Co-Diagnostics issues senior secured convertible note to J.J. Astor

The note and its schedule

Co-Diagnostics, Inc., a Utah corporation, issued a senior secured convertible note to J.J. Astor & Co., the lender, with an original issue date of October 9, 2026. The note is designated an original issue discount senior secured convertible installment promissory note and is the initial note under a loan agreement of the same date. The funding amount is $2,100,000 and the original principal amount is $2,835,000. The principal includes original issue discount of $735,000.

The lender kept an $84,000 origination fee, so the net amount advanced on October 9, 2026 was $2,016,000. The company must repay the principal in 30 weekly installments of $94,500 each. The first falls due on Wednesday, October 14, 2026, and the rest run each Wednesday until the final maturity date of May 7, 2027. The note names no placement agent, underwriter or counsel and gives no use of proceeds.

How the lender gets paid

The lender decides in a payment notice whether it takes each weekly installment in cash, through the proceeds of the company's at-the-market stock program, or in shares. The company must send 100% of net proceeds from that program to a deposit account that the lender controls. During any period when an ATM coverage requirement is not met, the lender has no obligation to release that money to the company.

The note also routes other capital raises to the lender. If the company completes any financing other than sales under the at-the-market program, it must apply 100% of the net proceeds to the note within one business day. If the note is paid in full within 45 days of issue with no prior default, the repayment amount drops to a factor rate of 1.29 times the funded amount, or $2,709,000, less installments already paid.

Conversion and dilution

The lender may convert all or part of the amount owed into common stock at any time after the initial loan closes, and the company has two business days to deliver the shares. The conversion price is 90% of the lowest volume weighted average price, with a floor of 20% of the Nasdaq Minimum Price. After an event of default, the price is the greater of 80% of the lowest VWAP over 10 consecutive trading days and that floor. If the floor, an exchange cap or a shortage of authorized shares leaves the lender short, the company must pay a make-whole amount in cash within three business days.

The lender's holding is capped at 9.99% of outstanding common stock, which it can raise to as much as 19.99% on notice effective the 61st day after delivery. The company must reserve at least 200% of the shares issuable at the floor price and register at least 200% of them for resale.

Default terms

If an event of default occurs, the default amount becomes 120% of the outstanding principal, plus default interest at 19% a year, compounded daily. Events of default include a missed weekly payment not cured within two business days, with only two such grace periods allowed. The ATM program ceasing to be available, or failing to raise enough to cover each installment, is also a default. So are delisting from Nasdaq, the New York Stock Exchange or NYSE American, a late Form 10-Q for the quarter ended September 30, 2026, a judgment of at least $100,000 unpaid for 45 days and a bankruptcy event. The note says the company was already in default on its headquarters lease under the SEC reports. A change of control makes the note immediately payable in full.

The company's finances

The annual report shows revenue of $622,489 for 2025, down from $3.9 million for 2024. The net loss widened to $46.9 million in 2025 from $37.6 million in 2024. Cash used in operations was $29.1 million in 2025 and $29.2 million in 2024.

Year-end cash and cash equivalents were $2.9 million for 2024 and $11.9 million for 2025, according to a 10-Q filed August 13, 2026. At June 30, 2026, cash and cash equivalents were $3.6 million, according to the company's 10-Q.

The company is now paying a secured lender weekly after revenue fell and operations used $29.1 million of cash in 2025.

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