8-K
Co-Diagnostics, Inc. (CODX)
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date of report (Date of earliest event reported): November 11, 2021
CO-DIAGNOSTICS,
INC.
(Exact name of small business issuer as specified in its charter)
| Utah | 1-38148 | 46-2609363 |
|---|---|---|
| (State<br> or other jurisdiction of | (Commission | (IRS<br> Employer |
| incorporation<br> or organization) | File<br> Number) | Identification<br> Number) |
2401S. 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<br> communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting<br> material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement<br> communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement<br> 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<br> of each class | Trading<br> Symbol(s) | Name<br> of each exchange on which registered |
|---|---|---|
| Common<br> Stock, par value $0.001 per share | CODX | The<br> 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. ☐
Item2.02. Results of Operations and Financial Condition.
Item7.01. Regulation FD. Disclosure.
On November 11, 2021, Co-Diagnostics, Inc. (the “Company”) issued a press release announcing financial results for its quarter ended September 30, 2021. A copy of the press release is included as Exhibit 99.1 and incorporated herein by reference. The Company anticipates filing its Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2021 with the U.S. Securities and Exchange Commission on or before November 15, 2021.
The disclosures under Item 2.02 and Item 7.01, including Exhibit 99.1 hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section. The information provided herein shall not be deemed incorporated by reference into any filing made under the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such filing.
Item9.01 Financial Statements and Exhibits.
(d) Exhibits
| Exhibit No.: | Description: |
|---|---|
| 99.1 | Press Released, dated November 11, 2021 |
| 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: November 11, 2021 | By: | /s/ Brian Brown |
| Name: | Brian<br> Brown | |
| Title: | Chief<br> Financial Officer<br><br> <br>(Principal<br> Financial and Accounting Officer) |
Exhibit99.1
Co-DiagnosticsReports Continued Strength in Third Quarter 2021 Financial Results
Solidquarterly results highlighted by record revenue of $30.1 million, pre-tax income of $13.6 million and fully diluted EPS of $0.38
**SALTLAKE CITY, November 11, 2021—**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 third quarter ended September 30, 2021.
ThirdQuarter 2021 Financial Results:
| ● | Revenue<br> increased 38.0% as compared to the prior year period to a record $30.1 million, primarily due to sales of the Logix Smart™<br> COVID-19 Test. |
|---|---|
| ● | Gross<br> profit increased 67.5% to $26.8 million, representing 89.0% of consolidated revenue due to improved product mix as compared to the<br> prior-year period. |
| ● | Operating<br> income totaled $13.6 million, representing a 13.2% increase from the prior year period due to increased sales and marketing expenses<br> as a result of increased third-party sales commissions, as well as increased research and development expenses related to the Eikon<br> point of care technology platform. |
| ● | Income<br> before taxes of $13.6 million, compared to $12.8 million in the prior period. |
| ● | Net<br> income of $11.5 million, compared to a net income of $15.7 million in the prior-year third quarter, representing $0.38 per fully<br> diluted share, as compared to $0.53 per fully diluted share in the third quarter of 2020. |
| ● | Cash,<br> cash equivalents, and marketable securities totaled $83.9 million as of September 30, 2021, an increase of $11.5 million from June<br> 30, 2021. |
| ● | Operating<br> cash flows totaled $36.2 million for the year-to-date period ending September 30, 2021, as compared to operating cash flows of $8.2<br> million during the prior year period. |
“This quarter brought continued growth and strong positioning for sustainability,” said Dwight Egan, Co-Diagnostics’ Chief Executive Officer. “We believe that our diverse international customer base, clean balance sheet and steady cash accumulation, in addition to our high-quality products whose performance has been validated by laboratories and regulatory bodies across the world, help us stand out from the crowd and all contributed to our record sales in Q3.
“An important step in our growth to becoming a leading global molecular diagnostics company is our upcoming point of care/at-home diagnostic platform,” continued Egan. “We are optimistic about the potential impact this new device can have on infectious disease diagnostics, not just for COVID-19 but other diseases as well, and believe we are well positioned to maintain our trajectory of market share growth as our investments in talent and R&D continue to yield positive results.”
ThirdQuarter 2021 Business Highlights:
| ● | Unveiled<br> at-home/point-of-care testing device at AACC annual meeting. |
|---|---|
| ● | Initiated<br> corporate rebranding to better reflect expanded scope, mission, and upcoming expansion into new diagnostics verticals. |
| ● | JV<br> CoSara received clearance from Indian FDA-equivalent for chikungunya and dengue tests. |
| ● | Received<br> approval to sell the Logix Smart ABC test in Mexico. |
| ● | Received<br> ANVISA approval to sell Logix Smart COVID-19 test kit in Brazil. |
| ● | Strengthened<br> the intellectual property portfolio with new international CoPrimer™ patent. |
FullYear 2021 Outlook:
Co-Diagnostics is offering the following guidance for its full year of 2021:
| ● | Revenue<br> to be in the range of $96.0 million to $100.0 million |
|---|---|
| ● | Diluted<br> earnings per share forecasted to be in the $1.07 to $1.16 range, with shares outstanding expected to be approximately 30 million<br> and a corporate effective tax rate of approximately 18.0%. |
ConferenceCall 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.
AboutCo-Diagnostics, Inc.:
Co-Diagnostics, Inc., a Utah corporation, is a molecular diagnostics company that develops, manufactures and markets a new, state-of-the-art diagnostics technology. 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.
Forward-LookingStatements:
Thispress release contains forward-looking statements. Forward-looking statements can be identified by words such as “believes,”“expects,” “estimates,” “intends,” “may,” “plans,” “will” andsimilar expressions, or the negative of these words. Such forward-looking statements are based on facts and conditions as they existat the time such statements are made and predictions as to future facts and conditions. Forward-looking statements in this release includestatements regarding the (i) use of funding proceeds, (ii) expansion of product distribution, (iii) acceleration of initiatives in liquidbiopsy and SNP detection, (iv) use of the Company’s liquid biopsy tests by laboratories, (v) capital resources and runway neededto advance the Company’s products and markets, (vi) increased sales in the near-term, (vii) flexibility in managing the Company’sbalance sheet, (viii) anticipation of business expansion, (ix) benefits in research and worldwide accessibility of the CoPrimer technologyand its cost-saving and scientific advantages, and (x) the impact that known and unknown COVID-19 variants may have on us and our products,our customers and suppliers, including disruptions and inefficiencies in the supply chain. Forward-looking statements are subjectto inherent uncertainties, risks and changes in circumstances. Actual results may differ materially from those contemplated or anticipatedby such forward-looking statements. Readers of this press release are cautioned not to place undue reliance on any forward-looking statements.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<br> Contact: | Investor<br> Relations Contact: |
|---|---|
| Andrew<br> Benson | Zach<br> Mizener |
| Head<br> of Investor Relations | Lambert<br> & Co. |
| +1<br> 801-438-1036 | +1<br> 616-233-0500 |
| investors@codiagnostics.com | zmizener@lambert.com |
CO-DIAGNOSTICS,INC.
CONDENSEDCONSOLIDATED BALANCE SHEETS
(Unaudited)
| December<br> 31, 2020 | |||
|---|---|---|---|
| Assets | |||
| Current<br> assets | |||
| Cash<br> and cash equivalents | 82,658,248 | $ | 42,976,713 |
| Marketable<br> investment securities | 1,251,285 | 4,335,446 | |
| Accounts<br> receivable, net | 14,589,599 | 12,136,833 | |
| Inventory | 3,302,925 | 7,995,189 | |
| Prepaid<br> expenses | 485,095 | 369,028 | |
| Total<br> current assets | 102,287,152 | 67,813,209 | |
| Property<br> and equipment, net | 1,524,806 | 949,639 | |
| Investment<br> in joint venture | 1,034,098 | 1,927,125 | |
| Deferred<br> tax asset | 512,552 | 547,224 | |
| Total<br> assets | 105,358,608 | $ | 71,237,197 |
| Liabilities<br> and stockholders' equity | |||
| Current<br> liabilities | |||
| Accounts<br> payable | 800,003 | $ | 598,318 |
| Accrued<br> expenses, current | 2,055,698 | 2,849,503 | |
| Accrued<br> expenses (related party), current | 30,000 | 120,000 | |
| Income<br> taxes payable | 1,044,640 | 637,560 | |
| Deferred<br> revenue | 189,556 | 305,307 | |
| Total<br> current liabilities | 4,119,897 | 4,510,688 | |
| Long-term<br> liabilities | |||
| Accrued<br> expenses, noncurrent | 1,080,358 | - | |
| Accrued<br> expenses (related party), noncurrent | - | 30,000 | |
| Total<br> long-term liabilities | 1,080,358 | 30,000 | |
| Total<br> liabilities | 5,200,255 | 4,540,688 | |
| Commitments<br> and contingencies (Note 9) | |||
| Stockholders'<br> equity | |||
| Convertible<br> preferred stock, 0.001 par value; 5,000,000 shares authorized; 0 shares issued and outstanding as of September 30, 2021 and December<br> 31, 2020 | - | - | |
| Common<br> stock, 0.001 par value; 100,000,000 shares authorized; 28,894,890 and 28,558,033 shares issued and outstanding as of September 30,<br> 2021 and December 31, 2020, respectively | 28,895 | 28,558 | |
| Additional<br> paid-in capital | 53,458,589 | 49,157,236 | |
| Accumulated<br> earnings | 46,670,869 | 17,510,715 | |
| Total<br> stockholders' equity | 100,158,353 | 66,696,509 | |
| Total<br> liabilities and stockholders' equity | 105,358,608 | $ | 71,237,197 |
All values are in US Dollars.
CO-DIAGNOSTICS,INC.
CONSOLIDATEDSTATEMENTS OF OPERATIONS
(Unaudited)
| Three<br> Months Ended<br><br> <br>September<br> 30, | Nine<br> Months Ended<br><br> <br>September<br> 30, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2021 | 2020 | 2021 | 2020 | |||||||||
| Revenue | $ | 30,101,353 | $ | 21,818,753 | $ | 77,484,262 | $ | 47,407,555 | ||||
| Cost<br> of revenue | 3,311,255 | 5,821,281 | 9,088,175 | 12,278,326 | ||||||||
| Gross<br> profit | 26,790,098 | 15,997,472 | 68,396,087 | 35,129,229 | ||||||||
| Operating<br> expenses | ||||||||||||
| Sales<br> and marketing | 4,253,091 | 798,474 | 11,303,950 | 1,457,148 | ||||||||
| General<br> and administrative | 2,919,498 | 2,203,417 | 8,323,620 | 5,853,935 | ||||||||
| Research<br> and development | 5,893,350 | 921,889 | 12,779,573 | 2,072,160 | ||||||||
| Depreciation<br> and amortization | 94,038 | 35,490 | 232,757 | 81,456 | ||||||||
| Total<br> operating expenses | 13,159,977 | 3,959,270 | 32,639,900 | 9,464,699 | ||||||||
| Income<br> from operations | 13,630,121 | 12,038,202 | 35,756,187 | 25,664,530 | ||||||||
| Other<br> income (expense) | ||||||||||||
| Interest<br> income | 11,379 | 29,992 | 36,565 | 75,740 | ||||||||
| Gain<br> (loss) on equity method investment in joint venture | (64,940 | ) | 748,557 | (401,288 | ) | 1,016,297 | ||||||
| Total<br> other income (expense) | (53,561 | ) | 778,549 | (364,723 | ) | 1,092,037 | ||||||
| Income<br> before income taxes | 13,576,560 | 12,816,751 | 35,391,464 | 26,756,567 | ||||||||
| Income<br> tax provision (benefit) | 2,100,594 | (2,914,781 | ) | 6,231,310 | (2,914,781 | ) | ||||||
| Net<br> income | $ | 11,475,966 | $ | 15,731,532 | $ | 29,160,154 | $ | 29,671,348 | ||||
| Earnings<br> per common share: | ||||||||||||
| Basic | $ | 0.40 | $ | 0.56 | $ | 1.01 | $ | 1.13 | ||||
| Diluted | $ | 0.38 | $ | 0.53 | $ | 0.98 | $ | 1.07 | ||||
| Weighted<br> average shares outstanding: | ||||||||||||
| Basic | 28,941,357 | 28,084,267 | 28,800,450 | 26,172,439 | ||||||||
| Diluted | 29,952,690 | 29,597,792 | 29,872,415 | 27,621,531 |