“During the first quarter, we refocused our business strategy to address the escalating need for COVID-19 diagnostic tests. In a short period of time, we developed a COVID-19 serological testing system, received FDA Emergency Use Authorization and began shipping tests to customers in the United States and Brazil in April. Our differentiated testing system offers numerical discrete detection of both IgM and IgG antibodies in approximately 15 minutes from a fingerstick. Then, in approximately 15 seconds, the DPP COVID-19 System reads the test to provide numerical results using the portable Micro Reader analyzers that are engineered and produced by our wholly owned subsidiary in Germany. Numerical results reduce the possibility of the types of human error that can be experienced in the visual interpretations required by many other serological tests,” said Gail Page, Chembio’s Executive Chair of the Board. “We are proud to be serving the needs of clinicians and the broader healthcare community in this time of crisis.”

“It has been an extremely productive first few weeks in my new role as CEO. Amid these challenging circumstances, the skill and hard work of this team has enabled a successful strategic pivot as we prioritize manufacturing and commercialization of our DPP COVID-19 System,” said Richard Eberly, Chembio’s Chief Executive Officer. “Through efficient use of our resources and technical ability, we are scaling production of these tests due to the strong demand we are experiencing. We believe the features and benefits offered by our DPP COVID-19 System will make it a preferred solution.”

First Quarter 2020 Financial Results

Total revenue for the first quarter of 2020 was $6.9 million, a decrease of 20% compared to the prior year period. Net product sales for the first quarter of 2020 were $5.7 million, a decrease of 14% compared to the prior year period. License and royalty revenue together with R&D and grant revenue for the first quarter of 2020 was $1.1 million, a decrease of 40% compared to the prior year period.

Gross product margin for the first quarter of 2020 was $1.3 million, compared to $1.6 million for the prior year period. Gross product margin percentage for the first quarter of 2020 was 23.5%, compared to 24.3% for the prior year period, a decrease resulting primarily from unfavorable average selling prices due to geographic mix.

Net loss for the first quarter of 2020 was $5.0 million, or $(0.29) per diluted share, compared to a net loss of $2.8 million, or $(0.16) per diluted share, for the prior year period.

Cash and cash equivalents as of March 31, 2020 totaled $11.2 million.

About Chembio Diagnostics

Chembio is a leading point-of-care diagnostics company focused on detecting and diagnosing infectious diseases including COVID-19, sexually transmitted disease and fever and tropical disease. Chembio’s patented DPP technology platform, which uses a small drop of blood from the fingertip, provides high-quality, cost-effective results in approximately 15 minutes. Coupled with Chembio’s extensive scientific expertise, its novel DPP technology offers broad market applications beyond infectious disease. Chembio’s products are sold globally, directly and through distributors, to hospitals and clinics, physician offices, clinical laboratories, public health organizations, government agencies and consumers. Learn more at www.chembio.com.

Forward-Looking Statements

Statements contained in this release that are not historical facts may be forward-looking statements within the meaning of the Securities Act of 1933, as amended. Forward-looking statements include statements regarding the intent, belief or current expectations of Chembio and its management. Such statements reflect management's current views, are based on certain assumptions, and involve risks and uncertainties. Actual results, events, or performance may differ materially from forward-looking statements due to a number of important factors, and will be dependent upon a variety of factors, including, but not limited to: the impact to our business, our suppliers and our customers of the COVID-19 pandemic and the actions taken to combat the COVID-19 pandemic;  the ability of Chembio to maintain existing, and timely obtain additional, regulatory approvals, particularly for our DPP COVID-19 System; and the risks of doing business with foreign governmental entities, including geopolitical, international and other challenges as well as potential material adverse effects of tariffs and other changes in U.S. trade policy. Chembio undertakes no obligation to publicly update forward-looking statements in this release to reflect events or circumstances that occur after the date hereof or to reflect any change in Chembio's expectations with regard to the forward-looking statements or the occurrence of unanticipated events. Factors that may impact Chembio's success are more fully disclosed in Chembio's public filings with the U.S. Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended December 31, 2019 and its subsequent Quarterly Reports on Form 10-Q, particularly under the heading “Risk Factors.” You should interpret many of the risks identified in these reports as being heightened as a result of the ongoing and numerous adverse impacts of the COVID-19 pandemic.

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