CDI(CODX) - 2021 Q1 - Quarterly Report

PART I FINANCIAL INFORMATION Item 1. Financial Statements The company's Q1 2021 financial statements reflect significant performance improvement, with revenue surging and net income turning positive Condensed Consolidated Balance Sheets As of March 31, 2021, the balance sheet reflects strong liquidity, with total assets of $81.1 million and cash increasing to $57.8 million Condensed Consolidated Balance Sheet Highlights (Unaudited) | Metric | March 31, 2021 ($) | December 31, 2020 ($) | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $57,788,893 | $42,976,713 | | Total current assets | $79,134,597 | $68,360,433 | | Total assets | $81,118,971 | $71,237,197 | | Liabilities & Equity | | | | Total current liabilities | $4,306,693 | $4,510,688 | | Total liabilities | $4,861,495 | $4,540,688 | | Accumulated earnings | $25,409,690 | $17,510,715 | | Total stockholders' equity | $76,257,476 | $66,696,509 | Condensed Consolidated Statements of Operations Q1 2021 revenue significantly increased to $20.0 million, leading to a gross profit of $16.8 million and a turnaround to a net income of $7.9 million Statement of Operations Summary (Unaudited) | Metric | Three Months Ended March 31, 2021 ($) | Three Months Ended March 31, 2020 ($) | | :--- | :--- | :--- | | Revenue | $20,024,769 | $1,548,528 | | Gross Profit | $16,752,204 | $1,066,788 | | Income (loss) from operations | $10,334,901 | ($1,081,949) | | Net income (loss) | $7,898,975 | ($1,065,193) | | Diluted EPS ($) | $0.26 | ($0.05) | Condensed Consolidated Statements of Cash Flows The company generated $12.3 million in cash from operating activities in Q1 2021, significantly improving cash and cash equivalents to $57.8 million Cash Flow Summary (Unaudited) | Metric | Three Months Ended March 31, 2021 ($) | Three Months Ended March 31, 2020 ($) | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $12,269,955 | ($1,335,528) | | Net cash provided by (used in) investing activities | $2,393,244 | ($250,370) | | Net cash provided by financing activities | $148,981 | $18,062,083 | | Net increase in cash and cash equivalents | $14,812,180 | $16,476,185 | | Cash and cash equivalents at end of period | $57,788,893 | $17,369,323 | Notes to Condensed Consolidated Financial Statements Notes detail accounting policies, revenue recognition, and other financial items, highlighting customer concentration, geographic revenue shifts, and ongoing securities class action lawsuits - The company's business involves developing, manufacturing, and selling reagents for molecular diagnostic tests for infectious diseases, cancer screening, and agricultural applications[18] - Significant customer concentration exists, with three customers accounting for approximately 57% of total revenue for the three months ended March 31, 2021. Two customers accounted for 61% of accounts receivable[39] Revenue by Geographic Area | Region | Q1 2021 Revenue ($) | Q1 2020 Revenue ($) | Q1 2021 % of Total | Q1 2020 % of Total | | :--- | :--- | :--- | :--- | :--- | | United States | $12,493,950 | $614,025 | 62% | 40% | | Rest of World | $7,530,819 | $934,503 | 38% | 60% | | Total | $20,024,769 | $1,548,528 | 100% | 100% | - The company is defending against securities class action complaints filed in July and September 2020, which allege false and misleading press releases. The company believes the lawsuits are without merit but is unable to estimate a range of potential loss[73] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management attributes Q1 2021 revenue and profitability growth to LogixSmart COVID-19 test sales, with increased R&D for a new point-of-care device, and maintains strong liquidity - The company has initiated a project to develop a low-cost, easy-to-use testing device for frequent COVID-19 screening that can provide PCR-quality results in less than an hour, targeting schools, businesses, and home use[93] - The increase in revenue of $18.5 million in Q1 2021 compared to Q1 2020 was primarily due to sales of the LogixSmart COVID-19 test[94] - Research and development expenses increased by $1.8 million year-over-year, driven by over $1 million in expenditures for the new point-of-care device and increased personnel costs[100] - As of March 31, 2021, the company had a strong liquidity position with $57.8 million in cash and cash equivalents and believes it has sufficient capital for the next 12 months of operations[103][109] Item 3. Quantitative and Qualitative Disclosures About Market Risk Disclosure is not required as the company qualifies as a 'smaller reporting company' under Regulation S-K - Disclosure is not required for "smaller reporting companies"[113] Item 4. Controls and Procedures As of March 31, 2021, disclosure controls and procedures were deemed effective, with a new CFO appointed in February 2021 - Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2021[113] - On February 22, 2021, Brian L. Brown was appointed as the company's Chief Financial Officer[114] PART II OTHER INFORMATION Item 1. Legal Proceedings No material developments occurred in previously disclosed legal proceedings, and the company has responded to inquiries from FINRA, NASDAQ, and the SEC - No material developments have occurred in the legal proceedings previously disclosed in the company's Annual Report on Form 10-K[117] - The company has received and responded to inquiries from FINRA, NASDAQ, and the SEC[118] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company issued 1,258 shares of common stock on April 6, 2021, for consulting services under an unregistered exemption - On April 6, 2021, the company issued 1,258 shares of common stock for consulting services[120] Item 3. Defaults Upon Senior Securities The company reported no defaults upon senior securities - None[122] Item 4. Mine Safety Disclosures This item is not applicable to the company - Not applicable[123] Item 5. Other Information The company reported no other information - None[124] Item 6. Exhibits This section indexes exhibits filed with Form 10-Q, including CEO and CFO certifications and XBRL interactive data files - The report includes CEO and CFO certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act[125] - XBRL Instance Document and related taxonomy files are included as exhibits[125]