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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

FORM 10-Q

 

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended March 31, 2024

 

OR

 

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from __________ to __________

 

Commission File No. 001-38148

 

CO-DIAGNOSTICS, INC.

(Exact Name of Registrant as Specified in Its Charter)

 

Utah   46-2609396
(State or other jurisdiction
of incorporation or organization)		   (I.R.S. Employer
Identification Number)

 

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

(Address of principal executive offices and zip code)

 

(801) 438-1036

(Registrant’s telephone number, including area code)

 

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   CODX   The Nasdaq Capital Market

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer ☐ Accelerated filer ☐
Non-accelerated filer ☒ Smaller reporting company ☒
    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. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

 

As of May 8, 2024, there were 31,278,418  shares of common stock, par value $0.001 per share, outstanding.

 

 

 

 

 

 

CO-DIAGNOSTICS, INC. AND SUBSIDIARIES

 

TABLE OF CONTENTS

 

PART I FINANCIAL INFORMATION:  
     
Item 1. Financial Statements (unaudited): 3
     
  Condensed Consolidated Balance Sheets 3
     
  Condensed Consolidated Statements of Operations 4
     
  Condensed Consolidated Statements of Cash Flows 5
     
  Condensed Consolidated Statements of Stockholders’ Equity 6
     
  Notes to Condensed Consolidated Financial Statements 7
     
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 18
     
Item 3. Quantitative and Qualitative Disclosures About Market Risk 21
     
Item 4. Controls and Procedures 21
     
PART II OTHER INFORMATION:  
     
Item 1. Legal Proceedings 22
     
Item 1A. Risk Factors 22
     
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 22
     
Item 3. Defaults Upon Senior Securities 22
     
Item 4. Mine Safety Disclosures 22
     
Item 5. Other Information 22
     
Item 6. Exhibits 23
     
  Signatures 24

 

2

 

 

PART I. FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

CO – DIAGNOSTICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

    March 31, 2024     December 31, 2023  
Assets                
Current assets                
Cash and cash equivalents   $ 23,099,251     $ 14,916,878  
Marketable investment securities     26,864,435       43,631,510  
Accounts receivable, net     434,868       303,926  
Inventory, net     1,549,812       1,664,725  
Income taxes receivable     -       26,955  
Prepaid expenses and other current assets     1,750,467       1,597,114  
Total current assets     53,698,833       62,141,108  
Property and equipment, net     3,183,116       3,035,729  
Operating lease right-of-use asset     2,758,757       2,966,774  
Intangible assets, net     26,328,000       26,403,667  
Investment in joint venture     702,427       773,382  
Total assets   $ 86,671,133     $ 95,320,660  
Liabilities and stockholders’ equity                
Current liabilities                
Accounts payable   $ 2,027,607     $ 1,482,109  
Accrued expenses     1,324,779       2,172,959  
Operating lease liability, current     859,912       838,387  
Contingent consideration liabilities, current     750,877       891,666  
Deferred revenue     306,477       362,449  
Total current liabilities     5,269,652       5,747,570  
Long-term liabilities                
Income taxes payable     679,018       659,186  
Operating lease liability     1,931,164       2,152,180  
Contingent consideration liabilities     438,638       748,109  
Total long-term liabilities     3,048,820       3,559,475  
Total liabilities     8,318,472       9,307,045  
Commitments and contingencies (Note 10)     -       -  
Stockholders’ equity                
Convertible preferred stock, $0.001 par value; 5,000,000 shares authorized; 0 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively     -       -  
Common stock, $0.001 par value; 100,000,000 shares authorized; 36,127,096 shares issued and 31,278,418 shares outstanding as of March 31, 2024 and 36,108,346 shares issued and 31,259,668 shares outstanding as of December 31, 2023     36,127       36,108  
Treasury stock, at cost; 4,848,678 shares held as of March 31, 2024 and December 31, 2023, respectively     (15,575,795 )     (15,575,795 )
Additional paid-in capital     98,379,651       96,808,436  
Accumulated other comprehensive income     226,555       146,700  
Accumulated earnings (deficit)     (4,713,877 )     4,598,166  
Total stockholders’ equity     78,352,661       86,013,615  
Total liabilities and stockholders’ equity   $ 86,671,133     $ 95,320,660  

 

See accompanying notes to unaudited condensed consolidated financial statements

 

3

 

 

CO – DIAGNOSTICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Unaudited)

 

   2024   2023 
   Three Months Ended March 31, 
   2024   2023 
Product revenue  $252,745   $601,957 
Grant revenue   215,109    - 
Total revenue   467,854    601,957 
Cost of revenue   234,505    502,241 
Gross profit   233,349    99,716 
Operating expenses          
Sales and marketing   1,563,682    1,706,331 
General and administrative   2,918,803    3,013,965 
Research and development   5,679,678    5,014,060 
Depreciation and amortization   330,573    316,010 
Total operating expenses   10,492,736    10,050,366 
Loss from operations   (10,259,387)   (9,950,650)
Other income, net          
Interest income   362,733    202,372 
Realized gain on investments   228,070    418,082 
Gain on remeasurement of acquisition contingencies   450,260    1,037,672 
Gain (loss) on equity method investment in joint venture   (70,955)   277,322 
Total other income, net   970,108    1,935,448 
Loss before income taxes   (9,289,279)   (8,015,202)
Income tax provision (benefit)   22,764    (2,259,811)
Net loss  $(9,312,043)  $(5,755,391)
Other comprehensive loss          
Change in net unrealized gains on marketable securities, net of tax   79,855    178,621 
Total other comprehensive income  $79,855   $178,621 
Comprehensive loss  $(9,232,188)  $(5,576,770)
           
Loss per common share:          
Basic and Diluted  $(0.31)  $(0.20)
Weighted average shares outstanding:          
Basic and Diluted   29,842,874    29,483,540 

 

See accompanying notes to unaudited condensed consolidated financial statements

 

4

 

 

CO – DIAGNOSTICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

   2024   2023 
   Three Months Ended March 31, 
   2024   2023 
Cash flows from operating activities          
Net loss  $(9,312,043)  $(5,755,391)
Adjustments to reconcile net loss to cash used in operating activities:          
Depreciation and amortization   330,573    316,010 
Stock-based compensation expense   1,571,234    2,168,742 
Change in fair value of acquisition contingencies   (450,260)   (1,037,672)
Non-cash lease expense   8,527    7,449 
Realized gain on investments   (228,070)   (418,082)
(Gain) loss from equity method investment   70,955    (277,322)
Deferred income taxes   -    (2,214,652)
Provision for credit losses   (14,658)   (113,998)
Inventory obsolescence expense   48,702    200,113 
Changes in assets and liabilities:          
Accounts receivable   (116,284)   865,525 
Prepaid expenses and other assets   (126,399)   60,451 
Inventory   66,211    (184,292)
Deferred revenue   (55,972)   18,120 
Income taxes payable   19,832    11,796 
Accounts payable, accrued expenses and other liabilities   (302,682)   435,686 
Net cash used in operating activities   (8,490,334)   (5,917,517)
Cash flows from investing activities          
Purchases of property and equipment   (402,293)   (179,944)
Proceeds from maturities of marketable investment securities   17,382,925    30,539,621 
Purchases of marketable securities   (307,925)   (40,574,387)
Net cash provided by (used in) investing activities   16,672,707    (10,214,710)
Cash flows from financing activities          
Repurchases of common stock   -    (482,196)
Net cash used in financing activities   -    (482,196)
Net increase (decrease) in cash and cash equivalents   8,182,373    (16,614,423)
Cash and cash equivalents at beginning of period   14,916,878    22,973,803 
Cash and cash equivalents at end of period  $23,099,251   $6,359,380 
Supplemental disclosure of cash flow information          
Income taxes paid  $-   $29,500 
Supplemental disclosure of non-cash investing and financing transactions          
Right-of-use assets obtained in exchange for new operating lease liabilities  $-   $657,150 

 

See accompanying notes to unaudited condensed consolidated financial statements

 

5

 

 

CO – DIAGNOSTICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

 

   Shares   Amount   Shares   Amount   Stock   Capital   Income   (Deficit)   Equity 
   Convertible Preferred Stock   Common Stock   Treasury   Additional Paid-in   Accumulated Other Comprehensive   Accumulated Earnings   Total Stockholders’ 
   Shares   Amount   Shares   Amount   Stock   Capital   Income   (Deficit)   Equity 
Balance as of December 31, 2023   -    -    36,108,346    36,108    (15,575,795)   96,808,436    146,700    4,598,166    86,013,615 
Stock-based compensation   -    -    18,750    19    -    1,571,215    -    -    1,571,234 
Other comprehensive income, net of tax   -    -    -    -    -    -    79,855    -    79,855 
Net loss   -    -    -    -    -    -    -    (9,312,043)   (9,312,043)
Balance as of March 31, 2024   -   $-    36,127,096   $36,127   $(15,575,795)  $98,379,651   $226,555   $(4,713,877)  $78,352,661 

 

   Convertible Preferred Stock   Common Stock   Treasury   Additional Paid-in   Accumulated Other Comprehensive   Accumulated
Earnings		   Total Stockholders’ 
   Shares   Amount   Shares   Amount   Stock   Capital   Income   (Deficit)   Equity 
Balance as of December 31, 2022   -   $-    34,754,265   $34,754   $(14,211,866)  $88,472,935   $293,140   $39,931,031   $114,519,994 
Stock-based compensation   -    -    68,750    69    -    2,168,673    -    -    2,168,742 
Repurchases of common stock   -    -    -    -    (482,196)   -    -    -    (482,196)
Other comprehensive income, net of tax   -    -    -    -    -    -    178,621    -    178,621 
Net loss   -    -    -    -    -    -    -    (5,755,391)   (5,755,391)
Balance as of March 31, 2023   -   $-    34,823,015   $34,823   $(14,694,062)  $90,641,608   $471,761   $34,175,640   $110,629,770 

 

See accompanying notes to unaudited condensed consolidated financial statements

 

6

 

 

CO – DIAGNOSTICS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

Note 1 – Overview and Basis of Presentation

 

Description of Business

 

Co-Diagnostics, Inc., a Utah corporation (the “Company” or “CODX”), is a molecular diagnostics company that develops, manufactures and markets state-of-the-art diagnostics technologies. The Company’s technologies are 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 for its Co-Dx PCR platform and to locate genetic markers for use in applications other than infectious disease. In connection with the sale of our tests we may sell diagnostic equipment from other manufacturers as self-contained lab systems.

 

Unaudited Condensed Consolidated Financial Statements

 

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information as they are prescribed for smaller reporting companies. As permitted under those rules and regulations, certain notes or other financial information normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. Accordingly, the accompanying unaudited condensed consolidated financial statements do not include all the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary to make the financial statements not misleading have been included. Operating results for the three months ended March 31, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024. These statements should be read in conjunction with the Company’s audited financial statements and related notes for the year ended December 31, 2023, included in the Company’s Annual Report on Form 10-K filed with the SEC on March 14, 2024. The Company’s significant accounting policies are set forth in Note 2 to the consolidated financial statements in its Annual Report on Form 10-K for the year ended December 31, 2023.

 

Use of Estimates

 

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the accompanying notes. Such estimates include receivables and other long-lived assets, legal contingencies, income taxes, share based arrangements, and others. These estimates and assumptions are based on management’s best estimates and judgments. Actual amounts and results could differ from those estimates.

 

Note 2 – Summary of Significant Accounting Policies

 

Reclassifications

 

Certain prior year amounts have been reclassified to conform with the current year’s presentation. These reclassifications have no impact on the previously reported results.

 

7

 

 

Accounts Receivable

 

Trade accounts receivable are recorded at the invoiced amount (net of allowance) and do not bear interest. The Company maintains an allowance for doubtful accounts for amounts the Company does not expect to collect. In establishing the required allowance, management considers historical losses, current market condition, customers’ financial condition, the age of receivables, and current payment patterns. Account balances are written off against the allowance once the receivable is deemed uncollectible. Recoveries of trade receivables previously written off are recorded when collected. At March 31, 2024 total accounts receivable was $620,548 with an allowance for uncollectable accounts of $185,680 resulting in a net amount of $434,868. At December 31, 2023 total accounts receivable was $504,264 with an allowance for uncollectable accounts of $200,338 resulting in a net amount of $303,926.

 

Inventory

 

Inventory is stated at the lower of cost or net-realizable value. Inventory cost is determined on a first-in first-out basis that approximates average cost in accordance with ASC 330-10-30-12. At March 31, 2024, the Company had $1,549,812 in inventory, of which $674,142 was finished goods and $875,670 was raw materials. At December 31, 2023, the Company had $1,664,725 in inventory, of which $700,467 was finished goods and $964,258 was raw materials. The Company establishes reserves to reduce low-moving, obsolete, or unusable inventories to their estimated useful or scrap values. The Company recognized $311,339 and $43,717 related to the change in inventory reserves during the three months ended March 31, 2024 and 2023, respectively.

 

Revenue Recognition

 

The Company generates revenue from customers from product and license sales. The Company recognizes revenue from customers when all of the following criteria are satisfied: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when, or as the Company satisfies each performance obligation.

 

The Company constrains revenue by giving consideration to factors that could otherwise lead to a probable reversal of revenue. The Company records any payments received from customers prior to the Company fulfilling its performance obligation(s) as deferred revenue.

 

Grant Revenue

 

The Company may submit applications to receive grant funding from governmental and non-governmental entities. The Company accounts for grants by analogizing to the contribution accounting model under ASC 958-605, Not-for-Profit Entities (“ASC 958”). Revenues from grants, contracts, and awards provided by governmental and non-governmental agencies are recorded based upon the terms of the specific agreements. The Company recognizes grant funding without conditions or continuing performance obligations as revenue in the consolidated statements of operations and comprehensive income (loss). The Company recognizes grant funding with conditions or continuing performance obligations as deferred revenue in the consolidated balance sheets if the conditions or performance obligations have not yet been met. The Company recognized grant funding revenue of $0.2 million and $0 during the three months ended March 31, 2024 and 2023, respectively. At March 31, 2024, the Company has also recorded $0.3 million of deferred revenue related to grant funding for which the cash was received, but the underlying conditions or performance obligations have not yet been met. Cash received from federal grants, contracts, and awards can be subject to audit by the grantor and, if the examination results in a disallowance of any expenditure, repayment could be required.

 

8

 

 

Income Taxes

 

The Company accounts for income taxes in accordance with the liability method of accounting for income taxes. Under this method, deferred income tax assets and deferred income tax liabilities represent the tax effect of temporary differences between financial reporting and tax reporting measured at enacted tax rates in effect for the year in which the differences are expected to reverse. The Company recognizes only the impact of tax positions that, based on their technical merits, are more likely than not to be sustained upon an audit by the taxing authority.

 

Valuation allowances are provided when it is more-likely-than-not that some or all of the deferred income tax assets may not be realized. In assessing the need for a valuation allowance, the Company has considered its historical levels of income, expectations of future taxable income and ongoing tax planning strategies.

 

Developing the provision for income taxes, including the effective tax rate and analysis of potential tax exposure items, if any, requires significant judgment and expertise in federal and state income tax laws, regulations and strategies, including the determination of deferred income tax assets and liabilities and any estimated valuation allowances deemed necessary to value deferred income tax assets. Judgments and tax strategies are subject to audit by various taxing authorities. The Company has uncertain income tax positions in the condensed consolidated financial statements, and adverse determinations by these taxing authorities could have a material adverse effect on the condensed consolidated financial positions, result of operations, or cash flows.

 

Concentrations Risk and Significant Customers

 

The Company had certain customers which were each responsible for generating 10% or more of the total revenue for the three months ended March 31, 2024. One customer accounted for approximately 26% of product revenue, and one granting agency accounted for all of the grant revenue recognized during the three months ended March 31, 2024. Two customers accounted for approximately 44% of product revenue for the three months ended March 31, 2023.

 

Four customers accounted for more than 10% of accounts receivable at March 31, 2024 and three customers accounted for more than 10% of accounts receivable at December 31, 2023. These customers together accounted for approximately 90% and 97% of accounts receivable at March 31, 2024 and December 31, 2023, respectively.

 

9

 

 

Recently Issued Accounting Standards

 

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) that are adopted by the Company as of the specified effective date. If not discussed, management believes that the impact of recently issued standards, which are not yet effective, will not have a material impact on the Company’s financial statements upon adoption.

 

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires an entity to disclose annually additional information related to the company’s income tax rate reconciliation and income taxes paid during the period. The guidance should be applied prospectively with the option to apply the standard retrospectively. The standard becomes effective for the Company for full year 2025 reporting. The Company is currently evaluating the impact of this new standard on its consolidated financial statements.

 

Note 3 – Cash, Cash Equivalents, and Financial Instruments

 

The following table shows the Company’s cash, cash equivalents, and marketable investment securities by significant investment category:

 

   March 31, 2024 
   Adjusted
Cost		   Total
Unrealized
Gains /
(Losses)		   Fair
Value		   Cash and
Cash
Equivalents		   Marketable
Investment
Securities		 
Cash  $23,099,251   $-   $23,099,251   $23,099,251   $- 
Level 2:                         
U.S. treasury securities   26,637,880    226,555    26,864,435    -    26,864,435 
Subtotal   26,637,880    226,555    26,864,435    -    26,864,435 
Total  $49,737,131   $226,555   $49,963,686   $23,099,251   $26,864,435 

 

   December 31, 2023 
   Adjusted
Cost		   Total
Unrealized
Gains /
(Losses)		   Fair
Value		   Cash and
Cash
Equivalents		   Marketable
Investment
Securities		 
Cash  $4,317,449   $-   $4,317,449   $4,317,449   $- 
Level 1:                         
Money market funds   10,599,429    -    10,599,429    10,599,429    - 
Subtotal   10,599,429    -    10,599,429    10,599,429    - 
Level 2:                         
U.S. treasury securities   43,484,810    146,700    43,631,510    -    43,631,510 
Subtotal   43,484,810    146,700    43,631,510    -    43,631,510 
Total  $58,401,688   $146,700   $58,548,388   $14,916,878   $43,631,510 

 

Marketable investment securities held as of March 31, 2024 mature over the next 12 months.

 

10

 

 

Note 4 – Fair Value Measurements

 

The Company measures and records certain financial assets and liabilities at fair value on a recurring basis. Fair value is based on the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

 

The following three levels of inputs are used to measure the fair value of financial assets and liabilities:

 

Level 1: Quoted market prices in active markets for identical assets or liabilities.

 

Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data.

 

Level 3: Unobservable inputs that are not corroborated by market data.

 

The following table summarizes the assets and liabilities measured at fair value on a recurring basis as of March 31, 2024 and December 31, 2023, by level within the fair value hierarchy:

 

   (Level 1)   (Level 2)   (Level 3)   Total 
   March 31, 2024 
   (Level 1)   (Level 2)   (Level 3)   Total 
Assets:                
Cash equivalents  $4,004,080   $-   $-   $4,004,080 
Marketable securities (U.S. treasury bills and notes)   -    26,864,435    -    26,864,435 
Total assets measured at fair value  $4,004,080   $26,864,435   $-   $30,868,515 
Liabilities:                    
Contingent consideration - common stock  $-   $-   $1,110,733   $1,110,733 
Contingent consideration - warrants   -    -    78,782    78,782 
Total liabilities measured at fair value  $-   $-   $1,189,515   $1,189,515 

 

   (Level 1)   (Level 2)   (Level 3)   Total 
   December 31, 2023 
   (Level 1)   (Level 2)   (Level 3)   Total 
Assets:                
Cash equivalents  $13,806,864   $-   $-   $13,806,864 
Marketable securities (U.S. treasury bills and notes)   -    43,631,510    -    43,631,510 
Total assets measured at fair value  $13,806,864   $43,631,510   $-   $57,438,374 
Liabilities:                    
Contingent consideration - common stock  $-   $-   $1,318,995   $1,318,995 
Contingent consideration - warrants   -    -    320,780    320,780 
Total liabilities measured at fair value  $-   $-   $1,639,775   $1,639,775 

 

11

 

 

The Company’s financial instruments that are measured at fair value on a recurring basis consist of U.S. treasury bills and notes as of March 31, 2024 and December 31, 2023.

 

The fair value of contingent consideration is calculated using a discounted probability weighted valuation model. Discount rates used in such calculations are a significant assumption that are not observed in the market, and therefore, the resulting fair value represents a Level 3 measurement.

 

The changes for Level 3 items measured at fair value on a recurring basis are as follows:

 

      
Fair value as of December 31, 2023  $1,639,775 
Change in fair value of contingent consideration issued for business acquisitions   (450,260)
Fair value as of March 31, 2024  $1,189,515 

 

The fair value of the contingent consideration is based on the fair value of the contingent consideration-common stock and contingent consideration-warrants. The fair value of the contingent consideration-common stock is equal to the probability-adjusted value of the Company’s common stock as of the valuation date. The fair value of the contingent consideration-warrants is equal to the probability adjusted value of a call option with terms consistent with the terms of the warrants as of the valuation date. Prior to the probability adjustments, the warrants were valued based on the following inputs:

 

   March 31, 2024   December 31, 2023 
Stock price  $1.12   $1.33 
Strike price  $9.13   $9.13 
Volatility   103.5%   187.5%
Risk-free rate   4.5%   4.0%
Expected term (years)   2.8    3.0 

 

Fair Value of Other Financial Instruments

 

The carrying amounts of certain financial instruments, including cash held in banks, accounts receivable, notes receivable, accounts payable, accrued liabilities, and other liabilities approximate fair value due to their short-term maturities and are excluded from the fair value tables above.

 

Note 5 – Intangible Assets, Net

 

Intangible assets, net consisted of the following:

 

   March 31, 2024 
   Weighted-Average  Gross       Net 
   Useful Life (1)  Carrying   Accumulated   Carrying 
   (in Years)  Amount   Amortization   Amount 
In-process research and development  Indefinite  $26,101,000   $-   $26,101,000 
Non-competition agreements  2.7   1,094,000    (867,000)   227,000 
Total intangible assets     $27,195,000   $(867,000)  $26,328,000 

 

   December 31, 2023 
   Weighted-Average  Gross       Net 
   Useful Life (1)  Carrying   Accumulated   Carrying 
   (in Years)  Amount   Amortization   Amount 
In-process research and development  Indefinite  $26,101,000   $-   $26,101,000 
Non-competition agreements  2.7   1,094,000    (791,333)   302,667 
Total intangible assets     $27,195,000   $(791,333)  $26,403,667 

 

  (1) Based on weighted-average useful life established as of the acquisition date.

 

12

 

 

The expected future annual amortization expense of the Company’s intangible assets held as of March 31, 2024 is as follows:

 

Year Ending December 31,   Amortization Expense 
2024 (remainder)    227,000 

 

Note 6 – Revenue

 

The following table sets forth revenue by geographic area:

 

   2024   2023 
   Three Months Ended March 31, 
   2024   2023 
United States          
Product revenue  $86,295   $393,154 
Grant revenue   215,109    - 
Total United States   301,404    393,154 
Rest of World          
Product revenue   166,450    208,803 
Grant revenue   -    - 
Total Rest of World   166,450    208,803 
Total  $467,854   $601,957 
Percentage of revenue by area:          
United States   64%   65%
Rest of World   36%   35%

 

Changes in the Company’s deferred revenue balance for the three months ended March 31, 2024 were as follows:

 

Balance as of December 31, 2023  $362,449 
Revenue recognized included in deferred revenue balance at the beginning of the period   (55,972)
Balance as of March 31, 2024  $306,477 

 

Note 7 – Loss Per Share

 

The following table reconciles the numerator and the denominator used to calculate basic and diluted loss per share for three months ended March 31, 2024 and 2023, respectively:

 

   2024   2023 
   Three Months Ended March 31, 
   2024   2023 
Numerator        
Net loss, as reported  $(9,312,043)  $(5,755,391)
           
Denominator          
Weighted average shares, basic   29,842,874    29,483,540 
Dilutive effect of stock options, warrants and RSUs   -    - 
Shares used to compute diluted loss per share   29,842,874    29,483,540 
           
Basic loss per share  $(0.31)  $(0.20)
Diluted loss per share  $(0.31)  $(0.20)

 

13

 

 

The computation of diluted loss per share for the three months ended March 31, 2024 and 2023, respectively, also excludes approximately 1.4 million shares of common stock and approximately 465,000 warrants to purchase shares of common stock that are contingent upon the achievement of certain milestones.

 

As a result of incurring a net loss for the three months ended March 31, 2024 and 2023, respectively, no potentially dilutive securities are included in the calculation of diluted loss per share because such effect would be anti-dilutive. The Company had potentially dilutive securities as of March 31, 2024, consisting of: (i) 2,564,310 restricted stock units and (ii) 532,112 options and warrants. The Company had potentially dilutive securities as of March 31, 2023, consisting of: (i) 2,732,517 restricted stock units and (ii) 120,445 options and warrants.

 

Note 8 – Stock-Based Compensation

 

Stock Incentive Plans

 

The Company’s board of directors adopted, and shareholders approved, the Co-Diagnostics, Inc. Amended and Restated 2015 Long Term Incentive Plan (the “Incentive Plan”) providing for the issuance of stock-based incentive awards to employees, officers, consultants, directors and independent contractors. On August 31, 2022, the shareholders approved an increase in the number of awards available for issuance under the Incentive Plan to an aggregate of 12,000,000 shares of common stock. The number of awards available for issuance under the Incentive Plan was 4,492,462 at March 31, 2024.

 

Stock Options

 

The following table summarizes option activity during the three months ended March 31, 2024:

 

    Number of
Options		   Weighted
Average
Exercise
Price		   Weighted
Average Fair
Value		   Weighted
Average
Remaining
Contractual
Life (Years)		 
Outstanding at December 31, 2023    1,040,572   $2.19   $1.37    4.89 
Granted    -    -    -      
Expired    -    -    -      
Forfeited/Cancelled    -    -    -      
Exercised    -    -    -      
Outstanding at March 31, 2024    1,040,572   $2.19   $1.37    4.63 
                      
Exercisable at March 31, 2024    1,040,572   $2.19   $1.37    4.63 

 

The aggregate intrinsic value of outstanding options at March 31, 2024 was approximately $0.1 million.

 

Stock-based compensation cost is measured at the grant date based on the fair value of the award granted and recognized as expense over the vesting period using the straight-line method. The Company uses the Black-Scholes model to value options granted. As of March 31, 2024, there were no unvested options and no unrecognized stock-based compensation expense related to options.

 

Restricted Stock Units

 

The grant date fair value of RSUs granted is determined using the closing market price of the Company’s common stock on the grant date with the associated compensation expense amortized over the vesting period of the awards. The following table sets forth the outstanding RSUs and related activity for the three months ended March 31, 2024:

 

    Number of RSUs   Weighted Average
Grant Date Fair
Value		 
Unvested at December 31, 2023    2,925,497   $3.99 
Granted    -    - 
Vested    (18,750)   9.54 
Forfeited/Cancelled    (134,525)   3.02 
Unvested at March 31, 2024    2,772,222   $4.04 

 

14

 

 

As of March 31, 2024, there was approximately $7.6 million of unrecognized stock-based compensation expense related to outstanding RSUs which is expected to be recognized over a weighted-average period of 1.5 years.

 

Warrants

 

The Company has issued warrants related to financings, acquisitions and as compensation to third parties for services provided. The Company estimates the fair value of issued warrants on the date of issuance as determined using a Black-Scholes pricing model. The Company amortizes the fair value of issued warrants using a vesting schedule based on the terms and conditions of each warrant if granted for services.

 

The following table summarizes warrant activity during the three months ended March 31, 2024:

 

    Number of
Warrants		   Weighted
Average
Exercise
Price		   Weighted
Average
Fair Value		   Weighted
Average
Remaining
Contractual
Life (Years)		 
Outstanding at December 31, 2023    485,000   $8.81   $1.29    3.0 
Granted    -    -    -      
Expired    -    -    -      
Forfeited/Cancelled    -    -    -      
Exercised    -    -    -      
Outstanding at March 31, 2024    485,000   $8.81   $0.79    2.7 

 

The aggregate intrinsic value of outstanding warrants at March 31, 2024 was approximately $0.

 

The total number of warrants exercisable at March 31, 2024 is 20,000. The ability to exercise the remaining 465,000 warrants issued in connection with acquisitions in prior years is contingent upon the achievement of certain development and revenue milestones on or before January 1, 2027. There was no unrecognized stock-based compensation expense related to warrants.

 

Stock-Based Compensation Expense

 

The Company recognized stock-based compensation expense as follows:

 

   2024   2023 
   Three Months Ended
March 31,		 
   2024   2023 
Cost of revenue  $8,141   $12,008 
Sales and marketing   370,381    529,117 
General and administrative   1,086,495    1,192,214 
Research and development   106,217    435,403 
Total stock-based compensation expense  $1,571,234   $2,168,742 

 

Note 9 – Income Taxes

 

For the three months ended March 31, 2024, the Company recognized expense from income taxes of $22,764, representing an effective tax rate of -0.2%. The Company’s effective tax rate will generally differ from the U.S. Federal statutory rate of 21.0%, primarily due to the full valuation allowance as well as state taxes, permanent items, and discrete items. For the three months ended March 31, 2023, the Company recognized a benefit from income taxes of $2,259,811.

 

15

 

 

Note 10 – Commitments and Contingencies

 

Lease Obligations

 

The Company leases administrative, R&D, sales and marketing and manufacturing facilities under non-cancellable operating leases and leases cancellable with one month notice. The Company expenses the cancelable leases in the period incurred in accordance with the practical expedient elected.

 

For the three months ended March 31,2024, components of lease expense are summarized as follows:

 

   Three Months
Ended
March 31, 2024		 
Operating lease costs  $267,984 
Short-term lease costs   8,750 
Total lease costs  $276,734 

 

As of March 31, 2024, the maturities of the Company’s lease liabilities are as follows:

 

   Year Ending
December 31,		 
2024 (remainder)  $752,656 
2025   1,018,383 
2026   714,630 
2027   300,591 
2028   308,463 
Thereafter   - 
Total lease payments   3,094,723 
Less: imputed interest   303,647 
Present value of operating lease liabilities   2,791,076 
Less: current portion   859,912 
Long-term portion  $1,931,164 

 

Other information related to operating leases was as follows:

 

   Three Months Ended
March 31, 2024		 
Cash paid for operating leases included in operating cash flows  $262,208 
Remaining lease term of operating leases   3.4 years 
Discount rate of operating leases   6.2%

 

Litigation

 

Liabilities for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred.

 

16

 

 

The Company is a defendant in two class action claims and three derivative actions claiming that the Company promulgated false and misleading press releases to increase the price of our stock to improperly benefit the officers and directors of the Company. The plaintiffs demand compensatory damages sustained as a result of the Company’s alleged wrongdoing in an amount to be proven at trial. The Company is also a party to two civil actions, one in the US and the other in the United Kingdom. Each of the civil actions is based on breach of contract claims against the Company. The Company believes these lawsuits are without merit and intends to defend the cases vigorously. The Company is unable to estimate a range of loss, if any, that could result were there to be an adverse final decision in these cases. As of the date of this report, the Company does not believe it is probable that these cases will result in an unfavorable outcome; however, if an unfavorable outcome were to occur in these cases, it is possible that the impact could be material to the Company’s results of operations in the period(s) in which any such outcome becomes probable and estimable.

 

Note 11 – Share Repurchase Program

 

In March 2022, the Company’s Board of Directors authorized a share repurchase program that would allow the Company to repurchase up to $30.0 million of CODX common stock. The repurchase program does not obligate the Company to acquire any particular number of common shares, and the repurchase program may be suspended or discontinued at any time at the Company’s discretion. The timing and amount of any share repurchases under the share repurchase program will be determined by Co-Diagnostics’ management at its discretion based on ongoing assessments of the capital needs of the business, the market price of the Company’s common stock, corporate and regulatory requirements, and general market conditions.

 

For accounting purposes, common stock repurchased under the stock repurchase program is recorded based upon the transaction date of the applicable trade. Such repurchased shares are held in treasury and are presented using the cost method. These shares are not retired and are considered issued but not outstanding. No shares were repurchased during the three months ended March 31, 2024.

 

Note 12 – Related Party Transactions

 

In 2023, the Company entered into a services agreement with CoSara, the Company’s equity method investment, under which CoSara provides certain research and development consulting and support services. During the three months ended March 31, 2024, the Company recognized $0.1 million of expense related to this agreement.

 

Note 13 – Subsequent Events

 

In October 2023, the Company was awarded grant funding of a total of approximately $9.0 million, contingent on the attainment of certain milestones. The first $3.5 million of funding under this grant was received by the Company at the time the grant was awarded in October 2023. In April 2024, a milestone under this grant was met and accepted, which resulted in the disbursement of an additional $2.0 million of funding per the grant agreement. These funds were received by the Company in April 2024.

 

17

 

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

Cautionary Note Regarding Forward-Looking Statements

 

This Quarterly Report on Form 10-Q contains “forward-looking statements” that involve risks and uncertainties. All statements other than statements of historical fact contained in this Quarterly Report and the documents incorporated by reference herein, including statements regarding future events, our future financial performance, business strategy, and plans and objectives of management for future operations, are forward-looking statements. We have attempted to identify forward-looking statements by terminology including “anticipates,” “believes,” “can,” “continue,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “should,” or “will” or the negative of these terms or other comparable terminology. Although we do not make forward-looking statements unless we believe we have a reasonable basis for doing so, we cannot guarantee their accuracy. These statements are only predictions and involve known and unknown risks, uncertainties and other factors and the documents incorporated by reference herein, which may affect our or our industry’s actual results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Moreover, we operate in a highly regulated, very competitive, and rapidly changing environment. New risks emerge from time to time, and it is not possible for us to predict all risk factors, nor can we address the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause our actual results to differ materially from those contained in any forward-looking statements.

 

These forward-looking statements are subject to certain risks and uncertainties that could cause our actual results to differ materially from those reflected in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed under the heading “Risk Factors” in other documents we file with the SEC, including our Annual Report on form 10-K for the year ended December 31, 2023. The following discussion should be read in conjunction with the Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on March 14, 2024, and the audited financial statements and notes included therein.

 

As used in this Quarterly Report, the terms “we”, “us”, “our”, and “Co-Diagnostics” means Co-Diagnostics, Inc., a Utah corporation and its consolidated subsidiaries (the “Company”), unless otherwise indicated.

 

Executive Overview

 

The following management’s discussion and analysis of financial condition and results of operations describes the principal factors affecting the results of our operations, financial condition, and changes in financial condition. This discussion should be read in conjunction with the accompanying unaudited financial statements and notes thereto included elsewhere in this report. The information contained in this discussion is subject to a number of risks and uncertainties. We urge you to review carefully the section of this report entitled “Cautionary Note Regarding Forward-Looking Statements.”

 

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, liquid biopsy for cancer screening, and agricultural applications. 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, patented approach to PCR test design of primer and probe structure (“Co-Primers®”) that eliminates one of the key vexing issues of PCR amplification: the exponential growth of primer-dimer pairs (false positives and false negatives) which adversely interferes with identification of the target DNA/RNA. Using our proprietary test design system and proprietary 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 proprietary 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 that is being 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 December 2023, we submitted the Co-Dx PCR platform for review by the U.S. Food and Drug Administration (FDA) for Emergency Use Authorization (EUA). The submission included the PCR Pro instrument, Co-Dx PCR COVID-19 detection test cups, and mobile app, all designed for use in point-of-care and at-home settings. 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.

 

18

 

 

Technology

 

We believe our proprietary 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 a CE Mark as approval for use of the test in a period of just over 30 days. This is a real-world example of how the 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 the virus should they not be detectable using currently available tests.

 

In addition, continued development has demonstrated the unique properties of our CoPrimer 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, consisting of the predictive mathematical algorithms and patented molecular structure used in the testing process, which together represents 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 pair 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 proprietary 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 Food and Drug Administration, or 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 approved for sale in countries such as the United Kingdom, Australia 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 as self-contained lab systems (which we refer to as the “MDx Device”).

 

In addition to testing for infectious disease, the 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 three multiplexed tests developed to test mosquitos for the identification of diseases carried by the mosquitos to enable municipalities to concentrate their efforts in managing mosquito populations on the specific areas known to be breeding the mosquitos that carry deadly viruses.

 

RESULTS OF OPERATIONS

 

The Three Months Ended March 31, 2024 Compared to the Three Months ended March 31, 2023

 

Revenues

 

For the three months ended March 31, 2024, we generated revenues of $467,854, compared to revenues of $601,957 for the three months ended March 31, 2023. Grant revenue accounted for $215,109 of revenue for the three months ended March 31, 2024, compared to $0 for the three months ended March 31, 2023. The decrease in total revenue of $134,103 was primarily due to lower sales of our Logix Smart COVID-19 throughout the world.

 

19

 

 

Cost of Revenues

 

We recorded cost of revenues of $234,505 for the three months ended March 31, 2024, compared to $502,241 for the three months ended March 31, 2023. After adjusting for the effect of the grant revenue in the current period, cost of revenues and gross margins are comparable for the three months ended March 31, 2024 and 2023, respectively.

 

Expenses

 

We incurred total operating expenses of $10,492,736 for the three months ended March 31, 2024, compared to total operating expenses of $10,050,366 for the three months ended March 31, 2023. The increase in operating expenses was primarily due to increased personnel expenses and additional investment in research and development. These increases were partially offset by decreased stock compensation expense.

 

Our sales and marketing expenses for the three months ended March 31, 2024 were $1,563,682, compared to $1,706,331 for the three months ended March 31, 2023. The decrease was primarily a result of decreased stock-based compensation expense, partially offset by increased tradeshow and travel expenses.

 

General and administrative expenses remained materially consistent at $2,918,803 for the three months ended March 31, 2024, compared to $3,013,965 for the three months ended March 31, 2023. The decrease in general and administrative expenses was primarily due to decreases in stock compensation, insurance expense, and professional services expenses, partially offset by increased legal expenses.

 

Our research and development expenses increased to $5,679,678 for the three months ended March 31, 2024, compared to $5,014,060 for the three months ended March 31, 2023. The primary increase in expenses was a result of increases in personnel related expenses and expenses related to development of the Co-Dx PCR platform.

 

Other Income

 

For the three months ended March 31, 2024 we had total other income of $970,108, compared to total other income of $1,935,448 for the three months ended March 31, 2023. The primary components of other income include a change in the fair value of contingent consideration liabilities and interest income and realized gains from investments in marketable securities.

 

Net Loss

 

We realized a net loss for the three months ended March 31, 2024 of $9,312,043, compared to a net loss for the three months ended March 31, 2023 of $5,755,391. The larger net loss was primarily the result of an increase in operating expenses, as well as changes in the fair value of acquisition contingencies and income related to investments in marketable securities. Additionally, we recorded income tax expense of $22,764 for the three months ended March 31, 2024, compared to an income tax benefit of $2,259,811 for the three months ended March 31, 2023. The primary reason for the change in the provision for income taxes is a result of the Company now being in a full valuation allowance.

 

Liquidity and Capital Resources

 

At March 31, 2024, we had cash and cash equivalents of $23,099,251. Additionally, we had $26,864,435 of marketable investment securities that could readily be converted into cash if needed. Additionally, our total current assets of March 31, 2024, were $53,698,833 compared to total current liabilities of $5,269,652.

 

Net cash used in operating activities during the three months ended March 31, 2024 was $8,490,334, compared to $5,917,517 for the three months ended March 31, 2023. The decrease in cash from operating activities was primarily due to decreased revenues and increased operating expenses, and the impact of non-cash items.

 

Net cash provided by investing activities during the three months ended March 31, 2024 was $16,672,707, primarily from maturities of marketable investment securities, compared to cash used in investing activities of $10,214,710 during the three months ended March 31, 2023.

 

Net cash used in financing activities was $0 for the three months ended March 31, 2024, compared to net cash used in financing activities of $482,196 for the same period in the prior year. This is due to the repurchase of outstanding common shares during the prior period, compared to no such repurchases in the current period.

 

20

 

 

Since commencing sales of our Logix Smart COVID-19 test in March 2020, we have used our cash generated from those sales to fund the purchase of inventories and the development of our Co-Dx PCR platform, and to pay our operating expenses. We have increased our work force most significantly in research and development in order to continue development of the Co-Dx PCR platform and additional tests that will enable continued use of our distributor network to sell additional products throughout the world.

 

We believe that our existing capital resources and the cash generated from future sales will be sufficient to meet our projected operating requirements for the next 12 months. However, our available capital resources may be consumed more rapidly than currently expected and we may need or want to raise additional financing for strategic opportunities. It is anticipated that the Company will continue to generate operating losses and use cash in operations in the near term. If needed, we expect additional investment capital to come from additional issuances of our common stock or other equity-based securities with existing and new investors similar to those that have provided funding in the past. On March 16, 2023, the Company entered into an Equity Distribution Agreement with Piper Sandler & Co. (“Piper”), pursuant to which we may sell from time to time, shares of our common stock, having an aggregate offering price of up to $50.0 million through Piper, as agent. No shares have been sold under the distribution agreement as of March 31, 2024. We may not be able to secure such financing in a timely manner or on favorable terms, if at all.

 

Off-Balance Sheet Arrangements

 

We have no off-balance sheet arrangements.

 

Item 3. Quantitative and Qualitative Disclosures about Market Risk

 

Not required under Regulation S-K for “smaller reporting companies.”

 

Item 4. Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures

 

We maintain “disclosure controls and procedures,” as defined in Rules 13a-15I and 15d-15(e) under the Exchange Act that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2024. Based on the evaluation of our disclosure controls and procedures as of March 31, 2024, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls were effective.

 

Changes in Internal Control over Financial Reporting

 

There have been no changes in our internal control over financial reporting during the three months ended March 31, 2024, that have materially affected or, are reasonably likely to materially affect, our internal control over financial reporting.

 

21

 

 

PART II – OTHER INFORMATION

 

Item 1. Legal Proceedings

 

There have been no material developments to the legal proceedings previously disclosed under Part I. Item 3 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

 

Item 1A. Risk Factors.

 

Not required under Regulation S-K for “smaller reporting companies.”

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

None.

 

Dividends

 

We have never declared or paid any cash dividends on our capital stock. The payment of dividends on our common stock in the future will depend on our earnings, capital requirements, operating and financial condition and such other factors as our board of directors may consider appropriate. We currently expect to use all available funds to finance the future development and expansion of our business and do not anticipate paying dividends on our common stock in the foreseeable future.

 

Pursuant to Section 16-10a-640 of the Utah Revised Business Corporation Act, no distribution may be made if, after giving it effect:

 

  (a) the corporation would not be able to pay its debts as they become due in the usual course of business; or
     
  (b) the corporation’s total assets would be less than the sum of its total liabilities plus, unless the articles of incorporation permit otherwise, the amount that would be needed, if the corporation were to be dissolved at the time of the distribution, to satisfy the preferential rights upon dissolution of shareholders whose preferential rights are superior to those receiving the distribution.

 

Item 3. Defaults Upon Senior Securities

 

None.

 

Item 4. Mine Safety Disclosures

 

Not applicable.

 

Item 5. Other Information

 

None.

 

22

 

 

Item 6. Exhibits

 

Exhibit Index

 

(a) Exhibits

 

Exhibit   Number Description
     
31.1*   Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*   Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*   Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2*   Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS   Inline XBRL Instance Document
101.SCH   Inline XBRL Taxonomy Extension Schema Document
101.CAL   Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF   Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB   Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE   Inline XBRL Taxonomy Extension Presentation Linkbase Document
104   Cover Page Interactive Data File

 

* Filed herewith.

# Management Contract or Compensatory Plan or Arrangement

 

23

 

 

SIGNATURES

 

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 thereunto duly authorized.

 

  CO-DIAGNOSTICS, INC.
     
Date: May 9, 2024 By: /s/ Dwight H. Egan
  Name: Dwight H. Egan
  Title: Chief Executive Officer and Principal Executive Officer
     
Date: May 9, 2024 By: /s/ Brian Brown
  Name: Brian Brown
  Title: Chief Financial Officer and Principal Financial and Accounting Officer

 

24

 

EXHIBIT 31.1

 

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES OXLEY ACT OF 2002

AND RULE 13a-14 OF THE EXCHANGE ACT OF 1934

 

I, Dwight H. Egan, certify that:

 

1. I have reviewed this Quarterly Report on Form 10-Q of Co-Diagnostics, Inc.;
   
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
   
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
   
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

  a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
     
  b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepting accounting principles;
     
  c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
     
  d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

 

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

  a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
     
  b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: May 9, 2024 By: /s/ Dwight H. Egan
    Dwight H. Egan
    Chief Executive Officer and Principal
Executive Officer

 

 

 

 

 

EXHIBIT 31.2

 

CERTIFICATION OF THE CHIEF FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES OXLEY ACT OF 2002

AND RULE 13a-14 OF THE EXCHANGE ACT OF 1934

 

I, Brian Brown, certify that:

 

1. I have reviewed this Quarterly Report on Form 10-Q of Co-Diagnostics, Inc.;
   
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
   
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
   
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

  a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
     
  b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepting accounting principles;
     
  c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
     
  d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

 

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

  a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
     
  b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: May 9, 2024 By: /s/ Brian Brown
    Brian Brown
    Chief Financial Officer and Principal Financial and
Accounting Officer

 

 

 

 

 

EXHIBIT 32.1

 

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER

PURSUANT TO 18 U.S. C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report of Co-Diagnostics, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2024, as filed with the Securities and Exchange Commission on the date hereof, I, Dwight H. Egan, Chief Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

 

  (1) The Form 10-Q fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
     
  (2) The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Date: May 9, 2024 By: /s/ Dwight H. Egan
    Dwight H. Egan
    Chief Executive Officer and Principal Executive Officer

 

 

 

 

 

EXHIBIT 32.2

 

CERTIFICATION OF THE CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S. C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report of Co-Diagnostics, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2024, as filed with the Securities and Exchange Commission on the date hereof, I, Brian Brown, Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

 

  (1) The Form 10-Q fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
     
  (2) The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Date: May 9, 2024 By: /s/ Brian Brown
    Brian Brown
    Chief Financial Officer and Principal Financial and Accounting Officer

 

 

 

 

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Mar. 31, 2024
May 08, 2024
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Document Fiscal Year Focus 2024  
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Entity File Number 001-38148  
Entity Registrant Name CO-DIAGNOSTICS, INC.  
Entity Central Index Key 0001692415  
Entity Tax Identification Number 46-2609396  
Entity Incorporation, State or Country Code UT  
Entity Address, Address Line One 2401 S. Foothill Drive  
Entity Address, Address Line Two Suite D  
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Entity Address, State or Province UT  
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v3.24.1.u1
Condensed Consolidated Balance Sheets (Unaudited) - USD ($)
Mar. 31, 2024
Dec. 31, 2023
Current assets    
Cash and cash equivalents $ 23,099,251 $ 14,916,878
Marketable investment securities 26,864,435 43,631,510
Accounts receivable, net 434,868 303,926
Inventory, net 1,549,812 1,664,725
Income taxes receivable 26,955
Prepaid expenses and other current assets 1,750,467 1,597,114
Total current assets 53,698,833 62,141,108
Property and equipment, net 3,183,116 3,035,729
Operating lease right-of-use asset 2,758,757 2,966,774
Intangible assets, net 26,328,000 26,403,667
Investment in joint venture 702,427 773,382
Total assets 86,671,133 95,320,660
Current liabilities    
Accounts payable 2,027,607 1,482,109
Accrued expenses 1,324,779 2,172,959
Operating lease liability, current 859,912 838,387
Contingent consideration liabilities, current 750,877 891,666
Deferred revenue 306,477 362,449
Total current liabilities 5,269,652 5,747,570
Long-term liabilities    
Income taxes payable 679,018 659,186
Operating lease liability 1,931,164 2,152,180
Contingent consideration liabilities 438,638 748,109
Total long-term liabilities 3,048,820 3,559,475
Total liabilities 8,318,472 9,307,045
Commitments and contingencies (Note 10)
Stockholders’ equity    
Convertible preferred stock, $0.001 par value; 5,000,000 shares authorized; 0 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively
Common stock, $0.001 par value; 100,000,000 shares authorized; 36,127,096 shares issued and 31,278,418 shares outstanding as of March 31, 2024 and 36,108,346 shares issued and 31,259,668 shares outstanding as of December 31, 2023 36,127 36,108
Treasury stock, at cost; 4,848,678 shares held as of March 31, 2024 and December 31, 2023, respectively (15,575,795) (15,575,795)
Additional paid-in capital 98,379,651 96,808,436
Accumulated other comprehensive income 226,555 146,700
Accumulated earnings (deficit) (4,713,877) 4,598,166
Total stockholders’ equity 78,352,661 86,013,615
Total liabilities and stockholders’ equity $ 86,671,133 $ 95,320,660
v3.24.1.u1
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares
Mar. 31, 2024
Dec. 31, 2023
Statement of Financial Position [Abstract]    
Convertible preferred stock, par value $ 0.001 $ 0.001
Convertible preferred stock , shares authorized 5,000,000 5,000,000
Convertible preferred stock, shares issued 0 0
Convertible preferred stock, shares outstanding 0 0
Common stock, par value $ 0.001 $ 0.001
Common stock, shares authorized 100,000,000 100,000,000
Common stock, shares issued 36,127,096 36,108,346
Common stock, shares outstanding 31,278,418 31,259,668
Treasury stock, shares 4,848,678 4,848,678
v3.24.1.u1
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($)
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Total revenue $ 467,854 $ 601,957
Cost of revenue 234,505 502,241
Gross profit 233,349 99,716
Operating expenses    
Sales and marketing 1,563,682 1,706,331
General and administrative 2,918,803 3,013,965
Research and development 5,679,678 5,014,060
Depreciation and amortization 330,573 316,010
Total operating expenses 10,492,736 10,050,366
Loss from operations (10,259,387) (9,950,650)
Other income, net    
Interest income 362,733 202,372
Realized gain on investments 228,070 418,082
Gain on remeasurement of acquisition contingencies 450,260 1,037,672
Gain (loss) on equity method investment in joint venture (70,955) 277,322
Total other income, net 970,108 1,935,448
Loss before income taxes (9,289,279) (8,015,202)
Income tax provision (benefit) 22,764 (2,259,811)
Net loss (9,312,043) (5,755,391)
Other comprehensive loss    
Change in net unrealized gains on marketable securities, net of tax 79,855 178,621
Total other comprehensive income 79,855 178,621
Comprehensive loss $ (9,232,188) $ (5,576,770)
Loss per common share:    
Basic $ (0.31) $ (0.20)
Diluted $ (0.31) $ (0.20)
Weighted average shares outstanding:    
Basic 29,842,874 29,483,540
Diluted 29,842,874 29,483,540
Product Revenue [Member]    
Total revenue $ 252,745 $ 601,957
Grant Revenue [Member]    
Total revenue $ 215,109
v3.24.1.u1
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Cash flows from operating activities    
Net loss $ (9,312,043) $ (5,755,391)
Adjustments to reconcile net loss to cash used in operating activities:    
Depreciation and amortization 330,573 316,010
Stock-based compensation expense 1,571,234 2,168,742
Change in fair value of acquisition contingencies (450,260) (1,037,672)
Non-cash lease expense 8,527 7,449
Realized gain on investments (228,070) (418,082)
(Gain) loss from equity method investment 70,955 (277,322)
Deferred income taxes (2,214,652)
Provision for credit losses (14,658) (113,998)
Inventory obsolescence expense 48,702 200,113
Changes in assets and liabilities:    
Accounts receivable (116,284) 865,525
Prepaid expenses and other assets (126,399) 60,451
Inventory 66,211 (184,292)
Deferred revenue (55,972) 18,120
Income taxes payable 19,832 11,796
Accounts payable, accrued expenses and other liabilities (302,682) 435,686
Net cash used in operating activities (8,490,334) (5,917,517)
Cash flows from investing activities    
Purchases of property and equipment (402,293) (179,944)
Proceeds from maturities of marketable investment securities 17,382,925 30,539,621
Purchases of marketable securities (307,925) (40,574,387)
Net cash provided by (used in) investing activities 16,672,707 (10,214,710)
Cash flows from financing activities    
Repurchases of common stock (482,196)
Net cash used in financing activities (482,196)
Net increase (decrease) in cash and cash equivalents 8,182,373 (16,614,423)
Cash and cash equivalents at beginning of period 14,916,878 22,973,803
Cash and cash equivalents at end of period 23,099,251 6,359,380
Supplemental disclosure of cash flow information    
Income taxes paid 29,500
Supplemental disclosure of non-cash investing and financing transactions    
Right-of-use assets obtained in exchange for new operating lease liabilities $ 657,150
v3.24.1.u1
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($)
Convertible Preferred Stock [Member]
Preferred Stock [Member]
Common Stock [Member]
Treasury Stock, Common [Member]
Additional Paid-in Capital [Member]
AOCI Attributable to Parent [Member]
Retained Earnings [Member]
Total
Balance at Dec. 31, 2022 $ 34,754 $ (14,211,866) $ 88,472,935 $ 293,140 $ 39,931,031 $ 114,519,994
Balance, shares at Dec. 31, 2022 34,754,265          
Stock-based compensation $ 69 2,168,673 2,168,742
Stock-based compensation, shares   68,750          
Other comprehensive income, net of tax 178,621 178,621
Net loss (5,755,391) (5,755,391)
Repurchases of common stock (482,196) (482,196)
Balance at Mar. 31, 2023 $ 34,823 (14,694,062) 90,641,608 471,761 34,175,640 110,629,770
Balance, shares at Mar. 31, 2023 34,823,015          
Balance at Dec. 31, 2023 $ 36,108 (15,575,795) 96,808,436 146,700 4,598,166 86,013,615
Balance, shares at Dec. 31, 2023 36,108,346          
Stock-based compensation $ 19 1,571,215 1,571,234
Stock-based compensation, shares   18,750          
Other comprehensive income, net of tax 79,855 79,855
Net loss (9,312,043) (9,312,043)
Balance at Mar. 31, 2024 $ 36,127 $ (15,575,795) $ 98,379,651 $ 226,555 $ (4,713,877) $ 78,352,661
Balance, shares at Mar. 31, 2024 36,127,096          
v3.24.1.u1
Overview and Basis of Presentation
 3 Months Ended
Mar. 31, 2024
Accounting Policies [Abstract]  
Overview and Basis of Presentation

Note 1 – Overview and Basis of Presentation

 

Description of Business

 

Co-Diagnostics, Inc., a Utah corporation (the “Company” or “CODX”), is a molecular diagnostics company that develops, manufactures and markets state-of-the-art diagnostics technologies. The Company’s technologies are 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 for its Co-Dx PCR platform and to locate genetic markers for use in applications other than infectious disease. In connection with the sale of our tests we may sell diagnostic equipment from other manufacturers as self-contained lab systems.

 

Unaudited Condensed Consolidated Financial Statements

 

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information as they are prescribed for smaller reporting companies. As permitted under those rules and regulations, certain notes or other financial information normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. Accordingly, the accompanying unaudited condensed consolidated financial statements do not include all the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary to make the financial statements not misleading have been included. Operating results for the three months ended March 31, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024. These statements should be read in conjunction with the Company’s audited financial statements and related notes for the year ended December 31, 2023, included in the Company’s Annual Report on Form 10-K filed with the SEC on March 14, 2024. The Company’s significant accounting policies are set forth in Note 2 to the consolidated financial statements in its Annual Report on Form 10-K for the year ended December 31, 2023.

 

Use of Estimates

 

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the accompanying notes. Such estimates include receivables and other long-lived assets, legal contingencies, income taxes, share based arrangements, and others. These estimates and assumptions are based on management’s best estimates and judgments. Actual amounts and results could differ from those estimates.

 
v3.24.1.u1
Summary of Significant Accounting Policies
 3 Months Ended
Mar. 31, 2024
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies

Note 2 – Summary of Significant Accounting Policies

 

Reclassifications

 

Certain prior year amounts have been reclassified to conform with the current year’s presentation. These reclassifications have no impact on the previously reported results.

 

 

Accounts Receivable

 

Trade accounts receivable are recorded at the invoiced amount (net of allowance) and do not bear interest. The Company maintains an allowance for doubtful accounts for amounts the Company does not expect to collect. In establishing the required allowance, management considers historical losses, current market condition, customers’ financial condition, the age of receivables, and current payment patterns. Account balances are written off against the allowance once the receivable is deemed uncollectible. Recoveries of trade receivables previously written off are recorded when collected. At March 31, 2024 total accounts receivable was $620,548 with an allowance for uncollectable accounts of $185,680 resulting in a net amount of $434,868. At December 31, 2023 total accounts receivable was $504,264 with an allowance for uncollectable accounts of $200,338 resulting in a net amount of $303,926.

 

Inventory

 

Inventory is stated at the lower of cost or net-realizable value. Inventory cost is determined on a first-in first-out basis that approximates average cost in accordance with ASC 330-10-30-12. At March 31, 2024, the Company had $1,549,812 in inventory, of which $674,142 was finished goods and $875,670 was raw materials. At December 31, 2023, the Company had $1,664,725 in inventory, of which $700,467 was finished goods and $964,258 was raw materials. The Company establishes reserves to reduce low-moving, obsolete, or unusable inventories to their estimated useful or scrap values. The Company recognized $311,339 and $43,717 related to the change in inventory reserves during the three months ended March 31, 2024 and 2023, respectively.

 

Revenue Recognition

 

The Company generates revenue from customers from product and license sales. The Company recognizes revenue from customers when all of the following criteria are satisfied: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when, or as the Company satisfies each performance obligation.

 

The Company constrains revenue by giving consideration to factors that could otherwise lead to a probable reversal of revenue. The Company records any payments received from customers prior to the Company fulfilling its performance obligation(s) as deferred revenue.

 

Grant Revenue

 

The Company may submit applications to receive grant funding from governmental and non-governmental entities. The Company accounts for grants by analogizing to the contribution accounting model under ASC 958-605, Not-for-Profit Entities (“ASC 958”). Revenues from grants, contracts, and awards provided by governmental and non-governmental agencies are recorded based upon the terms of the specific agreements. The Company recognizes grant funding without conditions or continuing performance obligations as revenue in the consolidated statements of operations and comprehensive income (loss). The Company recognizes grant funding with conditions or continuing performance obligations as deferred revenue in the consolidated balance sheets if the conditions or performance obligations have not yet been met. The Company recognized grant funding revenue of $0.2 million and $0 during the three months ended March 31, 2024 and 2023, respectively. At March 31, 2024, the Company has also recorded $0.3 million of deferred revenue related to grant funding for which the cash was received, but the underlying conditions or performance obligations have not yet been met. Cash received from federal grants, contracts, and awards can be subject to audit by the grantor and, if the examination results in a disallowance of any expenditure, repayment could be required.

 

 

Income Taxes

 

The Company accounts for income taxes in accordance with the liability method of accounting for income taxes. Under this method, deferred income tax assets and deferred income tax liabilities represent the tax effect of temporary differences between financial reporting and tax reporting measured at enacted tax rates in effect for the year in which the differences are expected to reverse. The Company recognizes only the impact of tax positions that, based on their technical merits, are more likely than not to be sustained upon an audit by the taxing authority.

 

Valuation allowances are provided when it is more-likely-than-not that some or all of the deferred income tax assets may not be realized. In assessing the need for a valuation allowance, the Company has considered its historical levels of income, expectations of future taxable income and ongoing tax planning strategies.

 

Developing the provision for income taxes, including the effective tax rate and analysis of potential tax exposure items, if any, requires significant judgment and expertise in federal and state income tax laws, regulations and strategies, including the determination of deferred income tax assets and liabilities and any estimated valuation allowances deemed necessary to value deferred income tax assets. Judgments and tax strategies are subject to audit by various taxing authorities. The Company has uncertain income tax positions in the condensed consolidated financial statements, and adverse determinations by these taxing authorities could have a material adverse effect on the condensed consolidated financial positions, result of operations, or cash flows.

 

Concentrations Risk and Significant Customers

 

The Company had certain customers which were each responsible for generating 10% or more of the total revenue for the three months ended March 31, 2024. One customer accounted for approximately 26% of product revenue, and one granting agency accounted for all of the grant revenue recognized during the three months ended March 31, 2024. Two customers accounted for approximately 44% of product revenue for the three months ended March 31, 2023.

 

Four customers accounted for more than 10% of accounts receivable at March 31, 2024 and three customers accounted for more than 10% of accounts receivable at December 31, 2023. These customers together accounted for approximately 90% and 97% of accounts receivable at March 31, 2024 and December 31, 2023, respectively.

 

 

Recently Issued Accounting Standards

 

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) that are adopted by the Company as of the specified effective date. If not discussed, management believes that the impact of recently issued standards, which are not yet effective, will not have a material impact on the Company’s financial statements upon adoption.

 

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires an entity to disclose annually additional information related to the company’s income tax rate reconciliation and income taxes paid during the period. The guidance should be applied prospectively with the option to apply the standard retrospectively. The standard becomes effective for the Company for full year 2025 reporting. The Company is currently evaluating the impact of this new standard on its consolidated financial statements.

 
v3.24.1.u1
Cash, Cash Equivalents, and Financial Instruments
 3 Months Ended
Mar. 31, 2024
Cash and Cash Equivalents [Abstract]  
Cash, Cash Equivalents, and Financial Instruments

Note 3 – Cash, Cash Equivalents, and Financial Instruments

 

The following table shows the Company’s cash, cash equivalents, and marketable investment securities by significant investment category:

 

   March 31, 2024 
   Adjusted
Cost		   Total
Unrealized
Gains /
(Losses)		   Fair
Value		   Cash and
Cash
Equivalents		   Marketable
Investment
Securities		 
Cash  $23,099,251   $-   $23,099,251   $23,099,251   $- 
Level 2:                         
U.S. treasury securities   26,637,880    226,555    26,864,435    -    26,864,435 
Subtotal   26,637,880    226,555    26,864,435    -    26,864,435 
Total  $49,737,131   $226,555   $49,963,686   $23,099,251   $26,864,435 

 

   December 31, 2023 
   Adjusted
Cost		   Total
Unrealized
Gains /
(Losses)		   Fair
Value		   Cash and
Cash
Equivalents		   Marketable
Investment
Securities		 
Cash  $4,317,449   $-   $4,317,449   $4,317,449   $- 
Level 1:                         
Money market funds   10,599,429    -    10,599,429    10,599,429    - 
Subtotal   10,599,429    -    10,599,429    10,599,429    - 
Level 2:                         
U.S. treasury securities   43,484,810    146,700    43,631,510    -    43,631,510 
Subtotal   43,484,810    146,700    43,631,510    -    43,631,510 
Total  $58,401,688   $146,700   $58,548,388   $14,916,878   $43,631,510 

 

Marketable investment securities held as of March 31, 2024 mature over the next 12 months.

 

 
v3.24.1.u1
Fair Value Measurements
 3 Months Ended
Mar. 31, 2024
Fair Value Disclosures [Abstract]  
Fair Value Measurements

Note 4 – Fair Value Measurements

 

The Company measures and records certain financial assets and liabilities at fair value on a recurring basis. Fair value is based on the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

 

The following three levels of inputs are used to measure the fair value of financial assets and liabilities:

 

Level 1: Quoted market prices in active markets for identical assets or liabilities.

 

Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data.

 

Level 3: Unobservable inputs that are not corroborated by market data.

 

The following table summarizes the assets and liabilities measured at fair value on a recurring basis as of March 31, 2024 and December 31, 2023, by level within the fair value hierarchy:

 

   (Level 1)   (Level 2)   (Level 3)   Total 
   March 31, 2024 
   (Level 1)   (Level 2)   (Level 3)   Total 
Assets:                
Cash equivalents  $4,004,080   $-   $-   $4,004,080 
Marketable securities (U.S. treasury bills and notes)   -    26,864,435    -    26,864,435 
Total assets measured at fair value  $4,004,080   $26,864,435   $-   $30,868,515 
Liabilities:                    
Contingent consideration - common stock  $-   $-   $1,110,733   $1,110,733 
Contingent consideration - warrants   -    -    78,782    78,782 
Total liabilities measured at fair value  $-   $-   $1,189,515   $1,189,515 

 

   (Level 1)   (Level 2)   (Level 3)   Total 
   December 31, 2023 
   (Level 1)   (Level 2)   (Level 3)   Total 
Assets:                
Cash equivalents  $13,806,864   $-   $-   $13,806,864 
Marketable securities (U.S. treasury bills and notes)   -    43,631,510    -    43,631,510 
Total assets measured at fair value  $13,806,864   $43,631,510   $-   $57,438,374 
Liabilities:                    
Contingent consideration - common stock  $-   $-   $1,318,995   $1,318,995 
Contingent consideration - warrants   -    -    320,780    320,780 
Total liabilities measured at fair value  $-   $-   $1,639,775   $1,639,775 

 

 

The Company’s financial instruments that are measured at fair value on a recurring basis consist of U.S. treasury bills and notes as of March 31, 2024 and December 31, 2023.

 

The fair value of contingent consideration is calculated using a discounted probability weighted valuation model. Discount rates used in such calculations are a significant assumption that are not observed in the market, and therefore, the resulting fair value represents a Level 3 measurement.

 

The changes for Level 3 items measured at fair value on a recurring basis are as follows:

 

      
Fair value as of December 31, 2023  $1,639,775 
Change in fair value of contingent consideration issued for business acquisitions   (450,260)
Fair value as of March 31, 2024  $1,189,515 

 

The fair value of the contingent consideration is based on the fair value of the contingent consideration-common stock and contingent consideration-warrants. The fair value of the contingent consideration-common stock is equal to the probability-adjusted value of the Company’s common stock as of the valuation date. The fair value of the contingent consideration-warrants is equal to the probability adjusted value of a call option with terms consistent with the terms of the warrants as of the valuation date. Prior to the probability adjustments, the warrants were valued based on the following inputs:

 

   March 31, 2024   December 31, 2023 
Stock price  $1.12   $1.33 
Strike price  $9.13   $9.13 
Volatility   103.5%   187.5%
Risk-free rate   4.5%   4.0%
Expected term (years)   2.8    3.0 

 

Fair Value of Other Financial Instruments

 

The carrying amounts of certain financial instruments, including cash held in banks, accounts receivable, notes receivable, accounts payable, accrued liabilities, and other liabilities approximate fair value due to their short-term maturities and are excluded from the fair value tables above.

 
v3.24.1.u1
Intangible Assets, Net
 3 Months Ended
Mar. 31, 2024
Goodwill and Intangible Assets Disclosure [Abstract]  
Intangible Assets, Net

Note 5 – Intangible Assets, Net

 

Intangible assets, net consisted of the following:

 

   March 31, 2024 
   Weighted-Average  Gross       Net 
   Useful Life (1)  Carrying   Accumulated   Carrying 
   (in Years)  Amount   Amortization   Amount 
In-process research and development  Indefinite  $26,101,000   $-   $26,101,000 
Non-competition agreements  2.7   1,094,000    (867,000)   227,000 
Total intangible assets     $27,195,000   $(867,000)  $26,328,000 

 

   December 31, 2023 
   Weighted-Average  Gross       Net 
   Useful Life (1)  Carrying   Accumulated   Carrying 
   (in Years)  Amount   Amortization   Amount 
In-process research and development  Indefinite  $26,101,000   $-   $26,101,000 
Non-competition agreements  2.7   1,094,000    (791,333)   302,667 
Total intangible assets     $27,195,000   $(791,333)  $26,403,667 

 

  (1) Based on weighted-average useful life established as of the acquisition date.

 

 

The expected future annual amortization expense of the Company’s intangible assets held as of March 31, 2024 is as follows:

 

Year Ending December 31,   Amortization Expense 
2024 (remainder)    227,000 

 
v3.24.1.u1
Revenue
 3 Months Ended
Mar. 31, 2024
Revenue  
Revenue

Note 6 – Revenue

 

The following table sets forth revenue by geographic area:

 

   2024   2023 
   Three Months Ended March 31, 
   2024   2023 
United States          
Product revenue  $86,295   $393,154 
Grant revenue   215,109    - 
Total United States   301,404    393,154 
Rest of World          
Product revenue   166,450    208,803 
Grant revenue   -    - 
Total Rest of World   166,450    208,803 
Total  $467,854   $601,957 
Percentage of revenue by area:          
United States   64%   65%
Rest of World   36%   35%

 

Changes in the Company’s deferred revenue balance for the three months ended March 31, 2024 were as follows:

 

Balance as of December 31, 2023  $362,449 
Revenue recognized included in deferred revenue balance at the beginning of the period   (55,972)
Balance as of March 31, 2024  $306,477 

 
v3.24.1.u1
Loss Per Share
 3 Months Ended
Mar. 31, 2024
Earnings Per Share [Abstract]  
Loss Per Share

Note 7 – Loss Per Share

 

The following table reconciles the numerator and the denominator used to calculate basic and diluted loss per share for three months ended March 31, 2024 and 2023, respectively:

 

   2024   2023 
   Three Months Ended March 31, 
   2024   2023 
Numerator        
Net loss, as reported  $(9,312,043)  $(5,755,391)
           
Denominator          
Weighted average shares, basic   29,842,874    29,483,540 
Dilutive effect of stock options, warrants and RSUs   -    - 
Shares used to compute diluted loss per share   29,842,874    29,483,540 
           
Basic loss per share  $(0.31)  $(0.20)
Diluted loss per share  $(0.31)  $(0.20)

 

 

The computation of diluted loss per share for the three months ended March 31, 2024 and 2023, respectively, also excludes approximately 1.4 million shares of common stock and approximately 465,000 warrants to purchase shares of common stock that are contingent upon the achievement of certain milestones.

 

As a result of incurring a net loss for the three months ended March 31, 2024 and 2023, respectively, no potentially dilutive securities are included in the calculation of diluted loss per share because such effect would be anti-dilutive. The Company had potentially dilutive securities as of March 31, 2024, consisting of: (i) 2,564,310 restricted stock units and (ii) 532,112 options and warrants. The Company had potentially dilutive securities as of March 31, 2023, consisting of: (i) 2,732,517 restricted stock units and (ii) 120,445 options and warrants.

 
v3.24.1.u1
Stock-Based Compensation
 3 Months Ended
Mar. 31, 2024
Share-Based Payment Arrangement [Abstract]  
Stock-Based Compensation

Note 8 – Stock-Based Compensation

 

Stock Incentive Plans

 

The Company’s board of directors adopted, and shareholders approved, the Co-Diagnostics, Inc. Amended and Restated 2015 Long Term Incentive Plan (the “Incentive Plan”) providing for the issuance of stock-based incentive awards to employees, officers, consultants, directors and independent contractors. On August 31, 2022, the shareholders approved an increase in the number of awards available for issuance under the Incentive Plan to an aggregate of 12,000,000 shares of common stock. The number of awards available for issuance under the Incentive Plan was 4,492,462 at March 31, 2024.

 

Stock Options

 

The following table summarizes option activity during the three months ended March 31, 2024:

 

    Number of
Options		   Weighted
Average
Exercise
Price		   Weighted
Average Fair
Value		   Weighted
Average
Remaining
Contractual
Life (Years)		 
Outstanding at December 31, 2023    1,040,572   $2.19   $1.37    4.89 
Granted    -    -    -      
Expired    -    -    -      
Forfeited/Cancelled    -    -    -      
Exercised    -    -    -      
Outstanding at March 31, 2024    1,040,572   $2.19   $1.37    4.63 
                      
Exercisable at March 31, 2024    1,040,572   $2.19   $1.37    4.63 

 

The aggregate intrinsic value of outstanding options at March 31, 2024 was approximately $0.1 million.

 

Stock-based compensation cost is measured at the grant date based on the fair value of the award granted and recognized as expense over the vesting period using the straight-line method. The Company uses the Black-Scholes model to value options granted. As of March 31, 2024, there were no unvested options and no unrecognized stock-based compensation expense related to options.

 

Restricted Stock Units

 

The grant date fair value of RSUs granted is determined using the closing market price of the Company’s common stock on the grant date with the associated compensation expense amortized over the vesting period of the awards. The following table sets forth the outstanding RSUs and related activity for the three months ended March 31, 2024:

 

    Number of RSUs   Weighted Average
Grant Date Fair
Value		 
Unvested at December 31, 2023    2,925,497   $3.99 
Granted    -    - 
Vested    (18,750)   9.54 
Forfeited/Cancelled    (134,525)   3.02 
Unvested at March 31, 2024    2,772,222   $4.04 

 

 

As of March 31, 2024, there was approximately $7.6 million of unrecognized stock-based compensation expense related to outstanding RSUs which is expected to be recognized over a weighted-average period of 1.5 years.

 

Warrants

 

The Company has issued warrants related to financings, acquisitions and as compensation to third parties for services provided. The Company estimates the fair value of issued warrants on the date of issuance as determined using a Black-Scholes pricing model. The Company amortizes the fair value of issued warrants using a vesting schedule based on the terms and conditions of each warrant if granted for services.

 

The following table summarizes warrant activity during the three months ended March 31, 2024:

 

    Number of
Warrants		   Weighted
Average
Exercise
Price		   Weighted
Average
Fair Value		   Weighted
Average
Remaining
Contractual
Life (Years)		 
Outstanding at December 31, 2023    485,000   $8.81   $1.29    3.0 
Granted    -    -    -      
Expired    -    -    -      
Forfeited/Cancelled    -    -    -      
Exercised    -    -    -      
Outstanding at March 31, 2024    485,000   $8.81   $0.79    2.7 

 

The aggregate intrinsic value of outstanding warrants at March 31, 2024 was approximately $0.

 

The total number of warrants exercisable at March 31, 2024 is 20,000. The ability to exercise the remaining 465,000 warrants issued in connection with acquisitions in prior years is contingent upon the achievement of certain development and revenue milestones on or before January 1, 2027. There was no unrecognized stock-based compensation expense related to warrants.

 

Stock-Based Compensation Expense

 

The Company recognized stock-based compensation expense as follows:

 

   2024   2023 
   Three Months Ended
March 31,		 
   2024   2023 
Cost of revenue  $8,141   $12,008 
Sales and marketing   370,381    529,117 
General and administrative   1,086,495    1,192,214 
Research and development   106,217    435,403 
Total stock-based compensation expense  $1,571,234   $2,168,742 

 
v3.24.1.u1
Income Taxes
 3 Months Ended
Mar. 31, 2024
Income Tax Disclosure [Abstract]  
Income Taxes

Note 9 – Income Taxes

 

For the three months ended March 31, 2024, the Company recognized expense from income taxes of $22,764, representing an effective tax rate of -0.2%. The Company’s effective tax rate will generally differ from the U.S. Federal statutory rate of 21.0%, primarily due to the full valuation allowance as well as state taxes, permanent items, and discrete items. For the three months ended March 31, 2023, the Company recognized a benefit from income taxes of $2,259,811.

 

 
v3.24.1.u1
Commitments and Contingencies
 3 Months Ended
Mar. 31, 2024
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies

Note 10 – Commitments and Contingencies

 

Lease Obligations

 

The Company leases administrative, R&D, sales and marketing and manufacturing facilities under non-cancellable operating leases and leases cancellable with one month notice. The Company expenses the cancelable leases in the period incurred in accordance with the practical expedient elected.

 

For the three months ended March 31,2024, components of lease expense are summarized as follows:

 

   Three Months
Ended
March 31, 2024		 
Operating lease costs  $267,984 
Short-term lease costs   8,750 
Total lease costs  $276,734 

 

As of March 31, 2024, the maturities of the Company’s lease liabilities are as follows:

 

   Year Ending
December 31,		 
2024 (remainder)  $752,656 
2025   1,018,383 
2026   714,630 
2027   300,591 
2028   308,463 
Thereafter   - 
Total lease payments   3,094,723 
Less: imputed interest   303,647 
Present value of operating lease liabilities   2,791,076 
Less: current portion   859,912 
Long-term portion  $1,931,164 

 

Other information related to operating leases was as follows:

 

   Three Months Ended
March 31, 2024		 
Cash paid for operating leases included in operating cash flows  $262,208 
Remaining lease term of operating leases   3.4 years 
Discount rate of operating leases   6.2%

 

Litigation

 

Liabilities for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred.

 

 

The Company is a defendant in two class action claims and three derivative actions claiming that the Company promulgated false and misleading press releases to increase the price of our stock to improperly benefit the officers and directors of the Company. The plaintiffs demand compensatory damages sustained as a result of the Company’s alleged wrongdoing in an amount to be proven at trial. The Company is also a party to two civil actions, one in the US and the other in the United Kingdom. Each of the civil actions is based on breach of contract claims against the Company. The Company believes these lawsuits are without merit and intends to defend the cases vigorously. The Company is unable to estimate a range of loss, if any, that could result were there to be an adverse final decision in these cases. As of the date of this report, the Company does not believe it is probable that these cases will result in an unfavorable outcome; however, if an unfavorable outcome were to occur in these cases, it is possible that the impact could be material to the Company’s results of operations in the period(s) in which any such outcome becomes probable and estimable.

 
v3.24.1.u1
Share Repurchase Program
 3 Months Ended
Mar. 31, 2024
Equity [Abstract]  
Share Repurchase Program

Note 11 – Share Repurchase Program

 

In March 2022, the Company’s Board of Directors authorized a share repurchase program that would allow the Company to repurchase up to $30.0 million of CODX common stock. The repurchase program does not obligate the Company to acquire any particular number of common shares, and the repurchase program may be suspended or discontinued at any time at the Company’s discretion. The timing and amount of any share repurchases under the share repurchase program will be determined by Co-Diagnostics’ management at its discretion based on ongoing assessments of the capital needs of the business, the market price of the Company’s common stock, corporate and regulatory requirements, and general market conditions.

 

For accounting purposes, common stock repurchased under the stock repurchase program is recorded based upon the transaction date of the applicable trade. Such repurchased shares are held in treasury and are presented using the cost method. These shares are not retired and are considered issued but not outstanding. No shares were repurchased during the three months ended March 31, 2024.

 
v3.24.1.u1
Related Party Transactions
 3 Months Ended
Mar. 31, 2024
Related Party Transactions [Abstract]  
Related Party Transactions

Note 12 – Related Party Transactions

 

In 2023, the Company entered into a services agreement with CoSara, the Company’s equity method investment, under which CoSara provides certain research and development consulting and support services. During the three months ended March 31, 2024, the Company recognized $0.1 million of expense related to this agreement.

 
v3.24.1.u1
Subsequent Events
 3 Months Ended
Mar. 31, 2024
Subsequent Events  
Subsequent Events

Note 13 – Subsequent Events

 

In October 2023, the Company was awarded grant funding of a total of approximately $9.0 million, contingent on the attainment of certain milestones. The first $3.5 million of funding under this grant was received by the Company at the time the grant was awarded in October 2023. In April 2024, a milestone under this grant was met and accepted, which resulted in the disbursement of an additional $2.0 million of funding per the grant agreement. These funds were received by the Company in April 2024.
v3.24.1.u1
Summary of Significant Accounting Policies (Policies)
 3 Months Ended
Mar. 31, 2024
Accounting Policies [Abstract]  
Reclassifications

Reclassifications

 

Certain prior year amounts have been reclassified to conform with the current year’s presentation. These reclassifications have no impact on the previously reported results.

 

 
Accounts Receivable

Accounts Receivable

 

Trade accounts receivable are recorded at the invoiced amount (net of allowance) and do not bear interest. The Company maintains an allowance for doubtful accounts for amounts the Company does not expect to collect. In establishing the required allowance, management considers historical losses, current market condition, customers’ financial condition, the age of receivables, and current payment patterns. Account balances are written off against the allowance once the receivable is deemed uncollectible. Recoveries of trade receivables previously written off are recorded when collected. At March 31, 2024 total accounts receivable was $620,548 with an allowance for uncollectable accounts of $185,680 resulting in a net amount of $434,868. At December 31, 2023 total accounts receivable was $504,264 with an allowance for uncollectable accounts of $200,338 resulting in a net amount of $303,926.

 
Inventory

Inventory

 

Inventory is stated at the lower of cost or net-realizable value. Inventory cost is determined on a first-in first-out basis that approximates average cost in accordance with ASC 330-10-30-12. At March 31, 2024, the Company had $1,549,812 in inventory, of which $674,142 was finished goods and $875,670 was raw materials. At December 31, 2023, the Company had $1,664,725 in inventory, of which $700,467 was finished goods and $964,258 was raw materials. The Company establishes reserves to reduce low-moving, obsolete, or unusable inventories to their estimated useful or scrap values. The Company recognized $311,339 and $43,717 related to the change in inventory reserves during the three months ended March 31, 2024 and 2023, respectively.

 
Revenue Recognition

Revenue Recognition

 

The Company generates revenue from customers from product and license sales. The Company recognizes revenue from customers when all of the following criteria are satisfied: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when, or as the Company satisfies each performance obligation.

 

The Company constrains revenue by giving consideration to factors that could otherwise lead to a probable reversal of revenue. The Company records any payments received from customers prior to the Company fulfilling its performance obligation(s) as deferred revenue.

 
Grant Revenue

Grant Revenue

 

The Company may submit applications to receive grant funding from governmental and non-governmental entities. The Company accounts for grants by analogizing to the contribution accounting model under ASC 958-605, Not-for-Profit Entities (“ASC 958”). Revenues from grants, contracts, and awards provided by governmental and non-governmental agencies are recorded based upon the terms of the specific agreements. The Company recognizes grant funding without conditions or continuing performance obligations as revenue in the consolidated statements of operations and comprehensive income (loss). The Company recognizes grant funding with conditions or continuing performance obligations as deferred revenue in the consolidated balance sheets if the conditions or performance obligations have not yet been met. The Company recognized grant funding revenue of $0.2 million and $0 during the three months ended March 31, 2024 and 2023, respectively. At March 31, 2024, the Company has also recorded $0.3 million of deferred revenue related to grant funding for which the cash was received, but the underlying conditions or performance obligations have not yet been met. Cash received from federal grants, contracts, and awards can be subject to audit by the grantor and, if the examination results in a disallowance of any expenditure, repayment could be required.

 

 
Income Taxes

Income Taxes

 

The Company accounts for income taxes in accordance with the liability method of accounting for income taxes. Under this method, deferred income tax assets and deferred income tax liabilities represent the tax effect of temporary differences between financial reporting and tax reporting measured at enacted tax rates in effect for the year in which the differences are expected to reverse. The Company recognizes only the impact of tax positions that, based on their technical merits, are more likely than not to be sustained upon an audit by the taxing authority.

 

Valuation allowances are provided when it is more-likely-than-not that some or all of the deferred income tax assets may not be realized. In assessing the need for a valuation allowance, the Company has considered its historical levels of income, expectations of future taxable income and ongoing tax planning strategies.

 

Developing the provision for income taxes, including the effective tax rate and analysis of potential tax exposure items, if any, requires significant judgment and expertise in federal and state income tax laws, regulations and strategies, including the determination of deferred income tax assets and liabilities and any estimated valuation allowances deemed necessary to value deferred income tax assets. Judgments and tax strategies are subject to audit by various taxing authorities. The Company has uncertain income tax positions in the condensed consolidated financial statements, and adverse determinations by these taxing authorities could have a material adverse effect on the condensed consolidated financial positions, result of operations, or cash flows.

 
Concentrations Risk and Significant Customers

Concentrations Risk and Significant Customers

 

The Company had certain customers which were each responsible for generating 10% or more of the total revenue for the three months ended March 31, 2024. One customer accounted for approximately 26% of product revenue, and one granting agency accounted for all of the grant revenue recognized during the three months ended March 31, 2024. Two customers accounted for approximately 44% of product revenue for the three months ended March 31, 2023.

 

Four customers accounted for more than 10% of accounts receivable at March 31, 2024 and three customers accounted for more than 10% of accounts receivable at December 31, 2023. These customers together accounted for approximately 90% and 97% of accounts receivable at March 31, 2024 and December 31, 2023, respectively.

 

 
Recently Issued Accounting Standards

Recently Issued Accounting Standards

 

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) that are adopted by the Company as of the specified effective date. If not discussed, management believes that the impact of recently issued standards, which are not yet effective, will not have a material impact on the Company’s financial statements upon adoption.

 

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires an entity to disclose annually additional information related to the company’s income tax rate reconciliation and income taxes paid during the period. The guidance should be applied prospectively with the option to apply the standard retrospectively. The standard becomes effective for the Company for full year 2025 reporting. The Company is currently evaluating the impact of this new standard on its consolidated financial statements.
v3.24.1.u1
Cash, Cash Equivalents, and Financial Instruments (Tables)
 3 Months Ended
Mar. 31, 2024
Cash and Cash Equivalents [Abstract]  
Schedule of Cash, Cash Equivalents and Marketable Investment Securities

The following table shows the Company’s cash, cash equivalents, and marketable investment securities by significant investment category:

 

   March 31, 2024 
   Adjusted
Cost		   Total
Unrealized
Gains /
(Losses)		   Fair
Value		   Cash and
Cash
Equivalents		   Marketable
Investment
Securities		 
Cash  $23,099,251   $-   $23,099,251   $23,099,251   $- 
Level 2:                         
U.S. treasury securities   26,637,880    226,555    26,864,435    -    26,864,435 
Subtotal   26,637,880    226,555    26,864,435    -    26,864,435 
Total  $49,737,131   $226,555   $49,963,686   $23,099,251   $26,864,435 

 

   December 31, 2023 
   Adjusted
Cost		   Total
Unrealized
Gains /
(Losses)		   Fair
Value		   Cash and
Cash
Equivalents		   Marketable
Investment
Securities		 
Cash  $4,317,449   $-   $4,317,449   $4,317,449   $- 
Level 1:                         
Money market funds   10,599,429    -    10,599,429    10,599,429    - 
Subtotal   10,599,429    -    10,599,429    10,599,429    - 
Level 2:                         
U.S. treasury securities   43,484,810    146,700    43,631,510    -    43,631,510 
Subtotal   43,484,810    146,700    43,631,510    -    43,631,510 
Total  $58,401,688   $146,700   $58,548,388   $14,916,878   $43,631,510 
v3.24.1.u1
Fair Value Measurements (Tables)
 3 Months Ended
Mar. 31, 2024
Fair Value Disclosures [Abstract]  
Schedule of Fair Value Assets and Liabilities

The following table summarizes the assets and liabilities measured at fair value on a recurring basis as of March 31, 2024 and December 31, 2023, by level within the fair value hierarchy:

 

   (Level 1)   (Level 2)   (Level 3)   Total 
   March 31, 2024 
   (Level 1)   (Level 2)   (Level 3)   Total 
Assets:                
Cash equivalents  $4,004,080   $-   $-   $4,004,080 
Marketable securities (U.S. treasury bills and notes)   -    26,864,435    -    26,864,435 
Total assets measured at fair value  $4,004,080   $26,864,435   $-   $30,868,515 
Liabilities:                    
Contingent consideration - common stock  $-   $-   $1,110,733   $1,110,733 
Contingent consideration - warrants   -    -    78,782    78,782 
Total liabilities measured at fair value  $-   $-   $1,189,515   $1,189,515 

 

   (Level 1)   (Level 2)   (Level 3)   Total 
   December 31, 2023 
   (Level 1)   (Level 2)   (Level 3)   Total 
Assets:                
Cash equivalents  $13,806,864   $-   $-   $13,806,864 
Marketable securities (U.S. treasury bills and notes)   -    43,631,510    -    43,631,510 
Total assets measured at fair value  $13,806,864   $43,631,510   $-   $57,438,374 
Liabilities:                    
Contingent consideration - common stock  $-   $-   $1,318,995   $1,318,995 
Contingent consideration - warrants   -    -    320,780    320,780 
Total liabilities measured at fair value  $-   $-   $1,639,775   $1,639,775 
Schedule of Changes in the Fair Value Measurement

The changes for Level 3 items measured at fair value on a recurring basis are as follows:

 

      
Fair value as of December 31, 2023  $1,639,775 
Change in fair value of contingent consideration issued for business acquisitions   (450,260)
Fair value as of March 31, 2024  $1,189,515 
Schedule of Contingent Consideration Common Stock and Warrants

   March 31, 2024   December 31, 2023 
Stock price  $1.12   $1.33 
Strike price  $9.13   $9.13 
Volatility   103.5%   187.5%
Risk-free rate   4.5%   4.0%
Expected term (years)   2.8    3.0 
v3.24.1.u1
Intangible Assets, Net (Tables)
 3 Months Ended
Mar. 31, 2024
Goodwill and Intangible Assets Disclosure [Abstract]  
Schedule of Intangible Assets, Net

Intangible assets, net consisted of the following:

 

   March 31, 2024 
   Weighted-Average  Gross       Net 
   Useful Life (1)  Carrying   Accumulated   Carrying 
   (in Years)  Amount   Amortization   Amount 
In-process research and development  Indefinite  $26,101,000   $-   $26,101,000 
Non-competition agreements  2.7   1,094,000    (867,000)   227,000 
Total intangible assets     $27,195,000   $(867,000)  $26,328,000 

 

   December 31, 2023 
   Weighted-Average  Gross       Net 
   Useful Life (1)  Carrying   Accumulated   Carrying 
   (in Years)  Amount   Amortization   Amount 
In-process research and development  Indefinite  $26,101,000   $-   $26,101,000 
Non-competition agreements  2.7   1,094,000    (791,333)   302,667 
Total intangible assets     $27,195,000   $(791,333)  $26,403,667 

 

  (1) Based on weighted-average useful life established as of the acquisition date.
Schedule of Future Amortization Expense

The expected future annual amortization expense of the Company’s intangible assets held as of March 31, 2024 is as follows:

 

Year Ending December 31,   Amortization Expense 
2024 (remainder)    227,000 
v3.24.1.u1
Revenue (Tables)
 3 Months Ended
Mar. 31, 2024
Revenue  
Summary of Revenue by Geographic Area

The following table sets forth revenue by geographic area:

 

   2024   2023 
   Three Months Ended March 31, 
   2024   2023 
United States          
Product revenue  $86,295   $393,154 
Grant revenue   215,109    - 
Total United States   301,404    393,154 
Rest of World          
Product revenue   166,450    208,803 
Grant revenue   -    - 
Total Rest of World   166,450    208,803 
Total  $467,854   $601,957 
Percentage of revenue by area:          
United States   64%   65%
Rest of World   36%   35%
Schedule of Deferred Revenue

Changes in the Company’s deferred revenue balance for the three months ended March 31, 2024 were as follows:

 

Balance as of December 31, 2023  $362,449 
Revenue recognized included in deferred revenue balance at the beginning of the period   (55,972)
Balance as of March 31, 2024  $306,477 
v3.24.1.u1
Loss Per Share (Tables)
 3 Months Ended
Mar. 31, 2024
Earnings Per Share [Abstract]  
Schedule of Basis and Diluted Earnings Per Share

The following table reconciles the numerator and the denominator used to calculate basic and diluted loss per share for three months ended March 31, 2024 and 2023, respectively:

 

   2024   2023 
   Three Months Ended March 31, 
   2024   2023 
Numerator        
Net loss, as reported  $(9,312,043)  $(5,755,391)
           
Denominator          
Weighted average shares, basic   29,842,874    29,483,540 
Dilutive effect of stock options, warrants and RSUs   -    - 
Shares used to compute diluted loss per share   29,842,874    29,483,540 
           
Basic loss per share  $(0.31)  $(0.20)
Diluted loss per share  $(0.31)  $(0.20)
v3.24.1.u1
Stock-Based Compensation (Tables)
 3 Months Ended
Mar. 31, 2024
Share-Based Payment Arrangement [Abstract]  
Schedule of Option Activity

The following table summarizes option activity during the three months ended March 31, 2024:

 

    Number of
Options		   Weighted
Average
Exercise
Price		   Weighted
Average Fair
Value		   Weighted
Average
Remaining
Contractual
Life (Years)		 
Outstanding at December 31, 2023    1,040,572   $2.19   $1.37    4.89 
Granted    -    -    -      
Expired    -    -    -      
Forfeited/Cancelled    -    -    -      
Exercised    -    -    -      
Outstanding at March 31, 2024    1,040,572   $2.19   $1.37    4.63 
                      
Exercisable at March 31, 2024    1,040,572   $2.19   $1.37    4.63 
Schedule of Outstanding Restricted Stock Units and Related Party

The grant date fair value of RSUs granted is determined using the closing market price of the Company’s common stock on the grant date with the associated compensation expense amortized over the vesting period of the awards. The following table sets forth the outstanding RSUs and related activity for the three months ended March 31, 2024:

 

    Number of RSUs   Weighted Average
Grant Date Fair
Value		 
Unvested at December 31, 2023    2,925,497   $3.99 
Granted    -    - 
Vested    (18,750)   9.54 
Forfeited/Cancelled    (134,525)   3.02 
Unvested at March 31, 2024    2,772,222   $4.04 
Schedule of Warrant Activity

The following table summarizes warrant activity during the three months ended March 31, 2024:

 

    Number of
Warrants		   Weighted
Average
Exercise
Price		   Weighted
Average
Fair Value		   Weighted
Average
Remaining
Contractual
Life (Years)		 
Outstanding at December 31, 2023    485,000   $8.81   $1.29    3.0 
Granted    -    -    -      
Expired    -    -    -      
Forfeited/Cancelled    -    -    -      
Exercised    -    -    -      
Outstanding at March 31, 2024    485,000   $8.81   $0.79    2.7 
Schedule of Recognized Stock-based Compensation Expense

The Company recognized stock-based compensation expense as follows:

 

   2024   2023 
   Three Months Ended
March 31,		 
   2024   2023 
Cost of revenue  $8,141   $12,008 
Sales and marketing   370,381    529,117 
General and administrative   1,086,495    1,192,214 
Research and development   106,217    435,403 
Total stock-based compensation expense  $1,571,234   $2,168,742 
v3.24.1.u1
Commitments and Contingencies (Tables)
 3 Months Ended
Mar. 31, 2024
Commitments and Contingencies Disclosure [Abstract]  
Schedule of Lease Expense

For the three months ended March 31,2024, components of lease expense are summarized as follows:

 

   Three Months
Ended
March 31, 2024		 
Operating lease costs  $267,984 
Short-term lease costs   8,750 
Total lease costs  $276,734 
Schedule of Maturities on Company Lease Liabilities

As of March 31, 2024, the maturities of the Company’s lease liabilities are as follows:

 

   Year Ending
December 31,		 
2024 (remainder)  $752,656 
2025   1,018,383 
2026   714,630 
2027   300,591 
2028   308,463 
Thereafter   - 
Total lease payments   3,094,723 
Less: imputed interest   303,647 
Present value of operating lease liabilities   2,791,076 
Less: current portion   859,912 
Long-term portion  $1,931,164 
Schedule of Other Information Related to Operating Lease

Other information related to operating leases was as follows:

 

   Three Months Ended
March 31, 2024		 
Cash paid for operating leases included in operating cash flows  $262,208 
Remaining lease term of operating leases   3.4 years 
Discount rate of operating leases   6.2%
v3.24.1.u1
Summary of Significant Accounting Policies (Details Narrative) - USD ($)
 1 Months Ended 3 Months Ended 12 Months Ended
Oct. 31, 2023
Mar. 31, 2024
Mar. 31, 2023
Dec. 31, 2023
Product Information [Line Items]        
Accounts receivable   $ 620,548   $ 504,264
Doubtful accounts   185,680   200,338
Accounts receivable, net   434,868   303,926
Inventory   1,549,812   1,664,725
Inventory, finished goods, gross   674,142   700,467
Inventory, raw materials, gross   875,670   $ 964,258
Inventory reserves   311,339 $ 43,717  
Grant funding revenue $ 9,000,000.0 200,000 $ 0  
Deferred revenue   $ 300,000    
Customers [Member] | Customer Concentration Risk [Member] | Accounts Receivable [Member]        
Product Information [Line Items]        
Concentration risk percentage   10.00%    
One Customer [Member] | Customer Concentration Risk [Member] | Revenue Benchmark [Member]        
Product Information [Line Items]        
Concentration risk percentage   26.00%    
Two Customers [Member] | Customer Concentration Risk [Member] | Revenue Benchmark [Member]        
Product Information [Line Items]        
Concentration risk percentage     44.00%  
Four Customers [Member] | Customer Concentration Risk [Member] | Accounts Receivable [Member]        
Product Information [Line Items]        
Concentration risk percentage   10.00%    
Three Customers [Member] | Customer Concentration Risk [Member] | Accounts Receivable [Member]        
Product Information [Line Items]        
Concentration risk percentage       10.00%
Customers Together [Member] | Customer Concentration Risk [Member] | Accounts Receivable [Member]        
Product Information [Line Items]        
Concentration risk percentage   90.00%   97.00%
v3.24.1.u1
Schedule of Cash, Cash Equivalents and Marketable Investment Securities (Details) - USD ($)
 3 Months Ended 12 Months Ended
Mar. 31, 2024
Dec. 31, 2023
Cash and Cash Equivalents [Line Items]    
Adjusted Cost $ 49,737,131 $ 58,401,688
Total Unrealized Gains / (Losses) 226,555 146,700
Fair Value 49,963,686 58,548,388
Cash and Cash Equivalents 23,099,251 14,916,878
Marketable Securities 26,864,435 43,631,510
Fair Value, Inputs, Level 2 [Member]    
Cash and Cash Equivalents [Line Items]    
Adjusted Cost 26,637,880 43,484,810
Total Unrealized Gains / (Losses) 226,555 146,700
Fair Value 26,864,435 43,631,510
Cash and Cash Equivalents
Marketable Securities 26,864,435 43,631,510
Fair Value, Inputs, Level 1 [Member]    
Cash and Cash Equivalents [Line Items]    
Adjusted Cost   10,599,429
Total Unrealized Gains / (Losses)  
Fair Value   10,599,429
Cash and Cash Equivalents   10,599,429
Marketable Securities  
Cash [Member]    
Cash and Cash Equivalents [Line Items]    
Adjusted Cost 23,099,251 4,317,449
Total Unrealized Gains / (Losses)
Fair Value 23,099,251 4,317,449
Cash and Cash Equivalents 23,099,251 4,317,449
Marketable Securities
US Treasury Securities [Member] | Fair Value, Inputs, Level 2 [Member]    
Cash and Cash Equivalents [Line Items]    
Adjusted Cost 26,637,880 43,484,810
Total Unrealized Gains / (Losses) 226,555 146,700
Fair Value 26,864,435 43,631,510
Cash and Cash Equivalents
Marketable Securities $ 26,864,435 43,631,510
Money Market Funds [Member] | Fair Value, Inputs, Level 1 [Member]    
Cash and Cash Equivalents [Line Items]    
Adjusted Cost   10,599,429
Total Unrealized Gains / (Losses)  
Fair Value   10,599,429
Cash and Cash Equivalents   10,599,429
Marketable Securities  
v3.24.1.u1
Schedule of Fair Value Assets and Liabilities (Details) - USD ($)
Mar. 31, 2024
Dec. 31, 2023
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Marketable securities (U.S. treasury bills and notes) $ 26,864,435 $ 43,631,510
Fair Value, Inputs, Level 1 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Marketable securities (U.S. treasury bills and notes)  
Fair Value, Inputs, Level 2 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Marketable securities (U.S. treasury bills and notes) 26,864,435 43,631,510
Fair Value, Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash equivalents 4,004,080 13,806,864
Marketable securities (U.S. treasury bills and notes) 26,864,435 43,631,510
Total assets measured at fair value 30,868,515 57,438,374
Contingent consideration - common stock 1,110,733 1,318,995
Contingent consideration - warrants 78,782 320,780
Total liabilities measured at fair value 1,189,515 1,639,775
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash equivalents 4,004,080 13,806,864
Marketable securities (U.S. treasury bills and notes)
Total assets measured at fair value 4,004,080 13,806,864
Contingent consideration - common stock
Contingent consideration - warrants
Total liabilities measured at fair value
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash equivalents
Marketable securities (U.S. treasury bills and notes) 26,864,435 43,631,510
Total assets measured at fair value 26,864,435 43,631,510
Contingent consideration - common stock
Contingent consideration - warrants
Total liabilities measured at fair value
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash equivalents
Marketable securities (U.S. treasury bills and notes)
Total assets measured at fair value
Contingent consideration - common stock 1,110,733 1,318,995
Contingent consideration - warrants 78,782 320,780
Total liabilities measured at fair value $ 1,189,515 $ 1,639,775
v3.24.1.u1
Schedule of Changes in the Fair Value Measurement (Details) - Fair Value, Recurring [Member]
 3 Months Ended
Mar. 31, 2024
USD ($)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]  
Fair value as of December 31, 2023 $ 1,639,775
Change in fair value of contingent consideration issued for business acquisitions (450,260)
Fair value as of March 31, 2024 $ 1,189,515
v3.24.1.u1
Schedule of Contingent Consideration Common Stock and Warrants (Details)
Mar. 31, 2024
Dec. 31, 2023
Measurement Input, Share Price [Member]    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Warrants measurement input 1.12 1.33
Measurement Input Strike Price [Member]    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Warrants measurement input 9.13 9.13
Measurement Input, Price Volatility [Member]    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Warrants measurement input 1.035 1.875
Measurement Input, Risk Free Interest Rate [Member]    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Warrants measurement input 0.045 0.040
Measurement Input, Expected Term [Member]    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Expected term 2 years 9 months 18 days 3 years
v3.24.1.u1
Schedule of Intangible Assets, Net (Details) - USD ($)
 3 Months Ended 12 Months Ended
Mar. 31, 2024
Dec. 31, 2023
Finite-Lived Intangible Assets [Line Items]    
Intangible assets, gross $ 27,195,000 $ 27,195,000
Less accumulated amortization (867,000) (791,333)
Intangible assets, net $ 26,328,000 $ 26,403,667
In Process Research and Development [Member]    
Finite-Lived Intangible Assets [Line Items]    
Estimated useful lives in years, term [1] Indefinite Indefinite
Intangible assets, gross $ 26,101,000 $ 26,101,000
Less accumulated amortization
Intangible assets, net 26,101,000 26,101,000
Noncompete Agreements [Member]    
Finite-Lived Intangible Assets [Line Items]    
Intangible assets, gross 1,094,000 1,094,000
Less accumulated amortization (867,000) (791,333)
Intangible assets, net $ 227,000 $ 302,667
Estimated useful lives in years [1] 2 years 8 months 12 days 2 years 8 months 12 days
[1] Based on weighted-average useful life established as of the acquisition date.
v3.24.1.u1
Schedule of Future Amortization Expense (Details)
Mar. 31, 2024
USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]  
2024 (remainder) $ 227,000
v3.24.1.u1
Summary of Revenue by Geographic Area (Details) - USD ($)
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Revenue geographic area                 $ 467,854 $ 601,957
UNITED STATES    
Revenue geographic area                 $ 301,404 $ 393,154
UNITED STATES | Revenue Benchmark [Member] | Geographic Concentration Risk [Member]    
Percentage of revenue 64.00% 65.00%
UNITED STATES | Product [Member]    
Revenue geographic area                 $ 86,295 $ 393,154
UNITED STATES | Grant [Member]    
Revenue geographic area                 215,109
Rest of World [Member]    
Revenue geographic area                 $ 166,450 $ 208,803
Rest of World [Member] | Revenue Benchmark [Member] | Geographic Concentration Risk [Member]    
Percentage of revenue 36.00% 35.00%
Rest of World [Member] | Product [Member]    
Revenue geographic area                 $ 166,450 $ 208,803
Rest of World [Member] | Grant [Member]    
Revenue geographic area                
v3.24.1.u1
Schedule of Deferred Revenue (Details)
 3 Months Ended
Mar. 31, 2024
USD ($)
Revenue  
Deferred revenue, beginning balance $ 362,449
Revenue recognized included in deferred revenue balance (55,972)
Deferred revenue, ending balance $ 306,477
v3.24.1.u1
Schedule of Basis and Diluted Earnings Per Share (Details) - USD ($)
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Earnings Per Share [Abstract]    
Net loss, as reported $ (9,312,043) $ (5,755,391)
Weighted average shares, basic 29,842,874 29,483,540
Dilutive effect of stock options, warrants and RSUs
Shares used to compute diluted loss per share 29,842,874 29,483,540
Basic loss per share $ (0.31) $ (0.20)
Diluted loss per share $ (0.31) $ (0.20)
v3.24.1.u1
Loss Per Share (Details Narrative) - shares
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Securities excluded from computation of diluted earnings per share 0 0
Restricted Stock Units (RSUs) [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Securities excluded from computation of diluted earnings per share 2,564,310 2,732,517
Share-Based Payment Arrangement, Option [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Securities excluded from computation of diluted earnings per share 532,112 120,445
Common Stock [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Securities excluded from computation of diluted earnings per share 1,400,000 1,400,000
Warrant [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Securities excluded from computation of diluted earnings per share 465,000 465,000
v3.24.1.u1
Schedule of Option Activity (Details)
 3 Months Ended
Mar. 31, 2024
$ / shares
shares
Share-Based Payment Arrangement [Abstract]  
Number of Options Outstanding, Beginning | shares 1,040,572
Weighted Average Exercise Price Outstanding, Beginning $ 2.19
Weighted Average Fair Value Outstanding, Ending $ 1.37
Weighted-average Remaining Contractual Life (years) Outstanding, Beginning 4 years 10 months 20 days
Number of Options Outstanding, Granted | shares
Weighted Average Exercise Price Granted
Weighted Average Fair Value Granted
Number of Options Outstanding, Expired | shares
Weighted Average Exercise Price Expired
Weighted Average Fair Value Expired
Number of Options Outstanding, Forfeited/Cancelled | shares
Weighted Average Exercise Price Forfeited/Cancelled
Weighted Average Fair Value Forfeited/Cancelled
Number of Options Outstanding, Exercised | shares
Weighted Average Exercise Price Exercised
Weighted Average Fair Value Exercised
Number of Options Outstanding, Ending | shares 1,040,572
Weighted Average Exercise Price Outstanding, Ending $ 2.19
Weighted-average Remaining Contractual Life (years) Outstanding, Ending 4 years 7 months 17 days
Number of Options Exercisable Ending | shares 1,040,572
Weighted Average Exercise Price, Exercisable Ending $ 2.19
Weighted Average Fair Value, Exercisable Ending $ 1.37
Weighted-average Remaining Contractual Life (years), Exercisable Ending 4 years 7 months 17 days
v3.24.1.u1
Schedule of Outstanding Restricted Stock Units and Related Party (Details) - Restricted Stock Units (RSUs) [Member]
 3 Months Ended
Mar. 31, 2024
$ / shares
shares
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]  
Number of Restricted Stock Units, Outstanding Beginning | shares 2,925,497
Weighted Average Grant Date Fair Value, Outstanding Beginning | $ / shares $ 3.99
Number of Restricted Stock Units, Granted | shares
Weighted Average Grant Date Fair Value, Granted | $ / shares
Number of Restricted Stock Units, Vested | shares (18,750)
Weighted Average Grant Date Fair Value, Vested | $ / shares $ 9.54
Number of Restricted Stock Units, Forfeited/Cancelled | shares (134,525)
Weighted Average Grant Date Fair Value, Forfeited/Cancelled | $ / shares $ 3.02
Number of Restricted Stock Units, Outstanding Ending | shares 2,772,222
Weighted Average Grant Date Fair Value, Outstanding Ending | $ / shares $ 4.04
v3.24.1.u1
Schedule of Warrant Activity (Details)
 3 Months Ended
Mar. 31, 2024
$ / shares
shares
Share-Based Payment Arrangement [Abstract]  
Number of Warrants Outstanding, Beginning | shares 485,000
Weighted Average Exercise Price, Beginning $ 8.81
Weighted Average fair value, Beginning $ 1.29
Weighted-average Remaining Contractual Life (Years) Outstanding 3 years
Number of Warrants Outstanding, Granted | shares
Weighted Average Exercise Price, Granted
Weighted Average Fair Value, Granted
Number of Warrants Outstanding, Expired | shares
Weighted Average Exercise Price, Expired
Weighted Average Fair Value, Expired
Number of Warrants Outstanding, Forfeited/Cancelled | shares
Weighted Average Exercise Price, Forfeited/Cancelled
Weighted Average Fair Value, Forfeited/Cancelled
Number of Warrants Outstanding, Exercised | shares
Weighted Average Exercise Price, Exercised
Weighted Average Fair Value, Exercised
Number of Warrants Outstanding, Ending | shares 485,000
Weighted Average Exercise Price, Ending $ 8.81
Weighted Average Fair Value, Ending $ 0.79
Weighted-average Remaining Contractual Life (Years) Outstanding 2 years 8 months 12 days
v3.24.1.u1
Schedule of Recognized Stock-based Compensation Expense (Details) - USD ($)
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]    
Total stock-based compensation expense $ 1,571,234 $ 2,168,742
Cost of Sale [Member]    
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]    
Total stock-based compensation expense 8,141 12,008
Sales and Marketing [Member]    
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]    
Total stock-based compensation expense 370,381 529,117
General and Administrative [Member]    
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]    
Total stock-based compensation expense 1,086,495 1,192,214
Research and Development [Member]    
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]    
Total stock-based compensation expense $ 106,217 $ 435,403
v3.24.1.u1
Stock-Based Compensation (Details Narrative) - USD ($)
 3 Months Ended
Mar. 31, 2024
Aug. 31, 2022
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]    
Stock based compensation expense related to weighted average period 4 years 7 months 17 days  
Warrant [Member]    
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]    
Aggregate intrinsic value of outstanding options $ 0  
Warrants exercisable 20,000  
Warrants to purchase a common stock 465,000  
Stock Options [Member]    
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]    
Aggregate intrinsic value of outstanding options $ 100,000  
Restricted Stock Units (RSUs) [Member]    
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]    
Unrecognized stock-based compensation $ 7,600,000  
Stock based compensation expense related to weighted average period 1 year 6 months  
2015 Long Term Incentive Plan [Member]    
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]    
Number of common shares availalble for issuance 4,492,462 12,000,000
v3.24.1.u1
Income Taxes (Details Narrative) - USD ($)
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Income Tax Disclosure [Abstract]    
Income tax expense (benefit) $ 22,764 $ (2,259,811)
Effective income tax rate reconciliation, percent (0.20%)  
Effective income tax rate reconciliation, percent 21.00%  
Income tax expense (benefit) $ (22,764) $ 2,259,811
v3.24.1.u1
Schedule of Lease Expense (Details)
 3 Months Ended
Mar. 31, 2024
USD ($)
Commitments and Contingencies Disclosure [Abstract]  
Operating lease costs $ 267,984
Short-term lease costs 8,750
Total lease costs $ 276,734
v3.24.1.u1
Schedule of Maturities on Company Lease Liabilities (Details) - USD ($)
Mar. 31, 2024
Dec. 31, 2023
Commitments and Contingencies Disclosure [Abstract]    
2024 (remainder) $ 752,656  
2025 1,018,383  
2026 714,630  
2027 300,591  
2028 308,463  
Thereafter  
Total lease payments 3,094,723  
Less: imputed interest 303,647  
Present value of operating lease liabilities 2,791,076  
Less: current portion 859,912 $ 838,387
Long-term portion $ 1,931,164 $ 2,152,180
v3.24.1.u1
Schedule of Other Information Related to Operating Lease (Details)
 3 Months Ended
Mar. 31, 2024
USD ($)
Commitments and Contingencies Disclosure [Abstract]  
Cash paid for operating leases included in operating cash flows $ 262,208
Remaining lease term of operating leases 3 years 4 months 24 days
Discount rate of operating leases 6.20%
v3.24.1.u1
Share Repurchase Program (Details Narrative)
$ in Millions
Mar. 31, 2022
USD ($)
Equity [Abstract]  
Stock repurchase program authorized amount $ 30.0
v3.24.1.u1
Related Party Transactions (Details Narrative) - USD ($)
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Related Party Transaction [Line Items]    
Research and development expenses $ 5,679,678 $ 5,014,060
CoSara Diagnostics Pvt Ltd [Member]    
Related Party Transaction [Line Items]    
Research and development expenses $ 100,000  
v3.24.1.u1
Subsequent Events (Details Narrative) - USD ($)
 1 Months Ended 3 Months Ended
Apr. 30, 2024
Oct. 31, 2023
Mar. 31, 2024
Mar. 31, 2023
Grant funding revenue   $ 9,000,000.0 $ 200,000 $ 0
Subsequent Event [Member]        
Disbursement fund $ 2,000,000.0      
Grant [Member]        
Grant funding revenue   $ 3,500,000    
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