Co-Diagnostics, Inc. Announces Q2 2020 Results on Form 10-Q

Company reports robust sales of COVID-19 tests and net income per common share of $0.43

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Aug 13, 2020, 16:01 ET

SALT LAKE CITY, Aug. 13, 2020 /PRNewswire/ -- Co-Diagnostics, Inc. (Nasdaq: CODX), a molecular diagnostics company with a unique, patented platform for the development of molecular diagnostic tests, announced today the filing of its operating results for the 3 month period ending June 30, 2020 on SEC Form 10-Q, and provided updates on Company developments.

Q2 2020 Highlights:

Company continues COVID-19 test sales and reports $24.04 million of revenue in Q2;
Net profit of $12.6 million in quarter and net income per common share of $0.43;
Stockholders' equity increased to $33.4 million compared to $1.7 million at the beginning of the year.
Gross margins of 70% on sales of Logix Smart™ COVID-19 test kits;
CoSara Diagnostics, Company's India joint venture, receives authorization from CDSCO in India to manufacture and sell COVID-19 tests and records profit for the 2nd Quarter and YTD;
Received FDA Emergency Use Authorization for COVID-19 test kit on April 3, 2020;
Cash on hand was $18.6 million as of June 30, 2020, an increase of $17.7 million over 12/31/2019;
Company is included in the Russell 2000^® and Russell 3000^® Index, widely used by investment managers and institutional investors for index funds and as benchmarks for active investment strategies.

Q3 2020 Mid-Quarter Highlights:

Company records COVID-19 test and equipment sales orders approaching $50 million YTD, including joint venture sales in India, through mid-third quarter (unaudited);
Receives purchase orders from public and private organizations in nearly 50 countries and over 25 states in the U.S. YTD;
Company nears completion of principal design work and verification for Flu A, Flu B, and COVID-19 multiplex panel with anticipated deployment during Q3;
Company announced that its partner Clinical Reference Lab has received FDA Emergency Use Authorization for CRL Rapid Response™, a saliva-based COVID-19 test that can be self-administered at home, work or any other setting and then tested using Co-Diagnostics' Logix Smart COVID-19 tests based on patented CoPrimer™ technology.

"In the last 4 months since Co-Diagnostics received emergency use authorization from the FDA, the Company has successfully grown our internationally recognized business and brand. With clients in over 50 countries, 25 U.S. states, and validations of test accuracy from regulatory bodies of numerous countries around the world, Co-Diagnostics has established a distribution platform that we believe will continue to support sales and profitability as our tests have gained widespread acceptance in the market. We have created a test menu and established the production capacity to meet demand for tests as the nations of the world continue to battle the pandemic, and believe these efforts will continue to bolster the Company's durability in the months and years to come," said Dwight Egan, Chief Executive Officer.

The Company will host an earnings call at 4:30 pm EDT today. Participants can register for access to the webcast here. The call will be recorded and later made available on the Company's website.

About Emergency Use Authorization:
The Co-Diagnostics SARS-CoV-2 Test has been made available under an emergency access mechanism called an Emergency Use Authorization (EUA). The EUA is supported by the Secretary of Health and Human Service's (HHS's) declaration that circumstances exist to justify the use of in vitro diagnostics (IVDs) under EUA for the detection and/or diagnosis of COVID-19. An IVD made available under an EUA has not undergone the same type of review as an FDA cleared IVD. However, based on the totality of scientific evidence available, it is reasonable to believe that this IVD may be effective in the detection of COVID-19. The EUAs for these tests are in effect for the duration of the COVID-19 emergency, unless terminated or revoked (after which the tests may no longer be used). An FDA cleared IVD should be used instead of an IVD under EUA, when applicable and available.

About Co-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-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 the (i) use of funding proceeds, (ii) expansion of product distribution, (iii) acceleration of initiatives in liquid biopsy and SNP detection, (iv) use of the Company's liquid biopsy tests by laboratories, (v) capital resources and runway needed to advance the Company's products and markets, (vi) increased sales in the near-term, (vii) flexibility in managing the Company's balance sheet, (viii) anticipation of business expansion, and (ix) benefits in research and worldwide accessibility of the CoPrimer technology and its cost-saving and scientific advantages. 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. 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.

CO – DIAGNOSTICS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

	June 30, 2020		December 31, 2019
ASSETS:
Current Assets
Cash and cash equivalents	$	18,550,437	$	893,138
Accounts receivables, net		5,349,876		131,382
Inventory		10,110,786		197,168
Prepaid expenses		521,180		362,566
Total current assets		34,532,279		1,584,254
Other Assets
Property and equipment, net		473,376		196,832
Investment in joint venture		1,416,480		434,240
Total other assets		1,889,856		631,072

Total assets	$	36,422,135	$	2,215,326

LIABILITIES AND STOCKHOLDERS' EQUITY:

Current Liabilities
Accounts payable	$	1,127,709	$	5,959
Accrued expenses		691,385		200,788
Accrued expenses (related party)		120,000		120,000
Deferred revenue		1,045,548		1,323
Total current liabilities		2,984,642		328,070
Long-term Liabilities, net of current portion
Accrued expenses-long-term (related party)		80,000		150,000
Total long-term liabilities, net of current portion		80,000		150,000
Total liabilities		3,064,642		478,070

STOCKHOLDERS' EQUITY
Convertible preferred stock, $0.001 par value; 5,000,000 shares authorized, 0 and 25,600 shares issued and outstanding as of June 30, 2020 and December 31, 2019, respectively		—		26

Common stock, $0.001 par value, 100,000,000 shares authorized; 27,991,042 and 17,342,922 shares issued and outstanding, as of June 30, 2020 and December 31, 2019, respectively.		27,991		17,343
Additional paid-in capital		46,726,869		26,687,701
Accumulated deficit		(13,397,367)		(24,967,814)
Total stockholders' equity		33,357,493		1,737,256

Total liabilities and stockholders' equity	$	36,422,135	$	2,215,326

CO – DIAGNOSTICS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2020		2019		2020		2019
Net revenue	$	24,040,274	$	61,574	$	25,588,802	$	64,974
Cost of revenue		8,344,674		38,809		8,826,414		39,261
Gross profit		15,695,600		22,765		16,762,388		25,713
Operating expenses:
Sales and marketing		390,191		252,076		658,674		508,179
Administrative and general		2,191,034		807,769		3,650,518		1,448,132
Research and development		750,249		312,590		1,150,271		659,896
Depreciation and amortization		25,218		16,094		45,966		29,762
Total operating expenses		3,356,692		1,388,529		5,505,429		2,645,969
Income (loss) from operations		12,338,908		(1,365,764)		11,256,959		(2,620,256)
Other expense:
Interest income		38,173		19,640		45,748		20,048
Interest expense		—		—		—		(106,427)
Gain on disposition of assets		—		—		—		850
Gain (loss) on equity method investment in joint venture		258,559		1,728		267,740		(7,000)
Total other expense		296,732		21,368		313,488		(92,529)
Income (loss) before income taxes		12,635,640		(1,344,396)		11,570,447		(2,712,785)
Provision for income taxes		—		—		—		—
Net income (loss)	$	12,635,640	$	(1,344,396)	$	11,570,447	$	(2,712,785)

Basic income (loss) per common share	$	0.46	$	(0.08)	$	0.42	$	(0.16)

Diluted income (loss) per common share	$	0.43	$	(0.08)	$	0.40	$	(0.16)

Weighted average common shares outstanding basic		27,582,229		17,017,964		27,605,137		16,544,926

Weighted average common shares outstanding diluted		29,152,222		17,017,964		29,094,475		16,544,926