CDI(CODX) - 2023 Q1 - Quarterly Report

PART I FINANCIAL INFORMATION Item 1. Financial Statements The unaudited consolidated financial statements for Q1 2023 reflect a significant revenue decrease, a shift to net loss, and declines in total assets and stockholders' equity, with negative operating cash flow Consolidated Balance Sheets As of March 31, 2023, total assets decreased to $117.0 million, driven by reduced cash and cash equivalents, while total liabilities and stockholders' equity also declined Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Cash and cash equivalents | $6,359 | $22,974 | | Marketable investment securities | $68,921 | $58,289 | | Total Assets | $116,997 | $123,086 | | Total Liabilities | $6,367 | $8,566 | | Total Stockholders' Equity | $110,630 | $114,520 | Consolidated Statements of Operations and Comprehensive Income (Loss) For Q1 2023, the company experienced a substantial revenue decline, leading to a significant gross profit reduction, increased operating expenses, and a shift from net income to a net loss year-over-year Q1 2023 vs. Q1 2022 Performance (in thousands) | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | Revenue | $602 | $22,699 | | Gross Profit | $100 | $19,417 | | Total Operating Expenses | $10,050 | $9,593 | | Net (Loss) Income | $(5,755) | $11,715 | | Basic EPS | $(0.20) | $0.35 | Consolidated Statements of Cash Flows For Q1 2023, the company reported net cash used in operating, investing, and financing activities, resulting in a significant net decrease in cash and cash equivalents compared to the prior year Cash Flow Summary (in thousands) | Activity | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | Net Cash (Used in) Provided by Operating Activities | $(5,499) | $7,806 | | Net Cash (Used in) Provided by Investing Activities | $(10,633) | $859 | | Net Cash (Used in) Provided by Financing Activities | $(482) | $150 | | Net (Decrease) Increase in Cash | $(16,614) | $8,815 | Consolidated Statements of Stockholders' Equity Stockholders' equity declined in Q1 2023, primarily due to the net loss and common stock repurchases, partially offset by stock-based compensation and other comprehensive income - Key changes in stockholders' equity for Q1 2023 included a net loss of $5,755,391 and common stock repurchases totaling $482,196, which were partially offset by stock-based compensation of $2,168,742[4] Notes to Consolidated Financial Statements The notes detail accounting policies, geographic revenue declines, increased stock-based compensation, and updates on ongoing litigation and the share repurchase program - The company develops, manufactures, and sells reagents for diagnostic tests, including for infectious diseases It is also developing a portable PCR device, the Co-Dx PCR Home™ platform, which is subject to FDA review and not yet for sale[16] Revenue by Geographic Area (in thousands) | Region | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | United States | $393 | $14,218 | | Rest of World | $209 | $8,481 | | Total | $602 | $22,699 | - The company is a defendant in two class-action claims and three derivative actions alleging false and misleading press releases The company believes these lawsuits are without merit and is unable to estimate a range of potential loss[105] Management's Discussion and Analysis of Financial Condition and Results of Operations Management attributes the Q1 2023 revenue decline to lower COVID-19 test sales, notes increased operating expenses from R&D, and confirms sufficient liquidity for the next 12 months - The decrease in revenue of $22.1 million was primarily due to lower sales of the Logix Smart COVID-19 test[208] - R&D expenses increased from $3.8 million to $5.0 million year-over-year, mainly due to increased personnel, materials, and stock-based compensation related to the Co-Dx PCR Home platform development[210] - As of March 31, 2023, the company had $6.4 million in cash and cash equivalents, plus $68.9 million in marketable investment securities Management believes these resources are sufficient for the next 12 months[184] Quantitative and Qualitative Disclosures About Market Risk This section is not required for smaller reporting companies, thus no information is provided - Disclosure is not required for "smaller reporting companies" under Regulation S-K[140][214] Controls and Procedures Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of March 31, 2023, with no material changes in internal control over financial reporting - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of March 31, 2023[227] - No changes occurred in the company's internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[214] PART II OTHER INFORMATION Legal Proceedings The company reports no material developments in previously disclosed legal proceedings and continues to defend against class action and derivative lawsuits - There have been no material developments to the legal proceedings previously disclosed in the 2022 Annual Report on Form 10-K[128] Risk Factors No material changes are reported from the risk factors previously disclosed in the company's 2022 Annual Report on Form 10-K - The report indicates no material changes from the risk factors previously disclosed in the company's 2022 Form 10-K[215] Unregistered Sales of Equity Securities and Use of Proceeds The company details Q1 2023 share repurchase activity under its $30.0 million program, with approximately $15.3 million remaining for future repurchases Share Repurchase Activity (Q1 2023) | Period | Total Shares Purchased | Average Price Paid per Share | Approx. Dollar Value Remaining | | :--- | :--- | :--- | :--- | | Jan 2023 | - | - | $15,788,134 | | Feb 2023 | - | - | $15,788,134 | | Mar 2023 | 309,012 | $1.56 | $15,305,938 | | Total | 309,012 | $1.56 | $15,305,938 | - The Board of Directors authorized a share repurchase program of up to $30.0 million in March 2022 The program has no expiration date and does not obligate the company to acquire any specific number of shares[114][231] Defaults Upon Senior Securities The company reported no defaults upon senior securities - None reported[218] Mine Safety Disclosures This item is not applicable to the company - Not applicable[232] Other Information The company reported no other information - None reported[219] Exhibits This section lists exhibits filed with the Form 10-Q, including CEO and CFO certifications and Inline XBRL documents - Exhibits filed include CEO and CFO certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002, along with various Inline XBRL files[233]