The SEC’s inquiriesĪs Utah continued to buy COVID-19 tests from Co-Diagnostics, health officials and doctors raised concerns about the testing practices at TestUtah locations and the sensitivity of the test. It said the company had not established any policies or procedures concerning related party transactions, and did not identify those transactions in its books or records, as required by the Exchange Act. In its filing, the SEC said Co-Diagnostics did not disclose those relationships in its annual reports for fiscal 2018, 2019 or 2020, nor did it document them in its proxy statements in 2019, 20. Both of their salaries more than quadrupled to over $1.1 million in 2020. It had not yet amended the news releases.Ĭo-Diagnostics was further admonished for not properly disclosing transactions with executives’ family members - including Egan’s son, Seth Egan, who was the director of sales, and Benson’s son, Andrew Benson, who served as the head of communications and investor relations. According to the SEC, Co-Diagnostics offered and sold over 3.3 million shares of stock at $3.08 per share, pulling in over $10 million on or around Feb.
The FDA reached out to the company with concerns about the news releases on Feb. Food and Drug Administration did not approve the tests to be sold for diagnostic purposes until April 3 of that year. While the company’s tests received early authorization from the European Union on Feb.
10, 2020, the releases announced “sales of its screening test designed to identify the presence of the novel coronavirus,” and quoted CEO Dwight Egan saying the company was “pleased to be able to offer a product to this market that excels in being both sensitive and specific, the two benchmarks for accuracy in molecular diagnostics.” The testing company’s 2020 profits, according to the SEC, were inflated by two news releases that prematurely led investors to believe its COVID-19 tests were ready to be sold to health care providers. The TestUtah coronavirus testing initiative, which was launched in April 2020 by Nomi Health under a no-bid state contract worth millions, initially used tests from Co-Diagnostics. In July 2019, the company’s stock had sunk so low that the Nasdaq sent it a letter saying it was in danger of being delisted, the SEC filing said. Boosted by the pandemic, the small Salt Lake City company turned a profit in 2020 for the first time since it had gone public in 2017, netting more than $42 million and enjoying a surging stock price.
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