Item 1.01Item 1.01 - Entry into Material Agreement
Item
1.01 Entry Into a Material Definitive Agreement.
On
May 19, 2026, Co-Diagnostics, Inc. (the “Company”), entered into a private placement transaction (the “Private Placement”),
pursuant to a Securities Purchase Agreement (the “Purchase Agreement”) with certain institutional and accredited investors
(the “Purchasers”) for aggregate gross proceeds of $3.0 million, before deducting fees to the placement agent and other expenses
payable by the Company in connection with the Private Placement. The Company intends to use the net proceeds from the Private Placement
for general corporate purposes and working capital. Maxim Group LLC (“Maxim”) acted as the exclusive placement agent for
the Private Placement, which is expected to close on May 21, 2026.
As
part of the Private Placement, the Company agreed to issue (i) 54,915 shares of the Company’s common stock (the “Shares”),
par value $0.001 per share (“Common Stock”), (ii) pre-funded warrants to purchase 1,592,532 shares of Common Stock (the “Pre-Funded
Warrants”) with an exercise price of $0.0001 per share, and (iii) warrants to purchase 3,294,894 shares of Common Stock (the “Common
Warrants,” together with the Pre-Funded Warrants, the “Warrants”) (the Warrants, together with the Shares and Warrant
Shares (as defined below), the “Securities”) with an exercise price of $1.571 per share. The purchase price per share of
Common Stock and the associated Common Warrant was $1.821 and the purchase price per Pre-Funded Warrant and associated Common Warrant
was $1.8209. The Common Warrants are exercisable immediately and expire five years from issuance. The Pre-Funded Warrants are exercisable
immediately and terminate when exercised in full.
The
Pre-Funded Warrants were sold, in lieu of shares of Common Stock, to any Purchaser whose purchase of shares of Common Stock would otherwise
result in such Purchaser, together with its affiliates and certain related parties, beneficially owning more than 4.99% (or, at such
Purchaser’s option upon issuance, 9.99%) of the Company’s outstanding Common Stock after giving effect to the issuance of
the Securities on the closing date of the Private Placement.
The
Purchase Agreement contains customary representations and warranties and agreements of the Company and the Purchasers and customary indemnification
rights and obligations of the parties. Pursuant to the Purchase Agreement, the Company agreed not to issue, enter into any agreement
to issue or announce the issuance or proposed issuance of any shares of Common Stock or any securities convertible into or exercisable
or exchangeable for shares of Common Stock or file any registration statement or prospectus, or any amendment or supplement thereto for
a period beginning on May 19, 2026 and ending 60 days after the earliest of the date that (a) the initial registration statement has
been declared effective by the United States Securities and Exchange Commission (the “SEC”), (b) all of the Shares and Common
Stock issuable upon exercise of the Warrants (the “Warrant Shares”) have been sold pursuant to Rule 144 or may be sold pursuant
to Rule 144 without the requirement for the Company to be in compliance with the current public information required under Rule 144 and
without volume or manner-of-sale restrictions, (c) following the one year anniversary of the closing date provided that a holder of Shares
or Warrant Shares is not an affiliate of the Company, or (d) all of the Shares and Warrant Shares may be sold pursuant to an exemption
from registration under Section 4(a)(1) of the Securities Act without volume or manner-of-sale restrictions and Company counsel has delivered
to such holders a standing written unqualified opinion that resales may then be made by such holders of the Shares and Warrant Shares
pursuant to such exemption which opinion shall be in form and substance reasonably acceptable to such holders (the “Effective Date”).
The Company’s officers and directors have also agreed to not sell or transfer any securities of the Company, subject to certain
exceptions, for a period of 60 days from the closing of the Private Placement.
Pursuant
to the Purchase Agreement, the Company also agreed not to effect or enter into an agreement to effect any issuance of Common Stock or
any securities convertible into or exercisable or exchangeable for shares of Common Stock involving a variable rate transaction (as defined
in the Purchase Agreement), for a period beginning on May 19, 2026 and ending 90 days after the Effective Date.
Pursuant
to the terms of a Placement Agency Agreement entered into between the Company and Maxim on May 19, 2026, the Company agreed to pay Maxim
(i) a cash fee equal to 7.0% of the aggregate gross proceeds raised in the Private Placement and (ii) reimbursement of Maxim’s
reasonable expenses, including, without limitation fees and disbursements of Maxim’s counsel, incurred in connection with the
Private Placement in an amount equal to $50,000. The Company also agreed to pay Maxim such compensation and reimbursement of expenses
with respect to any equity-linked, preferred, convertible or debt securities, or other financing or capital-raising transaction of
any kind that is consummated within the next 12 months involving investors that were contacted by or contacted Maxim in connection
with the Private Placement.
Warrants
The
Pre-Funded Warrants will be immediately exercisable and may be exercised at any time until all of the Pre-Funded Warrants are exercised
in full. The Pre-Funded Warrants may be exercised on a cashless basis at any time, in which case the holder would receive upon such exercise
the net number of shares of Common Stock determined according to the formula set forth in the Pre-Funded Warrants. No fractional shares
of Common Stock will be issued in connection with the exercise of a Pre-Funded Warrant. In lieu of fractional shares, we will pay the
holder an amount in cash equal to the fractional amount multiplied by the exercise price or round up to the next whole share.
The
Common Warrants will be exercisable immediately upon issuance and have a term of exercise equal to five years from the date of issuance.
If a registration statement registering the issuance of the shares of Common Stock underlying the Common Warrants under the Securities
Act, is not effective or available, the holder may, in its sole discretion, elect to exercise the Common Warrants through a cashless
exercise, in which case the holder would receive upon such exercise the net number of shares of Common Stock determined according to
the formula set forth in the Common Warrants. No fractional shares of Common Stock will be issued upon the exercise of any Common Warrant.
In lieu of fractional shares, we will pay the holder an amount in cash equal to the fractional amount multiplied by the exercise price
or round up to the next whole share.
Fundamental
Transaction. If a Fundamental Transaction (as defined in the respective Warrants) occurs, then the successor entity will succeed
to, and be substituted for the Company, and may exercise every right and power that the Company may exercise and will assume all of the
Company’s obligations under the Warrants with the same effect as if such successor entity had been named in the Warrants itself.
If holders of shares of Common Stock are given a choice as to the securities, cash or property to be received in such a Fundamental Transaction,
then the holder shall be given the same choice as to the consideration it would receive upon any exercise of the Warrants following such
a Fundamental Transaction. Additionally, as more fully described in the Common Warrants, in the event of certain Fundamental Transactions,
the holders of the Common Warrants will be entitled to receive consideration in an amount equal to the Black Scholes Value (as defined
in the Common Warrants), on the date of consummation of such Fundamental Transaction.
Stock
Dividends and Splits. If at any time on or after the date of issuance there occurs any share split, share dividend, share combination
recapitalization or other similar transaction involving our Common Stock then in each case the exercise price shall be multiplied by
a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately
before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event,
and the number of shares issuable upon exercise of the Warrant shall be proportionately adjusted such that the aggregate exercise price
of the Warrant shall remain unchanged.
Beneficial
Ownership Limitations. A holder will not have the right to exercise any portion of the Warrants if the holder (together with its
affiliates) would beneficially own in excess of 4.99% (or, upon election by a holder prior to the issuance of any warrants, 9.99%) of
the number of shares of Common Stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined
in accordance with the terms of the Warrants and Pre-Funded Warrants. However, any holder may increase or decrease such percentage to
any other percentage not in excess of 9.99%, upon at least 61 days’ prior notice from the holder to us with respect to any increase
in such percentage.
Registration
Rights Agreement
The
Company has agreed to file a resale registration statement covering the resale of the shares of Common Stock sold in the Private Placement
and the shares of Common Stock underlying the Pre-Funded Warrants and Common Warrants, pursuant to a Registration Rights Agreement (the
“Registration Rights Agreement”) entered into with the Purchasers. Pursuant to the Registration Rights Agreement, the Company
shall file the resale registration statement within fifteen (15) calendar days of May 19, 2026, and the resale registration statement
shall be effective within thirty (30) calendar days following the filing date (or, in the event of a full review by the SEC, sixty
(60) calendar days following the filing date). The Company has also agreed to keep the registration statement continuously effective
for a period that extends from the first date on which the SEC issues an order of effectiveness in relation to the Registration Statement
until such date that all registrable securities (as such term is defined in the Registration Rights Agreement) covered by the registration
statement have been sold thereunder or pursuant to Rule 144 or may be sold without volume or manner-of-sale restrictions pursuant to
Rule 144 and without the requirement for the Company to be in compliance with the current public information requirement under Rule 144.
The
foregoing descriptions of the Pre-Funded Warrants, Common Warrants, Purchase Agreement, Registration Rights Agreement, and Placement
Agency Agreement are qualified in their entirety by reference to the full text of those agreements, a form of each of which is filed
as Exhibits 4.1, 4.2, 10.1, 10.2, and 10.3 respectively, to this Current Report on Form 8-K and incorporated herein by reference.