effectively implement new systems could disrupt our entire operation and could result in decreased sales, increased overhead costs, excess inventory and product shortages, all of which could have a material adverse effect on our reputation, business, results of operations and financial condition. Cybersecurity risks and the failure to maintain the integrity of company, employee or customer data could expose us to data loss, litigation and liability, and our reputation could be significantly harmed. We and third-party service providers collect and retain large volumes of data, including personally identifiable information regarding clinical trial participants and others, for business purposes, including for regulatory, research and development and commercialization purposes, and our collaborators’ various information technology systems enter, process, summarize and report such data. We also maintain personally identifiable information about our employees. The integrity and protection of our company, employee and clinical data is critical to our business. We are subject to significant data security and privacy laws and regulations. These regulations impose significant requirements on how we maintain, use, and protect such information. Maintaining compliance with these evolving regulations and requirements could be difficult and may increase our expenses. In addition, a penetrated or compromised data system or the intentional, inadvertent or negligent release or disclosure of data could result in theft, loss or fraudulent or unlawful use of company, employee or clinical data which could harm our reputation, disrupt our operations, or result in remedial and other costs, fines or lawsuits. Risks Related to Our Capital Resources and Impairments We will require additional financing and our failure to obtain additional funding would force us to delay, reduce or eliminate our product development programs or commercialization efforts. We currently have limited committed sources of capital, and we have limited liquidity. Our cash and cash equivalents as of December 31, 2025 were $11.9 million. The Company previously maintained an Amended and Restated Equity Distribution Agreement (the “Prior ATM Agreement”) with Piper Sandler & Co. (“Piper Sandler”) and Clear Street, LLC (“Clear Street”), pursuant to which the Company could offer and sell shares of its common stock having an aggregate offering price of up to $17,111,650 from time to time through Piper Sandler and Clear Street, acting as sales agents, under a prospectus supplement dated October 18, 2024. As of December 31, 2025, the Company had sold 151,675 shares of common stock under the Prior ATM Agreement, resulting in net proceeds to the Company of approximately $1,660,805. The Prior ATM Agreement was subsequently terminated, and no further sales will be made under that program. On October 20, 2025, the Company entered into a new Equity Distribution Agreement (the “Agreement”) with Maxim Group LLC (“Maxim”) to establish an at-the-market (“ATM”) equity offering program. Pursuant to the Agreement, the Company may offer and sell shares of its common stock, par value $0.001 per share, having an aggregate offering price of up to $10.0 million, from time to time through Maxim, acting as the Company’s sales agent. Under the terms of the Agreement, the Company will pay Maxim a commission equal to 3.0% of the gross proceeds from the sale of any shares and will reimburse Maxim for certain legal and other out-of-pocket expenses incurred in connection with its services. Sales of common stock, if any, may be made in transactions deemed to be “at-the-market” offerings as defined in Rule 415 under the Securities Act of 1933, as amended, including sales made by means of ordinary brokers’ transactions on The Nasdaq Capital Market or otherwise at market prices prevailing at the time of sale or at prices negotiated with Maxim. The Company is not obligated to sell any shares under the Agreement and may terminate the offering at any time in accordance with its terms. The shares will be issued pursuant to the Company’s shelf Registration Statement on Form S-3 (File No. 333-270628), which was declared effective by the Securities and Exchange Commission on April 6, 2023. On October 20, 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. 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 $258,563. If adequate funds to develop our product candidates and fund operations are not available on a timely basis, we may terminate or delay the development of one or more of our product candidates, or delay activities necessary to commercialize our product candidates. Additional funding may not be available to us on acceptable terms, or at all. Any additional equity financing, if available, may not be available on favorable terms and will most likely be dilutive to our current stockholders, and debt financing, if available, may involve more restrictive covenants. Our ability to access capital when needed is not assured and, if not achieved on a timely basis, will materially harm our business, financial condition and results of operations or could cause us to cease operations. 15 Our independent registered public accounting firm has included an explanatory paragraph relating to our ability to continue as a going concern in its report on our audited financial statements. We may be unable to continue to operate without the threat of liquidation for the foreseeable future. Our report from our independent registered public accounting firm for the year ended December 31, 2025 includes an explanatory paragraph stating that our recurring losses from operations raises substantial doubt about our ability to continue as a going concern. If we are unable to obtain sufficient additional funding, our business, prospects, financial condition and results of operations will be materially and adversely affected, and we may be unable to continue as a going concern. If we are unable to continue as a going concern, we may have to liquidate our assets and may receive less than the value at which those assets are carried on our consolidated financial statements, and it is likely that investors will lose all or a part of their investment. Future reports from our independent registered public accounting firm may also contain statements expressing doubt about our ability to continue as a going concern. If we seek additional financing to fund our business activities in the future and there remains doubt about our ability to continue as a going concern, investors or other financing sources may be unwilling to provide additional funding on commercially reasonable terms or at all. Raising additional capital by issuing securities or through debt financings or licensing arrangements will likely cause dilution to existing stockholders, restrict our operations or require us to relinquish proprietary rights. To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest will likely be diluted, and the terms may include liquidation or other preferences that adversely affect your rights as a stockholder. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions such as incurring additional debt, making capital expenditures or declaring dividends. If we raise additional funds through collaboration and licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies or products or grant licenses on terms that are not favorable to us. Any of these events could adversely affect our ability to achieve our product development and commercialization goals and have a material adverse effect on our business, financial condition and results of operations. Risks Related to Regulatory Approval of Our Products and Other Government Regulations We received Emergency Use Authorization or EUA for our Logix Smart COVID-19 test in the US. For our existing EUA and any new EUA, the FDA may revoke any EUA where it is determined that the underlying health emergency no longer exists or warrants such authorization, which would adversely impact our ability to market our COVID-19 test in the United States. The FDA has the authority to grant an EUA to allow unapproved medical products to be used in an emergency to diagnose, treat or prevent serious or life-threatening diseases or conditions when there are no adequate, approved and available alternatives. During the COVID 19 pandemic the FDA determined that circumstances existed to justify the authorization of emergency use of medical devices, including alternative products used as medical devices, during the COVID-19 pandemic. On April 3, 2020, we received an EUA from the FDA for our Logix Smart Coronavirus Disease 2019 (COVID-19) kit for use on individuals who are suspected of COVID-19 by their healthcare provider. We cannot predict how long the EUA for our COVID-19 test will remain in place. The FDA may revoke an EUA where it is determined that the underlying health emergency no longer exists or warrants such authorization. The FDA may take such a position at any time and without notice and, therefore, we cannot predict how long our EUAs will remain in place. The FDA may also revoke an EUA when the circumstances justifying its issuance no longer exist, such as when an alternative is authorized for marketing through the standard procedures, including through a 510(k) clearance. If our existing EUAs are revoked prior to us having received regulatory approval to commercialize our COVID-19 test through a traditional pathway, we may not be able to obtain required clearances or approvals in a timely manner, or at all, and one or more of our competitors may obtain the necessary clearances or approvals for their products before we do. In addition, we would be required to cease our commercialization efforts, which would substantially and negatively impact our business. As a result, any such revocation could adversely impact our business, financial condition and results of operations. 16 Our long-term success depends substantially on our ability to obtain regulatory clearance or approval and thereafter commercialize our product candidates; we cannot be certain that we will be able to do so in a timely manner or at all. The process of obtaining regulatory clearances or approvals to market a medical diagnostic from the FDA or similar regulatory authorities outside of the United States can be costly and time consuming, and there can be no assurance that such clearances or approvals will be granted on a timely basis, or at all. The FDA’s 510(k) clearance process generally takes one to six months from the date of submission, depending on whether a special or traditional 510(k) premarket notification has been submitted, but can take significantly longer. An application for premarket approval, or PMA, must be submitted to the FDA if the device cannot be cleared through the 510(k) clearance process or is not exempt from premarket review by the FDA. The PMA process almost always requires one or more clinical trials and can take two to three years from the date of filing, or even longer. If we are required to obtain approval of any of our products through the PMA process, the costs associated with such a process will be significant, which could adversely affect our financial performance and results of operations. In addition, a submission through the PMA process would require us to delay commercialization of such product candidates until after approval is received, if ever. If we are unable to commercialize our product candidates in a timely manner, or at all, our business will be adversely affected. Similar to our compliance with U.S. regulatory requirements, we must obtain and comply with international requirements, in order to market and sell our products outside of the United States and we may only promote and market our products, if approved, as permitted by applicable regulatory authorities. There is no guarantee that we will receive the necessary regulatory approvals for our product candidates either inside the United States or internationally. If our product candidates do not receive necessary regulatory approvals, our business could be materially and adversely affected. Our current and future relationships with third-party payers and current and potential customers in the United States and elsewhere may be subject, directly or indirectly, to applicable anti-kickback, fraud and abuse, false claims, transparency, health information privacy and security and other healthcare laws and regulations, which could expose us to criminal sanctions, civil penalties, contractual damages, reputational harm administrative burdens and diminished profits and future earnings. Our current and future arrangements with third-party payers and current and potential customers, including providers and physicians, may expose us to broadly applicable fraud and abuse and other healthcare laws and regulations, including, without limitation, the federal Anti-Kickback Statute and the federal False Claims Act, which may constrain the business or financial arrangements and relationships through which we sell, market and distribute our products. In addition, we may be subject to transparency laws and patient privacy regulations by U.S. federal and state governments and by governments in foreign jurisdictions in which we conduct our business. The applicable federal, state and foreign healthcare laws and regulations that may affect our ability to operate include: ● the federal Anti-Kickback Statute, which prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made under federal healthcare programs, such as Medicare and Medicaid; ● federal civil and criminal false claims laws and civil monetary penalty laws, including the federal False Claims Act, which impose criminal and civil penalties, including civil whistleblower or qui tam actions, against individuals or entities for knowingly presenting, or causing to be presented, to the federal government, including the Medicare and Medicaid programs, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government; ● the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which imposes criminal and civil liability for executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters; ● HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, or HITECH, and their respective implementing regulations, which impose obligations on covered healthcare providers, health plans, and healthcare clearinghouses, as well as their business associates that create, receive, maintain or transmit individually identifiable health information for or on behalf of a covered entity, with respect to safeguarding the privacy, security and transmission of individually identifiable health information; ● the Physician Payments Sunshine Act, which requires (i) manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with specific exceptions, to report annually to CMS information related to certain “payments or other transfers of value” made to physicians, which is defined to include doctors, dentists, optometrists, podiatrists and chiropractors, and teaching hospitals, (ii) applicable manufacturers and applicable group purchasing organizations to report annually to CMS ownership and investment interests held in such entities by physicians and their immediate family members, with data collection beginning on August 1, 2013, (iii) manufacturers to submit reports to CMS by the 90 th day of each calendar year, and (iv) disclosure of such information by CMS on a publicly available website; and ● analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payers, including private insurers; state and foreign laws that require medical device companies to comply with the medical device industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers; state and foreign laws that require medical device manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; and state and foreign laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts. 17 Efforts to ensure that our business arrangements with third parties will comply with applicable healthcare laws and regulations may involve substantial costs. It is possible that governmental authorities will conclude that our business practices may not comply with current or future statutes, regulations or case law involving applicable fraud and abuse or other healthcare laws and regulations. If our operations are found to be in violation of any of these laws or any other governmental regulations that may apply to us, we may be subject to significant civil, criminal and administrative penalties, including, without limitation, damages, fines, imprisonment, exclusion from participation in government healthcare programs, such as Medicare and Medicaid, and the curtailment or restructuring of our operations, which could have a material adverse effect on our business. If any of the physicians or other healthcare providers or entities with whom we expect to do business, including our collaborators, are found not to be in compliance with applicable laws, they may be subject to criminal, civil or administrative sanctions, including exclusions from participation in government healthcare programs, which could also materially affect our business. We are subject to numerous and evolving data protection, privacy and information security laws in the jurisdictions in which we operate. These laws govern the collection, use, disclosure, transfer and safeguarding of personal information, including health-related information. The regulatory framework for data privacy and data security is rapidly evolving, and interpretation and enforcement practices remain uncertain. New or amended laws, or differing interpretations of existing laws, may require us to incur additional compliance costs, modify our business practices or restrict certain operations. In the United States, we may be subject to the Health Insurance Portability and Accountability Act of 1996, as amended by HITECH (collectively, “HIPAA”), to the extent we act as a covered entity or business associate. HIPAA establishes privacy and security standards for the protection of protected health information and authorizes significant civil and criminal penalties for noncompliance. In addition, all 50 U.S. states and the District of Columbia have enacted breach notification laws, and many states have adopted broader privacy and data security requirements that may impose additional obligations and liabilities. We may also be subject to international data protection laws, including those in the European Union and other jurisdictions, which impose stringent requirements on the processing and transfer of personal information and authorize significant fines for violations. A failure or perceived failure by us, our employees, or our third-party service providers to comply with applicable data protection laws or to adequately safeguard personal information could result in regulatory investigations or enforcement actions, fines, litigation, contractual liability, mandatory notifications, reputational harm and loss of customer confidence. We rely on third-party vendors to process and store certain data, and any security breach or noncompliance by such vendors could adversely affect us, even if we are not directly at fault. We maintain general liability and cyber insurance coverage; however, such coverage may not be adequate to cover all liabilities or may not be available on acceptable terms in the future. Any significant data security incident, regulatory proceeding or enforcement action could materially and adversely affect our business, financial condition and results of operations. We are subject to evolving global data protection and privacy laws, and compliance with such laws may be costly and may expose us to liability. We collect and process personal information in connection with our operations, including clinical research activities and interactions with healthcare providers. As a result, we may be subject to various U.S. federal and state laws governing the privacy and security of personal information, including, where applicable, the Health Insurance Portability and Accountability Act of 1996, as amended (“HIPAA”), state breach notification laws, and state consumer privacy laws such as the California Consumer Privacy Act, as amended by the California Consumer Rights Act. These laws impose requirements relating to the collection, use, disclosure and safeguarding of personal information and may provide for significant civil penalties and, in some cases, private rights of action. We may also be subject to international data protection laws, including the European Union General Data Protection Regulation (“GDPR”) and the United Kingdom GDPR, which impose strict requirements regarding the processing and transfer of personal data and authorize substantial fines for non-compliance. The data protection regulatory environment is rapidly evolving, and new or amended laws, differing interpretations, and increased enforcement activity may require us to incur additional compliance costs, implement new safeguards, or change our business practices. A failure or perceived failure to comply with applicable privacy and data protection laws, or any data security incident involving personal information, whether by us or our third-party service providers, could result in regulatory investigations, fines, litigation, contractual liability, reputational harm and loss of customer confidence, any of which could materially and adversely affect our business, financial condition and results of operations. 18 Risks Related to Our Intellectual Property If the combination of patents, trade secrets and contractual provisions that we rely on to protect our intellectual property is inadequate, our ability to commercialize our products successfully will be harmed, and we may not be able to operate our business profitably. Our success depends significantly on our ability to protect our proprietary rights to the technologies incorporated in our products. We rely on a combination of patent protection, trade secret laws and nondisclosure, confidentiality and other contractual restrictions to protect our proprietary technology. However, these may not adequately protect our rights or permit us to gain or keep any competitive advantage. The issuance of a patent is not conclusive as to its scope, validity or enforceability. The scope, validity or enforceability of our issued patents can be challenged in litigation or proceedings before the U.S. Patent and Trademark Office, or the USPTO, or foreign patent offices. In addition, our pending patent applications include claims to numerous important aspects of our products under development that are not currently protected by any of our issued patents. We cannot assure you that any of our pending patent applications will result in the issuance of patents to us. The USPTO or foreign patent offices may deny or require significant narrowing of claims in our pending patent applications. Patents issued as a result of the pending patent applications, if any, may not provide us with significant commercial protection or be issued in a form that is advantageous to us. Proceedings before the USPTO or foreign patent offices could result in adverse decisions as to the priority of our inventions and the narrowing or invalidation of claims in issued patents. The laws of some foreign countries may not protect our intellectual property rights to the same extent as the laws of the United States, if at all. Our competitors may successfully challenge and invalidate or render unenforceable our issued patents, including any patents that may issue in the future, which could prevent or limit our ability to market our products and could limit our ability to stop competitors from marketing products that are substantially equivalent to ours. In addition, competitors may be able to design around our patents or develop products that provide outcomes that are comparable to our products but that are not covered by our patents. In the event a competitor infringes upon any of our patents or other intellectual property rights, enforcing our rights may be difficult, time-consuming and expensive, and would divert management’s attention from managing our business. There can be no assurance that we will be successful on the merits in any enforcement effort. In addition, we may not have sufficient resources to litigate, enforce or defend our intellectual property rights. We could become subject to intellectual property litigation that could be costly, result in the diversion of management’s time and efforts, require us to pay damages, prevent us from marketing our commercially available products or product candidates and/or reduce the margins we may realize from our products that we may commercialize. Whether a product infringes a patent involves complex legal and factual issues, and the determination is often uncertain. There may be existing patents of which we are unaware that our products under development may inadvertently infringe. The likelihood that patent infringement claims may be brought against us increases as the number of participants in the in vitro diagnostics market increases and as we achieve more visibility in the marketplace and introduce products to market. Any infringement claim against us, even if without merit, may cause us to incur substantial costs, and would place a significant strain on our financial resources, divert the attention of management from our core business, and harm our reputation. In some cases, litigation may be threatened or brought by a patent holding company or other adverse patent owner who has no relevant product revenues and against whom our patents may provide little or no deterrence. If we were found to infringe any patents, we could be required to pay substantial damages, including triple damages if an infringement is found to be willful, and royalties and could be prevented from selling our products unless we obtain a license or are able to redesign our products to avoid infringement. We may not be able to obtain a license enabling us to sell our products on reasonable terms, or at all, and there can be no assurance that we would be able to redesign our products in a way that would not infringe those patents. If we fail to obtain any required licenses or make any necessary changes to our technologies or the products that incorporate them, we may be unable to commercialize one or more of our products or may have to withdraw products from the market, all of which would have a material adverse effect on our business, financial condition and results of operations. 19 We rely substantially on our trademarks and trade names. If our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our markets of interest and our business may be harmed. We rely substantially upon trademarks to build and maintain the integrity of our brand. Our registered and unregistered trademarks or trade names may be challenged, infringed, circumvented, declared unenforceable or determined to be violating or infringing on other intellectual property rights. We may not be able to protect or enforce our rights to these trademarks and trade names, which we rely upon to build name recognition among potential partners and customers in our markets of interest. At times, competitors or other third parties may adopt trade names or trademarks similar to ours, thereby impeding our ability to build brand identity and possibly leading to market confusion. Asserting claims against such third parties may be prohibitively expensive. In addition, there could be potential trade name or trademark infringement, or dilution claims brought by owners of other trademarks against us. Over the long term, if we are unable to establish name recognition based on our trademarks and trade names, then we may not be able to compete effectively, and our business may be adversely affected. Our efforts to enforce or protect our proprietary rights related to trademarks, trade secrets, domain names or other intellectual property may be ineffective, could result in substantial costs and diversion of resources and could harm our business, financial condition and results of operations. Risks Related to Litigation from Operating Our Business Current or future litigation, government investigations and other legal proceedings may harm our business. We have been, currently are and may in the future become, involved in legal proceedings that could have a negative impact on our reputation, business and financial condition and divert the attention of our management from the operation of our business. The types of legal proceedings we may be or become subject to include patent and other intellectual property claims, product liability claims, employee claims, tort or contract claims, federal or state regulatory investigations, securities class actions and shareholder derivative actions, and other legal proceedings, investigations or claims. For example, we are currently parties to two securities class action claims and three derivative actions. Litigation and other legal proceedings are inherently unpredictable and can result in excessive or unanticipated verdicts and/or injunctive relief that affect how we operate our business. We obtain business insurance, including executive and corporate securities liability insurance to insure against such claims should they arise. The insurance we have in place for such events may prove to be inadequate to pay a damage award, we may have to pay the excess of this award out of our cash reserves, which could significantly harm our financial condition. A legal proceeding claim, even one without merit, could harm our reputation in the industry, lead to significant legal fees, and result in the diversion of management’s attention from managing our business. We could incur judgments or enter into settlements of claims for monetary damages or for agreements to change the way we operate our business, or both. There may be an increase in the scope of these matters or there may be additional lawsuits, claims, proceedings or investigations in the future, which could harm our business, financial condition and results of operations. Adverse publicity about regulatory or legal action against us could damage our reputation and brand image, undermine our customers’ confidence and reduce long-term demand for any of our products or other offerings, even if the regulatory or legal action is unfounded or not material to our operations. For additional information, see “Item 3. Legal Proceedings.” 20 General Risk Factors The price of our common stock may fluctuate substantially. The market price of our common stock may be subject to wide fluctuation in response to various factors, some of which are beyond our control. Some factors that may cause the market price of our common stock to fluctuate, in addition to the other risks mentioned in this “Risk Factors” section and elsewhere in this report, are: ● sales or purchases of our common stock by our shareholders, executives, and directors; ● our ability to obtain regulatory approval to commercialize our PCR platform on a timely basis or at all; ● our ability to enter new markets; ● actual or unanticipated fluctuations in our annual and quarterly financial results; ● our ability to obtain financings to continue and expand our commercial activities, expand our manufacturing operations, conduct research and development activities including, but not limited to, human clinical trials, and other business activities; ● our ability to secure resources and the necessary personnel to continue and expand our commercial activities, develop additional diagnostic tests, conduct clinical trials and gain approval for our diagnostic tests on our desired schedule; ● commencement, enrollment or results of our clinical trials of our diagnostic tests or any future clinical trials we may conduct; ● changes in the development status of our diagnostic tests; ● any delays or adverse developments or perceived adverse developments with respect to review by the FDA or other similar foreign regulatory authorities of our planned clinical trials; ● any delay in our submission for studies or test approvals or adverse regulatory decisions, including failure to receive regulatory approval or clearance for our diagnostic tests; ● our announcements or our competitors’ announcements regarding new tests, enhancements, significant contracts, acquisitions or strategic investments; ● failures to meet external expectations or management guidance; ● changes in our capital structure or dividend policy, including future issuances of securities and sales of large blocks of common stock by our shareholders; ● announcements and events surrounding financing efforts, including debt and equity securities; ● competition from existing technologies and diagnostic tests or new technologies and diagnostic tests that may emerge; ● announcements of acquisitions, partnerships, collaborations, joint ventures, new diagnostic tests, capital commitments, or other events by us or our competitors; ● changes in general economic, political and market conditions in any of the regions in which we conduct our business; ● changes in industry conditions or perceptions; ● changes in valuations of similar companies or groups of companies; ● analyst research reports, recommendations and changes in recommendations, price targets and withdrawals of coverage; ● departures and additions of key personnel; ● disputes and litigations related to intellectual properties, proprietary rights, and contractual obligations; ● changes in applicable laws, rules, regulations, or accounting practices and other dynamics; ● other events or factors, many of which may be out of our control. In addition, if the market for stocks in our industry or industries related to our industry, or the stock market in general, experiences a loss of investor confidence, the trading price of our common stock could decline for reasons unrelated to our business, financial condition and results of operations. If any of the foregoing occurs, it could cause our stock price to fall and may expose us to lawsuits that, even if unsuccessful, could be costly to defend and a distraction to management. 21 Anti-takeover provisions in our charter documents and Utah law could discourage, delay, or prevent a change of control of our Company and may affect the trading price of our common stock. We are a Utah corporation and the anti-takeover provisions of the Utah Control Shares Acquisition Act may discourage, delay or prevent a change of control by limiting the voting rights of control shares acquired in a control share acquisition. In addition, our Articles of Incorporation and Bylaws may discourage, delay or prevent a change in our management or control over us that shareholders may consider favorable. Among other things, our Amended and Restated Articles of Incorporation and Bylaws: ● authorize the issuance of “blank check” preferred stock that could be issued by our board of directors in response to a takeover attempt; ● provide that vacancies on our board of directors, including newly created directorships, may be filled only by a majority vote of directors then in office, except a vacancy occurring by reason of the removal of a director without cause shall be filled by vote of the shareholders; ● no right to cumulative voting; ● limit who may call special meetings of shareholders These provisions could have the effect of delaying or preventing a change of control, whether or not it is desired by, or beneficial to, our shareholders. We do not currently intend to pay dividends on our common stock. We do not expect to pay cash dividends on our common stock. Any future dividend payments are within the absolute discretion of our board of directors and will depend on, among other things, our results of operations, working capital requirements, capital expenditure requirements, financial condition, contractual restrictions, business opportunities, anticipated cash needs, provisions of applicable law and other factors that our board of directors may deem relevant. We may not generate sufficient cash from operations in the future to pay dividends on our common stock. We are a “smaller reporting company” and the reduced disclosure requirements applicable to smaller reporting companies may make our common stock less attractive to investors. We are currently a “smaller reporting company” as defined in the Securities Exchange Act of 1934. Smaller reporting companies are able to provide simplified executive compensation disclosures in their filings, and have certain other decreased disclosure obligations in their SEC filings, including, among other things, only being required to provide two years of audited financial statements in annual reports. We cannot predict whether investors will find our common stock less attractive because of our reliance on any of these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile. We incur substantial costs as a result of being a public company and our management expects to devote substantial time to public company compliance programs. As a public company, we incur significant legal, insurance, accounting and other expenses, including costs associated with public company reporting. We intend to invest resources to comply with evolving laws, regulations and standards, and this investment will result in increased general and administrative expenses and may divert management’s time and attention from product development and commercialization activities. If our efforts to comply with new laws, regulations and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to practice, regulatory authorities may initiate legal proceedings against us, and our business may be harmed. These laws and regulations could make it more difficult and costlier for us to obtain director and officer liability insurance for our directors and officers, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These factors could also make it more difficult for us to attract and retain qualified executive officers and qualified members of our board of directors, particularly to serve on our audit and compensation committees. In addition, if we are unable to continue to meet the legal, regulatory and other requirements related to being a public company, we may not be able to maintain the listing of our common stock on The NASDAQ Capital Market, which would likely have a material adverse effect on the trading price of our common stock. 22 We incur substantial costs as a result of being a public company and are subject to the continued listing requirements of the NASDAQ Capital Market, our management expects to devote substantial time to public company compliance programs. As a public company, we incur significant legal, insurance, accounting and other expenses, including costs associated with public company reporting. We intend to invest resources to comply with evolving laws, regulations and standards, and this investment will result in increased general and administrative expenses and may divert management’s time and attention from product development and commercialization activities. If our efforts to comply with new laws, regulations and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to practice, regulatory authorities may initiate legal proceedings against us, and our business may be harmed. These laws and regulations could make it more difficult and costlier for us to obtain director and officer liability insurance for our directors and officers, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These factors could also make it more difficult for us to attract and retain qualified executive officers and qualified members of our board of directors, particularly to serve on our audit and compensation committees. In addition, if we are unable to continue to meet the legal, regulatory and other requirements related to being a public company, we may not be able to maintain the listing of our common stock on The NASDAQ Capital Market, which would likely have a material adverse effect on the trading price of our common stock. Currently our common stock is quoted on the NASDAQ Capital Market under the symbol “CODX”. We must satisfy certain minimum listing maintenance requirements to maintain the NASDAQ Capital Market quotation, including certain governance requirements and a series of financial tests relating to stockholders’ equity or net income or market value, public float, number of market makers and stockholders, market capitalization, and maintaining a minimum bid price of $1.00 per share. As previously disclosed, on January 10, 2025, the Company received a notice from the Listing Qualifications Department of The NASDAQ Stock Market (the “Staff”) stating that the bid price of the Company’s common stock for the previous 30 consecutive trading days had closed below the minimum $1.00 per share required for continued listing on The NASDAQ Capital Market under NASDAQ Listing Rule 5550(a)(2). The Company had an initial period of 180 calendar days to regain compliance with Listing Rule 5550(a)(2). To regain compliance, the bid price of the Company’s common stock must close at $1 or more for a minimum of ten consecutive business days before July 9, 2025. On July 10, 2025, the Company received notification from the Staff indicating that the Company would have an additional 180-day grace period, until January 5, 2026, to regain compliance with NASDAQ’s $1.00 minimum bid requirement. The notification indicated that the Company did not regain compliance during the initial 180-day grace period provided under the rule. In accordance with NASDAQ Marketplace Rule 5810(c)(3)(A), the Company was eligible for the additional grace period because it met the continued listing requirement for market value of publicly held shares and all other applicable requirements for initial listing on the Nasdaq Capital Market with the exception of the bid price requirement, and provided written notice of its intention to cure the deficiency during the second compliance period by effecting a reverse stock split, if necessary. In order to regain compliance with the $1.00 minimum bid price requirement, on January 1, 2026 we effected a 1-for-30 reverse stock split (the “Reverse Stock Split”). 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. On January 7, 2026, the Company received written notice from the Staff indicating that the Staff had determined to delist the Company’s common stock from The Nasdaq Capital Market due to the Company’s continued non-compliance with the minimum bid price requirement set forth in Nasdaq Listing Rule 5550(a)(2). The Company subsequently requested a hearing before the Nasdaq Hearings Panel to address the bid price deficiency; however, the Company’s securities were suspended from trading on The Nasdaq Capital Market effective at the open of trading on January 14, 2026, in accordance with Nasdaq Listing Rule 5815(a)(1)(B)(ii)(d). On February 12, 2026, the Company participated in a hearing with the Nasdaq Hearings Panel. On March 9, 2026, the Company was formally notified by Nasdaq that it had demonstrated compliance with the $1.00 bid price requirement set forth in Nasdaq Listing Rule 5550(a)(2) and all other applicable criteria for continued listing on The Nasdaq Capital Market. Accordingly, the Company’s securities resumed trading on Nasdaq effective with the open of the market on March 11, 2026, and the previously disclosed listing matter before the Nasdaq Hearing Panel was closed. The Nasdaq Hearings Panel imposed a Discretionary Panel Monitor for a period of one year, through March 9, 2027. If, during the monitoring period, the Company’s closing bid price falls below $1.00 per share for 30 consecutive business days, the Company will not be eligible for a 180-day compliance period otherwise available under the Nasdaq Listing Rules. Rather, Nasdaq would issue a delist determination, which the Company could then appeal by requesting a hearing before the Panel. Such request would stay any further action by Nasdaq pending the conclusion of the hearing process. Although we have regained 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.