Co-Diagnostics takes up to $3.1 million in secured convertible loans

The loan and its two notes

Co-Diagnostics, Inc. entered into a loan agreement dated October 9, 2026, with J.J. Astor & Co., the lender. The lender agreed to provide up to $3.1 million in loans. At the initial closing it funded $2.1 million and the company issued a senior secured convertible installment promissory note with an original principal amount of $2.835 million.

The principal reflects a factor rate of 1.35 times the funded amount. The lender kept a 4% origination fee, which leaves initial net cash proceeds of about $2.016 million before other transaction expenses. Starting 60 days after the loan agreement date, and subject to its conditions, the company may borrow another $1.0 million under a second note with a principal of $1.35 million.

The notes are payable in 30 weekly installments and are secured by a senior-priority lien on substantially all company assets. The company must keep at least $250,000 in cash while the notes are outstanding. The company says the net proceeds will go to general working capital.

The placement agent and the cash waterfall

The company and the lender signed an ATM waterfall distribution agreement under which 100% of the net proceeds from sales under the company's existing at-the-market program, after only the sales agent's commissions, go to a deposit account controlled in favor of the lender. The first $1.0 million is payable to the lender. After that, 80% goes to the notes and 20% is released to the company until the week's installment is paid.

The waterfall is limited when the market value of registered, freely tradeable shares under the program falls below 200% of the outstanding principal. The agreement stays in effect until the notes are paid in full. The 8-K/A says it revises the waterfall agreement to remove Maxim Group LLC as a party, and that Maxim instead signed an ATM payment direction letter to remit net proceeds to the deposit account specified in it.

Maxim Group LLC acted as the company's exclusive placement agent on a reasonable best efforts basis under a placement agency agreement. The company agreed to pay Maxim a cash fee of 5.0% of gross proceeds at the initial closing and at any later closing, plus expense reimbursement, including counsel fees, up to $5,000. Maxim is also entitled to a transaction fee of 5.0% of the proceeds of any financing completed in the 12 months after the closing. The 8-K/A names no underwriter.

Covenants, shares and the lender's protections

The company agreed to reserve shares for conversion and to seek stockholder approval for issuances above the applicable Nasdaq limit. The loan agreement requires a preliminary proxy statement within five business days after funding of the initial loan, a definitive proxy mailing within five business days after SEC clearance, and a stockholder meeting within 30 days after mailing. The lender also received 600,000 commitment shares. Conversion is at the greater of 90% of the lowest volume-weighted average price over 10 trading days and the Nasdaq minimum price, with a floor of 20% of that minimum price. That floor resets every six months to the lower of itself and 20% of the lowest VWAP over the prior 20 trading days. After an event of default, principal rises to 120% and bears default interest of 19% a year, compounded daily.

The company must issue make-whole shares if commitment shares are sold on a day when the stock closes below $0.218. It also agreed to file a registration statement within 30 days of the initial funding to register for resale 200% of the conversion shares, including make-whole shares, and to have it effective within 60 days, subject to SEC guidance.

The company's finances

The annual report shows revenue of $622,489 for 2025, down from $3.9 million for 2024, and a net loss of $46.9 million for 2025, up from $37.6 million. Cash used in operations was $29.1 million in 2025 and $29.2 million in 2024. Year-end cash and cash equivalents were $11.9 million for 2025, according to a 10-Q filed August 13, 2026, and $2.9 million for 2024. At June 30, 2026, cash and cash equivalents were $3.6 million.

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