Item 1. Business
ITEM
1: BUSINESS
Overview
Co-Diagnostics,
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. CODX’s
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.
We
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. 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 Co-Dx
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.
4
Technology
We
believe our proprietary and patented molecular diagnostics technology is paving the way for innovation in disease detection and life
sciences research through our enhanced detection of genetic material. For various reasons, including owning our own platform, we believe
we will be able to accomplish this faster and more economically than some competitors, allowing for significant margins while still positioning
ourselves as a low-cost provider of molecular diagnostics and screening services. For example, we were the first US-based company to
receive a CE-marking for a COVID-19 test in early 2020, as we worked to help slow the spread of the pandemic through our global network
of distributors covering clinical labs in more than 50 countries. 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
in a period of just over 30 days. This is a real-world example of how CODX technology can be used in an evolving epidemic or pandemic
to get diagnostic tools in the hands of medical professionals in a timely manner. It can be similarly used to design a test for mutated
strains of SARS-CoV-2 or other viruses should they not be detectable using currently available tests.
In
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.
Our
scientists use the complex mathematics of DNA/RNA PCR test design to engineer and optimize PCR tests and to automate algorithms that
rapidly screen millions of possible options to pinpoint the optimum design. The intellectual property we use in our business consists
of the predictive mathematical algorithms and patented molecular structure used in the testing process, which together represent a major
advance in PCR testing systems. CODX technologies are now protected by more than 20 granted or pending US and foreign patents, as well
as certain trade secrets and copyrights. 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.
Our
proprietary test design process involves identifying the optimal locations on the target genes for amplification and pairing the locations
with the optimized primer and probe structure to achieve outputs that meet the design input requirements identified from market research.
This is done by following planned and documented processes, procedures and testing. In other words, we use the data resulting from our
tests to verify whether we succeeded in designing what we intended. Verification involves a series of testing that concludes that the
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.
Using
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. 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.
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Co-Dx
PCR Platform
We
believe the benefits of affordable, high-quality diagnostics should be available to everyone. High-quality point-of-care polymerase chain
reaction (“PCR”) testing plays a crucial role in healthcare. It enables rapid diagnosis of infectious diseases, such as COVID-19
or tuberculosis, facilitating timely treatment and containment measures. By delivering results on-site, it eliminates the need for sample
transportation, reducing the risk that the sample is transported incorrectly or lost, reducing turnaround time to results, and
allowing for immediate decision-making. Gold-standard PCR testing at the point of care ensures reliable detection of pathogens, minimizing
incorrect results. In short, high-quality PCR testing at home and at the point of care enhances patient care, public health response,
and helps control the spread of infectious diseases. That is why we are developing the Co-Dx PCR platform utilizing our Co-Primers™
real-time PCR technology for at-home and point-of-care testing. Because we believe that testing for COVID-19 and other infectious diseases
will continue to be a consideration for public health worldwide, we initiated the Co-Dx PCR platform to facilitate frequent, affordable,
reliable PCR testing to patients in point-of-care and at-home settings, including schools, businesses, and the hospitality industry.
We believe this may be accomplished through the development of a testing platform comprised of a compact, relatively low-cost testing
device, the Co-Dx PCR Pro instrument, together with patent-pending diagnostic test cups that work with the instrument and an intuitive
mobile application, that is easy to use by professionals and non-professionals, all of which can provide PCR test results in around 30
minutes. As user test results are analyzed and anonymized in the cloud, we believe this data may be useful for governmental health agencies
and the World Health Organization to determine where outbreaks of infectious diseases may be occurring and to enable them to act more
quickly and efficiently to slow-down or perhaps even prevent further spread.
The
6 ½” x 4 1/2” x 6”, 2 lbs. Co-Dx PCR Pro instrument operates via a smartphone app with simple-to-follow instructions
that includes videos to walk users through every step, from sample swab collection to the straightforward instrument operation. Results
are processed in the cloud and delivered back to the user’s smartphone or tablet in about 30 minutes using software designed from
the ground-up for this specific use. The PCR tests themselves (contained in the simple but unique, innovative test collection cups) are
powered by patented Co-Dx Co-Primers PCR technology.
The
initial diagnostic test designed for use on this platform, an at-home and point-of-care COVID-19 PCR test, was ultimately facilitated
by our development of a saliva or nasal swab-based PCR test that does not require RNA/DNA extraction (standard in laboratory-based PCR
testing). The final result is believed to be approximately equivalent to those processed by a high-complexity clinical laboratory. Our
COVID-19 PCR platform test has the advantages of increased speed over clinical laboratories, with results in around 30 minutes compared
to hours or even days, and ease of handling thanks to lyophilization (or freeze-drying) of our testing reagents to allow for storage
at room temperatures. In December 2023, we submitted our proprietary Co-Dx PCR COVID-19 test cups, together with the Co-Dx PCR Pro instrument
and mobile application, all designed for use in point-of-care and at-home settings, for review by the U.S. Food and Drug Administration
(FDA) for Emergency Use Authorization (EUA). 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 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 will also allow the Company to incorporate
more recent Co-Dx PCR platform developments into the COVID-19 test, which Co-Dx 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.
We
expect to develop further diagnostic tests for use with the PCR Pro instrument, including a multiplex test for influenza A and B, RSV
and COVID-19. To that effect, in July 2023 we were awarded $1.2 million in funding from the National Institutes of Health (NIH) as part
of the Rapid Acceleration of Diagnostics (RADx ® ) Tech program for development of our upper respiratory panel diagnostic test for
use on the Company’s Co-Dx PCR platform. We are utilizing the funds from the RADx Tech award to complete development of our flu
A/B, COVID-19, and RSV multiplex test, preparatory for that test to begin clinical trials on the Co-Dx PCR Pro instrument. The NIH launched
the RADx initiative on April 29, 2020, with the goal of speeding innovation in the development, commercialization, and implementation
of technologies for COVID-19 testing, leveraging the existing NIH Point-of-Care Technology Research Network. The RADx Tech program is
managed by the National Institute of Biomedical Imaging and Bioengineering (NIBIB), to support the accelerated development of tests and
provide regulatory guidance during the COVID-19 pandemic and beyond.
6
We
are also developing diagnostics tests for TB and HPV for use with our Co-Dx PCR platform. We have been awarded two grants totaling $6.8
million for the TB test and one grant totaling $987,000 for the HPV test by the Bill & Melinda Gates Foundation to support the development
and manufacture of these tests for our Co-Dx PCR platform. In 2014, all United Nations Member States and the World Health Organization
(WHO) committed to ending the global TB epidemic by 2030, before the COVID-19 pandemic slowed, stalled or reversed progress of global
TB targets. The WHO reported a worldwide gap of roughly 2.7 million unidentified cases between the reported number of newly diagnosed
TB cases in 2023 and the estimated number of incident cases, highlighting the need for a dramatic increase of affordable, high-quality,
point-of-care TB diagnostics to enable rapid treatment decisions to be made for a disease that has a mortality rate of about 50% if left
untreated. The National Cancer Institute estimates that high-risk HPVs cause roughly 5% of all cancers worldwide, including cervical
cancer, the fourth most common cancer in women and which led to an estimated 350,000 cervical cancer deaths in 2022 according to the
WHO. About 94% of these deaths are in low- and middle-income countries, and all of which the WHO believes can be dramatically reduced
by access to diagnostics, vaccinations, and cancer screenings.
Infectious
Disease Product Offering
Using
our proprietary test design system and reagents, we and CoSara Diagnostics Pvt Ltd (“CoSara”), our consolidated joint venture
for development and manufacturing in India, design and sell PCR diagnostic tests for detection of diseases and pathogens such as COVID-19,
influenza, tuberculosis, hepatitis B and C, malaria, dengue, human papillomavirus, chikungunya, and Zika virus, all of which tests have
been designed and verified in our laboratories. Our tuberculosis test and Zika tests received CE marking in 2018, and a triplex test
for Zika, dengue and chikungunya received CE marking in 2019, qualifying the tests to be sold throughout the European community and in
most countries in Central and South America. In December 2019, CoSara received a license to manufacture and sell tuberculosis, hepatitis
B, hepatitis C, human papillomavirus 16/18 and malaria tests in India from the Central Drugs Standard Control Organization (“CDSCO”).
In February 2020, we received CE marking for our Logix Smart COVID-19 test followed by an EUA by the FDA in April 2020. Also, in April
2020, our COVID-19 test was approved for manufacture and sale in India by the CDSCO and in Mexico by the INDRE, Mexico’s equivalent
to the United States Center for Disease Control. In August 2020, we received approval from the Australian Department of Health Therapeutic
Goods Division to sell our COVID-19 test in Australia.
As
explained above, our Logix Smart COVID-19 test was designed, developed, submitted for regulatory clearance and ready to be used as an
in vitro diagnostic or IVD in countries that accept CE marking for regulatory clearance in a period of just over 30 days. This
is a real-world example of how CODX technology can be used in an evolving epidemic or pandemic to get diagnostic tools in the hands of
medical professionals in a timely manner. It can be similarly used to design a test for mutated strains of SARS-CoV-2 or other viruses
should they not be detectable using currently available tests.
Caribbean
and Central and South America
We
began selling PCR diagnostic tests to entities located in South and Central America and the Caribbean in 2018. In some of those countries,
there are limited regulatory hurdles, which allowed us to begin offering our tests immediately with CE markings. We have applied for
and received registrations for our tests in many of those countries that require registration, and our distributors in those countries
have provided us with in-country assistance in completing such registrations.
We
first offered our Zika test in this region because of the demand for such a test, followed by tests for tuberculosis, and our triplex
test for Zika, chikungunya, and dengue. Sales of those tests have not been material, but with the granting of CE marking and EUA for
our Logix Smart COVID-19, we experienced an increase in sales in this region.
India
In
January 2017, the Company entered into an agreement to manufacture diagnostics tests for seven infectious diseases with a pharmaceutical
manufacturing company in India and formed CoSara Diagnostics Pvt. Ltd. as a joint venture. The agreement provided for the construction
of a manufacturing plant and the manufacture of the tests named above and the joint sales and marketing of those tests in India. We have
received a license for the plant in Ranoli, India to manufacture approved tests and it is being used for testing and manufacturing of
our products for the Indian market.
The
CDSCO has given us the approval for manufacture and sale of the 15 tests referred to above, and the Company’s joint venture
manufactures and sells 14 of those tests under the SaraGene brand. The Company manages a reagent rental program in India with
thermocyclers purchased from a third-party manufacturer and which we refer to here as our Co-Dx Box. The placement of thermocyclers
in India has facilitated the sale of the SaraGene PCR tests in India. The WHO 2024 Global Tuberculosis Report indicates that India
was the country with the highest number of cases of tuberculosis in the world in 2023, with 26% of an estimated global incidence of
approximately 10.8 million cases.
7
On
March 19, 2020, we announced that CoSara received authorization to manufacture and sell COVID-19 tests in India. Those tests in India
are branded as SaraGene COVID-19 tests and are sold exclusively by CoSara. The Indian government places restrictions on the price that
could be charged for COVID-19 tests which limited the revenue in India more than we experienced in other parts of the world. At the time
of this report, CoSara has received CDSCO clearance for RT-PCR tests for Mycobacterium tuberculosis, malaria, hepatitis B, hepatitis
C (including viral load tests for both hepatitis B and C), human papillomavirus (HPV), a test for high-risk HPV, two COVID-19 assays,
chikungunya, dengue, a dengue/chikungunya duplex test, an influenza A/influenza B/COVID-19 (“ABC”) multiplex test, and in
2024 CDSCO cleared the manufacture and sell SARAPLEX™ Influenza Multiplex (IFM) Test Kit to clinical laboratories as an in vitro
diagnostic for the detection and differentiation of Influenza A and Influenza B.
Europe
Molecular
diagnostics, such as our tests, are governed in Europe by the framework for IVDs, which encompasses diagnostic products such as reagents,
instruments and systems intended for use in diagnosis of disease. The regulatory system for some IVDs historically allowed for a self-certification
procedure, placing heavy responsibility on manufacturers. Non self-certified products were subject to the same standards as self-certified
products but were also subject to audit and review by a notified body prior to receiving approval to receiving CE marking. A CE-marking
is a manufacturer’s declaration that a product meets the requirements of the applicable European Commission (EC) directive. Examples
of current obligations include having in place a qualitative manufacturing process, user instructions that are clear and fit for purpose,
and ensuring that the ‘physical’ features of devices and diagnostics do not pose any danger. If a product fulfils these and
other related control requirements, it may bear a CE marking, as an indication that the product is compliant with EU legislation and
sold in the European Union. We have received CE marking for six of our tests including for COVID-19, COVID-19 (2 gene test), ABC (a triplex
test for Flu A, Flu B and COVID-19), a DS (Direct Saliva, extraction-free) COVID-19 test, tuberculosis, Zika, and our Zika, dengue, chikungunya
triplex tests. In May 2022, the EC published the In Vitro Diagnostic Regulation (IVDR), a new regulation that significantly revised the
requirements for CE marking of IVDs. To avoid potential shortages of essential healthcare products, the EC extended the transition deadlines
in 2024. Co-Dx is actively pursuing CE-IVD compliance under IVDR through the Annex IX route to conformity. For manufacturers actively
pursuing IVDR compliance, European regulators have allowed a grace period until 2028 for Class B devices to harmonize their devices and
Quality Management Systems (QMS) with the new regulation.
Co-Diagnostics
PCR tests are manufactured under an ISO 13485:2016 certified quality management system, relating to the design and manufacture of our
medical device products. The ISO certification indicates that we meet the standards required to pursue CE-marking for certain of our
products, subject to the requirements in the updated directive mentioned above.
United
States
Section
801(e) of the Federal Food, Drug, and Cosmetic Act, as amended (the “FDA Act”) covers certain medical devices that have not
yet received an approved Premarket Approval in the United States by the FDA, such as our products. We have not commenced any premarket
approval steps with the FDA for any of our Logix Smart PCR tests. Section 801(e) of the FDA Act applies to medical devices that are acceptable
to the importing country and that are manufactured under the FDA’s Good Manufacturing Practices, and grants Co-Diagnostics permission
to export all of our IVD products. We have received EUA clearance for our Logix Smart COVID-19 test, which allows sales to qualified
labs in the United States and facilitates the registration for sale in other countries as well. Under the FDA’s existing policy,
the FDA continues to review a prioritized subset of COVID-19 tests for EUAs, and emphasizes that traditional device premarket review
pathways remain open to all developers. We intend to pursue all appropriate FDA review pathways for products under development, including
traditional premarket review pathways.
Under
our EUA, we are actively selling our Logix Smart COVID-19 test to overseas customers and to CLIA certified laboratories in the United
States. The CLIA labs are able to use our test, or to further validate our COVID-19 tests (or other tests) as Laboratory Developed Tests
(LDTs), which refers to a diagnostic test that has been validated for use in the CLIA lab. LDTs may be used by the lab only in that laboratory.
CLIA laboratories develop the performance characteristics, perform the analytical validation for their LDTs and obtain licenses to offer
them as diagnostic services. We are currently marketing our Logix Smart COVID-19 test to CLIA laboratories throughout the US.
8
Market
Opportunity
The
market opportunity for our tests changed radically with the emergence of the COVID-19 pandemic. Because we were able to respond rapidly
and produce a quality product, we have been able to build a worldwide distribution network that
has allowed us to export products throughout the world. We anticipate that our network of distributors that we have built over
the past five years will serve us well in sales and distribution of other diagnostic tests and our forthcoming PCR diagnostic platform.
The
molecular diagnostics market is a fast-growing portion of the in vitro (test tube-based, controlled environment) diagnostics market.
There are several advantages of PCR tests, such as the ones we market and sell, over other forms of diagnostic testing. These advantages
include higher specificity and sensitivity, the ability to perform multiplex tests and the ability to test for drug resistance or for
individual genes.
Mosquito
Vector Control Services
In
response to market demand, in June 2019 we introduced our first Vector Smart ® PCR tests to be used exclusively for mosquito-borne
pathogens in mosquito populations. Municipalities in the US and many other countries in the world are concerned about the diseases carried
by mosquitos, which infect the human population. To prevent outbreaks of potentially harmful viruses such as Zika or West Nile from infecting
the public, many municipalities conduct mitigation operations to eliminate the mosquito populations carrying the diseases. Because it
is too expensive and potentially harmful to the environment to treat all mosquito breeding areas, municipalities may identify and focus
their efforts on particular areas with mosquitos that are carrying the harmful viruses. To know where the host mosquitos with the harmful
viruses are located, traps are set, mosquitos collected and then tested. There are over 3,000 mosquito abatement districts throughout
the United States and almost all of them conduct testing to help make the spraying more effective.
Our
first vector related test was a triplex test that tests for West Nile, western equine encephalitis and St. Louis encephalitis. We began
shipping the tests in June 2019. We added a second test that tests mosquitos for Zika, chikungunya and dengue in a triplex test. Finally,
in November 2019, we completed a test for West Nile, eastern equine encephalitis and St. Louis encephalitis, specifically for use in
the eastern United States. As a result, mosquito abatement districts can test for three target viruses in one test as compared to performing
three different tests using other market available tests. Our products also allow municipalities to obtain test results in-house in a
matter of hours, instead of the days or weeks they might otherwise have to wait for a central lab to process the mosquito tests.
We
have sold our Vector Smart™ test products and/or related lab equipment to testing districts in different sections of the country
and are marketing our products through trade shows, electronic and regular mail solicitations.
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Competitive
Advantages of Co-Diagnostics
We
believe that we have the following competitive advantages:
●
Affordability:
Lower-cost test kits, a low-cost Co-Dx Box, and an affordable Co-Dx PCR platform for at-home and point-of-care testing (the
platform is subject to FDA review and not available for sale at the time of this filing).
●
Flexibility:
CODX’s tests have been designed to run on many customers’ DNA/RNA diagnostic testing machines. Our technology
is well suited to the new generation of point-of-care testing (POCT), compact and portable analysis machinery for field, clinical
and office applications.
●
Speed :
We believe our rapid assay design system software provides shorter time to product release. This has been demonstrated with the
conception, design, product manufacture, clinical verification and submission for a CE marking for our Logix Smart COVID-19 test
(under the previous directive) being approximately 30 days.
●
Accuracy :
We believe our technology allows us to build tests that are highly sensitive and specific, the two benchmarks for accuracy in PCR
testing.
●
Personalized
Medicine : We project that rising health care costs in developed and developing nations will increasingly require that health
care systems be patient-specific to eliminate waste, misdiagnoses, and ineffectiveness. A critical component will be accurate, more
affordable molecular diagnostics, especially in at-home and POCT settings, for which we are developing products.
●
Low-Cost
Provider : Our platform technology obviates the need to pay certain patent royalties typically required of our competitors,
which use third-party patented test platforms to design and manufacture their tests.
●
Worldwide
Footprint : With a dynamic technology that encompasses markets worldwide, we anticipate that we can identify the best target
markets, not only in low-to-middle income countries but also in developed nations.
●
Data
Collection : With the anticipated deployment of the Co-Dx PCR platform we expect to play a role in centralizing global data
collection on infectious diseases that may contribute to faster vaccination and therapeutic responses from health authorities.
●
Growth
Industry Category : We believe that real-time PCR testing is the fastest-growing segment of in vitro diagnostic testing.
●
Combination
Product Offering : Our tests can be a well-designed match for a new generation of compact and other small POCT devices now
entering the market, including our own Co-Dx Box and Co-Dx PCR Pro instrument. Used together, we believe these affordable tests and
devices have the potential to revolutionize the molecular diagnostics industry in cost, speed of test results and simplification.
●
Multiplexing:
Our existing multiplexed tests demonstrate that our Co-Primers-designed tests are able to test for multiple targets in the
same sample without the distortion caused by false negatives and false positives that often occur in multiplexed tests.
10
Intellectual
Property
Much
of our future success and value depends on our proprietary technology, and therefore, our patent and intellectual property strategy is
of critical importance. Currently, our flagship Co-Primers technology is covered by two U.S. patents titled “Cooperative primers,
probes, and applications thereof” as well as by granted and pending foreign counterparts. We have another three U.S. patents directed
to our earlier work in primer and assay designs. For more recent works, we have filed international and U.S. patent applications directed
to “Methods and Compositions for Next Generation Sequencing (NGS) Library Preparation,” “Allele-Specific Design of
Cooperative Primers for Improved Nucleic Acid Variant Genotyping,” “Methods and Compositions Related to Cooperative Primers
and Reverse Transcription,” and “Systems, Methods, and Apparatus for Automated Self-Contained Biological Analysis”
which is the basis of our at-home and point-of-care PCR platform. We intend to continue building our patent portfolio as development
continues and resources are available.
We
also protect some of our technology and know-how as trade secrets and, where appropriate, we use and register trademarks to protect and
strengthen our products and proprietary brands. All trademarks, trade/product names, graphics and logos of Co-Diagnostics contained herein
are trademarks of Co-Diagnostics or its subsidiary, as applicable, in the U.S. and/or other countries. Solely for convenience, we may
refer to trademarks in this Annual Report on Form 10-K without the ™ or ® symbols, but such references are not intended to
indicate, in any way, that we will not assert, to the fullest extent permitted by law, our rights to our trademarks.
Major
Customers
The
Company had certain customers which were each responsible for generating 10% or more of the total revenue for the years ended December
31, 2024 and 2023, respectively. One customer accounted for approximately 31% of product revenue for the year ended December 31, 2024
and two customers accounted for approximately 27% of product revenue for the year ended December 31, 2023. Two granting agencies accounted
for approximately 95% of grant revenue for the year ended December 31, 2024, and one granting agency accounted for 100% of grant revenue
for the year ended December 31, 2023. These customers and granting agencies may not account for the same percentage of product revenue
or grant revenue in future periods. If we were to sell
nothing to those customers in the future, it would have a material adverse effect on our financial condition unless we were able to replace
those customers with others.
Competition
The molecular diagnostics industry is extremely competitive. There are
many firms that provide some or all of the products we provide and provide many diagnostic tests that we have yet to develop. Many of
these competitors are larger than us and have significantly greater financial resources. Many of our competitors have a competitive advantage
in the diagnostic testing industry because they also have other lines of business in the diagnostics, pharmaceutical, or biotech industries
from which they derive revenues and for which they are well known and respected in the medical profession. Many of these competitors already
have an established customer base with industry standard technology, which we must overcome to be successful. In the diagnostic testing
and POCT industries, we compete with such companies as BioMerieux, Siemens, Qiagen, Roche Diagnostics and Cepheid and with such pharmaceutical
companies as Abbott Laboratories, Becton Dickinson and Johnson and Johnson. We also compete with companies from Asia in certain markets
who are willing to sell their tests for much less than we sell our tests, which creates competitive price pressure on us in certain regions,
particularly Asia and Latin America.
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We
expect competition to continue to increase as other established and emerging companies enter the market, as customer requirements evolve,
and as new products, services and technologies are introduced. Some of our existing or new competitors may have strong relationships
with current and potential customers, including governmental authorities, and, as a result, may be able to respond more quickly to new
or changing regulatory requirements, new or emerging technologies, and changes in customer requirements.
Government
Regulation
In
the United States, we are regulated by the FDA and our products must be approved, cleared, or authorized by the FDA before we are allowed
to sell our tests in the United States as in vitro diagnostics. The FDA granted us an EUA to manufacture and sell our Logix Smart
COVID-19 test to CLIA labs in the United States. The Company operates under an ISO 13485:2016 certified quality management system, relating
to the design and manufacture of our medical device products. Being ISO certified greatly facilitates our applications for regulatory
clearance, including CE marking, which allows us to sell any tests in most countries in Europe, South America and Asia, depending on
the country and following that country’s registration process. We currently have CE markings issued for our Logix Smart COVID-19
test, tuberculosis test, our Zika virus test, a triplex test that tests for Zika, dengue, and chikungunya simultaneously, a triplex “ABC”
test that identifies and distinguishes between Flu A, Flu B and Covid-19, our SARS-CoV-2 2-gene multiplex test, and our DS (Direct Saliva,
extraction-free) COVID-19 test. In addition, our Logix Smart COVID-19 has received the required license to manufacture and sell in India
from India’s CDSCO, and The National Epidemiology Institute in Mexico evaluated our Logix Smart COVID-19 and ABC tests and approved
them for sale in Mexico. We have also received clearance to sell our Logix Smart COVID-19 test in Australia.
Employees
As
of December 31, 2024, we had 132 full-time and part-time employees at our executive offices and lab facilities in Salt Lake City, Utah.
We have engaged independent contractors to promote the use of our products and develop outlets for products and employ the services of
independent sales representatives on an “as needed” basis.
We
consider our people and the way we work to support each other and serve our customers to be critical to our success. The key human capital
measures and objectives that we focus on in managing our business are: maintaining a strong and collaborative company culture, increasing
our diversity, inclusion and belonging, offering fair and competitive compensation and benefits, investing in people and organizational
development, protecting and enriching employee health and wellness, and sustaining a culture of respectful and effective communications.
Organizational
History and Corporate Information
We
were incorporated as Co-Diagnostics, Inc., in Utah on April 18, 2013. Our principal executive office is located at 2401 S. Foothill Drive,
Salt Lake City, Utah 84109. Our telephone number is (801) 438-1036. Our web address is www.codiagnostics.com . The contents of
our website are not incorporated by reference in this Annual Report.
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