Co-Diagnostics, Inc.

Good afternoon, and welcome to the Code Diagnostics, Inc., fourth quarter and full year 2022 earnings results conference call. All participants will be in a listen-only mode, and should you need any assistance during the call, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one under telephone keypad. and to withdraw a question, please press star then two. Please note that this event is being recorded today. I would now like to turn the conference over to Andrew Benson, Head of Investor Relations. Please go ahead, sir.

Thank you. I am Andrew Benson and joining me this afternoon are members of the Co-Diagnostics Management Team including Dwight Egan, Chief Executive Officer and Brian Brown, Chief Financial Officer. We will begin the call with management's prepared remarks and then open up the call to questions from our analysts. Before we begin, we would like to inform the listeners that certain statements made by co-diagnostics during the course of this call may constitute forward-looking statements. Any statement about company expectations, beliefs, plans, objectives, assumptions of future events or performance are forward-looking statements. For example, statements concerning 2023 financial and operational guidance, the development, regulatory clearance, Commercialization and features of new products, plans and objectives of management, and market trends are all forward-looking statements. This includes statements concerning the company's forthcoming CODI-X PCR home testing platform, which is subject to FDA review and is not yet available for sale. The company believes these statements are based on reasonable assumptions. However, these statements are not guarantees of performance and involve known and unknown risks and uncertainties. that may cause the actual results to be materially different from any future result expressed or implied by such statements. Important factors which could cause actual results to differ materially from those in these forward-looking statements are detailed in co-diagnostics filings with the SEC. Co-diagnostics assumes no obligation and expressly disclaims any duty to update any forward-looking statements to reflect events or circumstances occurring after this call or to reflect the occurrence of unanticipated events. In addition, the company may discuss certain non-GAAP financial measures during today's call. These non-GAAP financial measures should not be considered a replacement for and should be read together with GAAP results. We refer you to the company's earnings release out shortly before this call, which may contain reconciliation to the non-GAAP financial measures presented to their most comparable GAAP results. At this time, I would like to turn the call over to Co-Diagnostics Chief Executive Officer Dwight Egan. Dwight.

Thank you, Andrew, and thank you all for joining us. On this call, we will provide an overview of our results for 2022, updates on key financial performance metrics, and a discussion of progress against our strategy. Then, we will take questions from our analysts. Three years ago at this time, when Kodiak had just recently become the first U.S.-based company with a CE marking for a COVID-19 test and nationwide shutdowns had barely begun, We couldn't even imagine the state the world would be in in the weeks, months, and years that followed. Through it all, CoDiagnostics never lost sight of our mission to prevent the spread of infectious disease by making high-quality PCR diagnostics accessible to communities all around the world, leveraging our experience in state-of-the-art PCR technology to achieve these goals. Our proven record of accomplishments in the last three years was accompanied not only by increased visibility in the world of diagnostics, and a vastly increased distributor and customer base, but also the resources and connections to manifest a key element of our vision since our founding 10 years ago this year. Reduction of healthcare costs around the globe by democratizing infectious disease testing made possible thanks to a platform bringing the highest level of quality and diagnostics directly to the people and places who need it the most. This can be in a remote clinic in rural India where tuberculosis has been endemic for generations, or a skilled nursing facility in Ohio looking for a way to reduce costs and provide better care for its patients by confidently identifying potential fatal respiratory diseases before they can spread, or on the kitchen counter of a family concerned about the health of a young child in the middle of the night. Empowering patients and physicians to make informed, timely healthcare decisions, either at the point of care at home or, thanks to test processed in high-throughput clinical laboratory settings, is the foundation of our corporate tagline, the power to know. That's why we're pleased to recently announce our CODIX PCR platform at home and point-of-care platform has begun the clinical trials and analytical studies that are expected to support submissions to the United States FDA and other regulatory bodies, along with its initial COVID-19 test. As has been shared previously, the company's real-time PCR platform has been developed for detection of infectious diseases in at-home and point-of-care settings, and multiplex panels are planned to follow after receipt of the platform's initial regulatory authorization by the FDA. We have already built manufacturing lines for the device and sample collection cups and continue to expand our capacity to build more lines to meet expected future demand for our platform It's true that this milestone is the culmination of a development process that spans two years of research and development. But more than that, it has its genesis in our corporate mission and is only possible due to the expert skills of well over 100 dedicated scientists, engineers, and support staff stretching back nearly a decade. It brings together the power of our patented, battle-tested co-primer technology coupled with other proprietary IP Setting a new standard for compact point-of-care testing that unlocks the multiplexing potential of real-time PCR. With regards to the planned respiratory panel for influenza A, B, COVID, and RSV, our research and planning indicates that multiplex tests can overcome a major price and convenience hurdle, allowing patients to test for multiple diseases all at once and for a single affordable price. The innovative sample collection cup and sample processing design is also ideal for other multiplex testing panels, such as the company's expected sexually transmitted infections multiplex panel. The cloud-based real-time epidemiology data also provides opportunities for departments and ministries of health to quickly identify and track outbreaks at a scale that has never been possible before such a tool existed, and to provide resources and information where they are needed before diseases spread among a community or region. To illustrate the advantages of introducing such a platform into a high-risk environment currently relying on technology that is now becoming outdated, imagine a typical 100-bed skilled nursing facility operating close to capacity, which provides only single-plex antigen test kits for residents and its 100 staff members on hand at any given time, which include nurses, food service, administrative and general support staff. This kind of facility is among the most vulnerable to respiratory diseases, especially COVID, flu, and RSV. In this hypothetical but realistic scenario, one of the newly arrived elderly residents is visited by a family member who is unaware of the RSV he brought with him from his daughter's daycare and that stayed behind after he came in contact with several staff members and residents. A few of the staff reported feeling ill 48 hours later, as well as a handful of residents, many of whom didn't even come in contact with the original visitor. It wasn't until five days after the initial visit when one of the patients was hospitalized and tested for RSV that the facility realized that they had an outbreak of RSV among the staff and residents, the latter of whom all fall into a high-risk category for all respiratory illnesses. Dozens more positive cases follow, including other visitors who arrived healthy but left as carriers. To say nothing, of the financial and quality of life costs that would be borne by the facility as a result of an RSV outbreak that they might have prevented. Now imagine the same facility, but this time visitors are given an option to utilize a multiplex Kodiak's PCR home upper respiratory panel upon their arrival and within 30 minutes know with a high degree of accuracy whether they are bringing one or more of four potentially deadly diseases into the facility. This test would be free of charge to the visitor and roughly the same price to the facility as a single-plex antigen COVID test. Within 30 minutes, the facility would know that every member of the staff who came in contact with the individual should be tested every day for the next week, and every patient should be tested, quarantined, and closely monitored, stopping an outbreak before it could happen. Let's say the visitor elects not to take advantage of the testing opportunity, but the facility has a policy that any staff member experiencing any symptoms is required to take the Kodiak's Gold Standard Multiplex PCR test on their arrival to work, unable to come into contact with any other staff or patient until they've received a negative result. Two days later, a staff member tests positive for RSV, and the entire facility is immediately tested, cutting the time to detection from five days to two and hospitalizations to zero. The state health department is immediately notified of an outbreak of RSV in the area and informs the public. who take extra precautions when sending their children to school. The outbreak is controlled. The well-being of the patients is improved. The facility's liability is dramatically reduced, and tens of thousands of dollars are saved. Perhaps most importantly, the patients and their caregivers experience the peace of mind that comes with the power to know. Similar scenarios can exist in other settings, but I hope this helps to illustrate the empowering effects that prompt, accurate diagnosis can have on the quality of life of individuals and consumers. As an update on our clinical evaluations, all institutional review board or IRB approvals are in place for five locations and patient sampling has begun. Our current development timeline projects that we expect to begin evaluations for our respiratory multiplex in time for the next flu and RSV season, sometime in late 2023. These studies will continue uninterrupted to collect the data necessary to prepare for respective EUA or 510 FDA submissions for both of these, as we likewise expect to do for our other planned tests. Throughout the course of 2022, we continued to make progress on the optimization of the new CODIX PCR home platform and defining its total addressable market launch along with development of our other business sectors and our in-demand PCR products. We believe the general trend seen in COVID-19 testing by the legacy centralized laboratory model reflects an appetite among consumers for COVID testing that is more affordable and as convenient as possible. Two key elements that have driven the innovation in our new platform, the secure cloud-based data system where analysis takes place also allows patients to send test results to their physician or other authorized parties as directed by the end user, and in the case of point of care locations, directly to regulatory authorities as required by law. Interesting to note is the apparent divide between the perception that the danger of COVID is a thing of the past and the reality of the situation, which is that in the United States, we have reached an uncomfortable plateau of hundreds of deaths per day. While the multiplexing value of the new platform is clear, we believe it is important to remember that the market for COVID testing will always exist, providing it can be available, affordable, and convenient, three hallmarks of the Kodiak's PCR home platform. A diagnostics company would ignore this and the market for COVID testing at their peril, doing themselves and their customers a disservice. We look forward to bringing our initial COVID test on the platform to market. with the even more valuable multiplex panel to follow. We have continued to exercise financial intelligence and wise spending practices evident from our 81.3 million of cash and liquid reserves as we look toward the company's future, which extends far beyond COVID. I want to emphasize that our new platform has been designed and engineered to be versatile and durable with long-term disruptive potential as a diagnostic medical device. Taking advantage of a worldwide shift to at-home point-of-care testing for a wide array of pathogens, we believe this shift, along with the reduction or elimination in COVID testing mandates, are largely responsible for our overall revenue decrease in 2022. But it is the versatility beyond COVID that we believe holds the greatest potential and that has attracted much attention to our new platform, Among the opportunities that we have already identified have been collaborations with international non-governmental organizations, or NGOs, and nonprofits, such as FIND, the Global Alliance for Diagnostics. Our current project agreement with FIND is exploratory in nature, not remunerative, but FIND's and other NGOs' interest in the new platform extends to other endemic diseases, such as tuberculosis, which took the lives of a staggering 1.6 million people in 2021 alone. This is even more shocking when you realize that despite all advances made in healthcare year over year, lately these numbers are climbing. This has created an urgency among NGOs to slow the spread of the disease through increased access to gold standard real-time diagnostics exactly in line with our mission and our new platform. Recently, Codex has also been participating in the Apollo Project, being conducted by Seattle-based PATH, a global team of innovators working to accelerate health equity so all people and communities can thrive. PATH advises and partners with public institutions, businesses, grassroots groups, and investors to solve the world's most pressing health challenges. The Apollo Project is a molecular point-of-care platform landscaping and benchmarking evaluation focused on advancing novel point-of-care molecular diagnostics for use in low-resource settings. This project aims to identify and assess molecular diagnostic technologies and to select the best-in-class that can have broader application and use for diseases of global concern. CODIX submitted the CODIX PCR Home Platform for Phase 1 of Apollo and was selected from a large list of applicants to participate in Phase 2 of the evaluation which is currently being conducted. It is also proving to be helpful to have an established footprint in a country like India, which is a major area of focus for NGOs. Our Indian joint venture released three new IBD-cleared PCR products in 2022 for hepatitis B, hepatitis C, and human papillomavirus, and are in the process of completing the validation work on a tuberculosis test for drug-resistant strains of the bacteria, opening up a large potential market for tuberculosis testing in India. We believe that the new platform's versatility that has garnered so much interest by NGOs is augmented by its durability. Our highly experienced and renowned team of developers, scientists, and engineers tasked with bringing the CodexPCR home platform from concept to reality have remained fixed on the objective of building a durable platform technology that has the potential to address the needs in a variety of industries fueling future growth. To that end, we have continued to optimize and refine the platform and all of its myriad components, including the user experience. We believe the additional time spent preparing the platform for clinical evaluations has been worth it as we seek to unveil a device that is considerably more robust than was initially conceived. As Maura shared about the improvements and capabilities of this forthcoming product, we are confident that the price and specification advantages of our platform's value proposition against competitive products will create an opportunity for market leadership in this area. Our current timeline to product launch is as follows. Clinical trials for the new platform to support our FDA EUA submission are ongoing. Because the evaluations are dependent on identifying and rolling a particular number of both symptomatic and asymptomatic COVID-19 positive and negative patients at testing sites, The company will not be providing projected timelines for completion at this time. We are concurrently performing additional studies on the platform, including testing for tuberculosis and P. gingivalis for the dental market. Before beginning clinical trials, we also concluded another usability study for our initial COVID-19 test that showed strong results with no major challenges. Our commercialization strategy is being guided by ongoing analysis provided by a respected field marketing research firm that has not only helped us to focus in on what we believe will be the most accessible high-throughput locations for our initial launch, but also provided invaluable feedback for optimization of the device itself on everything from the price to the packaging as the company better understands the size, scope, and needs of the platform's total addressable market. Some of the optimization work performed in 2022 includes enhanced TTR, or time to result, increased multiplexing capabilities, and greater product stabilization, which results in longer shelf life for the test cartridges. One of the most important innovations was the ability to test and go, where an end user does not need to maintain proximity to the device or return to it following the runtime, and instead receives their result on their smartphone from the cloud on the fly. In addition, end users can choose their own testing preference for the platform's initial COVID test by using either a swab or saliva. We intend to explore the relevant reimbursement codes already available for similar but non-real-time PCR products on the market, to work actively with health insurance companies on getting coverage for tests on the platform, and to advocate for their FSA HSA eligibility. The device has been designed to incorporate specialized optics and other innovative features to accommodate multiplex assays as we expand its future suite of products to include additional respiratory, STI, and other infectious diseases utilizing our co-primer technology. This patented molecule has unique properties associated with facilitating multiplex PCR, and we intend to bring the full power and capabilities of our patented technology to our new CODIX PCR platform. and, of course, our co-primer technology is more than just a unique, innovative molecule. It is a platform technology with wide-ranging applications. In addition to other products we have discussed in previous public statements, such as our ongoing development of a multiplex STI panel to detect and differentiate between four prevalent causes of sexually transmitted infections for both the new platform and our centralized lab business channel, The company rolled out two products for MPOCs last year in response to an urgent health concern generated by that virus and continues to work on its upper respiratory panel multiplex for centralized labs as well. We continue throughout the year to reinforce and increase our visibility among the centralized laboratory business channel that we have served across our growing distribution network of more than 50 countries, following our strategy of maintaining a noticeable presence at conferences and trade shows, This high-throughput laboratory market is responsible for driving most of our sales, providing the cash flow for our R&D efforts and plans for future growth as we continue to grow the product pipeline for this business channel. Our commitment to this channel was reinforced in 2022 by our expanded OEM agreement with Biomolecular Systems for the COTIX box magnetic induction PCR cycler to encompass 193 countries worldwide. In previous calls, we have mentioned other PCR tools being developed for several pathogens of significance in dentistry, mental health, and liquid biopsy for detection of cancer-associated mutations present in human blood. While it remains prudent for the company to remain focused on the opportunities within the infectious disease market, performance evaluations remain ongoing in conjunction with these initiatives. Our work with Bayer Crop Services and LGC likewise continues within our agricultural vertical and the company's mosquito abatement business saw significant growth in 2022 in terms of laboratory installations and continued purchases from our existing customer base. We were also pleased to be able to introduce Dr. Mark Poritz as our new Chief Scientific Officer in the fourth quarter of 2022. Mark had previously served as the CSO of the subsidiary we acquired at the end of 2021 and has been actively involved in the development of the Codex PCR home since its inception. Dr. Poritz is a Harvard University and UC San Francisco educated molecular biologist with more than 30 years of experience in the application of PCR and related methods and played a key role in the growth of BioFire Diagnostics, including in the development of the Filmarray platform. Lastly, as a further indication of our commitment to a successful product launch, COTI-X has also deepened its industry experience by recently adding Rachel Jones as our head of technical marketing Rachel is the former chief commercial officer at BioFire Diagnostics, where she built and led the commercial team responsible for the successful launch of syndromic infectious disease diagnostics. Overall, we believe our advancements in our at-home point-of-care real-time PCR testing platform, team of experts working diligently to achieve our shared company vision, growing product pipeline, and our practice of letting financial intelligence drive our smart spending during 2022 positioned co-diagnostics to execute against our strategic growth initiatives. Our continued investments in talent and R&D remain positive indicators of the progress we are achieving to drive further value for our shareholders. This concludes my initial remarks. Let me now turn the time over to Brian Brown for a review of the key metrics and numbers. Brian?