Form 8-K Co-Diagnostics, Inc. For: Aug 11

August 11, 2022 4:03 PM EDT
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Washington, D.C. 20549





Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934


Date of report (Date of earliest event reported): August 11, 2022



(Exact name of small business issuer as specified in its charter)


Utah   1-38148   46-2609363
(State or other jurisdiction of   (Commission   (IRS Employer
incorporation or organization)   File Number)   Identification Number)


2401 S. Foothill Drive, Suite D, Salt Lake City, Utah 84109

(Address of principal executive offices)


(801) 438-1036

(Issuer’s telephone number)


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:


Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


Securities registered pursuant to Section 12(b) of the Act:


Title of each class   Trading Symbol(s)   Name of each exchange on which registered
Common Stock, par value $0.001 per share   CODX   The Nasdaq Capital Market


Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).


Emerging growth company


If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.







Item 2.02. Results of Operations and Financial Condition.


On August 11, 2022, Co-Diagnostics, Inc. (the “Company”) issued a press release announcing financial results for its quarter ended June 30, 2022. The full text of the press release, which includes information regarding the Company’s use of a non-GAAP financial measure, is furnished as Exhibit 99.1 to this Form 8-K.


The information contained in this Item 2.02, including Exhibit 99.1 attached hereto, is being furnished and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liabilities of that section. Furthermore, the information contained in this Item 2.02 or Exhibit 99.1 shall not be deemed to be incorporated by reference into any registration statement or other document filed pursuant to the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.


Item 7.01. Regulation FD. Disclosure.


The information set forth under Item 2.02 is incorporated by reference as if fully set forth herein.


Item 9.01 Financial Statements and Exhibits.


(d) Exhibits


Exhibit No.:   Description:
99.1   Press Release, dated August 11, 2022
104   Cover Page Interactive Data File (embedded within the Inline XBRL document)







Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.


Date: August 11, 2022 By: /s/ Brian Brown
  Name: Brian Brown

Chief Financial Officer

(Principal Financial and Accounting Officer)





Exhibit 99.1


Co-Diagnostics, Inc. Reports Second Quarter 2022 Financial Results


Second quarter results impacted by volume declines;

Further progress on the development of the Co-Dx PCR Home platform


SALT LAKE CITY, August 11, 2022— Co-Diagnostics, Inc. (NASDAQ: CODX), a molecular diagnostics company with a unique, patented platform for the development of molecular diagnostic tests, announced today financial results for the second quarter ended June 30, 2022.


Second Quarter 2022 Financial Results:


  Revenue of $5.0 million, down from $27.4 million during the prior year period, due primarily to lower demand of the Logix Smart™ COVID-19 Test
  Gross profit of $4.1 million, representing 81.8% of consolidated revenue stemming from inefficiencies in lower sales volumes
  Operating loss of $4.1 million compared to operating income of $11.8 million a year ago, due to lower sales volumes and continued investments into research and development
  Net loss of $2.7 million, compared to a net income of $9.8 million in the prior-year second quarter, representing a loss of $0.08 per fully diluted share
  Adjusted EBITDA loss of $2.3 million
  Cash, cash equivalents, and marketable securities of $96.0 million as of June 30, 2022
  Cash flow from operations of $1.7 million for the second quarter ended June 30, 2022


Dwight Egan, Co-Diagnostics’ Chief Executive Officer, remarked “Our second quarter results reflect lower volumes for our Logix Smart™ COVID-19 Test, which we believe is primarily the result of a reduction in mandated testing in travel and public venues and in government funding for testing programs. The Company has initiatives underway intended to actively address these pressures, such as growing our international distributor network, expanding our infectious disease testing menu including monkeypox, and most importantly, our upcoming at-home/point-of-care testing platform. We anticipate these initiatives will potentially be bolstered by recurring COVID surges as we have previously experienced.”


Mr. Egan further stated that “progress continues in the development and optimization of the Co-Dx™ PCR Home testing platform* and its manufacturing capacity to meet the anticipated demand for gold-standard PCR in at-home and point-of-care settings. We believe that the need for accurate and reliable COVID-19 testing will persist as new variants emerge, and we continue to invest time and resources to meet the evolving demand for COVID-19 and other infectious diseases globally. We remain confident in our business strategy and in our unique portfolio of innovative testing products that extend far beyond COVID-19.”


Second Quarter 2022 and Recent Business Highlights:


  Indian JV CoSara received clearance from Indian regulators for Hepatitis C viral load test
  Completed principal design for monkeypox virus test and shipped testing reagents to international distributor
  Announced global expansion of OEM agreement with Bio Molecular Systems (“BMS”) for the Co-Dx Box™ magnetic induction PCR cycler, to encompass 193 countries worldwide
  Continued optimization of the Co-Dx PCR Home device, which has been showcased at several tradeshows and conferences.
  Initiated previously announced repurchase of shares to return value to Company shareholders





Conference Call and Webcast


Co-Diagnostics will host a conference call and webcast at 4:30 p.m. EDT today to discuss its financial results with analysts and institutional investors. The conference call and webcast will be available via:


Webcast: on the Events & Webcasts page


Conference Call: 877-317-6789 (domestic) or 412-317-6789 (international)


The call will be recorded and later made available on the Company’s website:


*The Co-Dx PCR Home platform is subject to FDA review and is not currently for sale.


About Co-Diagnostics, Inc.:


Co-Diagnostics, Inc., a Utah corporation, is a molecular diagnostics company that develops, manufactures and markets new, state-of-the-art diagnostics technologies. The Company’s technology is utilized for tests that are designed using the detection and/or analysis of nucleic acid molecules (DNA or RNA). The Company also uses its proprietary technology to design specific tests to locate genetic markers for use in industries other than infectious disease and license the use of those tests to specific customers.


Non-GAAP Financial Measures:


This press release contains adjusted EBITDA, which is a non-GAAP measure defined as net income excluding depreciation, amortization, income tax (benefit) expense, net interest (income) expense, stock-based compensation, and one-time transaction related costs. The Company believes that adjusted EBITDA provides useful information to management and investors relating to its results of operations. The Company’s management uses this non-GAAP measure to compare the Company’s performance to that of prior periods for trend analyses, and for budgeting and planning purposes. The Company believes that the use of adjusted EBITDA provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing the Company’s financial measures with other companies, many of which present similar non-GAAP financial measures to investors, and that it allows for greater transparency with respect to key metrics used by management in its financial and operational decision-making.


Management does not consider the non-GAAP measure in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal limitation of the non-GAAP financial measure is that it excludes significant expenses that are required by GAAP to be recorded in the Company’s financial statements. In order to compensate for these limitations, management presents the non-GAAP financial measure together with GAAP results. Non-GAAP measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results. A reconciliation tables of the net income, the most comparable GAAP financial measure to adjusted EBITDA, is included at the end of this release. The Company urges investors to review the reconciliation and not to rely on any single financial measure to evaluate the company’s business.


Forward-Looking Statements:


This press release contains forward-looking statements. Forward-looking statements can be identified by words such as “believes,” “expects,” “estimates,” “intends,” “may,” “plans,” “will” and similar expressions, or the negative of these words. Such forward-looking statements are based on facts and conditions as they exist at the time such statements are made and predictions as to future facts and conditions. Forward-looking statements in this release include statements regarding (i) completion of development and FDA submission for approval of the new Co-Dx at-home/point-of-care PCR testing device, (ii) that there will be recurring COVID surges, and (iii) our confidence that the need for accurate and reliable COVID-19 testing will persist as new variants emerge. Forward-looking statements are subject to inherent uncertainties, risks and changes in circumstances. Actual results may differ materially from those contemplated or anticipated by such forward-looking statements. Readers of this press release are cautioned not to place undue reliance on any forward-looking statements. There can be no assurance that any of the anticipated results will occur on a timely basis or at all due to certain risks and uncertainties, a discussion of which can be found in our Risk Factors disclosure in our Annual Report on Form 10-K, filed with the Securities and Exchange Commission (SEC) on March 24, 2022, and in our other filings with the SEC. The Company does not undertake any obligation to update any forward-looking statement relating to matters discussed in this press release, except as may be required by applicable securities laws.


Company Contact: Investor Relations Contact:  
Andrew Benson Zachary Mizener
Head of Investor Relations Lambert & Co.
+1 801-438-1036 +1 616-233-0500
[email protected] [email protected]









   June 30, 2022   December 31, 2021 
Current assets          
Cash and cash equivalents  $86,045,405   $88,607,234 
Marketable investment securities   9,951,550    1,255,266 
Accounts receivable, net   12,260,009    20,839,182 
Inventory   4,705,921    2,004,169 
Prepaid expenses and other current assets   1,569,374    2,338,444 
Note receivable   35,200    75,000 
Total current assets   114,567,459    115,119,295 
Property and equipment, net   2,421,349    1,933,216 
Operating lease right-of-use asset   530,033    - 
Goodwill   15,388,546    14,706,818 
Intangible assets, net   26,981,667    27,195,000 
Investment in joint venture   877,089    1,004,953 
Note receivable   75,000    75,000 
Total assets  $160,841,143   $160,034,282 
Liabilities and stockholders’ equity          
Current liabilities          
Accounts payable  $848,379   $607,506 
Accrued expenses, current   1,818,773    3,859,652 
Operating lease liability, current   287,900    - 
Contingent consideration liabilities, current   3,761,084    5,767,304 
Income taxes payable   -    2,213,088 
Deferred revenue   -    150,000 
Total current liabilities   6,716,136    12,597,550 
Long-term liabilities          
Income taxes payable   1,464,024    1,067,853 
Deferred tax liability   5,310,573    7,228,444 
Operating lease liability   201,266    - 
Contingent consideration liabilities   2,678,204    4,665,337 
Total long-term liabilities   9,654,067    12,961,634 
Total liabilities   16,370,203    25,559,184 
Commitments and contingencies (Note 12)          
Stockholders’ equity          
Convertible preferred stock, $0.001 par value; 5,000,000 shares authorized; 0 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively   -    - 

Common stock, $0.001 par value; 100,000,000 shares authorized; 34,313,432 shares issued and 33,780,992 shares outstanding as of June 30, 2022 and 33,819,862 shares issued and outstanding as of December 31, 2021

    34,313     33,820 
Treasury stock, at cost; 532,440 and 0 shares held as of June 30, 2022 and December 31, 2021, respectively   (2,599,478)   - 
Additional paid-in capital    83,838,533     80,271,999 
Accumulated earnings   63,197,572    54,169,279 
Total stockholders’ equity   144,470,940    134,475,098 
Total liabilities and stockholders’ equity  $160,841,143   $160,034,282 









   Three Months Ended June 30,   Six Months Ended June 30, 
   2022   2021   2022   2021 
Revenue  $5,023,226   $27,358,140   $27,722,270   $47,382,909 
Cost of revenue   915,432    2,504,355    4,197,383    5,776,920 
Gross profit   4,107,794    24,853,785    23,524,887    41,605,989 
Operating expenses                    
Sales and marketing   1,472,225    5,853,313    4,124,373    7,050,859 
General and administrative   2,468,421    2,468,433    5,390,616    5,404,122 
Research and development   3,889,844    4,669,160    7,661,171    6,886,223 
Depreciation and amortization   424,342    71,714    671,606    138,719 
Total operating expenses   8,254,832    13,062,620    17,847,766    19,479,923 
Income from operations   (4,147,038)   11,791,165    5,677,121    22,126,066 
Other income (expense)                    
Interest income   61,671    10,529    73,064    25,186 
(Loss) on disposition of assets   (48,740)   -    (142,161)   - 
Gain on remeasurement of acquisition contingencies   812,822    -    4,192,712    - 
Gain (loss) on equity method investment in joint venture   (106,525)   128,595    (127,864)   (336,348)
Total other income (expense)   719,228    139,124    3,995,751    (311,162)
Income (loss) before income taxes   (3,427,810)   11,930,289    9,672,872    21,814,904 
Income tax provision   (741,507)   2,145,076    644,580    4,130,716 
Net income (loss)  $(2,686,303)  $9,785,213   $9,028,292   $17,684,188 
Earnings per common share:                    
Basic  $(0.08)  $0.34   $ 0.28    $0.62 
Diluted  $(0.08)  $0.33   $ 0.27    $0.59 
Weighted average shares outstanding:                    
Basic    33,472,251     28,794,047     32,509,664     28,728,828 
Diluted    33,472,251     29,741,265     33,253,612     29,833,955 









Reconciliation of net income to adjusted EBITDA:


   Three Months Ended June 30,   Six Months Ended June 30, 
   2022   2021   2022   2021 
Net income  $(2,686,303)  $9,785,213   $9,028,292   $17,684,188 
Interest income   (61,671)   (10,529)   (73,064)   (25,186)
Depreciation and amortization   424,342    71,714    671,606    138,719 
Transaction costs   47,943    -    126,171    - 
Change in fair value of contingent consideration   (812,822)   -    (4,192,712)   - 
Stock-based compensation expense   1,533,286    927,338    2,908,381    2,440,347 
Income tax provision   (741,507)   2,145,076    644,580    4,130,716 
Adjusted EBITDA  $(2,296,732)  $12,918,812   $9,113,254   $24,368,784 




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