UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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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) |
SIGNATURE
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.
| CO-DIAGNOSTICS, INC. | ||
| Date: August 11, 2022 | By: | /s/ Brian Brown |
| Name: | Brian Brown | |
| Title: | 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: ir.codiagnostics.com 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: https://codiagnostics.com.
*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 |
| investors@codiagnostics.com | zmizener@lambert.com |
CO-DIAGNOSTICS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
| June 30, 2022 | December 31, 2021 | |||||||
| Assets | ||||||||
| 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 | ||||
CO-DIAGNOSTICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| 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 | ||||||||||||
CO-DIAGNOSTICS, INC. AND SUBSIDIARIES
GAAP AND NON-GAAP MEASURES
(Unaudited)
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 | |||||||
Cover |
Aug. 11, 2022 |
|---|---|
| Cover [Abstract] | |
| Document Type | 8-K |
| Amendment Flag | false |
| Document Period End Date | Aug. 11, 2022 |
| Entity File Number | 1-38148 |
| Entity Registrant Name | CO-DIAGNOSTICS, INC. |
| Entity Central Index Key | 0001692415 |
| Entity Tax Identification Number | 46-2609363 |
| Entity Incorporation, State or Country Code | UT |
| Entity Address, Address Line One | 2401 S. Foothill Drive |
| Entity Address, Address Line Two | Suite D |
| Entity Address, City or Town | Salt Lake City |
| Entity Address, State or Province | UT |
| Entity Address, Postal Zip Code | 84109 |
| City Area Code | (801) |
| Local Phone Number | 438-1036 |
| Written Communications | false |
| Soliciting Material | false |
| Pre-commencement Tender Offer | false |
| Pre-commencement Issuer Tender Offer | false |
| Title of 12(b) Security | Common Stock, par value $0.001 per share |
| Trading Symbol | CODX |
| Security Exchange Name | NASDAQ |
| Entity Emerging Growth Company | true |
| Elected Not To Use the Extended Transition Period | false |