As filed with the Securities and Exchange Commission on October 23, 2020.March 16, 2023
Registration No. 333-__________333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
CO-DIAGNOSTICS, INC.
(Exact name of registrantRegistrant as specified in its charter)
| Utah | 3841 | 46-2609396 | ||
(State or other jurisdiction of incorporation or organization) | (Primary Standard Industrial Classification Code Number) | (I.R.S. Employer Identification Number) |
2401 S. Foothill Drive
Salt Lake City, Utah 84109
(801) 438-1036
(Address, including zip code and telephone number, including area code, of registrant’sRegistrant’s principal executive offices)
Reed L. BensonBrian Brown
Chief Financial Officer
Co-Diagnostics, Inc.
2401 S. Foothill Drive
Salt Lake City, Utah 84109
(801) 438-1036
(Name, address, including zip code and telephone number, including area code, of agent for service)
Copies to:
Ross D. Carmel, Esq.
Philip Magri, Esq.
Carmel, Milazzo & Feil LLP
55 West 39th Street, 18th Floor
New York, New York 10018
T: (212) 658-0458
www.cmfllp.com
David F. Marx Daniel P. Lyman Dorsey & Whitney LLP 111 South Main Street, Suite 2100 Salt Lake City, Utah 84111 | Kevin Ontiveros Vice President and General Counsel Co-Diagnostics, Inc. 2401 S. Foothill Drive Salt Lake City, Utah 84109 (801) 438-1036 |
Approximate date of commencement of proposed sale to the public: Fromfrom time to time after the effective date of this registration statement.
If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [ ]☐
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. [X]☒
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.
[ ] ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.
[ ] ☐
If this Form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box.
[ ] ☐
If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box.
[ ] ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large | |
| Accelerated filer | ☐ |
| Non-accelerated filer | ☒ |
| Smaller reporting company | ☒ |
| Emerging growth company | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the ExchangeSecurities Act. ☐
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CALCULATION OF REGISTRATION FEE
| Title of Each Class of Securities to be Registered (1) |
Registered (2) (3) | Proposed Maximum Aggregate Offering Price per Security (2) (3) | Proposed Maximum Aggregate Offering Price (2) (3) | Amount of Registration Fee (4) | ||||||||||||
| Common Stock, par value $0.0001 per share | — | — | — | — | ||||||||||||
| Preferred Stock, par value $0.0001 per share | — | — | — | — | ||||||||||||
| Warrants to purchase Common Stock, Preferred Stock or other securities (5) | — | — | — | — | ||||||||||||
| Units (6) | — | — | — | — | ||||||||||||
| TOTAL | — | — | $ | 100,000,000 | $ | 10,910.00 | ||||||||||
The Registrantregistrant hereby amends this Registration Statementregistration statement on such date or dates as may be necessary to delay its effective date until the Registrantregistrant shall file a further amendment that specifically states that this Registration Statementregistration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statementthe registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.
EXPLANATORY NOTE
This registration statement contains two prospectuses:
| ● | a base prospectus which covers the offering, issuance and sale by the registrant of up to a maximum aggregate offering price of $150,000,000 of the registrant’s common stock, preferred stock, debt securities, warrants, units and/or rights; and | |
| ● | an equity distribution agreement prospectus covering the offering, issuance and sale by the registrant of up to a maximum aggregate offering price of $50,000,000 of the registrant’s common stock that may be issued and sold under an equity distribution agreement with Piper Sandler & Co. |
The base prospectus immediately follows this explanatory note. The specific terms of any other securities to be offered pursuant to the base prospectus will be specified in one or more prospectus supplements to the base prospectus. The equity distribution agreement prospectus immediately follows the base prospectus.
The $50,000,000 of shares of common stock that may be offered, issued and sold under the equity distribution agreement prospectus is included in the $150,000,000 of securities that may be offered, issued and sold by the registrant under the base prospectus. Upon termination of the equity distribution agreement, any portion of the $50,000,000 included in the equity distribution agreement prospectus that is not sold pursuant to the equity distribution agreement will be available for sale in other offerings pursuant to the base prospectus and an accompanying prospectus supplement, and if no shares are sold under the equity distribution agreement, the full $50,000,000 of securities may be sold in other offerings pursuant to the base prospectus and an accompanying prospectus supplement.
The information in this prospectus is not complete and may be changed. We may not sell these securities or accept an offer to buy these securities until the registration statement filed with the Securities and Exchange Commission declares our registration statementis effective. This prospectus is not an offer to sell these securities, and it is not soliciting an offeroffers to buy these securities in any state where thesuch offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED OCTOBER 23, 2020March 16, 2023
PROSPECTUS
CO-DIAGNOSTICS, INC.
$100,000,000150,000,000
COMMON STOCKCommon Stock, Preferred Stock,
PREFERRED STOCKDebt Securities,
WARRANTS
UNITSWarrants, Units and Rights
WeFrom time to time, we may offer and sell up to $150,000,000 of any combination of the following securities separatelydescribed in this prospectus, either individually or together, in combination. We may also offer shares of common stock or preferred stock upon conversion of debt securities, shares of common stock upon conversion of preferred stock, or shares of common stock, shares of preferred stock or debt securities upon the exercise of warrants.
This prospectus provides a general description of the securities we may offer. Each time we sell securities, we will provide specific terms of the securities offered in a supplement to this prospectus. We may also authorize one or more series or classes andfree writing prospectuses to be provided to you in amounts, at prices and on terms described in one or more offerings: common stock; preferred stock; warrants to purchase our securities, each of which may be convertible into equity securities; or units comprised of, or other combinations of, the foregoing securities.
We may offer securities through underwriting syndicates managed or co-managed by one or more underwriters or dealers, through agents or directly to purchasers. Theconnection with these offerings. A prospectus supplement for each offering of securities will describe in detail the plan of distribution for that offering. For general information about the distribution of securities offered, please see “Plan of Distribution” in this prospectus. Each time our securities are offered, we will provide aand any related free writing prospectus supplement containing more specific information about the particular offering and attach it to this prospectus. The prospectus supplements may also add, update or change information contained in this prospectus. You should carefully read this prospectus, the applicable prospectus supplement and any related free writing prospectus, as well as any documents incorporated by reference in this prospectus before you invest in any securities. This prospectus may not be used to offer or sellconsummate a sale of securities without aunless accompanied by an applicable prospectus supplement which includes a description of the method and terms of this offering.supplement.
Our common stock is quotedlisted on the Nasdaq Capital Market under the symbol “CODX.” As of the date of filing, the aggregate market value of our outstanding common stock held by non-affiliates pursuant to General Instruction I.B.1. of Form S-3 was approximately $349,972,708 based on 28,269,201 issued and outstanding shares of our common stock held by non-affiliates as of the date of filing and $12.38 which wasOn March 15, 2023, the last reported sale price offor our common stock was $2.91 per share. The applicable prospectus supplement will contain information, where applicable, as to any other listing on the Nasdaq Capital Market on October 22, 2020.
If we decide to seek a listingor any securities market or other exchange of any preferred stock, purchase contracts, warrants, subscriptions rights, depositary shares or units offered by this prospectus, the related prospectus supplement will disclose the exchange or market on which the securities, will be listed, if any, or where we have made an application for listing, if any.
_______________covered by the prospectus supplement.
InvestingINVESTING IN OUR SECURITIES INVOLVES RISKS. YOU SHOULD REVIEW CAREFULLY THE RISKS AND UNCERTAINTIES DESCRIBED UNDER THE HEADING “RISK FACTORS” ON PAGE 6 AND CONTAINED IN THE APPLICABLE PROSPECTUS SUPPLEMENT AND ANY RELATED FREE WRITING PROSPECTUS AND UNDER SIMILAR HEADINGS IN THE OTHER DOCUMENTS THAT ARE INCORPORATED BY REFERENCE INTO THIS PROSPECTUS.
The securities may be sold directly to investors, through agents designated from time to time or to or through underwriters or dealers. For additional information on the methods of sale, you should refer to the section entitled “Plan of Distribution” in ourthis prospectus. If any underwriters or agents are involved in the sale of any securities involves a high degree of risk. You should read “Risk Factors” beginning on page 13 ofwith respect to which this prospectus is being delivered, the names of such underwriters or agents and any applicable commissions or discounts and over-allotment options will be set forth in a prospectus supplement. The price to the public of such securities and the reportsnet proceeds we file with the Securities and Exchange Commission pursuantexpect to the Securities Exchange Act of 1934, as amended, incorporated by referencereceive from such sale will also be set forth in thisa prospectus to read about factors to consider before purchasing our securities.
_____________________supplement.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
_____________________
The date of this prospectus is ___________, 2020., 2023
TABLE OF CONTENTS
We have not authorized anyone to provide you with information different from that contained or incorporated by reference in this prospectus or any accompanying prospectus supplement or free writing prospectus, and we take no responsibility for any other information that others may give you. This prospectus is not an offer to sell, nor is it a solicitation of an offer to buy, the securities in any jurisdiction where the offer or sale is not permitted. You should not assume that the information contained in this prospectus or any prospectus supplement or free writing prospectus is accurate as of any date other than the date on the front cover of those documents, or that the information contained in any document incorporated by reference is accurate as of any date other than the date of the document incorporated by reference, regardless of the time of delivery of this prospectus or any sale of a security. Our business, financial condition, results of operations and prospects may have changed since those dates.
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In this prospectus, unless otherwise stated or unless the context otherwise requires, all references to “Co-Dx,” “we,” “us,” “our,” “our company,” or “the Company” in this prospectus refer collectively to Co-Diagnostics, Inc., a Utah corporation, and its subsidiaries.
This prospectus is part of a registration statement on Form S-3 that we filed with the Securities and Exchange Commission or SEC,(“SEC”), utilizing a “shelf” registration process. Under this shelf registration process, we may offer and sell either individually or inany combination in one or more offerings, any of the securities described in this prospectus for total gross proceeds ofin one or more offerings up to $100,000,000.a total dollar amount of $150,000,000. This prospectus provides you with a general description of the securities we may offer. Each time we offersell securities under this prospectus,shelf registration, we will provide a prospectus supplement to this prospectus that will contain more specific information about the terms of that offering. We may also authorize one or more free writing prospectuses to be provided to you that may contain material information relating to these offerings. The prospectus supplement and any related free writing prospectus that we may authorize to be provided to you may also add, update or change any of the information contained in this prospectus or in theany documents that we have incorporated by reference into this prospectus.
We urge you to You should read carefully this prospectus, any applicable prospectus supplement and any related free writing prospectuses we have authorized for use in connection with a specific offering,prospectus, together with the information incorporated herein by reference as described under the heading “Incorporation of Documents by Reference,Reference.” before investing in any of the securities being offered.
You should rely only on the information contained in,that we have provided or incorporated by reference into,in this prospectus, and any applicable prospectus supplement along with the information contained inand any related free writing prospectusesprospectus that we have authorized for use in connection with a specific offering.may authorize to be provided to you. We have not authorized anyone else to provide you with differentgive any information or additional information.to make any representation other than those contained or incorporated by reference in this prospectus, any applicable prospectus supplement or any related free writing prospectus that we may authorize to be provided to you. You must not rely upon any information or representation not contained or incorporated by reference in this prospectus or the accompanying prospectus supplement. This prospectus isand the accompanying supplement to this prospectus do not constitute an offer to sell onlyor the solicitation of an offer to buy any securities offered hereby, but only under circumstancesother than the registered securities to which they relate, nor do this prospectus and the accompanying supplement to this prospectus constitute an offer to sell or the solicitation of an offer to buy securities in jurisdictions whereany jurisdiction to any person to whom it is lawfulunlawful to do so.
Themake such offer or solicitation in such jurisdiction. You should not assume that the information appearingcontained in this prospectus, any applicable prospectus supplement or any related free writing prospectus is accurate only as ofon any date subsequent to the date set forth on the front of the document andor that any information we have incorporated by reference is accurate only as ofcorrect on any date subsequent to the date of the document incorporated by reference, regardless of the time of delivery ofeven though this prospectus, any applicable prospectus supplement or any related free writing prospectus is delivered or any sale ofsecurities sold on a security.later date.
This document contains references to trademarks, trade names and service marks belonging to other entities. Solely for convenience, trademarks, trade names and service marks referred to in this prospectus contains summaries of certain provisions containedmay appear without the ® or TM symbols, but such references are not intended to indicate, in some ofany way, that the documents described herein, but reference is madeapplicable licensor will not assert, to the actual documents for complete information. Allfullest extent under applicable law, its rights to these trademarks and trade names. We do not intend our use or display of the summaries are qualified in their entiretyother companies’ trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of us by, the actual documents. Copies of some of the documents referred to herein have been filed, will be filed or will be incorporated by reference as exhibits to the registration statement of which this prospectus is a part, and you may obtain copies of those documents as described below under the section entitled “Where You Can Find Additional Information.”any other companies.
This prospectus contains, or incorporates by reference, trademarks, tradenames, service marks and service names of Co-Diagnostics, Inc., a Utah corporation.
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CAUTIONARY NOTE REGARDING FORWARD LOOKINGFORWARD-LOOKING STATEMENTS
This prospectus and any accompanying prospectus supplement and the documents incorporated by reference herein may contain forward lookingforward-looking statements thatwithin the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which involve risks and uncertainties. Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact. Forward-looking statements are based on our management’s current beliefs, expectations and assumptions about future events, conditions and results and on information currently available to us. Discussions containing these forward-looking statements may be found, among other places, in the sections of this prospectus entitled “Prospectus Summary” and “Risk Factors.”
All statements, other than statements of historical fact, contained in this prospectusincluded or incorporated herein regarding our strategy, future operations, financial position, future revenues, projected costs, plans, prospects and any accompanying prospectus supplement and the documents incorporated by reference herein, including statements regarding future events, our future financial performance, business strategy, and plans and objectives of management for future operations, are forward-looking statements. We have attempted toIn some cases, you can identify forward-looking statements by terminology including “anticipates,terms such as “anticipate,” “believes,” “can,” “continue,“believe,” “could,” “estimates,“estimate,” “expects,“expect,” “intends,“intend,” “may,” “plans,“plan,” “potential,” “predicts,“predict,” “project,” “should,” or “will” or the negative of these terms or other comparable terminology. Although we do not make forward looking statements unless we believe we have a reasonable basis for doing so, we cannot guarantee their accuracy.“will,” “would” and similar expressions. These statements are only predictions and involve known and unknown risks, uncertainties and other factors including the risks outlined under “Risk Factors” starting on page 13 or elsewhere in this prospectus and the documents incorporated by reference herein, whichthat may cause our or our industry’s actual results, levels of activity, performance, time frames or achievements to be materially different from any future results, performance, time frames or achievements expressed or implied by these forward-looking statements. Moreover, we operate in a highly regulated, very competitive, and rapidly changing environment. New risks emerge from time to time and it is not possible for us to predict all risk factors, nor can we address the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause our actual results to differ materially from those contained in any forward-looking statements.
We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short term and long-term business operations, and financial needs. These forward-looking statements are subject to certain risks and uncertainties that could cause our actual results to differ materially from those reflected in the forward-looking statements. FactorsRisks, uncertainties and other factors that couldmight cause or contribute to such differences include, but are not limited to, those discussed in this prospectus, and in particular, the risks discussed below and under the headingsection entitled “Risk Factors” in our most recent Annual Report on Form 10-K and those discussed in other documents we filesubsequent filings with the SEC. The following discussion should be read in conjunction with the unaudited condensed consolidated financial statements for the quarter ended June 30, 2020 and notes thereto included in our quarterly report on Form 10-Q for the quarterly period ended June 30, 2020 filed with the SEC on August 13, 2020 and audited condensed consolidated financial statements for the fiscal years ended December 31, 2019 and 2018 and notes thereto included in our annual report on Form 10-K for the fiscal year ended December 31, 2019 filed with the SEC on March 30, 2020 and incorporated by reference herein. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by law. In light ofGiven these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this prospectus may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statement.
Any forward-looking statementother factors, many of which are beyond our control, you read in this prospectus, any prospectus supplement or any document incorporated by reference reflects our current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to our operations, operating results, growth strategy and liquidity. You should not place undue reliance on these forward-looking statements.
In addition, past financial and/or operating performance is not necessarily a reliable indicator of future performance, and you should not use our historical performance to anticipate results or future period trends. We can give no assurances that any of the events anticipated by the forward-looking statements because such statements speak onlywill occur or, if any of them do, what impact they will have on our results of operations and financial condition. Except as to the date when made. Werequired by law, we assume no obligation to publicly update or revise these forward-looking statements for any reason,publicly, or to updaterevise any forward-looking statements to reflect events or developments occurring after the reasons actual results could differ materially from those anticipated in these forward-looking statements,date of this prospectus, even if new information becomes available in the future, except as otherwise required by applicable law. You are advised, however, to consult any further disclosures we make on related subjects in our reports on Forms 10-Q, 8-K and 10-K filed with the SEC. You should understand that it is not possible to predict or identify all risk factors. Consequently, you should not consider any such list to be a complete set of all potential risks or uncertainties.
future.
OUR BUSINESSProspectus Summary
This description of our businesssummary highlights selected information from this prospectus and does not contain all of the information that you shouldneed to consider before investing in our Company.making your investment decision. You should carefully read the entire prospectus, including all documentsthe risks of investing discussed under “Risk Factors” beginning on page 6, the information incorporated by reference, herein. In particular, attention should be directed toincluding our “Risk Factors,” “Information With Respect to the Company,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the financial statements, and related notes thereto contained herein or otherwise incorporated by reference hereto, before making an investment decision.the exhibits to the registration statement of which this prospectus is a part.
In this prospectus, “Co-Diagnostics,” “theThe Company” “we,” “us,” and “our” refer to Co-Diagnostics, Inc., a Utah corporation, and its consolidated subsidiaries.
Overview
Co-Diagnostics, Inc., a Utah corporation (the “Company” or “CDI”), is developing robust and innovative molecular tools for detection of infectious diseases, liquid biopsy for cancer screening, and agricultural applications. We have developed and wedevelop, manufacture and sell reagents used for diagnostic tests that function via the detection and/or analysis of nucleic acid molecules (DNA or RNA)., including robust and innovative molecular tools for detection of infectious diseases, liquid biopsy for cancer screening, and agricultural applications. In connection with the sale of our tests we may sell diagnostic equipment from other manufacturers as self-contained lab systems (which we refer to as the “MDx Device”). We are also developing a unique, groundbreaking portable PCR device and proprietary test cups (the “Co-Dx PCR Home™ platform”) that have been designed to bring affordable, reliable polymerase chain reaction (“PCR”) to patients in point-of-care and even at-home settings. This platform is subject to U.S. Food and Drug Administration (“FDA”) review and is not available for sale at the time of this filing. There is no guarantee that our Co-Dx PCR Home platform will receive the necessary regulatory approvals for commercialization, or that, if regulatory approval is received, we will be able to successfully commercialize this platform.
Our diagnostics systems enable very rapid,dependable, low-cost, molecular testing for organisms and genetic diseases by automating or simplifying historically complex procedures in both the development and administration of tests. CDI’sCODX’s technical advance involves a novel, patented approach to Polymerase Chain Reaction (“PCR”)PCR test design of primer and probe structure (“CoPrimers”CoPrimers™”) that eliminates one of the key vexing issues of PCR amplification,amplification: the exponential growth of primer-dimer pairs (false positives and false negatives) which adversely interferes with identification of the target DNA.DNA/RNA.
We believe our proprietary molecular diagnostics technology is paving the way for innovation in disease detection and life sciences research through our enhanced detection of genetic material. Because weFor various reasons, including owning our own our platform, we are confidentbelieve we will be able to accomplish this faster and more economically than some competitors, allowing for significant margins while still positioning Co-Diagnostics to beourselves as a low-cost provider of molecular diagnostics and screening services.
In addition, continued development has demonstrated the unique properties of our CoPrimer technology that make themwe believe makes it ideally suited tofor a variety of applications where specificity is key to optimal results, including multiplexing several targets, enhanced Single Nucleotide Polymorphism (“SNP”) detection and enrichment for next gengeneration sequencing.
Our scientists use the complex mathematics of DNADNA/RNA PCR test design to “engineer” a DNA testengineer and optimize PCR tests and to automate algorithms that rapidly screen millions of possible options to pinpoint the optimum design. Dr. Brent Satterfield, our Chief Technology Officer,founder, developed the Company’s intellectual property we use in our business, consisting of the predictive mathematical algorithms and proprietary reagentspatented molecular structure used in the testing process, which together represent a major advance in PCR testing systems. CDICODX technologies are now protected by sevenmore than 20 granted or pending US and foreign patents, as well as certain trade secrets and copyrights. Ownership of our proprietary platform permits us the advantage of avoiding payment of patent royalties required by other PCR test systems, which enablesmay allow the sale of diagnostic PCR tests at a lower price than competitors, while enabling us to maintain profit margins.
Our proprietary test design process involves identifying the optimal locations on the target genes for amplification and pair the locations with the optimized primer and probe structure to achieve outputs that meet the design input requirements identified from market research. This is done by following planned and documented processes, procedures and testing. In other words, we use the data resulting from our tests to verify whether we succeeded in designing what we intended. Verification involves a series of testing that concludes that the product is ready to proceed to validation in an evaluation either in our laboratory or in an independent laboratory setting using initial production tests to confirm that the product as designed meets the user needs.
We may either sell or lease the MDx Device to labs and diagnostic centers, through sale or lease agreements, and sell the reagents that comprise our proprietary tests to those laboratories and testing facilities.
We designedUsing our tests by identifying the optimal locations on the target gene for amplification and paired the location with the optimized primer and probe structure to achieve outputs that meet the design input requirements identified from market research. This is done by following planned and documented processes, procedures and testing. In other words, the data resulting from our tests verify that we succeeded in designing what we intended at the outset. Verification is a series of testing that concludes that the product is ready to proceed to validation in an evaluation either in our lab or in an independent laboratory setting using initial production tests to confirm that the product as designed meets the user needs.
Using its proprietary test design system and proprietary reagents, CDI haswe have designed and obtained regulatory approval in the European Community andand/or in India to sell PCR diagnostic tests for the detection of COVID-19, influenza, tuberculosis, hepatitis B and C, human papilloma virus,papillomavirus, malaria, chikungunya, dengue, and the zikaZika virus. In the United States, CDI haswe obtained Emergency Use Authorization (“EUA”) for itsour Logix Smart™ COVID-19 detection test from the Food and Drug Administration, or FDA, and sellswe sell that test to qualified labs. In addition, our COVID-19 detection test and certain of our other suite of COVID-19 products have been approved for sale in countries such as the United Kingdom, Australia and Mexico by the regulatory bodies in those countries and have been registered for sale in many more countries.
In addition to testing for infectious disease, the technology lends itself to identifying any section of a DNA or RNA strand that describedescribes any type of genetic trait, which creates a number ofseveral significant applications. We, in conjunctionsconjunction with our customers, are active in designing and licensing tests that identify genetic traits in plant and animal genomes. We also have three multiplexed tests developed to test mosquitos for the identification of diseases carried by the mosquitos to enable municipalities to concentrate their efforts in sprayingmanaging mosquito populations on the specific areas known to be breeding the mosquitos that carry deadly viruses.
Recent Developments
On January 23, 2020, we announced the completion of the principleprincipal design work for a PCR screening test for new coronavirus, COVID-19, intended to address the potential need for detection of the virus. An outbreak of respiratory illness caused by the pneumonia-like COVID-19 has spread rapidly throughout the world since first being discovered in the Chinese city of Wuhan on December 31, 2019. China confirmed human-to-human transmission of the virus and the United States announced the first infection in this country, detected in a traveler returning from Wuhan. Our COVID-19This test features the Company’sour patented CoPrimer™CoPrimers technology, and was designed using our proprietary software system, following the guidelines published by the World Health Organization (WHO) and Centers for Disease Control.Control (CDC).
On February 20, 2020, we announced that our Logix Smart™ COVID-19 Test technical file had been submitted for registration with the European Community, and that it was expected to be available late February as an in vitro diagnostic (“IVD”) for markets that accept a CE marking as valid regulatory approval. Subsequently, on February 24, 2020, we announced that ourthis test had obtained regulatory clearance to be sold as an in vitroin-vitro diagnostic (“IVD”) for the diagnosis of SARS-CoV-2 (COVID-19)COVID-19 in markets that accept CE-marking as valid regulatory approval and became available for purchase from the Company’sour Utah-based ISO-13485:2016 certified facility. The Declaration of Conformity for the Logix Smart COVID-19 test confirms that it meets the Essential Requirements of the European Community’s In-Vitro Diagnostic Medical Device Directive (IVDD 98/79/EC), permitting export and sales of the product as an IVD to commence immediately in the European Community. We shipped samples of the Research Use Only version of our test to distributors in various countries, which allowed future customers to confirm the quality and sensitivity of the product, and for us to accelerate the sales efforts of the COVID-19 test.
We commenced sales of the COVID-19 tests in February and March of 2020 to international customers and to date have since sold theover 34,000,000 of this and other COVID tests in numerous countries around the world through an expanding distributor network.
On April 6, 2020, we announced that we had received an Emergency Use AuthorizationEUA from the FDA allowing us to commence sales of our Logix Smart COVID-19 test to CLIA designated labslaboratories certified by the Center for Medicare and Medicaid Services under the Clinical Laboratories Improvements Act (“CLIA”) to accept human samples for diagnostics testing throughout the United States and we have been actively marketingsold our Logix Smart COVID-19 test to such CLIA labs since that time.
Infectious Disease Product OfferingBecause we believe that testing for COVID-19 will continue to be a consideration for public health worldwide, we have initiated the Co-Dx PCR Home platform to facilitate frequent testing in homes, schools, businesses, and the hospitality industry. We believe this may be accomplished through the development of a compact, relatively low-cost testing device, easy to use by non-professionals, that can provide PCR test results in around 30 minutes. The initial project built on this platform, an at-home and point-of-care COVID-19 PCR test, was ultimately facilitated by our development of a saliva or nasal swab-based PCR test that does not require the RNA/DNA extraction. While we believe the final result is believed to be approximately equivalent to those processed by a high-complexity clinical laboratory, it our COVID-19 PCR test has the advantages of increased speed and ease of handling thanks to lyophilization (or freeze-drying) of our testing reagents to allow for stability at room temperatures.
Using its proprietaryOn February 15, 2021, we engaged the services of a group of professionals at Idaho Molecular, Inc. (“IdMo”) and Advanced Conceptions, Inc. (“ACI”), with the expertise to develop the hardware for a device using our CoPrimers as the reagent chemistry. In December 2021, we announced the closing of the acquisitions of IdMo and ACI along with all existing and future assets and intellectual property related to the platform and device. It is expected that the device and test design systemwill be available to homes, schools, offices, and proprietary reagents, CDI designsthe travel industry among other locations, at a cost that will allow screening frequently to prevent spread of the COVID-19 virus in the future, as well as other diseases as additional single- and sells PCR diagnosticmultiplex tests are developed and validated for diseases and pathogens such as COVID-19, tuberculosis, hepatitis B and C, malaria, dengue, human papilloma virus, chikungunya, and zika virus, all of which tests have been designed and verified in CDI’s laboratory. Our tuberculosis test and zika test received a CE Mark in 2018, and a triplexuse on the device. The device would also be available to test for zika, dengueother pathogens detectable through saliva or other samples as we develop those tests and chikungunya received a CE Mark in 2019, qualifying the tests to be sold throughout the European community and in most countries in central and South America. In December, 2019, our Indian joint venture received a license to manufacture and sell tuberculosis, hepatitis B, hepatitis C, human papilloma virus 16/18 and malaria tests in India from the Central Drugs Standard Control Organization (“CDSCO”). In February 2020, we received a CE Mark for our Logix Smart COVID-19 test and in April 2020, our COVID-19 test was approved for manufacture and sale in India by the CDSCO and in Mexico by the INDRE, Mexico’s equivalentoffer them to the United States Center for Disease Control.marketplace. All such tests will be subject to regulatory approval.
As explained above,
On February 22, 2023, we announced that clinical evaluations for the development of our Logix Smart COVID-19 test was designed, developed, submitted for regulatory approveddevice and ready to be used both as a Research Use Only (“RUO”) and as an IVD in countries that accept a CE Mark as approval for use of the test in a period of just over thirty days. This is a real-world example of how in an evolving epidemic that the CDI technology can be used to get diagnostics tools in the hands of medical professionals without delay. It can be similarly used to design aits initial test for mutationsCOVID-19 had begun. Because the evaluations are dependent on identifying and enrolling a particular number of both symptomatic and asymptomatic COVID-19-positive and -negative patients at testing sites, the virus should they occur.Company did not provide projected timelines for completion at that time.
Caribbean and Central and South AmericaCorporate Information
Our initial sales were to entities located in South and Central America. In some of those countries, there are limited regulatory hurdles and we started offering our tests immediately. We have applied for registration of our tests in those countries that require registration and our distributors in those countries have provided us with in country assistance in completing such registrations.
We first offered our zika test in this region because of the demand for such test, followed quickly by tests for tuberculosis, our triplex test for zika, chikungunya, and dengue, hepatitis B and C, and dengue. Sales of those tests have not been material, but with the granting of a CE mark for our Logix Smart COVID-19, we began significant sales in this region. Products are manufactured for sale upon receipt of purchase orders from distributors, labs and hospitals.
India
The Company has entered into an agreement to manufacture diagnostics tests for seven infectious diseases with a pharmaceutical manufacturing company in India and formed an Indian joint venture organized as CoSara Diagnostics, Pvt. The agreement provided for the construction of a manufacturing plant and the manufacture of the tests named above and the joint sales and marketing of those tests in India. We have received a license for the plant in Rinoli, India to manufacture approved tests and it is being used for testing and manufacturing for the Indian market.
As mentioned above, the CDSCO has given us the approval for manufacture and sale of the five tests referred above and the Company has begun manufacture and sale of those tests. The Company has commenced a reagent rental program in India with thermocyclers purchased from third-party vendors, some of which have software customized for us and which we refer to as our “MDx Device.” We have placed thirty-nine (39) thermocyclers, twenty of which are MDx Devices, with labs in India. Each of the reagent rental placements requires the purchase of a minimum quantity of our tests per month. The placement of thermocyclers in India has facilitated the sale of the SaraGene COVID-19 tests in India. The World Health Organization (“WHO”) 2019 Global Tuberculosis Report indicates that India is the country with the highest number of cases of tuberculosis in the world and has recently exceeded all countries in the world for cases of COVID-19 except the United States. WHO tuberculosis statistics for India for 2018 give an estimated incidence figure of 2.69 million cases of tuberculosis for India out of a global incidence of approximately 10.00 million. The tuberculosis incidence for India is the number of new cases of active tuberculosis disease in India during a certain time period (usually a year). We believe that we will be able to sell our tuberculosis test in India through our sales distribution network that we are building currently.
On March 19, 2020, we announced that CoSara Diagnostics, Pvt., our Indian joint venture, received authorization to begin manufacture and sale of COVID-19 tests in India. Those tests in India are branded as SaraGene COVID-19 tests and are sold exclusively by CoSara. Because any commercial activity in India was severely restricted until in May CoSara was not able to commence manufacture and sale of the SaraGene test until late in the second quarter, but sales efforts still resulted in sales significant enough to make CoSara profitable for the quarter ending June 30, 2020.
Although the efforts of CoSara are concentrated in provided the SaraGene COVID-19 test to the Indian market now, we intend to submit in 2021 technical files to the CDSCO requesting approval tests for HIV and Dengue as well as a blood bank panel to increase the number of tests to be sold in that market.
Europe
Molecular diagnostics, such as our tests, are governed in Europe by the framework for in vitro diagnostics (IVDs), which encompasses diagnostic products such as reagents, instruments and systems intended for use in diagnosis of disease. The regulatory system for IVDs is built largely on a self-certification procedure, placing heavy responsibility on manufacturers. Non self-certified products are subject to the same standards as self-certified products but are subject to audit and review by a notified body prior to receiving approval to be CE-marked. A CE-marking is a manufacturer’s declaration that a product meets the requirements of the applicable European Commission directive. Examples of current obligations include having in place a qualitative manufacturing process, user instructions that are clear and fit for purpose, ensuring that the ‘physical’ features of devices and diagnostics do not pose any danger. If a product fulfils these and other related control requirements, it may be CE-marked as an indication that the product is compliant with EU legislation and sold in the European Union. We have received CE Marks for four of our tests including COVID-19, tuberculosis, Zika, and our zika, dengue, chikungunya triplex tests.
We have received ISO 13485 and ISO 9001 certifications relating to the design and manufacture of our medical device products. The ISO certification indicates that we meet the standards required to self-certify certain of our products and affix a CE-marking for sales of our products in countries accepting the CE marking (not in the United States) with only minimal further governmental approvals and registrations in most countries.
United States
The U.S. Food and Drug Administration (FDA) has granted permission for us to export many of our products. The FDA’s permission to export was granted under Section 801(e) of the Federal Food, Drug, and Cosmetic Act, as amended (the “FDC Act”). Section 801(e) of the FDA Act covers certain medical devices that have not yet received an approved Premarket Approval in the United States by the FDA, such as our products. We have not commenced any Premarket Approval steps with the FDA. Section 801(e) of the FDA Act applies to medical devices that are acceptable to the importing country and that are manufactured under the FDA’s Good Manufacturing Practices. We have received Emergency Use Authorization (EUA) for our COVID-19 test, which allows sales to qualified labs in the United States.
Under our EUA we are actively marketing our LogixSmart COVID-19 test to CLIA certified laboratories in the United States and the CLIA labs are able to qualify our LogixSmart test as a Laboratory Developed Test (LDT), a diagnostic test that has been validated for use in the CLIA lab. These tests may be used by the lab only in that laboratory. CLIA laboratories develop the performance characteristics, perform the analytical validation for their LDT’s and obtain licenses to offer them as diagnostic services. The FDA has publicly announced its intention to regulate certain LDTs in a phased-in approach, but draft guidance that was published a couple of years ago was withdrawn at the end of the Obama administration and replaced by an informal non-enforceable discussion paper reflecting some of the feedback that it received on LDT regulation. To date we have sold our LogixSmart COVID-19 test to more than 15 CLIA laboratories and hospitals in the US and are responding to additional inquiries every week.
Market Opportunity
The market opportunity for our tests changed radically with the emergence of the COVID-19 pandemic. Because we were able to respond rapidly and produce a quality product we have been able to build a distribution network that extends to more than 80 countries with over 50 active distributors, most of which have been the sales network that has allowed us to export more than twenty million dollars of sales throughout the world. We believe that after the pandemic is brought under control that the network of distributors that we have built in these extra-ordinary times will serve us well in sales of other diagnostic tests.
The molecular diagnostics market is a fast-growing portion of the in vitro (test tube-based, controlled environment) diagnostics market. Using estimates of the incidence of disease by the Centers for Disease Control (CDC), the World Health Organization (WHO) and other international health agencies and sources, the Company estimates that the global annual demand for diagnostic tests are:
There are several advantages of molecular tests, such as the ones we market and sell, over other forms of diagnostic testing. These advantages include higher sensitivities, the ability to perform multiplex tests and the ability to test for drug resistance or individual genes.
Mosquito Vector Control Services
In response to market demand, we introduced our first diagnostics tests to be used exclusively to test mosquito DNA in June 2019. Municipalities in the US and many other countries in the world are concerned about the diseases carried by mosquitos and which infect the human population. To prevent outbreaks of potentially harmful viruses, such as Zika or West Nile, from infecting the public the municipalities conduct spraying operations to eliminate the mosquito populations carrying the diseases. Because it is too expensive and potentially harmful to the environment to spray all mosquito breeding areas, the problem is to identify which particular area has mosquitos that are carrying the harmful viruses. To know where the host mosquitos with the harmful viruses are located, traps are set, mosquitos collected and then tested to find the areas that most needed spraying. There are over three thousand mosquito abatement districts throughout the United States and almost all of them conduct testing to help make the spraying more effective.
Our first vector related test was a triplex test that tests for West Nile, Western Equine and St. Louis encephalitis. We began shipping the tests in June 2019. We added a second test that tests mosquitos for Zika, chikungunya and dengue in a triplex test. Finally, in November 2019, we completed a test for West Nile, Eastern Equine and St. Louis encephalitis, specifically for use in the eastern United States. As a result, mosquito abatement districts can test for three target viruses in one test for the same cost as one test would cost ($10-$15) using other market available PCR tests. Additionally, the districts are more effective because they can get test results in a matter of hours using our product instead of weeks when they have to wait for a central lab to process the mosquito tests.
We have sold our Vector Smart test products and/or related lab equipment to more than ten different testing districts and are marketing our products through trade shows, electronic and regular mail solicitations and have hired additional sales personnel in the eastern US to more economically and efficiently market to the east coast areas.
Competitive Advantages of Co-Diagnostics
We believe that we have the following competitive advantages:
Liquid Biopsy for Cancer Screening
The development of the liquid biopsy test will spur low cost testing in many developing countries. We believe that our liquid biopsy cancer screening may be ready for testing in the second quarter of 2021 if we have sufficient development resources to dedicate to the project. Medical applications of our SNP detection technology can determine the presence of cancer cells or cell-free genetic material in a liquid or tissue biopsy, and to determine the distinct type of cancer involved. A real-life example of this includes being able to identify specific mutation(s) in genes linked to breast cancer in order to determine a patient’s prognosis, initiate the most effective and affordable treatment and to determine whether chemotherapy is necessary. After diagnosis the relative cost of our technology would allow for frequent testing to measure the effectiveness of the treatment and thus could be a companion diagnostic for a range of treatments.
Our technology has for all practical purposes essentially eliminated, primer-dimers, which opens up some very unique applications for liquid biopsy for cancer detection. Our ability to multiplex the reaction in testing for several DNA targets allows technicians to detect multiple cancers as free-circulating DNA fragments or whole cells in a blood sample at the same time
Agricultural Applications
SNP detection is also used in the agricultural industry to identify variations in crop genomes to achieve improved seed viability and other desired characteristics, including drought resistance, disease resistance, pest resistance and higher yield.
In mid-2017, the Company was first approached by a large agribusiness to evaluate our ability to multiplex certain target genomes. The results of the development project have successfully demonstrated our ability to not only multiplex the target genomes, but targeted SNP’s as well. The project was undertaken in conjunction with the manufacturer of our CoPrimer tests. The results of the project encouraged the parent of our manufacturer to seek a world-wide licensing arrangement for our CoPrimers in the agricultural industry, which was completed in October 2018. Pursuant to the exclusive license for the agronomics industry, the licensee will pay us a royalty for all CoPrimers sold to the licensee’s customers. In January 2019, the licensee formally introduced the product at a large agricultural conference and has branded the product to sell as “BHQ CoPrimers.”
Additional Licensing and Assay Development
In addition, the unique properties of our CoPrimer technology make them ideally suited to a variety of applications where sensitivity is key to optimal results, including multiplexing several targets, enhanced SNP detection and enrichment for next gen sequencing. Our licensee for our agricultural testing requested an expansion of our license agreement to include test design services for their customers and potential customers, both in the infectious disease arena as well as for agricultural customers. The license was amended in July 2019 and we will derive a license fee from our licensee for its design services. If any of its customers desire to commercialize the tests designed, they will need to seek a commercial license directly from us. Because of these unique characteristics of CoPrimers, research companies and institutions have requested that we design diagnostics to locate and identify uncommon gene sequences and SNPs and create tests for the target sequences in a multiplexed reaction. This application of our technology is in its beginning stages, but we believe that the results from our initial research indicate a significant step forward in defining the capabilities of our technology, which we believe can be translated to revenue producing licensing arrangements.
Intellectual Property Protection
Because much of our future success and value depends on our proprietary technology, our patent and intellectual property strategy is of critical importance. Five of our initial U.S. patents related to our technology have been granted by the U.S. Patent and Trademark Office (PTO), including the patent for our CoPrimer technology, which we consider our most important patent. One of our patents has been issued in Great Britain, but is still pending in the United States. As of July 31, 2020, we had two additional patents pending in the U.S. and foreign counterpart applications. Two of our issued patents expire in 2034, one in 2036 and one in 2038.
We have identified additional applications of the technology, which represent potential patents that further define specific applications of the processes that are covered by the original patents. We intend to continue building our intellectual property portfolio as development continues and resources are available.
We have copyrighted our development software that is used by us to develop diagnostic tests based on our technology. We have allowed one potential customer access to our development software and intend to sell customized reagents through that customer to labs serviced by that customer throughout the world. To date we have not sold any products to that customer.
Major Customers
The Company had certain customers which are each responsible for generating 10% or more of the Company’s total revenue for the three and six months ended June 30, 2020. These three customers together accounted for approximately 58% and 55% of the Company’s total revenue for the three and six months ended June 30, 2020, respectively. These customers may not account for the same percentage of sales in future periods. If we were to sell nothing to those customers in the future, it would have a material adverse effect on our financial condition unless we were able to replace those customers with others.
Competition
The molecular diagnostics industry is extremely competitive. There are many firms that provide some or all of the products we provide and provide many diagnostic tests that we have yet to develop. Many of these competitors are larger than us and have significantly greater financial resources. Because we are not established, many of our competitors have a competitive advantage in the diagnostic testing industry because they also have other lines of business in the pharmaceutical industry from which they derive revenues and for which they are well known and respected in the medical profession. We will need to overcome the disadvantage of being a start up with no history of success and no respect of the medical and testing professionals, although this is changing as we continue to market our LogixSmart COVID-19 tests in the United States to well-known and successful laboratories. In the diagnostic testing industry, we compete with such companies as BioMerieux, Siemens, Qiagen, and Cepheid and with such pharmaceutical companies as Abbott Laboratories, Becton, Dickinson and Johnson and Johnson.
Many of these competitors already have an established customer base with industry standard technology, which we must overcome to be successful.
Employees
As of September 30, 2020, we employ 32 full-time personnel at our executive offices and lab facilities in Salt Lake City, Utah, and two employees outside of Utah. We have engaged two independent contractors in India to promote the use of our products and develop outlets for products and employ the services of independent sales representatives on an “as needed” basis.
Government Regulation
In the United States, we will be regulated by the U.S. Federal Drug Administration (FDA) and our products must be approved by the FDA before we will be allowed to sell our tests in the United States. However, the FDA granted us an Emergency Use Authorization (EUA) to manufacture and sell our Logix Smart COVID-19 test to CLIA labs in the United States. Because our lab is ISO certified, we are allowed to apply for CE-Marking, which will allow us to sell any CE Marked test in most countries in Europe, South America and Asia. We currently have CE Marks issued for our Logix Smart COVID-19 test, tuberculosis test, our zika virus test, and a triplex test that tests for zika, dengue, and chikungunya simultaneously. In addition, our Logix Smart COVID-19 has received the license to manufacture and sell in India from India’s CDSCO and the National Epidemiology Institute in Mexico evaluated our Logix Smart COVID-19 test and approved it for sale in Mexico. We are in the process of registering for sale our Logix Smart COVID-19 test in a number of major countries around the world.
Organizational History and Corporate Information
We were incorporated as Co-Diagnostics, Inc. in Utah on April 18, 2013. Our principal executive officeheadquarters is located at 2401 S. Foothill Drive, Suite D, Salt Lake City, Utah 84109. Our84109 and our telephone number is (801) 438-1036. OurWe maintain a website addressat https://www.co-dx.com. Information on the website ishttp://codiagnostics.com. The contents of our website are not incorporated by reference in the Registration Statement on Form S-3and is not a part of which this prospectus is a part.
prospectus.
Implications of Being an Emerging Growth CompanyAdditional Information
We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012. We will remain an emerging growth company until the earlier of (i) the last day of the fiscal year following the fifth anniversary of July 12, 2017, the date of the first sale ofFor additional information related to our common stock pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Securities Act”); (ii) the last day of the fiscal year in which we have total annual gross revenues of $1.07 billion or more; (iii) the date on which we have issued more than $1.07 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a large accelerated filer under applicable rules promulgate by the U.S. Securitiesbusiness and Exchange Commission (the “SEC” or the “Commission”). We expect that we will remain an emerging growth company for the foreseeable future, but cannot retain our emerging growth company status indefinitely. Weoperations, please refer to the Jumpstart Our Business Startups Actreports incorporated herein by reference, as described under the caption “Incorporation by Reference” on page 28 of 2012 herein as the “JOBS Act.” For so long as we remain an emerging growth company, we are permitted and intend to rely on exemptions from specified disclosure requirements that are applicable to other public companies that are not emerging growth companies. These exemptions include:
For as long as we continue to be an emerging growth company, we expect that we will take advantage of the reduced disclosure obligations available to us as a result of that classification. Accordingly, the information contained herein may be different than the information you receive from other public companies in which you hold stock.this prospectus.
An emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of theThe Securities Act for complying with new or revised accounting standards. This allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have irrevocably elected to avail ourselves of this extended transition period and, as a result, we will not be required to adopt new or revised accounting standards on the dates on which adoption of such standards is required for other public reporting companies.
We are also a “smaller reporting company,” meaning that the market value of our stock held by non-affiliates is less than $700 million as of our most recently completed second fiscal quarter and our annual revenue was less than $100 million during our most recently completed fiscal year. We may continue to be a smaller reporting company if either (i) the market value of our stock held by non-affiliates is less than $250 million or (ii) our annual revenue was less than $100 million during the most recently completed fiscal year and the market value of our stock held by non-affiliates is less than $700 million as of our most recently completed second fiscal quarter. If we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies.May Offer
We may offer shares of our common stock and preferred stock, various series of debt securities and warrants to purchase any of such securities, either individually or in units, and rights to purchase shares of common stock, shares of preferred stock, or warrants, with a total value of up to $100,000,000$150,000,000 from time to time under this prospectus, together with any applicable prospectus supplement and related free writing prospectus, at prices and on terms to be determined by market conditions at the time of offering. Each time we offer a type or series of securities, under this prospectus, we will provide offerees with a prospectus supplement that will describe the specific amounts, prices and other important terms of the securities being offered, including, to the extent applicable:
Common Stock
Asecurities. The prospectus supplement and any related free writing prospectus that wealso may authorize to be provided to you may also add, update or change information contained in this prospectus or in documents we have incorporated by reference.reference into this prospectus. However, no prospectus supplement or free writingwill fundamentally change the terms that are set forth in this prospectus willor offer a security that is not registered and described in this prospectus at the time of the effectiveness of the registration statement of which this prospectus is a part.its effectiveness.
WeThis prospectus may sellnot be used to consummate a sale of any securities unless it is accompanied by a prospectus supplement.
Nasdaq Capital Market Listing
Our common stock is listed on the securities to or through underwriters, dealers or agents or directly to purchasers. We, as well as any agents acting on our behalf, reserveNasdaq Capital Market under the sole right to accept and to reject in whole or in part any proposed purchase of securities. Eachsymbol “CODX”. The applicable prospectus supplement will set forthcontain information, where applicable, as to other listings, if any, on the names of any underwriters, dealersNasdaq Capital Market or agents involved in the sale ofother securities described in that prospectus supplement and any applicable fee, commission or discount arrangements with them, details regarding any over-allotment option granted to them, and net proceeds to us. The following is a summaryexchange of the securities we may offer with this prospectus.covered by the applicable prospectus supplement.
We currently have authorized 100,000,000 sharesAn investment in our securities involves a high degree of common stock, $0.001 par value. We may offer sharesrisk. The prospectus supplement applicable to each offering of our common stock either alonesecurities will contain a discussion of the risks applicable to an investment in our securities. Prior to making a decision about investing in our securities, you should carefully consider the specific factors discussed under the heading “Risk Factors” in the applicable prospectus supplement, together with all of the other information contained or underlying other registered securities convertible intoincorporated by reference in the prospectus supplement or exercisableappearing or incorporated by reference in this prospectus. You should also consider the risks, uncertainties and assumptions discussed under Item 1A, “Risk Factors,” in our Annual Report on Form 10-K for our common stock. Holders of our common stock are entitled to such dividends as our Board of Directors (the “Board”the fiscal year ended December 31, 2022, which is incorporated herein by reference, and may be amended, supplemented or “Board of Directors”) may declaresuperseded from time to time out of legally available funds, subjectby other reports we file with the SEC in the future. The risks and uncertainties we have described are not the only ones we face. Additional risks and uncertainties not presently known to the preferential rights of the holders of any shares of our preferred stock that are outstandingus or that we currently deem immaterial may issue in the future. Currently, we do not pay any dividends onalso affect our common stock. Each holder of our common stock is entitled to one vote per share. In this prospectus, we provide a general description of, among other things, the rights and restrictions that apply to holders of our common stock.operations.
Except as described in any applicable prospectus, prospectus supplement and in any free writing prospectusprospectuses in connection with a specific offering, we currently intend to use the net proceeds from the sale of the securities offered underby this prospectus for general corporate purposes and working capital and capital expenditures. We may also use the net proceeds to invest in or acquire complementary businesses, products or technologies, although we have no current commitments or agreements with respect to any such investments or acquisitions as of the date of this prospectus. We have not determined the amount of net proceeds to be used specifically for the foregoing purposes. As a result, our management will have broad discretion in the allocation of the net proceeds and investors will be relying on the judgment of our management regarding the application of the proceeds of any sale of the securities. Pending use of the net proceeds, we may invest the proceeds in short-term, investment-grade, interest-bearing instruments.
We have never declared or paid any cash dividends on our securities. We have no present plan to declare and pay any dividends on our securities in the near future. We currently intend to retain most, if not all, of our available funds and any future earnings to operate and expand our business. Any future determination to pay dividends will be at the discretion of our board of directors, subject to applicable laws, and will depend on our financial condition, results of operations, capital requirements, general business conditions and other factors that our board of directors considers relevant.
Our business is subject to many risks and uncertainties, which may affect our future financial performance. If any of the events or circumstances described below occur, our business and financial performance could be adversely affected, our actual results could differ materially from our expectations, and the price of our stock could decline. The risks and uncertainties discussed below are not the only ones we face. There may be additional risks and uncertainties not currently known to us or that we currently do not believe are material that may adversely affect our business and financial performance. You should carefully consider the risks described below, together with all other information included in this prospectus including our financial statements and related notes, before making an investment decision. The statements contained in this prospectus that are not historic facts are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in or implied by forward-looking statements. If any of the following risks actually occurs, our business, financial condition or results of operations could be harmed. In that case, the trading price of our common stock could decline, and investors in our securities may lose all or part of their investment.
Risks Related to Our Business and Industry
We have a limited commercial history upon which to base our prospects, have only generated revenues and profits for one quarter and may not expect to continue to generate profits in the foreseeable future. We may never sustain profitability.
We began operations in April 2013, and we have a limited operating history. Prior to the current COVID-19 pandemic we did not earn significant revenue to date and do not know whether we will continue to earn significant revenue in the near future. We realized net income for the six months ended June 30, 2020 of $11,570,447, compared to a net loss of $6.2 million and $6.3 million for the years ended December 31, 2019 and December 31, 2018, respectively. The revenues related primarily to sales of our Logix Smart COVID-19 test. Our accumulated deficit was $13,397,367 as of June 30, 2020 and $24,967,814 and $18.7 million as of December 31, 2019 and December 31, 2018, respectively. Potential investors should be aware of the difficulties normally encountered by a new enterprise, many of which are beyond our control, including substantial risks and expenses in the course of developing new diagnostic tests, establishing or entering new markets, organizing operations and marketing procedures. We have no way to predict how long the current pandemic will continue and whether we will have new products to take the place of our COVID-19 test to continue our revenues and profitability. The likelihood of our success must be considered in light of these risks, expenses, complications and delays, and the competitive environment in which we operate. There is, therefore, nothing at this time upon which to base an assumption that our business plan will prove successful, and we may not be able to generate significant revenue, raise additional capital or operate profitably. We will continue to encounter risks and difficulties frequently experienced by early commercial stage companies, including scaling up our infrastructure and headcount, and may encounter unforeseen expenses, difficulties or delays in connection with our growth. In addition, as a result of the start-up nature of our business and the uncertainties surrounding the current pandemic, we may, in the future, continue to sustain substantial operating expenses without generating sufficient revenues to cover expenditures. Any investment in our company is therefore highly speculative and could result in the loss of your entire investment.
Our near-term success is dependent upon our ability to continue sales of our tests.
Our success will depend, in part, upon our ability to commence sales of our tests other than our COVID-19 test. Attracting new customers and distribution networks requires substantial time and expense. Any failure to initiate sales of our other tests to further validate our platform would adversely affect our operating results. Many factors could affect the market acceptance and commercial success of our diagnostic tests, including:
Three customers generated a majority of our revenues for the three and six month periods ended June 30, 2020.
The Company had certain customers which are each responsible for generating 10% or more of the Company’s total revenue for the three and six months ended June 30, 2020. These three customers together accounted for approximately 58% and 55% of the Company’s total revenue for the three and six months ended June 30, 2020, respectively. These customers may not account for the same percentage of sales in future periods. If we were to sell nothing to those customers in the future, it would have a material adverse effect on our financial condition unless we were able to replace those customers with others.
We have broad discretion in the use of the net proceeds from this offering and may not use them effectively.
We intend to use the net proceeds from this offering for working capital and other general corporate purposes. Our management, however, will have broad discretion in the applicationpurposes, including expanding our sales and marketing, capital expenditures, facilities expansion, and development of existing and new products. We may use a portion of the net proceeds to acquire complementary business or products, technologies or businesses or to repay indebtedness we may incur from time to time; however, we currently have no binding agreements or commitments to complete any such transactions or to make any such indebtedness repayments from the proceeds of this offering, includingalthough we do look for anysuch acquisition opportunities.
As of the purposes described in the section entitled “Usedate of Proceeds.” Because of the number and variability of factors that will determine our use of the net proceeds from this offering, their ultimate use may vary substantially from their currently intended use. Our management may not apply our cash from this offering in ways that ultimately increase the value of any investment in our securities or enhance shareholder value. The failure by our management to apply these funds effectively could harm our business. Pending their use, we may invest the net proceeds from this offering in short-term, investment-grade, interest-bearing securities. These investments may not yield a favorable return to our shareholders. If we do not invest or apply our cash in ways that enhance shareholder value, we may fail to achieve expected financial results, which may result in a decline in the price of our shares of common stock, and, therefore, may negatively impact our ability to raise capital, invest in or expand our business, acquire additional products or licenses, commercialize our diagnostic tests, or continue our operations.
Risks Related to Owning our Common Stock and Other Securities
The price of our common stock may fluctuate substantially.
The market price of our common stock may be subject to wide fluctuation in response to various factors, some of which are beyond our control. Some factors that may cause the market price of our common stock to fluctuate, in addition to the other risks mentioned in this “Risk Factors” section and elsewhere in this prospectus, are:
In addition, if the market for stocks in our industry or industries related to our industry, or the stock market in general, experiences a loss of investor confidence, the trading price of our common stock could decline for reasons unrelated to our business, financial condition and results of operations. If any of the foregoing occurs, it could cause our stock price to fall and may expose us to lawsuits that, even if unsuccessful, could be costly to defend and a distraction to management.
You may experience immediate and substantial dilution in the book value per share of any common stock you receive in this offering.
The purchase price per share in this offering is substantially higher than the net tangible book value per share of our common stock, and, therefore, you will suffer immediate and substantial dilution in the net tangible book value of the common stock you purchase in this offering. The exercise of outstanding stock options and warrants would result in further dilution of your investment. See the section entitled “Dilution” for a more detailed illustration of the dilution you would incur if you participate in this offering. Purchasers of the shares we sell, as well as our existing shareholders, will experience significant dilution if we sell shares at prices significantly below the price at which they invested.
Future sales of our common stock in the public market may cause our stock price to decline and impair our ability to raise future capital through the sale of our equity securities.
There are a substantial number of shares of our common stock held by shareholders who owned shares of our capital stock prior to our initial public offering that may be able to sell in the public market. Sales by such shareholders of a substantial number of shares could significantly reduce the market price of our common stock.
Shares issued by us upon exercise of options granted under our equity plan will be eligible for sale in the public market. If any of these holders cause a large number of securities to be sold in the public market, the sales could reduce the trading price of our common stock. These sales also could impede our ability to raise capital in the future.
Anti-takeover provisions in our charter documents and Utah law could discourage delay or prevent a change of control of our Company and may affect the trading price of our common stock.
We are a Utah corporation and the anti-takeover provisions of the Utah Control Shares Acquisition Act may discourage, delay or prevent a change of control by limiting the voting rights of control shares acquired in a control share acquisition. In addition, our Articles of Incorporation, and Bylaws may discourage, delay or prevent a change in our management or control over us that shareholders may consider favorable. Among other things, our Amended and Restated Articles of Incorporation and Bylaws:
| as amended, authorize | ||
These provisions could have the effect of delaying or preventing a change of control, whether or not it is desired by, or beneficial to, our shareholders.
Nasdaq may delist our common stock from its exchange, which could limit investors’ ability to make transactions in our common stock and subject us to additional trading restrictions.
Should we fail to satisfy the continued listing requirements of the Nasdaq Capital Market, such as the corporate governance requirements or the minimum closing bid price requirement, Nasdaq may take steps to delist our common stock. Such a delisting would likely have a negative effect on the price of our common stock, and would impair your ability to sell or purchase our common stock when you wish to do so. In the event of a delisting, we would take actions to restore our compliance with the Nasdaq Capital Market’s listing requirements, but we can provide no assurance that any such action taken by us would allow our common stock to become listed again, stabilize the market price or improve the liquidity of our common stock, prevent our common stock from dropping below the Nasdaq Capital Market’s minimum bid price requirement or prevent future non-compliance with the Nasdaq Capital Market’s listing requirements.
If the Nasdaq Capital Market does not maintain the listing of our securities for trading on its exchange, we could face significant material adverse consequences, including:
Therefore, it may be difficult for our shareholders to sell any shares if they desire or need to sell them.
We do not currently intend to pay dividends on our common stock.
We do not expect to pay cash dividends on our common stock. Any future dividend payments are within the absolute discretion of our board of directors and will depend on, among other things, our results of operations, working capital requirements, capital expenditure requirements, financial condition, contractual restrictions, business opportunities, anticipated cash needs, provisions of applicable law and other factors that our board of directors may deem relevant. We may not generate sufficient cash from operations in the future to pay dividends on our common stock.
We are an “emerging growth company” and will be able to avail ourselves of reduced disclosure requirements applicable to emerging growth companies, which could make our common stock less attractive to investors.
We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, and we intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. Investors may find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile. We may take advantage of these reporting exemptions until we are no longer an “emerging growth company.” We will remain an “emerging growth company” until the earliest of (i) the last day of the fiscal year in which we have total annual gross revenues of $1.07 billion or more; (ii) the last day of our fiscal year following the fifth anniversary of the date of the completion of our initial public offering; (iii) the date on which we have issued more than $1.07 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the Securities and Exchange Commission.
We have elected to use the extended transition periods for complying with new or revised accounting standards.
We have elected to use the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transaction period provided in Section 7(a)(2)(B). As a result, our financial statements may not be comparable to those of companies that comply with public company effective dates.
Our management is required to devote substantial time to compliance initiatives.
As a public company, we incur significant legal, accounting and other expenses that we did not incur as a newly formed entity. The Sarbanes-Oxley Act, as well as rules subsequently implemented by the Securities and Exchange Commission, and Nasdaq, have imposed various new requirements on public companies, including requiring establishment and maintenance of effective disclosure and financial controls and changes in corporate governance practices. Our management and other personnel devote a substantial amount of time to these new compliance initiatives. Moreover, these rules and regulations increase our legal and financial compliance costs and make some activities more time consuming and costly. We expect these rules and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance and we may be required to incur substantial costs to maintain the same or similar coverage.
We may offer shares of common stock, shares of preferred stock or warrants to purchase common stock, preferred stock or any combination of the foregoing, either individually or as units comprised of one or more of the other securities. We may offer up to $100,000,000 of securities under this prospectus. If securities are offered as units, we will describe the terms of the units in a prospectus supplement.
DESCRIPTION OF CAPITAL STOCK
General
Our authorized capital stock presently consists of 100,000,000 shares of common stock, par value $0.001 per share and 5,000,000 shares of “blank check” preferred stock, par value $0.001 per share. As of the date of this filing, we had 28,269,201 shares of common stock outstanding and 163 holders of record of our common stock. On August 1, 2020, we had 30,000 shares of preferred stock designated as Series A Convertible Preferred Stock (the “Series A Preferred Stock”). All 25,600 previously outstanding shares of Series A Preferred Stock were converted into common stock during 2020.
The following is a summary of the termsrights of our capital stock.common and preferred stock and some of the provisions of our Articles of Incorporation, as amended, our Amended and Restated Bylaws, and the Utah Revised Business Corporation Act (the “URBCA”). Because it is only a summary, it does not contain all the information that may be important to you and is subject to and qualified in its entirety by our Articles of Incorporation, as amended, and our Amended and Restated Bylaws, a copy of each of which has been incorporated as an exhibit to the registration statement of which this prospectus forms a part. We urge to you read each of the Articles of Incorporation, as amended, and the Amended and Restated Bylaws described herein in their entirety for a complete description of the rights and preferences of our securities.
Common Stock
As of December 31, 2022 there were 30,872,607 shares of common stock outstanding. In addition, as of December 31, 2022 there were: (i) 1,040,572 shares of common stock subject to outstanding options; (ii) 2,426,725 shares of common stock subject to unvested outstanding restricted stock units; (iii) 6,210,790 shares of common stock available for future issuance under 2015 Amended and Restated Long Term Incentive Plan; and 485,000 shares of common stock reserved for future issuance under outstanding common stock purchase warrants.
Holders of our common stock are entitled to one vote for each share held of record on all matters submitted to a vote of the shareholders, and do not have cumulative voting rights. Accordingly, the holders of a majority of the shares of our common stock entitled to vote in any election of directors maycan elect all of the directors standing for election. HoldersSubject to preferences that may be applicable to any outstanding shares of preferred stock, holders of our common stock are entitled to receive ratably such dividends, if any, dividends, as may be declared from time to time by theour Board of Directors out of funds legally available therefor, subject to the rights of the holders of preferred stock. Upon the liquidation, dissolution or winding up of our company, the holders of common stock are entitled to receive ratably our net assets available after the payment of our debts and other liabilities. Holders of common stock have no preemptive, subscription, redemption or conversion rights. Thefor dividend payments. All outstanding shares of our common stock are fully paid and nonassessable, and any shares of our common stock to be sold pursuant to this prospectus will be fully paid and nonassessable. The holders of common stock have no preferences or rights of conversion, exchange, pre-emption or other subscription rights. There are no redemption or sinking fund provisions applicable to our common stock. In the event of any liquidation, dissolution or winding-up of our affairs, holders of our common stock will be entitled to share ratably in our assets that are remaining after payment or provision for payment of all of our debts and obligations and after liquidation payments to holders of outstanding shares of preferred stock, if any.
Listing
The transfer agent and registrar for our common stock is VStock Transfer LLC located at 18 Lafayette Pl, Woodmere, New York 11598. Our common stock is listed on the Nasdaq Capital Market under the symbol “CODX.”“CODX”.
Preferred StockArticles of Incorporation and Amended and Restated Bylaws
OurShareholders’ rights and related matters are governed by our Articles of Incorporation, as amended, authorizesAmended and Restated Bylaws and Utah law, including the URBCA. An amendment to our Articles of Incorporation, as amended, must be approved by holders of a majority of our outstanding common and our preferred stock, if any, except for certain limited amendments that can be effected by the Board of Directors without shareholder approval. Our Amended and Restated Bylaws may be amended or repealed by the Board of Directors by the affirmative vote of a majority of the directors then in office or by our shareholders at any annual meeting of shareholders, or special meeting of shareholders called for such purpose, by the affirmative vote of at least seventy-five percent (75%) of the shares present in person or represented by proxy at such meeting and entitled to vote on such amendment or repeal, voting together as a single class; provided, however, that if the Board of Directors recommends that stockholders approve such amendment or repeal at such meeting of stockholders, such amendment or repeal shall only require the affirmative vote of a majority of the shares present in person or represented by proxy at such meeting and entitled to vote on such amendment or repeal, voting together as a single class.
Board of Directors
Our Amended and Restated Bylaws provide that the number of directors must fall within a range between three (3) and ten (10), the exact number to be fixed by resolution of our Board of Directors. Our Board of Directors has adopted a resolution limiting the current size of the board to 5 persons.
Preferred Stock
Our Board of Directors has the authority under our Articles of Incorporation, as amended, without further action by our shareholders, to issue up to 5,000,000 shares of “blank check” preferred stock, par value $0.001 per share, of which 30,000 have been designated as Series A Convertible Preferred Stock. All 25,600 previously outstanding shares of Series A Preferred Stock were converted into common stock during 2020. The Board of Directors of the Company may provide for the issue of any or all of the unissued and undesignated shares of the preferred stock in one or more series, and to fixestablish from time to time the number of shares and to determine or alter forbe included in each such series, to fix the rights, preferences, privileges and restrictions of the shares of each wholly unissued series, including dividend rights, conversion rights, voting rights, terms of redemption, liquidation preference and sinking fund terms, and to increase or decrease the number of shares of any such voting powers, full or limited, or no voting powers, andseries (but not below the number of shares of such designation, preferences, and relative, participating, optional, or other rights and such qualifications, limitations, or restrictions thereof, as shall be stated and expressed in the resolution or resolutions adopted by theseries then outstanding).
Our Board of Directors providing formay authorize the issuance of suchpreferred stock with voting or conversion rights that could have the effect of restricting dividends on our common stock, diluting the voting power of our common stock, impairing the liquidation rights of our common stock or otherwise adversely affecting the rights of holders of our common stock. The issuance of preferred stock, while providing flexibility in connection with possible acquisitions and other corporate purposes, could, among other things, have the effect of delaying, deferring or preventing a change of control and may adversely affect the market price of our common stock. As of December 31, 2022, no shares of preferred stock were outstanding, and as may be permitted by law, without shareholder approval.we have no current plans to issue any preferred stock.
Future Preferred Stock
Our boardBoard of directors hasDirectors will fix the rightrights, preferences, privileges, qualifications and restrictions of the preferred stock of each series that we sell under this prospectus and applicable prospectus supplements in the certificate of designation relating to establish onethat series. We will file as an exhibit to the registration statement of which this prospectus is a part or moreincorporate by reference into the registration statement of which this prospectus is a part the form of any certificate of designation that describes the terms of the series of preferred stock without shareholder approval. Unless required by law or by any stock exchange on which our common stock is listed,we are offering before the authorized sharesissuance of preferred stock will be available for issuance at the discretion of our board of directors without further action by our shareholders. Our board of directors is able to determine, with respect to anyrelated series of preferred stock, the terms and rights of that series, including:stock. This description will include:
| ● | the | |
| ● | the number of shares we are offering; | |
| ● | the liquidation preference per share; | |
| ● | the purchase price per share; | |
| ● | the dividend rate per share, dividend period and payment dates and method of | |
| ● | whether dividends |
The issuance of preferred stock could adversely affect, among other things, the voting power of holders of common stock and the likelihood that shareholders will receive dividend payments and payments upon our liquidation, dissolution or winding up. The issuance of preferred stock could also have the effect of delaying, deferring or preventing a change in control of us.
A prospectus supplement relating to any series of preferred stock being offered will include specific terms related to the offering. They will include, where applicable:
| cumulative, the date from which dividends | ||
| ● | our right, if any, to defer payment of dividends and the maximum length of any such deferral period; | |
| ● | the procedures for any auction and remarketing, if | |
| ● | the | |
| ● | the provisions for redemption or repurchase, if applicable, | |
| ● | any listing of the | |
| ● | whether the | |
| ● | whether the preferred stock will be exchangeable into debt securities, and, if applicable, the exchange period, the exchange price, or how it will be calculated, and under what circumstances it may be adjusted; |
| ● | voting rights, if any, of the preferred stock; | |
| ● | preemptive rights, if any; | |
| ● | restrictions on transfer, sale or other assignment, if any; | |
| ● |
| ● | the relative ranking and preferences of the preferred stock as to dividend rights and rights if we liquidate, dissolve or wind up our affairs; | |
| ● | any limitations on issuances of any class or series of preferred stock | |
| ● | any other specific terms, rights, preferences, | |
IfWhen we issue shares of preferred stock under this prospectus, the shares will be fully paid and nonassessable and will not have, or be subject to, any preemptive or similar rights.
Indemnification of Officers and Directors and InsuranceWarrants
Our Bylaws provide for limitationThe following summary of liabilitythe material terms of our directorsexisting warrants is not intended to be complete and is qualified by reference to our Articles of Incorporation, as amended, and Amended and Restated Bylaws and the warrant-related documents described herein which are exhibits to the registration statement of which this prospectus is a part. We urge you to read each of the Articles of Incorporation, as amended, and Amended and Restated Bylaws and the warrant-related documents described herein in their entirety for indemnificationa complete description of the rights and preferences of the warrants.
Contingent Consideration Warrants
On December 31, 2021, we completed our acquisitions (the “Acquisitions”) of Advanced Conceptions, Inc. (“ACI”) and Idaho Molecular Inc. (“IdMo”), pursuant to (i) an Agreement and Plan of Merger (as amended, the “ACI Merger Agreement”) with ACI Acquisition Corp., an Idaho corporation and our wholly-owned subsidiary, ACI, and the Company Representative named therein and (ii) an Agreement and Plan of Merger (as amended, the “IM Merger Agreement” and together with the ACI Merger Agreement, the “Merger Agreements”) with IDMO Acquisition Corp., an Idaho corporation and our wholly-owned subsidiary (“IM Merger Sub”), IdMo, and the Company Representative named therein.
Upon the completion of the Acquisitions, all outstanding shares of ACI and Idaho Molecular common stock were initially exchanged for approximately 3.2 million shares of common stock and contingent consideration that includes up to approximately 1.4 million shares of common stock and approximately 456,000 warrants to purchase shares of common stock. During 2022, we finalized negotiations with one remaining shareholder of ACI. Following the resolution with the remaining shareholder, the total number of shares issued as purchase consideration in the Acquisitions was approximately 3.3 million shares. Additionally, the aggregate purchase consideration for the Acquisitions included contingent consideration of up to approximately 1.4 million shares and 465,000 warrants (the “Contingent Consideration Warrants”) to purchase shares of common stock. The contingent consideration is based on the achievement of certain milestones, which include regulatory approval for identified products, as well as production and net revenue targets.
The material terms and provisions of the Contingent Consideration Warrants are summarized below. This summary of some provisions of the Contingent Consideration Warrants is not complete. For the complete terms of the Contingent Consideration Warrants, you should refer to the warrant agreements filed as Exhibit 4.7 and Exhibit 4.8 to the registration statement of which this prospectus forms a part. Pursuant to the warrant agreements between us and VStock Transfer, LLC, as warrant agent, the Contingent Consideration Warrants were issued in book-entry form.
Exercise. The Contingent Consideration Warrants have an initial exercise price equal to $9.125 per share. The Contingent Consideration Warrants become exercisable, subject to certain conditions, upon the achievement of certain milestones described in the Merger Agreements, or the earlier of (in each case provided that such event occurs prior to January 1, 2027) (i) a change of control, as defined in the Merger Agreements, (ii) the consummation of a transaction or series of transactions in which we or any of our directors and officersaffiliates sell all or substantially all of the assets relating to the fullest extent permitteddesign, engineering and development of a prototype highly sensitive and rapid response home saliva and/or nasal swab diagnostic platform and receptacle kits for, among other things, PCR testing and pathogen detection (“Working Prototype”) for the ultimate manufacturing, commercialization and marketing of home use, consumer diagnostic kits based off the Working Prototype and the related saliva receptacle cups containing our pathogen detection technology (the “Project”), and (iii) our failure to satisfy certain funding commitments relating to the Project. Notwithstanding the foregoing, the Contingent Consideration Warrants will expire at 5:0 pm Eastern Time on January 1, 2027.
The holder of a Contingent Consideration Warrant is not deemed a holder of our underlying common stock until such warrant is exercised. The holders must pay the exercise price in cash upon exercise of the Contingent Consideration Warrants, unless such holders are utilizing the cashless exercise provision of the Contingent Consideration Warrants. Prior to the exercise of any Contingent Consideration Warrants to purchase common stock, holders of the Contingent Consideration Warrants do not have any of the rights of holders of the common stock purchasable upon exercise, including the right to vote, except as set forth therein.
Stock Dividends and Stock Splits. The exercise price and the number of shares issuable upon exercise of the Contingent Consideration Warrants is subject to appropriate adjustment in the event of recapitalization events, stock dividends, stock splits, stock combinations, reclassifications, reorganizations or similar events affecting our common stock.
Merger or Consolidation. In the event we consummate a merger or consolidation with or into another person or other reorganization event in which we are not the surviving entity, the holders of the Contingent Consideration Warrants will be entitled to receive upon exercise of such Contingent Consideration Warrants the same kind and amount of securities, cash or property which the holders would have received had they exercised their Contingent Consideration Warrants immediately prior to such fundamental transaction.
Registration Rights. The Contingent Consideration Warrants include registration rights requiring the company to maintain a registration statement registering the resale of the shares of common stock underlying the Contingent Consideration Warrants, until such time as such shares of common stock can be freely sold under Utah law. Our directors and officersRule 144 of the Securities Act. If we fail to satisfy such registration rights, we may be liablerequired to pay partial liquidated damages equal to the product of 2.0% multiplied by the aggregate consideration paid to the holder in the Acquisitions.
The Contingent Consideration Warrants are not listed on any securities exchange, and we do not intend to apply for listing of the Contingent Consideration Warrants on any securities exchange or other trading system.
Coltrin Warrants
In October 2019 and February 2020, we issued an aggregate of 50,000 warrants to Coltrin & Associates, Inc. for public relations services (the “Coltrin Warrants”). The material terms and provisions of the Coltrin Warrants are summarized below. This summary of some provisions of the Coltrin Warrants is not complete. For the complete terms of the Coltrin Warrants, you should refer to the warrant agreements filed as Exhibit 4.9, Exhibit 4.10, Exhibit 4.11, and Exhibit 4.12 to the registration statement of which this prospectus forms a breachpart.
Exercise. The Coltrin Warrants have an initial exercise price equal to $1.40 per share. The 30,000 Coltrin Warrants issued in October 2019 expire in October 2024. The 20,000 Coltrin Warrants issued in February 2020 expire in February 2025. The holder of a Coltrin Warrant is not deemed a holder of our underlying common stock until such warrant is exercised. The holders must pay the exercise price in cash upon exercise of the Coltrin Warrants, unless such holders are utilizing the cashless exercise provision of the Coltrin Warrants issued in October 2019. Prior to the exercise of any Coltrin Warrants to purchase common stock, holders of the Coltrin Warrants do not have any of the rights of holders of the common stock purchasable upon exercise, including the right to vote, except as set forth therein.
Stock Dividends and Stock Splits. The exercise price and the number of shares issuable upon exercise of the Contingent Consideration Warrants is subject to appropriate adjustment in the event of recapitalization events, stock dividends, stock splits, stock combinations, reclassifications, reorganizations or failuresimilar events affecting our common stock.
Fundamental Transaction. In the event we consummate a Fundamental Transaction, as defined in the Coltrin Warrants, the holders of the Coltrin Warrants will be entitled to performreceive upon exercise of such Contingent warrants the same kind and amount of securities, cash or property which the holders would have received had they exercised their dutieswarrants immediately prior to such fundamental transaction. Any successor to us or surviving entity shall assume the obligations under the November 2018 Warrants. Additionally, as more fully described in accordance with Utah law onlythe Coltrin Warrants, in the event of certain Fundamental Transactions, the holders of the Coltrin Warrants will be entitled to receive cash consideration in an amount equal to the value of such Fundamental Transaction per share of common stock outstanding less the exercise price of the Coltrin Warrants.
Purchase Rights. If at any time we grant, issue, or sell any options, convertible securities, or other rights to purchase shares, warrants, securities, or other property pro rata to the record holders of any class of our common stock (the “Purchase Rights”), the holders of the Coltrin Warrants will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the holder could have acquired if the holder had held the number of shares of common stock acquirable upon complete exercise of the Coltrin Warrants (without regard to any beneficial ownership limitations) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of common stock are to be determined for the grant, issue or sale of such Purchase Rights.
Distributions. In addition to the adjustments described above, if we declare or make any dividend or other distribution of our assets to holders of common stock, then the holders of the Coltrin Warrants will be entitled to participate in such distribution to the same extent that the holder would have participated therein if the holder had held the number of shares of common stock acquirable upon the complete exercise of their breachColtrin Warrants immediately before the date on which a record is taken for such distribution, or, failureif no such record is taken, the date as of which the record holders of common stock are to perform constitutes gross negligence, willful misconductbe determined for the participation in such distribution.
The Coltrin Warrants are not listed on any securities exchange, and we do not intend to apply for listing of the Coltrin Warrants on any securities exchange or intentional harm onother trading system.
Effects of Anti-Takeover Provisions of our company Articles of Incorporation, as amended, and Amended and Restated Bylaws
Some provisions of our Articles of Incorporation, as amended, and Amended and Restated Bylaws could make the acquisition of control of us and/or the removal of our shareholders. Ourexisting management more difficult, including those that provide as follows:
| ● | our directors may only be removed for cause, and only with a the vote of the holders of at least 75 percent of the voting power of the then outstanding shares entitled to vote as a single class; | |
| ● | our Amended and Restated Bylaws may be amended or repealed by the Board of Directors by the affirmative vote of a majority of the directors then in office or by our shareholders at any annual meeting of shareholders, or special meeting of shareholders called for such purpose, by the affirmative vote of at least seventy-five percent (75%) of the shares present in person or represented by proxy at such meeting and entitled to vote on such amendment or repeal, voting together as a single class; provided, however, that if the Board of Directors recommends that stockholders approve such amendment or repeal at such meeting of stockholders, such amendment or repeal shall only require the affirmative vote of a majority of the shares present in person or represented by proxy at such meeting and entitled to vote on such amendment or repeal, voting together as a single class; | |
| ● | any action required or permitted to be taken by the shareholders of the Company may be effected only at a duly called annual or special meeting of the shareholders of the Company and may not be effected by written consent.; | |
| ● | special meetings of the stockholders may be called only by the Board of Directors pursuant to a resolution approved by the affirmative vote of a majority of the directors then in office.; | |
| ● | our Board of Directors may create new directorships and may appoint new directors to serve for the full term of the class of directors in which the new directorship was created and may fill vacancies on our Board of Directors occurring for any reason for the remainder of the term of the class of director in which the vacancy occurred; | |
| ● | our Board of Directors may issue shares of preferred stock without any vote or further action by the shareholders; and | |
| ● | our Board of Directors retains the power to designate series of preferred stock and to determine the powers, rights, preferences, qualifications and limitations of each class. |
| 12 |
Indemnification
Additionally, we will indemnify any person who was or is a party or is threatened to be personally liable for monetary damages formade a party to any threatened, pending or completed action taken or failuresuit by or in the right of the corporation to take actionprocure a judgment in its favor by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, exceptofficer, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise against expenses (including attorneys’ fees) actually and reasonably incurred by him in specific instances established by Utah law.
In accordanceconnection with Utah law, we may generally indemnify a directorthe defense or officer against liability incurred in a proceedingsettlement of such action or suit, if he or she acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, except that his or her conduct wasno indemnification shall be made in our best interest and that he or she had no reason to believe his or her conduct was unlawful. We may not indemnify a director or officer if the person was adjudged liable to us or in the event it is adjudicated that the director or officer received an improper personal benefit.
Under Utah law, we will indemnify a director or officer who is successful on the merits or otherwise in defense of any proceeding, or in the defenserespect of any claim, issue or matter in the proceeding,as to which hesuch person shall have been adjudged to be liable to the corporation unless and only to the extent that the judicial court in which such action or shesuit was a party because he or she is or was a director or an officer, asbrought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, may be, against reasonablesuch person is fairly and reasonably entitled to indemnity for such expenses incurred by him or her in connection withwhich the proceeding or claim with respect to which he or she has been successful.court shall deem proper.
We maintain a directors’have entered into separate indemnification agreements with our executive officers and officers’ liability insurance policy which, subjectdirectors, in addition to the limitationsindemnification provided for in our Amended and exclusions stated therein, coversRestated Bylaws. These agreements, among other things, require us to indemnify our directorsexecutive officers and officersdirectors for certain actionsexpenses, including attorneys’ fees incurred by an executive officer or inactions they may takedirector in any action or omitproceeding arising out of their services as one of our executive officers or directors, or as an executive officer or director of any of our subsidiaries or any other company or enterprise to take in their capacities as directors and officers.which the person provides services at our request.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our officers, directors officers and controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.
Defensive Provisions of Utah Law
Certain provisions of Utah law summarized below may be considered to have an anti-takeover effect and may delay, deter, or prevent a tender offer, proxy contest or other takeover attempt that shareholders might consider to be in their best interest, including a takeover attempt that might result in the payment of a premium over the market price of our common stock.
The Company maintains general liability insuranceUtah Control Shares Acquisition Act, or the Control Shares Act, provides that, covers certain liabilitieswhen a person or group acquires control of its directorsshares of a corporation that is subject to the Control Shares Act equal to or in excess of 20%, 33 1/3% or a majority of the voting power of the corporation, the acquiring person is not permitted to vote the shares unless a majority of the corporation’s shares, excluding shares held by the acquiring person or by the officers and officers arisingemployee-directors of the corporation, approve a resolution granting the acquiring person the right to vote the shares. As a public company headquartered in Utah, the Control Shares Act will apply to acquisitions of our common stock that cause an acquiring person to exceed the specified thresholds. Although a corporation may opt out of claims based on actsthe Control Shares Act, we have not elected to opt out of the Control Shares Act.
Section 728 of the URBCA prohibits cumulative voting in the election of directors. Cumulative voting could facilitate a shareholder or omissionsgroup of shareholders in their capacities as directorselecting one or officers, including liabilities undermore candidates to our Board of Directors in opposition to our slate of proposed directors.
Part 18 of the Securities Act. Insofar as indemnificationURBCA is an anti-takeover provision that makes it difficult to effect a hostile takeover of an SEC-registered Utah corporation. It does so by generally prohibiting business combinations between a Utah corporation and a shareholder holding 20% or more of the corporation’s shares until the interested shareholder has been an interested shareholder for liabilities arising underat least five years. The following exceptions apply: (1) the Securities Actbusiness combination or acquisition of shares by the interested shareholder was approved by the board of the corporation before the date the interested shareholder crossed the 20% ownership threshold; (2) the business combination is approved by a majority of the disinterested shareholders, provided that the business combination still may not occur earlier than five years after the interested shareholder’s share acquisition date; or (3) the purchase price of the business combination meets certain “fair price” thresholds.
Defensive Provisions in Articles or Bylaws
Our Amended and Restated Bylaws set forth procedures for shareholders to recommend nominees to the Company’s Board of Directors. Nominations of persons for election to our Board of Directors to be considered by the stockholders may be permittedmade at an annual meeting of stockholders (i) pursuant to directors, officers,the Company’s notice of meeting, (ii) by or persons who controlat the direction of the Board of Directors, or (iii) by any stockholder of the Company who (A) was a stockholder of record at the time of giving of the notice, (B) is entitled to vote with respect to such matter at the meeting, and (C) complies with the notice procedures set forth in the Amended and Restated Bylaws.
The following is a summary of key provisions from our Amended and Restated Bylaws. For nominations to be properly brought before an annual meeting by a stockholder, the stockholder making such nominations must have given timely notice in writing to the secretary of the Company. To be timely, a stockholder’s notice shall be delivered to the secretary at the principal executive offices of the Company has been informednot later than the close of business on the 75th day nor earlier than the close of business on the 125th day prior to the first anniversary of the preceding year’s annual meeting; provided, however, that in the opinionevent that the date of the Commission,annual meeting is more than 30 days before or more than 60 days after such indemnificationanniversary date, notice by the stockholder to be timely must be so delivered not later than the close of business on the later of (x) the 75th day prior to the scheduled date of such annual meeting or (y) the 15th day following the day on which public announcement of the date of such meeting is against public policyfirst made by the Company. To be in proper form, a stockholder’s notice to the secretary must: set forth, as expressedto the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made (A) the name and address of such stockholder, as they appear on the Company’s books, and of such beneficial owner, if any, (B) the class or series and number of shares of the Company that are, directly or indirectly, owned beneficially and of record by such stockholder and such beneficial owner, if any, as of the date of such notice, and (C) any other information relating to such stockholder and beneficial owner, if any, that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for, as applicable, the Securitiesproposal and/or for the election of directors in a contested election pursuant to Section 14 of the Exchange Act, and is therefore unenforceable.
These provisions may discourage shareholders from bringing a lawsuit against the Company’s directors for breach of their fiduciary duty, or may have the practical effect in some cases of eliminating the Company’s shareholders’ ability to collect monetary damages from its directorsrules and officers. These provisions may also have the effect of reducing the likelihood of derivative litigation against directors and officers, even though such an action, if successful, might otherwise benefit the Company and its shareholders. Furthermore, a shareholder’s investment may be adversely affected to the extent the Company pays the costs of settlement and damage awards against directors and officers pursuant to these indemnification provisions.
Authorized but Unissued Sharesregulations promulgated thereunder.
Our authorized but unissuedAmended and Restated Bylaws provide that special meetings of the stockholders may be called only by the Board of Directors pursuant to a resolution approved by the affirmative vote of a majority of the directors then in office. Only those matters set forth in the notice of the special meeting may be considered or acted upon at a special meeting of stockholders of the corporation, unless otherwise required by law. This restriction on the calling of special shareholders’ meetings may deter hostile takeovers by making it more difficult for a person or entity to obtain immediate control of the corporation between annual meetings.
Our Articles of Incorporation, as amended, authorize the issuance of 100,000,000 shares of common stock and 5,000,000 shares of preferred stock. Shares were authorized to provide our Board of Directors with as much flexibility as possible to effect, among other transactions, financings, acquisitions, share dividends, and the exercise of employee stock willoptions. However, these additional authorized shares may also be available forused by the Board of Directors, to the extent consistent with its fiduciary duty, to deter future issuance without your approval. We may useattempts to gain control of the Company. As a result of the ability to issue additional shares, for a varietyour Board of purposes, including future public offeringsDirectors has the power to raise additional capital,issue shares to fund acquisitions and as employee compensation. The existence of authorized but unissued shares of common stock and preferred stock could render more difficult or discourage anpersons friendly to management in order to attempt to obtain control of us by means ofblock a proxy contest, tender offer, merger or otherwise.other transaction by which a third party seeks control of the Company, and thereby allow members of management to retain their positions.
The matters described above may be considered to have an anti-takeover effect and may delay, defer or prevent a tender offer or other takeover attempt that a shareholder might consider to be in such shareholder’s best interest, including such an attempt as might result in the receipt of a premium over the market price for the common stock held by such shareholder.
Transfer Agent and Registrar
OurThe transfer agent and registrar for our common stock is VStock Transfer Company, Inc.LLC located at 18 Lafayette Pl, Woodmere, New York 11598. Its telephone number is (212) 828-8436.
Stock Market Listing
Our common stock is listed on the Nasdaq Capital Market under the symbol “CODX”.
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DESCRIPTION OF DEBT SECURITIES
This section describes the general terms and provisions of the debt securities that we may offer using this prospectus and the related indenture. This section is only a summary and does not purport to be complete. You must look to the relevant form of debt security and the related indenture for a full understanding of all terms of any series of debt securities. The form of debt security and the related indenture have been or will be filed or incorporated by reference as exhibits to the registration statement of which this prospectus is a part. See “Where You Can Find More Information” for information on how to obtain copies.
We may issue debt securities from time to time, in one or more series, as either senior or subordinated debt or as senior or subordinated convertible debt. While the terms we have summarized below will apply generally to any debt securities that we may offer under this prospectus, we will describe the particular terms of any debt securities that we may offer in more detail in the applicable prospectus supplement. The terms of any debt securities offered under a prospectus supplement may differ from the terms described below. Unless otherwise mentioned or unless the context requires otherwise, whenever we refer to the indenture, we also are referring to any supplemental indentures that specify the terms of a particular series of debt securities.
We will issue the debt securities under the indenture that we will enter into with the trustee named in the indenture. The indenture will be qualified under the Trust Indenture Act of 1939, as amended, or the Trust Indenture Act. We have filed the form of indenture as an exhibit to the registration statement of which this prospectus is a part, and supplemental indentures and forms of debt securities containing the terms of the debt securities being offered will be filed as exhibits to the registration statement of which this prospectus is a part or will be incorporated by reference from reports that we file with the SEC.
The following summary of material provisions of the debt securities and the indenture is subject to, and qualified in its entirety by reference to, all of the provisions of the indenture applicable to a particular series of debt securities. We urge you to read the applicable prospectus supplements and any related free writing prospectuses related to the debt securities that we may offer under this prospectus, as well as the complete indenture that contains the terms of the debt securities.
General
The indenture does not limit the amount of debt securities that we may issue. It provides that we may issue debt securities up to the principal amount that we may authorize and may be in any currency or currency unit that we may designate. Except for the limitations on consolidation, merger and sale of all or substantially all of our assets contained in the indenture, the terms of the indenture do not contain any covenants or other provisions designed to give holders of any debt securities protection against changes in our operations, financial condition or transactions involving us.
We may issue the debt securities issued under the indenture as “discount securities,” which means they may be sold at a discount below their stated principal amount. These debt securities, as well as other debt securities that are not issued at a discount, may be issued with “original issue discount” (“OID”) for U.S. federal income tax purposes because of interest payment and other characteristics or terms of the debt securities. Material U.S. federal income tax considerations applicable to debt securities issued with OID will be described in more detail in the applicable prospectus supplement.
We will describe in the applicable prospectus supplement the terms of the series of debt securities being offered, including:
| ● | the title of the series of debt securities; | |
| ● | any limit upon the aggregate principal amount that may be issued; | |
| ● | the maturity date or dates; | |
| ● | the form of the debt securities of the series; | |
| ● | the applicability of any guarantees; | |
| ● | whether or not the debt securities will be secured or unsecured, and the terms of any secured debt; | |
| ● | whether the debt securities rank as senior debt, senior subordinated debt, or subordinated debt; |
| ● | if the price (expressed as a percentage of the aggregate principal amount thereof) at which such debt securities will be issued is a price other than the principal amount thereof, the portion of the principal amount thereof payable upon declaration of acceleration of the maturity thereof, or if applicable, the portion of the principal amount of such debt securities that is convertible into another security or the method by which any such portion shall be determined; | |
| ● | the interest rate or rates, which may be fixed or variable, or the method for determining the rate and the date interest will begin to accrue, the dates interest will be payable and the regular record dates for interest payment dates or the method for determining such dates; | |
| ● | our right, if any, to defer payment of interest and the maximum length of any such deferral period; | |
| ● | if applicable, the date or dates after which, or the period or periods during which, and the price or prices at which, we may, at our option, redeem the series of debt securities pursuant to any optional or provisional redemption provisions and the terms of those redemption provisions; | |
| ● | the date or dates, if any, on which, and the price or prices at which we are obligated, pursuant to any mandatory sinking fund, mandatory redemption or analogous provisions or otherwise, to repurchase, at the holder’s option, the series of debt securities; | |
| ● | the denominations in which we will issue the series of debt securities, if other than denominations of $1,000 and any integral multiple thereof; | |
| ● | any and all terms, if applicable, relating to any auction or remarketing of the debt securities of that series and any security for our obligations with respect to such debt securities and any other terms which may be advisable in connection with the marketing of debt securities of that series; | |
| ● | whether the debt securities of the series shall be issued in whole or in part in the form of a global security or securities; the terms and conditions, if any, upon which such global security or securities may be exchanged in whole or in part for other individual securities; and the depositary for such global security or securities; | |
| ● | if applicable, the provisions relating to conversion or exchange of any debt securities of the series and the terms and conditions upon which such debt securities will be so convertible or exchangeable, including the conversion or exchange price, as applicable, or how it will be calculated and may be adjusted, any mandatory or optional (at our option or the holders’ option) conversion or exchange features, the applicable conversion or exchange period and the manner of settlement for any conversion or exchange; | |
| ● | if other than the full principal amount thereof, the portion of the principal amount of debt securities of the series which shall be payable upon declaration of acceleration of the maturity thereof; | |
| ● | additions to or changes in the covenants applicable to the particular debt securities being issued, including, among others, the consolidation, merger or sale covenant; | |
| ● | additions to or changes in the events of default with respect to the securities and any change in the right of the trustee or the holders to declare the principal, premium, if any, and interest, if any, with respect to such securities to be due and payable; | |
| ● | additions to or changes in or deletions of the provisions relating to covenant defeasance and legal defeasance; | |
| ● | additions to or changes in the provisions relating to satisfaction and discharge of the indenture; | |
| ● | additions to or changes in the provisions relating to the modification of the indenture both with and without the consent of holders of debt securities issued under the indenture; | |
| ● | the currency or currencies, including composite currencies, in which payment of debt securities if other than U.S. dollars and the manner of determining the equivalent amount in U.S. dollars; | |
| ● | whether interest will be payable in cash or additional debt securities at our or the holders’ option and the terms and conditions upon which the election may be made; | |
| ● | the terms and conditions, if any, upon which we will pay amounts in addition to the stated interest, premium, if any, and principal amounts of the debt securities of the series to any holder that is not a “United States person” for federal tax purposes; | |
| ● | any restrictions on transfer, sale or assignment of the debt securities of the series; | |
| ● | any other specific terms, preferences, rights or limitations of, or restrictions on, the debt securities, any other additions or changes in the provisions of the applicable indenture, and any terms that may be required by us or advisable under applicable laws or regulations; and | |
| ● | the subordination terms of the debt securities of the series, if any. |
Conversion or Exchange Rights
We will set forth in the applicable prospectus supplement the terms on which a series of debt securities may be convertible into or exchangeable for shares of our common stock or our other securities. We will include provisions as to settlement upon conversion or exchange and whether conversion or exchange is mandatory, at the option of the holder or at our option. We may include provisions pursuant to which the number of shares of our common stock or our other securities that the holders of the series of debt securities receive would be subject to adjustment.
Consolidation, Merger or Sale
Unless we provide otherwise in the prospectus supplement applicable to a particular series of debt securities, the indenture will not contain any covenant that restricts our ability to merge or consolidate, or sell, convey, transfer or otherwise dispose of our assets as an entirety or substantially as an entirety. However, any successor to or acquirer of such assets (other than a subsidiary of ours) must assume all of our obligations under the indenture or the debt securities, as appropriate.
Events of Default under the Indenture
Unless we provide otherwise in the prospectus supplement applicable to a particular series of debt securities, the following are events of default under the indenture with respect to any series of debt securities that we may issue:
| ● | if we fail to pay any installment of interest on any series of debt securities, as and when the same shall become due and payable, and such default continues for a period of 90 days; provided, however, that a valid extension of an interest payment period by us in accordance with the terms of any indenture supplemental thereto shall not constitute a default in the payment of interest for this purpose; | |
| ● | if we fail to pay the principal of, or premium, if any, on any series of debt securities as and when the same shall become due and payable whether at maturity, upon redemption, by declaration or otherwise, or in any payment required by any sinking or analogous fund established with respect to such series; provided, however, that a valid extension of the maturity of such debt securities in accordance with the terms of any indenture supplemental thereto shall not constitute a default in the payment of principal or premium, if any; | |
| ● | if we fail to observe or perform any other covenant or agreement contained in the debt securities or the indenture, other than a covenant specifically relating to another series of debt securities, and our failure continues for 90 days after we receive written notice of such failure, requiring the same to be remedied and stating that such is a notice of default thereunder, from the trustee or holders of at least 25% in aggregate principal amount of the outstanding debt securities of the applicable series; and |
| ● | if specified events of bankruptcy, insolvency or reorganization occur. |
If an event of default with respect to debt securities of any series occurs and is continuing, other than an event of default specified in the last bullet point above, the trustee or the holders of at least 25% in aggregate principal amount of the outstanding debt securities of that series, by notice to us in writing, and to the trustee if notice is given by such holders, may declare the unpaid principal of, premium, if any, and accrued interest, if any, of such series of debt securities due and payable immediately. If an event of default specified in the last bullet point above occurs with respect to us, the principal amount of and accrued interest, if any, of each issue of debt securities then outstanding shall be due and payable without any notice or other action on the part of the trustee or any holder.
The holders of a majority in principal amount of the outstanding debt securities of an affected series may waive any default or event of default with respect to the series and its consequences, except defaults or events of default regarding payment of principal, premium, if any, or interest, unless we have cured the default or event of default in accordance with the indenture. Any waiver shall cure the default or event of default.
Subject to the terms of the indenture, if an event of default under an indenture shall occur and be continuing, the trustee will be under no obligation to exercise any of its rights or powers under such indenture at the request or direction of any of the holders of the applicable series of debt securities, unless such holders have offered the trustee reasonable indemnity. The holders of a majority in principal amount of the outstanding debt securities of any series will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the trustee, or exercising any trust or power conferred on the trustee, with respect to the debt securities of that series, provided that:
| ● | the direction so given by the holder is not in conflict with any law or the applicable indenture; and |
| ● | subject to its duties under the Trust Indenture Act, the trustee need not take any action that might involve it in personal liability or might be unduly prejudicial to the holders not involved in the proceeding. |
A holder of the debt securities of any series will have the right to institute a proceeding under the indenture or to appoint a receiver or trustee, or to seek other remedies only if:
| ● | the holder has given written notice to the trustee of a continuing event of default with respect to that series; |
| ● | the holders of at least 25% in aggregate principal amount of the outstanding debt securities of that series have made written request; |
| ● | such holders have offered to the trustee indemnity satisfactory to it against the costs, expenses and liabilities to be incurred by the trustee in compliance with the request; and |
| ● | the trustee does not institute the proceeding, and does not receive from the holders of a majority in aggregate principal amount of the outstanding debt securities of that series other conflicting directions within 90 days after the notice, request and offer. |
These limitations do not apply to a suit instituted by a holder of debt securities if we default in the payment of the principal, premium, if any, or interest on, the debt securities.
We will periodically file statements with the trustee regarding our compliance with specified covenants in the indenture.
Modification of Indenture; Waiver
Unless we provide otherwise in the prospectus supplement applicable to a particular series of debt securities, we and the trustee may change an indenture without the consent of any holders with respect to specific matters:
| ● | to cure any ambiguity, defect or inconsistency in the indenture or in the debt securities of any series; | |
| ● | to comply with the provisions described above under “Description of Debt Securities-Consolidation, Merger or Sale; | |
| ● | to provide for uncertificated debt securities in addition to or in place of certificated debt securities; | |
| ● | to add to our covenants, restrictions, conditions or provisions such new covenants, restrictions, conditions or provisions for the benefit of the holders of all or any series of debt securities, to make the occurrence, or the occurrence and the continuance, of a default in any such additional covenants, restrictions, conditions or provisions an event of default or to surrender any right or power conferred upon us in the indenture; | |
| ● | to add to, delete from or revise the conditions, limitations, and restrictions on the authorized amount, terms, or purposes of issue, authentication and delivery of debt securities, as set forth in the indenture; | |
| ● | to make any change that does not adversely affect the interests of any holder of debt securities of any series in any material respect; | |
| ● | to provide for the issuance of and establish the form and terms and conditions of the debt securities of any series as provided above under “Description of Debt Securities-General” to establish the form of any certifications required to be furnished pursuant to the terms of the indenture or any series of debt securities, or to add to the rights of the holders of any series of debt securities; | |
| ● | to evidence and provide for the acceptance of appointment under any indenture by a successor trustee; or | |
| ● | to comply with any requirements of the SEC in connection with the qualification of any indenture under the Trust Indenture Act. |
In addition, under the indenture, the rights of holders of a series of debt securities may be changed by us and the trustee with the written consent of the holders of at least a majority in aggregate principal amount of the outstanding debt securities of each series that is affected. However, unless we provide otherwise in the prospectus supplement applicable to a particular series of debt securities, we and the trustee may make the following changes only with the consent of each holder of any outstanding debt securities affected:
| ● | extending the fixed maturity of any debt securities of any series; |
| ● | reducing the principal amount, reducing the rate of or extending the time of payment of interest, or reducing any premium payable upon the redemption of any series of any debt securities; or |
| ● | reducing the percentage of debt securities, the holders of which are required to consent to any amendment, supplement, modification or waiver. |
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Discharge
The indenture provides that we can elect to be discharged from our obligations with respect to one or more series of debt securities, except for specified obligations, including obligations to:
| ● | provide for payment; |
| ● | register the transfer or exchange of debt securities of the series; |
| ● | replace stolen, lost or mutilated debt securities of the series; |
| ● | pay principal of and premium and interest on any debt securities of the series; |
| ● | maintain paying agencies; |
| ● | hold monies for payment in trust; |
| ● | recover excess money held by the trustee; |
| ● | compensate and indemnify the trustee; and |
| ● | appoint any successor trustee. |
In order to exercise our rights to be discharged, we must deposit with the trustee money or government obligations sufficient to pay all the principal of, any premium, if any, and interest on, the debt securities of the series on the dates payments are due.
Form, Exchange, and Transfer
We will issue the debt securities of each series only in fully registered form without coupons and, unless we provide otherwise in the applicable prospectus supplement, in denominations of $1,000 and any integral multiple thereof. The indenture provides that we may issue debt securities of a series in temporary or permanent global form and as book-entry securities that will be deposited with, or on behalf of, The Depository Trust Company, or DTC, or another depositary named by us and identified in the applicable prospectus supplement with respect to that series. To the extent the debt securities of a series are issued in global form and as book-entry, a description of terms relating to any book-entry securities will be set forth in the applicable prospectus supplement. To the extent the debt securities of a series are issued in global form and as book-entry, a description of terms relating to any book-entry securities will be set forth in the applicable prospectus supplement.
At the option of the holder, subject to the terms of the indenture and the limitations applicable to global securities described in the applicable prospectus supplement, the holder of the debt securities of any series can exchange the debt securities for other debt securities of the same series, in any authorized denomination and of like tenor and aggregate principal amount.
Subject to the terms of the indenture and the limitations applicable to global securities set forth in the applicable prospectus supplement, holders of the debt securities may present the debt securities for exchange or for registration of transfer, duly endorsed or with the form of transfer endorsed thereon duly executed if so required by us or the security registrar, at the office of the security registrar or at the office of any transfer agent designated by us for this purpose. Unless otherwise provided in the debt securities that the holder presents for transfer or exchange, we will impose no service charge for any registration of transfer or exchange, but we may require payment of any taxes or other governmental charges.
We will name in the applicable prospectus supplement the security registrar, and any transfer agent in addition to the security registrar, that we initially designate for any debt securities. We may at any time designate additional transfer agents or rescind the designation of any transfer agent or approve a change in the office through which any transfer agent acts, except that we will be required to maintain a transfer agent in each place of payment for the debt securities of each series.
If we elect to redeem the debt securities of any series, we will not be required to:
| ● | issue, register the transfer of, or exchange any debt securities of that series during a period beginning at the opening of business 15 days before the day of mailing of a notice of redemption of any debt securities that may be selected for redemption and ending at the close of business on the day of the mailing; or |
| ● | register the transfer of or exchange of any debt securities so selected for redemption, in whole or in part, except the unredeemed portion of any debt securities we are redeeming in part. |
Information Concerning the Trustee
The trustee, other than during the occurrence and continuance of an event of default under an indenture, undertakes to perform only those duties as are specifically set forth in the applicable indenture. Upon an event of default under an indenture, the trustee must use the same degree of care as a prudent person would exercise or use in the conduct of his or her own affairs. Subject to this provision, the trustee is under no obligation to exercise any of the powers given it by the indenture at the request of any holder of debt securities unless it is offered reasonable security and indemnity against the costs, expenses and liabilities that it might incur.
Payment and Paying Agents
Unless we otherwise indicate in the applicable prospectus supplement, we will make payment of the interest on any debt securities on any interest payment date to the person in whose name the debt securities, or one or more predecessor securities, are registered at the close of business on the regular record date for the interest.
We will pay principal of and any premium and interest on the debt securities of a particular series at the office of the paying agents designated by us, except that unless we otherwise indicate in the applicable prospectus supplement, we will make interest payments by check that we will mail to the holder or by wire transfer to certain holders. Unless we otherwise indicate in the applicable prospectus supplement, we will designate the corporate trust office of the trustee as our sole paying agent for payments with respect to debt securities of each series. We will name in the applicable prospectus supplement any other paying agents that we initially designate for the debt securities of a particular series. We will maintain a paying agent in each place of payment for the debt securities of a particular series.
All money we pay to a paying agent or the trustee for the payment of the principal of or any premium or interest on any debt securities that remains unclaimed at the end of two years after such principal, premium or interest has become due and payable will be repaid to us, and the holder of the debt security thereafter may look only to us for payment thereof.
Governing Law
The indenture and the debt securities, and any claim, controversy or dispute arising under or related to the indenture or the debt securities, will be governed by and construed in accordance with the laws of the State of New York, except to the extent that the Trust Indenture Act is applicable.
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The following description, together with the additional information we may include in any applicable prospectus supplements and free writing prospectuses, summarizes the material terms and provisions of the warrants that we may offer under this prospectus, which may consist of warrants to purchase common stock, or preferred stock or debt securities and may be issued in one or more series. Warrants may be offered independently or together with shares of common stock, orshares of preferred stock or debt securities offered by any prospectus supplement, and may be attached to or separate from those securities. While the terms we have summarized below will apply generally to any warrants that we may offer under this prospectus, we will describe the particular terms of any series of warrants that we may offer in more detail in the applicable prospectus supplement and any applicable free writing prospectus. The terms of any warrants offered under a prospectus supplement may differ from the terms described below. However, no prospectus supplement will fundamentally change the terms that are set forth in this prospectus or offer a security that is not registered and described in this prospectus at the time of its effectiveness.
We will issue the warrants under a warrant agreement that we will enter into with a warrant agent to be selected by us. The warrant agent will act solely as an agent of ours in connection with the warrants and will not act as an agent for the holders or beneficial owners of the warrants. We will file as exhibits to the registration statement of which this prospectus is a part, or will incorporate by reference from a current report on Form 8-K that we file with the SEC, the form of warrant document or agreement including a form of warrant certificate, that describes the terms of the particular series of warrants we are offering before the issuance of the related series of warrants. The following summaries of material provisions of the warrants and the warrant agreements are subject to, and qualified in their entirety by reference to, all the provisions of the warrant document or agreement and warrant certificate applicable to a particular series of warrants. We urge you to read the applicable prospectus supplement and any applicable free writing prospectus related to the particular series of warrants that we sell under this prospectus, as well as the complete warrant agreements and warrant certificatesdocument or agreement that contain the terms of the warrants.
General
We will describe in the applicable prospectus supplement the terms relating to a series ofthe warrants, including:including, if applicable:
| ● | the offering price and aggregate number of warrants offered; | |
| ● | the currency for which the warrants may be purchased; | |
| ● | if applicable, the designation and terms of the securities with which the warrants are issued and the number of warrants issued with each such security or each principal amount of such security; | |
| ● | if applicable, the date on and after which the warrants and the related securities will be separately transferable; |
| ● | in the case of warrants to purchase debt securities, the principal amount of debt securities purchasable upon exercise of one warrant and the price at, and currency in which, this principal amount of debt securities may be purchased upon such exercise; |
| ● | in the case of warrants to purchase common stock or preferred stock, the number of shares of common stock or preferred stock, as the case may be, purchasable upon the exercise of one warrant and the price at which these shares may be purchased upon such exercise; | |
| ● | the effect of any merger, consolidation, sale or other disposition of our business on the warrant agreements and the warrants; | |
| ● | the terms of any rights to redeem or call the warrants; | |
| ● | any provisions for changes to or adjustments in the exercise price or number of securities issuable upon exercise of the warrants; | |
| ● | the dates on which the right to exercise the warrants will commence and expire; | |
| ● | the manner in which the warrant agreements and warrants may be modified; | |
| ● | material United States federal income tax consequences of holding or exercising the warrants; | |
| ● | the terms of the securities issuable upon exercise of the warrants; and | |
| ● | any other specific terms, preferences, rights or limitations of or restrictions on the warrants. |
Before exercising their warrants, holders of warrants will not have any of the rights of holders of the securities purchasable upon such exercise, including, in the case of warrants to purchase common stock or preferred stock, the right to receive dividends, if any, or, payments upon our liquidation, dissolution or winding up or to exercise voting rights, if anyincluding:
| ● | in the case of warrants to purchase debt securities, the right to receive payments of principal of, or premium, if any, or interest on, the debt securities purchasable upon exercise or to enforce covenants in the applicable indenture; or |
| ● | in the case of warrants to purchase common stock or preferred stock, the right to receive dividends, if any, or, payments upon our liquidation, dissolution or winding up or to exercise voting rights, if any. |
Exercise of Warrants
Each warrant will entitle the holder to purchase the securities that we specify in the applicable prospectus supplement at the exercise price that we describe in the applicable prospectus supplement. Unless we otherwise specify in the applicable prospectus supplement, holders of the warrants may exercise the warrants at any time up to the specified time on the expiration date that we set forth in the applicable prospectus supplement. After the close of business on the expiration date, unexercised warrants will become void.
Holders of the warrants may exercise the warrants by delivering the warrant certificate representing the warrants to be exercised together with specified information, and paying the required amount to the warrant agent in immediately available funds, as provided in the applicable prospectus supplement. We will set forth on the reverse side ofin the warrant certificateagreement or documents and in the applicable prospectus supplement the information that the holder of the warrant will be required to deliver to the warrant agent.
Upon receipt of the required payment and the warrant certificatedocuments properly completed and duly executed at the corporate trust office of the warrant agent or any other office indicated in the applicable prospectus supplement, we will issue and deliver the securities purchasable upon such exercise. If fewer than all of the warrants represented by the warrant certificate are exercised, then we will issue a new warrant certificate for the remaining amount of warrants. If we so indicate in the applicable prospectus supplement, holders of the warrants may surrender securities as all or part of the exercise price for warrants.
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Enforceability
We may issue rights to purchase shares of our common stock, shares of our preferred stock, or warrants in one or more series. Rights may be issued independently or together with any other offered security and may or may not be transferable by Holdersthe person purchasing or receiving the subscription rights. In connection with any rights offering to our shareholders, we may enter into a standby underwriting arrangement with one or more underwriters pursuant to which the underwriters will purchase any of Warrantsthe offered securities remaining unsubscribed after the expiration of the rights offering. In connection with a rights offering to our shareholders, we will distribute certificates evidencing the rights and an applicable prospectus supplement to our shareholders on the record date that we set for receiving rights in the rights offering. An applicable prospectus supplement will describe the following terms of rights in respect of which this prospectus is being delivered:
| ● | the title of the rights; |
| ● | the securities for which the rights are exercisable; |
| ● | the exercise price for the rights; |
| ● | the date of determining the security holders entitled to the rights distribution; |
| ● | the number of the rights issued to each security holder; |
| ● | the extent to which the rights are transferable; |
| ● | if applicable, a discussion of the material United States federal income tax considerations applicable to the issuance or exercise of the rights; |
| ● | the date on which the right to exercise the rights shall commence, and the date on which the rights shall expire (subject to any extension); |
| ● | the conditions to completion of the rights offering; |
| ● | any provisions for changes to or adjustments in the exercise price or number of securities issuable upon exercise of the rights; |
| ● | the extent to which the rights include an over-subscription privilege with respect to unsubscribed securities; |
| ● | if applicable, the material terms of any standby underwriting or other purchase arrangement that we may enter into in connection with the rights offering; and |
| ● | any other terms of the rights, including terms, procedures and limitations relating to the exchange and exercise of the rights. |
Each warrantright will entitle the holder to purchase for cash the amount of securities, at the exercise price. Rights may be exercised at any time up to the close of business on the expiration date of the rights. After the close of business on the expiration date, all unexercised rights will become void. The manner in which rights may be exercised will be described in an applicable prospectus supplement. We may, but we will not be required to, permit the exercise of rights through the delivery of a notice of guaranteed delivery from a bank, a trust company, or a New York Stock Exchange member guaranteeing delivery of (1) payment of the exercise price for the securities for which the rights are being exercised, and (2) a properly completed and executed rights certificate. The notice of guaranteed delivery must be received by the rights agent before the expiration of the rights, and the rights agent will act solely as ournot honor a notice of guaranteed delivery unless a properly completed and executed rights certificate and full payment for the securities being purchased are received by the rights agent underby the close of business on the third business day after the expiration time of the rights. Upon receipt of payment and the proper completion and due execution of the rights certificate at the designated office of the rights agent or any other office indicated in an applicable warrant agreement and will not assume any obligationprospectus supplement, we or relationship of agency or trust with any holder of any warrant. A single bank or trust company may act as warrant agent for more than one issue of warrants. A warrantthe transfer agent will have no duty or responsibility in case of any default by us underforward, as soon as practicable, the applicable warrant agreement or warrant, including any duty or responsibility to initiate any proceedings at law or otherwise, or to make any demand upon us. Any holder of a warrant may, withoutsecurities purchased through the consentexercise of the related warrant agentrights. We may determine to offer any unsubscribed offered securities directly to persons other than shareholders, to or through agents, underwriters or dealers or through a combination of the holder of any other warrant, enforce by appropriate legal action its rightmethods, including pursuant to exercise, and receive the securities purchasable upon exercise of, its warrants.standby underwriting arrangements, as set forth in an applicable prospectus supplement.
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The following description, together with the additional information we may include in any applicable prospectus supplements, and free writing prospectuses, summarizes the material terms and provisions of the units that we may offer under this prospectus.
While the terms we have summarized below will apply generally to any units that we may offer under this prospectus, we will describe the particular terms of any series of units in more detail in the applicable prospectus supplement. The terms of any units offered under a prospectus supplement may differ from the terms described below. However, no prospectus supplement will fundamentally change the terms that are set forth in this prospectus or offer a security that is not registered and described in this prospectus at the time of its effectiveness.
We will file as exhibits to the registration statement of which this prospectus is a part, or will incorporate by reference from a current report on Form 8-K that we file with the SEC, the form of unit agreement that describes the terms of the series of units we are offering, and any supplemental agreements, before the issuance of the related series of units. The following summaries of material terms and provisions of the units are subject to, and qualified in their entirety by reference to, all the provisions of the unit agreement and any supplemental agreements applicable to a particular series of units. We urge you to read the applicable prospectus supplements related to the particular series of units that we sell under this prospectus, as well as the complete unit agreement and any supplemental agreements that contain the terms of the units.
General
We may issue units comprised of one or more debt securities, shares of common stock, shares of preferred stock and warrants in any combination. Each unit will be issued so that the holder of the unit is also the holder of each security included in the unit. Thus, the holder of a unit will have the rights and obligations of a holder of each included security. The unit agreement under which a unit is issued may provide that the securities included in the unit may not be held or transferred separately, at any time or at any time before a specified date.
We will describe in the applicable prospectus supplement the terms of the series of units, including:
| ● | the designation and terms of the units and of the securities comprising the units, including whether and under what circumstances those securities may be held or transferred separately; | |
| ● | any provisions of the governing unit agreement that differ from those described below; and | |
| ● | any provisions for the issuance, payment, settlement, transfer or exchange of the units or of the securities comprising the units. |
The provisions described in this section, as well as those described under “Description of Capital Stock,” “Description of Debt Securities” and “Description of Warrants” will apply to each unit and to any shares of common stock, shares of preferred stock, debt security or warrant included in each unit, respectively.
Issuance in Series
We may issue units in such amounts and in numerous distinct series as we determine.
Enforceability of Rights by Holders of Units
Each unit agent will act solely as our agent under the applicable unit agreement and will not assume any obligation or relationship of agency or trust with any holder of any unit. A single bank or trust company may act as unit agent for more than one series of units. A unit agent will have no duty or responsibility in case of any default by us under the applicable unit agreement or unit, including any duty or responsibility to initiate any proceedings at law or otherwise, or to make any demand upon us. Any holder of a unit may, without the consent of the related unit agent or the holder of any other unit, enforce by appropriate legal action its rights as holder under any security included in the unit.
We, the unit agents, and any of their agents may treat the registered holder of any unit certificate as an absolute owner of the units evidenced by that certificate for any purpose and as the person entitled to exercise the rights attaching to the units so requested, despite any notice to the contrary. See “Legal
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General
Each debt security, warrant, and unit will be represented either by a certificate issued in definitive form to a particular purchaser or by one or more global securities representing the entire issuance of securities. Unless the applicable prospectus supplement, information incorporated by reference or free writing prospectus provides otherwise, certificated securities in definitive form and global securities will be issued in registered form. Definitive securities name you or your nominee as the owner of the security, and in order to transfer or exchange these securities or to receive payments other than interest or other interim payments, you or your nominee must physically deliver the securities to the trustee, registrar, paying agent or other agent, as applicable. Global securities name a depositary or its nominee as the owner of the debt securities, warrants or units represented by these global securities. The depositary maintains a computerized system that will reflect each purchaser’s beneficial ownership of the securities through an account maintained by the purchaser with its broker/dealer, bank, trust company or other representative, as we explain more fully below.
Registered Global Securities
We may issue the registered debt securities, warrants or units in the form of one or more fully registered global securities, bearing all applicable legends, to be deposited with and registered in the name of a depositary or its nominee identified in the applicable prospectus supplement, information incorporated by reference or free writing prospectus. In those cases, one or more registered global securities will be issued in a denomination or aggregate denominations equal to the portion of the aggregate principal or face amount of the securities to be represented by registered global securities. Unless and until it is exchanged in whole for certificated securities in definitive registered form, a registered global security may not be transferred except as a whole by and among the depositary for the registered global security, the nominees of the depositary or any successors of the depositary or those nominees.
If not described below, any specific terms of the depositary arrangement with respect to any securities to be represented by a registered global security will be described in the prospectus supplement, information incorporated by reference or free writing prospectus relating to those securities. We anticipate that the following provisions will apply to all depositary arrangements.
Ownership of Securities.beneficial interests in a registered global security will be limited to persons, called participants, that have accounts with the depositary or persons that may hold interests through participants. Upon the issuance of a registered global security, the depositary will credit, on its book-entry registration and transfer system, the participants’ global accounts with the respective principal or face amounts of the securities beneficially owned by the participants. Any dealers, underwriters or agents participating in the distribution of the securities will designate the accounts to be credited. Ownership of beneficial interests in a registered global security will be shown on, and the transfer of ownership interests will be effected only through, records maintained by the depositary, with respect to interests of participants, and on the records of participants, with respect to interests of persons holding through participants. The laws of some jurisdictions may require that some purchasers of securities take physical delivery of these securities in definitive form. These laws may impair such purchasers’ global abilities to own, transfer or pledge beneficial interests in registered global securities.
So long as the depositary, or its nominee, is the registered owner of a registered global security, that depositary or its nominee, as the case may be, will be considered the sole owner or holder of the securities represented by the registered global security for all purposes under the applicable indenture, warrant agreement or unit agreement. Except as described below, owners of beneficial interests in a registered global security will not be entitled to have the securities represented by the registered global security registered in their names, will not receive or be entitled to receive physical delivery of the securities in definitive form and will not be considered the owners or holders of the securities under the applicable indenture, warrant agreement or unit agreement. Accordingly, each person owning a beneficial interest in a registered global security must rely on the procedures of the depositary for that registered global security and, if that person is not a participant, on the procedures of the participant through which the person owns its interest, to exercise any rights of a holder under the applicable indenture, warrant agreement or unit agreement. These procedures may change from time to time. We understand that, under existing industry practices, if we request any action of holders or if an owner of a beneficial interest in a registered global security desires to give or take any action that a holder is entitled to give or take under the applicable indenture, warrant agreement or unit agreement, the depositary for the registered global security would authorize the participants holding the relevant beneficial interests to give or take that action, and the participants would authorize beneficial owners owning through them to give or take that action or would otherwise act upon the instructions of beneficial owners holding through them.
Principal, premium, if any, on and interest payments on debt securities, and any payments to holders with respect to warrants or units, represented by a registered global security registered in the name of a depositary or its nominee will be made to the depositary or its nominee, as the case may be, as the registered owner of the registered global security. None of us, the trustees, the warrant agents, the unit agents or any other agent of ours, agent of the trustees or agent of the warrant agents or the unit agents will have any responsibility or liability for any aspect of the records relating to payments made on account of beneficial ownership interests in the registered global security or for maintaining, supervising or reviewing any records relating to those beneficial ownership interests.
We expect that the depositary for any of the securities represented by a registered global security, upon receipt of any payment of principal, premium, interest or other distribution of underlying securities or other property to holders on that registered global security, will immediately credit participants’ accounts in amounts proportionate to their respective beneficial interests in that registered global security as shown on the records of the depositary. We also expect that payments by participants to owners of beneficial interests in a registered global security held through participants will be governed by standing customer instructions and customary practices, as is now the case with the securities held for the accounts of customers or registered in “street name,” and will be the responsibility of those participants.
If the depositary for any of the securities represented by a registered global security is at any time unwilling or unable to continue as depositary or ceases to be qualified to serve as a depositary, and a qualified successor depositary is not appointed by us within 90 days, we will issue certificated securities in definitive form in exchange for the registered global security that had been held by the depositary. Any securities issued in definitive form in exchange for a registered global security will be registered in the name or names that the depositary gives to the relevant trustee, warrant agent or unit agent or other relevant agent of ours or theirs. It is expected that the depositary’s instructions will be based upon directions received by the depositary from participants with respect to ownership of beneficial interests in the registered global security that had been held by the depositary.
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We may sell the securities offered through this prospectus (1) to or through underwriters or dealers, (2) directly to purchasers, including our affiliates, (3) through agents, including ordinary brokerage transactions, block trades, placements, “at the market” transactions, put or call transactions or in any other way not involving market makers or established trading markets, (4) through a combination of any of these methods, or (5) through any other methods described in a prospectus supplement. The securities may be distributed at a fixed price or prices, which may be changed, at market prices prevailing at the time of sale, at prices related to the prevailing market prices, or at negotiated prices. Any prospectus supplement will include, to the extent applicable, the following information:
| ● | the terms of the offering; | |
| ● | the names of any underwriters or agents; | |
| ● | the name or names of any managing underwriter or underwriters; | |
| ● | the purchase price of the securities; | |
| ● | the net proceeds from the sale of the securities; | |
| ● | any delayed delivery arrangements; | |
| ● | any underwriting discounts, commissions and other items constituting underwriters’ compensation; | |
| ● | any initial public offering price; | |
| ● | any discounts or concessions allowed or reallowed or paid to dealers; and | |
| ● | any commissions paid to agents. |
We may engage in at the market offerings into an existing trading market in accordance with Rule 415(a)(4). Any at the market offering will be through an underwriter or underwriters acting as principal or agent for us.
Under Rule 15c6-1 of the Exchange Act, trades in the secondary market generally are currently required to settle in two business days, unless the parties to any such trade expressly agree otherwise. The applicable prospectus supplement may provide that the original issue date for your securities may be more than two scheduled business days after the trade date for your securities. Accordingly, in such a case, if you wish to trade securities on any date prior to the second business day before the original issue date for your securities, you will be required, by virtue of the fact that your securities initially are expected to settle in more than two scheduled business days after the trade date for your securities, to make alternative settlement arrangements to prevent a failed settlement.
We may issue to the holders of our common stock, on a pro rata basis for no consideration, subscription rights to purchase shares of common stock, shares of preferred stock, or debt securities. These subscription rights may or may not be transferable by stockholders. The applicable prospectus supplement will describe the specific terms of any offering of our common or preferred stock through the issuance of subscription rights, including the terms of the subscription rights offering, the terms, procedures and limitations relating to the exchange and exercise of the subscription rights and, if applicable, the material terms of any standby underwriting or purchase arrangement entered into by us in connection with the offering of common or preferred stock through the issuance of subscription rights.
Sales through Underwriters or Dealers
If underwriters are used in the sale, the underwriters will acquire the securities for their own account, including through underwriting, purchase, security lending or repurchase agreements with us. The underwriters may resell the securities from time to time in one or more transactions, including negotiated transactions. Underwriters may sell the securities in order to facilitate transactions in any of our other securities (described in this prospectus or otherwise), including other public or private transactions and short sales. Underwriters may offer securities to the public either through underwriting syndicates represented by one or more managing underwriters or directly by one or more firms acting as underwriters. Unless otherwise indicated in the prospectus supplement, the obligations of the underwriters to purchase the securities will be subject to certain conditions, and the underwriters will be obligated to purchase all the offered securities if they purchase any of them. The underwriters may change from time to time any initial public offering price and any discounts or concessions allowed or reallowed or paid to dealers. The prospectus supplement will include the names of the principal underwriters, the respective amount of securities underwritten, the nature of the obligation of the underwriters to take the securities and the nature of any material relationship between an underwriter and us.
Some or all of the securities that we offer through this prospectus may be new issues of securities with no established trading market. Any underwriters to whom we sell securities for public offering and sale may make a market in those securities, but they will not be obligated to do so and they may discontinue any market making at any time without notice. Accordingly, we cannot assure you of the liquidity of, or continued trading markets for, any securities offered pursuant to this prospectus.
If dealers are used in the sale of securities offered through this prospectus, we will sell the securities to them as principals. They may then resell those securities to the public at varying prices determined by the dealers at the time of resale. The prospectus supplement will include the names of the dealers and the terms of the transaction.
Direct Sales and Sales through Agents
We may sell the securities offered through this prospectus directly. In this case, no underwriters or agents would be involved.
Securities may also be sold through agents designated from time to time. Any required prospectus supplement will name any agent involved in the offer or sale of the offered securities and will describe any commissions payable to the agent by us. Unless otherwise indicated in such prospectus supplement, any agent will agree to use its reasonable best efforts to solicit purchases for the period of its appointment.
We may sell the securities directly to institutional investors or others who may be deemed to be underwriters within the meaning of the Securities Act with respect to any sale of those securities. The terms of any such sales will be described in any required prospectus supplement.
Delayed Delivery Contracts
If the applicable prospectus supplement indicates, we may authorize agents, underwriters or dealers to solicit offers from certain types of institutions to purchase securities at the public offering price under delayed delivery contracts. These contracts would provide for payment and delivery on a specified date in the future. The contracts would be subject only to those conditions described in the prospectus supplement. The applicable prospectus supplement will describe the commission payable for solicitation of those contracts.
Market Making, Stabilization and Other Transactions
Unless the applicable prospectus supplement states otherwise, all securities we may offer, other than common stock, will be new issues of securities with no established trading market. We may elect to list any series of offered securities on an exchange. Any underwriters that we use in the sale of such offered securities may make a market in such securities, but may discontinue such market making at any time without notice. Accordingly, we cannot assure you that the securities will have a liquid trading market.
Any underwriter engaged by us may also engage in stabilizing transactions, syndicate covering transactions and penalty bids in accordance with Rule 104 under the Exchange Act. Stabilizing transactions involve bids to purchase the underlying security in the open market for the purpose of pegging, fixing or maintaining the price of the securities. Syndicate covering transactions involve purchases of the securities in the open market after the distribution has been completed in order to cover syndicate short positions.
Penalty bids permit the underwriters to reclaim a selling concession from a syndicate member when the securities originally sold by the syndicate member are purchased in a syndicate covering transaction to cover syndicate short positions. Stabilizing transactions, syndicate covering transactions and penalty bids may cause the price of the securities to be higher than it would be in the absence of the transactions. The underwriters may, if they commence these transactions, discontinue them at any time.
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Derivative Transactions and Hedging
We, the underwriters or other agents may engage in derivative transactions involving the securities. These derivatives may consist of short sale transactions and other hedging activities. The underwriters or agents may acquire a long or short position in the securities, hold or resell securities acquired and purchase options or futures on the securities and other derivative instruments with returns linked to or related to changes in the price of the securities. In order to facilitate these derivative transactions, we may enter into security lending or repurchase agreements with the underwriters or agents. The underwriters or agents may effect the derivative transactions through sales of the securities to the public, including short sales, or by lending the securities in order to facilitate short sale transactions by others. The underwriters or agents may also use the securities purchased or borrowed from us or others (or, in the case of derivatives, securities received from us in settlement of those derivatives) to directly or indirectly settle sales of the securities or close out any related open borrowings of the securities.
Electronic Auctions
We may also make sales through the Internet or through other electronic means. Since we may from time to time elect to offer securities directly to the public, with or without the involvement of agents, underwriters or dealers, utilizing the Internet or other forms of electronic bidding or ordering systems for the pricing and allocation of such securities, you should pay particular attention to the description of that system we may provide in any prospectus supplement.
Such electronic system may allow bidders to directly participate, through electronic access to an auction site, by submitting conditional offers to buy that are subject to acceptance by us, and which may directly affect the price or other terms and conditions at which such securities are sold. These bidding or ordering systems may present to each bidder, on a so-called “real-time” basis, relevant information to assist in making a bid, such as the clearing spread at which the offering would be sold, based on the bids submitted, and whether a bidder’s individual bids would be accepted, prorated or rejected. For example, in the case of a debt security, the clearing spread could be indicated as a number of “basis points” above an index treasury note. Of course, many pricing methods can and may also be used.
Upon completion of such an electronic auction process, securities will be allocated based on prices bid, terms of bid or other factors. The final offering price at which securities would be sold and the allocation of securities among bidders would be based in whole or in part on the results of the Internet or other electronic bidding process or auction.
General Information
Agents, underwriters and dealers may be entitled, under agreements entered into with us, to indemnification by us against certain liabilities, including liabilities under the Securities Act. Agents, underwriters and dealers may engage in transactions with or perform services for us in the ordinary course of their businesses.
Our common stock is listed on the Nasdaq Capital Market under the symbol “CODX”.
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Dorsey & Whitney LLP, Salt Lake City, Utah will pass for us upon the validity of the securities being offered by this prospectus and applicable prospectus supplement, and counsel named in the applicable prospectus supplement will pass upon legal matters for any underwriters, dealers or agents.
The consolidated financial statements of Co-Diagnostics, Inc., incorporated by reference herein incorporated by reference in this prospectus, have been audited by Haynie & Company, an independent registered public accounting firm, as stated in their report. Such financial statements are incorporated by reference in reliance upon the report of such firm, given their authority as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the information requirements of the Exchange Act and, in accordance therewith, file annual, quarterly and current reports, proxy statements and other information with the SEC. These documents may be accessed through the SEC’s electronic data gathering, analysis and retrieval system via electronic means, including the SEC’s home page on the Internet (www.sec.gov). Copies of certain information filed by us with the SEC are also available on our website at www.carparts.com/investor. The information contained on our website is not incorporated by reference into this prospectus and, therefore, is not part of this prospectus or any accompanying prospectus supplement.
This prospectus is part of a registration statement on Form S-3 that we have filed with the SEC under the Securities Act. Certain information in the registration statement has been omitted from this prospectus in accordance with SEC rules and regulations. For more detail about us and any securities that may be offered by this prospectus, you may examine the registration statement on Form S-3 and the exhibits filed with it at the locations listed in the previous paragraph. Please be aware that statements in this prospectus referring to a contract or other document are summaries and you should refer to the exhibits that are part of the registration statement for a copy of the contract or document.
The SEC allows us to “incorporate by reference” information that we file with it into this prospectus, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is an important part of this prospectus. The information incorporated by reference is considered to be a part of this prospectus, and information that we file later with the SEC will automatically update and supersede information contained in this prospectus and any accompanying prospectus supplement. We incorporate by reference the documents listed below that we have previously filed with the SEC:
| ● | our Annual Report on Form 10-K for the year ended December 31, 2022; and | |
| ● | the description of our common stock, which is contained in the Registration Statement on Form 8-A, as filed with the SEC on July 11, 2017, as updated by the description of our common stock contained in Exhibit 4.1 to our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, including any amendment or report filed for the purpose of updating such description. |
We also incorporate by reference into this prospectus additional documents that we may file with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, excluding, in each case, information deemed furnished and not filed, until we sell all of the securities we are offering or the termination of the offering. All reports and other documents filed by us pursuant to the Exchange Act after the date of the initial registration statement and prior to effectiveness of the registration statement shall be deemed to be incorporated by reference into this prospectus. Any statements contained in a previously filed document incorporated by reference into this prospectus is deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained in this prospectus, or in a subsequently filed document also incorporated by reference herein, modifies or supersedes that statement.
We will provide to each person, including any beneficial owner, to whom a prospectus is delivered, without charge upon written or oral request, a copy of any or all of the information that has been incorporated by reference into this prospectus but not delivered with the prospectus, including exhibits that are specifically incorporated by reference into such documents. Requests should be directed to: Corporate Secretary, Co-Diagnostics, Inc., 2401 S Foothill Drive, Suite D, Salt Lake City, UT 84109 and our telephone number is (801) 438-1036.
$150,000,000
Common Stock,
Preferred Stock,
Debt Securities,
Warrants,
Units and Rights
PROSPECTUS
____________, 2023
The information in this prospectus is not complete and may be changed. We may not sell these securities or accept an offer to buy these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities, and it is not soliciting offers to buy these securities in any state where such offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED March 16, 2023
PROSPECTUS
Up to $50,000,000
Common Stock
We have entered into an equity distribution agreement (the “Equity Distribution Agreement”) with Piper Sandler & Co. (“Piper Sandler”), relating to shares of our common stock offered by this prospectus. In accordance with the terms of the Equity Distribution Agreement, pursuant to this prospectus, we may offer and sell shares of our common stock, $0.001 par value, having an aggregate offering price of up to $50,000,000 from time to time through Piper Sandler acting as our agent.
Our common stock is listed on the Nasdaq Capital Market LLC under the symbol “CODX.” On March 15, 2023, the last reported sale price of our common stock was $2.91 per share.
Sales of our common stock, if any, under this prospectus will be made in sales deemed to be “at the market offerings” as defined in Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended, or (the “Securities Act”). Piper Sandler is not required to sell any specific number or dollar amount of shares of our common stock, but as instructed by us will act as our agent on a best efforts basis and will use commercially reasonable efforts to sell on our behalf all of the shares of common stock requested to be sold by us, consistent with its normal trading and sales practices and applicable laws and regulations, subject to the terms and conditions of the Equity Distribution Agreement, on mutually agreed terms between Piper Sandler and us. There is no arrangement for funds to be received in any escrow, trust or similar arrangement. The offering of shares of our common stock pursuant to the Equity Distribution Agreement will terminate upon the earlier of (1) the sale of shares of our common stock pursuant to this prospectus supplement having an aggregate sales price of $50,000,000 and (2) the termination by us or Piper Sandler of the Equity Distribution Agreement pursuant to its terms. We provide more information about how the common stock will be sold in the section entitled “Plan of Distribution.”
Piper Sandler will be entitled to compensation at a commission rate of up to 3.0% of the gross proceeds of any shares of common stock sold pursuant to the Equity Distribution Agreement. See “Plan of Distribution” for additional information regarding compensation to be paid to Piper Sandler. In connection with the sale of the common stock on our behalf, Piper Sandler will be deemed to be an “underwriter” within the meaning of the Securities Act and the compensation of Piper Sandler will be deemed to be underwriting commissions or discounts. We have also agreed to provide indemnification and contribution to Piper Sandler with respect to certain liabilities, including liabilities under the Securities Act and the Exchange Act of 1934, as amended (the “Exchange Act”).
INVESTING IN OUR SECURITIES INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD REVIEW CAREFULLY THE RISKS AND UNCERTAINTIES REFERENCED UNDER THE HEADING “RISK FACTORS” ON PAGE 6 OF THIS PROSPECTUS AS WELL AS THOSE CONTAINED IN ANY RELATED FREE WRITING PROSPECTUS, AND IN THE OTHER DOCUMENTS THAT ARE INCORPORATED BY REFERENCE INTO THIS PROSPECTUS.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Piper Sandler
THE DATE OF THIS PROSPECTUS IS __________, 2022
TABLE OF CONTENTS
PROSPECTUS
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This prospectus relates to the registration statement on Form S-3 that we filed with the Securities and Exchange Commission, or SEC, utilizing a “shelf” registration process. Under this shelf registration process, we may from time to time sell shares of our common stock. Under this prospectus, we may from time to time sell shares of our common stock having an aggregate offering price of up to $50,000,000, at prices and on terms to be determined by market conditions at the time of the offering. Before buying any of the common stock that we are offering, we urge you to carefully read this prospectus, any prospectus supplement, and the information incorporated by reference as described under the headings “Where You Can Find More Information” and “Incorporation of Certain Information by Reference” herein and therein. These documents contain important information that you should consider when making your investment decision.
This prospectus describes the terms of this offering of common stock and also adds to and updates information contained in the documents incorporated by reference into this prospectus. To the extent there is a conflict between the information contained in this prospectus, on the one hand, and the information contained in any document incorporated by reference into this prospectus that was filed with the SEC, before the date of this prospectus, on the other hand, you should rely on the information in this prospectus. If any statement in one of these documents is inconsistent with a statement in another document having a later date (for example, a document incorporated by reference into this prospectus) the statement in the document having the later date modifies or supersedes the earlier statement. The information contained in this prospectus or any free writing prospectus, or incorporated by reference herein or therein, is accurate only as of the respective dates thereof, regardless of the time of delivery of this prospectus or of any sale of our shares of common stock. Our business, financial condition, results of operations and prospects may have changed since those dates.
We further note that the representations, warranties and covenants made by us in any agreement that is filed as an exhibit to any document that is incorporated by reference herein were made solely for the benefit of the parties to such agreement, including, in some cases, for the purpose of allocating risk among the parties to such agreements, and should not be deemed to be a representation, warranty or covenant to you. Moreover, such representations, warranties or covenants were accurate only as of the date when made. Accordingly, such representations, warranties and covenants should not be relied on as accurately representing the current state of our affairs.
We have not, and Piper Sandler has not, authorized anyone to provide any information other than that contained or incorporated by reference in this prospectus, any prospectus supplement or in any free writing prospectus prepared by or on behalf of us or to which we have referred you. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. This prospectus does not constitute an offer to sell, or a solicitation of an offer to purchase, the securities offered by this prospectus in any jurisdiction to or from any person to whom or from whom it is unlawful to make such offer or solicitation of an offer in such jurisdiction.
This document contains references to trademarks, trade names and service marks belonging to other entities. Solely for convenience, trademarks, trade names and service marks referred to in this prospectus may appear without the ® or TM symbols, but such references are not intended to indicate, in any way, that the applicable licensor will not assert, to the fullest extent under applicable law, its rights to these trademarks and trade names. We do not intend our use or display of other companies’ trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of us by, any other companies.
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This summary highlights selected information from this prospectus and does not contain all of the information that you need to consider in making your investment decision. You should carefully read the entire prospectus, including the information incorporated by reference, including our financial statements, and the exhibits to the registration statement of which this prospectus is a part.
The Company
We develop, manufacture and sell reagents used for diagnostic tests that function via the detection and/or analysis of nucleic acid molecules (DNA or RNA), including robust and innovative molecular tools for detection of infectious diseases, liquid biopsy for cancer screening, and agricultural applications. In connection with the sale of our tests we may sell diagnostic equipment from other manufacturers as self-contained lab systems (which we refer to as the “MDx Device”). We are also developing a unique, groundbreaking portable PCR device and proprietary test cups (the “Co-Dx PCR Home™ platform”) that have been designed to bring affordable, reliable polymerase chain reaction (“PCR”) to patients in point-of-care and even at-home settings. This platform is subject to U.S. Food and Drug Administration (“FDA”) review and is not available for sale at the time of this filing. There is no guarantee that our Co-Dx PCR Home platform will receive the necessary regulatory approvals for commercialization, or that, if regulatory approval is received, we will be able to successfully commercialize this platform.
Our diagnostics systems enable dependable, low-cost, molecular testing for organisms and genetic diseases by automating or simplifying historically complex procedures in both the development and administration of tests. CODX’s technical advance involves a novel, patented approach to PCR test design of primer and probe structure (“CoPrimers™”) that eliminates one of the key vexing issues of PCR amplification: the exponential growth of primer-dimer pairs (false positives and false negatives) which adversely interferes with identification of the target DNA/RNA.
We believe our proprietary molecular diagnostics technology is paving the way for innovation in disease detection and life sciences research through our enhanced detection of genetic material. For various reasons, including owning our own platform, we believe we will be able to accomplish this faster and more economically than some competitors, allowing for significant margins while still positioning ourselves as a low-cost provider of molecular diagnostics and screening services.
In addition, continued development has demonstrated the unique properties of our CoPrimer technology that we believe makes it ideally suited for a variety of applications where specificity is key to optimal results, including multiplexing several targets, enhanced Single Nucleotide Polymorphism (“SNP”) detection and enrichment for next generation sequencing.
Our scientists use the complex mathematics of DNA/RNA PCR test design to engineer and optimize PCR tests and to automate algorithms that rapidly screen millions of possible options to pinpoint the optimum design. Dr. Brent Satterfield, our founder, developed the intellectual property we use in our business, consisting of the predictive mathematical algorithms and patented molecular structure used in the testing process, which together represent a major advance in PCR testing systems. CODX technologies are now protected by more than 20 granted or pending US and foreign patents, as well as certain trade secrets and copyrights. Ownership of our proprietary platform permits us the advantage of avoiding payment of patent royalties required by other PCR test systems, which may allow the sale of diagnostic PCR tests at a lower price than competitors, while enabling us to maintain profit margins.
Our proprietary test design process involves identifying the optimal locations on the target genes for amplification and pair the locations with the optimized primer and probe structure to achieve outputs that meet the design input requirements identified from market research. This is done by following planned and documented processes, procedures and testing. In other words, we use the data resulting from our tests to verify whether we succeeded in designing what we intended. Verification involves a series of testing that concludes that the product is ready to proceed to validation in an evaluation either in our laboratory or in an independent laboratory setting using initial production tests to confirm that the product as designed meets the user needs.
We may either sell or lease the MDx Device to labs and diagnostic centers, through sale or lease agreements, and sell the reagents that comprise our proprietary tests to those laboratories and testing facilities.
Using our proprietary test design system and proprietary reagents, we have designed and obtained regulatory approval in the European Community and/or in India to sell PCR diagnostic tests for the detection of COVID-19, influenza, tuberculosis, hepatitis B and C, human papillomavirus, malaria, chikungunya, dengue, and the Zika virus. In the United States, we obtained Emergency Use Authorization (“EUA”) for our Logix Smart™ COVID-19 detection test from the Food and Drug Administration, or FDA, and we sell that test to qualified labs. In addition, our COVID-19 detection test and certain of our other suite of COVID-19 products have been approved for sale in countries such as the United Kingdom, Australia and Mexico by the regulatory bodies in those countries and have been registered for sale in many more countries.
In addition to testing for infectious disease, the technology lends itself to identifying any section of a DNA or RNA strand that describes any type of genetic trait, which creates several significant applications. We, in conjunction with our customers, are active in designing and licensing tests that identify genetic traits in plant and animal genomes. We also have three multiplexed tests developed to test mosquitos for the identification of diseases carried by the mosquitos to enable municipalities to concentrate their efforts in managing mosquito populations on the specific areas known to be breeding the mosquitos that carry deadly viruses.
On January 23, 2020, we announced the completion of the principal design work for a PCR test for COVID-19, intended to address the potential need for detection of the virus. This test features our patented CoPrimers technology, and was designed using our proprietary software system, following the guidelines published by the World Health Organization (WHO) and Centers for Disease Control (CDC).
On February 24, 2020, we announced that this test had obtained regulatory clearance to be sold as an in-vitro diagnostic (“IVD”) for the diagnosis of COVID-19 in markets that accept CE-marking as valid regulatory approval and became available for purchase from our Utah-based ISO-13485:2016 certified facility.
We commenced sales of the COVID-19 tests in February and March of 2020 to international customers and to date have since sold over 34,000,000 of this and other COVID tests in numerous countries around the world through an expanding distributor network.
On April 6, 2020, we announced that we had received an EUA from the FDA allowing us to commence sales of our Logix Smart COVID-19 test to laboratories certified by the Center for Medicare and Medicaid Services under the Clinical Laboratories Improvements Act (“CLIA”) to accept human samples for diagnostics testing throughout the United States and have sold our Logix Smart COVID-19 test to such CLIA labs since that time.
Because we believe that testing for COVID-19 will continue to be a consideration for public health worldwide, we have initiated the Co-Dx PCR Home platform to facilitate frequent testing in homes, schools, businesses, and the hospitality industry. We believe this may be accomplished through the development of a compact, relatively low-cost testing device, easy to use by non-professionals, that can provide PCR test results in around 30 minutes. The initial project built on this platform, an at-home and point-of-care COVID-19 PCR test, was ultimately facilitated by our development of a saliva or nasal swab-based PCR test that does not require the RNA/DNA extraction. While we believe the final result is believed to be approximately equivalent to those processed by a high-complexity clinical laboratory, it our COVID-19 PCR test has the advantages of increased speed and ease of handling thanks to lyophilization (or freeze-drying) of our testing reagents to allow for stability at room temperatures.
On February 15, 2021, we engaged the services of a group of professionals at Idaho Molecular, Inc. (“IdMo”) and Advanced Conceptions, Inc. (“ACI”), with the expertise to develop the hardware for a device using our CoPrimers as the reagent chemistry. In December 2021, we announced the closing of the acquisitions of IdMo and ACI along with all existing and future assets and intellectual property related to the platform and device. It is expected that the device and test will be available to homes, schools, offices, and the travel industry among other locations, at a cost that will allow screening frequently to prevent spread of the COVID-19 virus in the future, as well as other diseases as additional single- and multiplex tests are developed and validated for use on the device. The device would also be available to test for other pathogens detectable through saliva or other samples as we develop those tests and offer them to the marketplace. All such tests will be subject to regulatory approval.
On February 22, 2023, we announced that clinical evaluations for the device and its initial test for COVID-19 had begun. Because the evaluations are dependent on identifying and enrolling a particular number of both symptomatic and asymptomatic COVID-19-positive and -negative patients at testing sites, the Company did not provide projected timelines for completion at that time.
Corporate Information
Our headquarters is located at 2401 S. Foothill Drive, Salt Lake City, Utah 84109 and our telephone number is (801) 438-1036. We maintain a website at https://www.co-dx.com. Information on the website is not incorporated by reference and is not a part of this prospectus.
Additional Information
For additional information related to our business and operations, please refer to the reports incorporated herein by reference, as described under the caption “Incorporation of Certain Information by Reference” on page 18 of this prospectus.
Nasdaq Capital Market Listing
Our common stock is listed on the Nasdaq Capital Market under the symbol “CODX”.
| Shares of Common Stock Offered By Us | Shares of our common stock having an aggregate offering price of up to $50,000,000. | |
| Common Stock Outstanding After This Offering | Up to 48,054,737 shares, assuming the sale of up to 17,182,130 shares of our common stock at a price of $2.91 per share, which was the closing price of our common stock on the Nasdaq Capital Market on March 15, 2023. The actual number of shares issued will vary depending on the sales price under this offering. | |
| Plan of Distribution | Sales of shares of our common stock, if any, will be made pursuant to the terms of the Equity Distribution Agreement. Sales of the shares will be made in sales deemed to be “at-the-market” equity offerings as defined in Rule 415 promulgated under the Securities Act, which may be made from time to time on the Nasdaq Capital Market, the existing trading market for our common stock, through Piper Sandler, as agent. Piper Sandler will use commercially reasonable efforts to sell on our behalf all of the shares of common stock requested to be sold by us, consistent with its normal trading and sales practices and applicable rules and regulations, subject to the terms and conditions of the Equity Distribution Agreement. See “Plan of Distribution” on page 17 of this prospectus. | |
| Use of Proceeds | We currently intend to use the net proceeds from the sale of securities offered by this prospectus for working capital and other general corporate purposes, including expanding our sales and marketing, capital expenditures, facilities expansion, and development of existing and new products. We may use a portion of the net proceeds to acquire complementary business or products, technologies or businesses or to repay indebtedness we may incur from time to time; however, we currently have no binding agreements or commitments to complete any such transactions or to make any such indebtedness repayments from the proceeds of this offering, although we do look for such acquisition opportunities. See “Use of Proceeds” on page 8 of this prospectus. | |
| Risk Factors | Investing in our common stock involves significant risks. See “Risk Factors” on page 6 of this prospectus, and under similar headings in other documents incorporated by reference into this prospectus. | |
| Symbol on the Nasdaq Capital Market | “CODX” |
The number of shares of common stock to be outstanding after this offering is based on 30,872,607 shares of common stock outstanding as of December 31, 2022 and excludes as of December 31, 2022:
| ● | 1,040,572 shares of common stock issuable upon the exercise of outstanding stock options having a weighted-average exercise price of approximately $2.19 per share. | |
| ● | 2,426,725 shares of common stock issuable upon the vesting of outstanding unvested restricted stock units. | |
| ● | 485,000 shares of common stock issuable upon the exercise of outstanding common stock warrants having a weighted-average exercise price of approximately $8.81 per share. |
In addition, unless we specifically state otherwise, all information in this prospectus assumes no exercise of outstanding stock options subsequent to December 31, 2022.
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus and the documents incorporated by reference contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which involve risks and uncertainties. Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact. Forward-looking statements are based on our management’s current beliefs, expectations and assumptions about future events, conditions and results and on information currently available to us. Discussions containing these forward-looking statements may be found, among other places, in the sections of this prospectus entitled “Prospectus Summary” and “Risk Factors.”
All statements, other than statements of historical fact, included or incorporated herein regarding our strategy, future operations, financial position, future revenues, projected costs, plans, prospects and objectives are forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “would” and similar expressions. These statements involve risks, uncertainties and other factors that may cause our actual results, performance, time frames or achievements to be materially different from any future results, performance, time frames or achievements expressed or implied by the forward-looking statements. Risks, uncertainties and other factors that might cause or contribute to such differences include, but are not limited to, those discussed in the section entitled “Risk Factors” in our most recent Annual Report on Form 10-K and our subsequent filings with the Securities and Exchange Commission (the “SEC”). Given these risks, uncertainties and other factors, many of which are beyond our control, you should not place undue reliance on these forward-looking statements.
In addition, past financial and/or operating performance is not necessarily a reliable indicator of future performance, and you should not use our historical performance to anticipate results or future period trends. We can give no assurances that any of the events anticipated by the forward-looking statements will occur or, if any of them do, what impact they will have on our results of operations and financial condition. Except as required by law, we assume no obligation to update these forward-looking statements publicly, or to revise any forward-looking statements to reflect events or developments occurring after the date of this prospectus, even if new information becomes available in the future.
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An investment in our securities involves a high degree of risk. You should carefully review the risks and uncertainties described below and under the section entitled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2022 and other reports and documents that are incorporated by reference into this prospectus, before deciding whether to purchase any of the securities being registered pursuant to the registration statement of which this prospectus is a part. Each of the risk factors could adversely affect our business, operating results and financial condition, as well as adversely affect the value of an investment in our securities, and the occurrence of any of these risks might cause you to lose all or part of your investment. Additional risks not presently known to us or that we currently believe are immaterial may also significantly impair our business operations. Please also read carefully the section above titled “Cautionary Note Regarding Forward-Looking Statements.”
ADDITIONAL RISKS RELATED TO THIS OFFERING
You may experience dilution.
The offering price per share in this offering may exceed the net tangible book value per share of our common stock outstanding prior to this offering. Assuming that an aggregate of 17,182,130 shares of our common stock are sold at a price of $2.91 per share, the last reported sale price of our common stock on the Nasdaq Capital Market on March 15, 2023, for aggregate gross proceeds of $50,000,000, and after deducting commissions and estimated offering expenses payable by us, you would experience immediate dilution of $0.08 per share, representing the difference between our as adjusted net tangible book value per share as of December 31, 2022 after giving effect to this offering and the assumed offering price. See the section entitled “Dilution” below for a more detailed illustration of the dilution you would incur if you participate in this offering. Because the sales of the shares offered hereby will be made directly into the market or in negotiated transactions, the prices at which we sell these shares will vary and these variations may be significant. Purchasers of the shares we sell, as well as our existing shareholders, will experience significant dilution if we sell shares at prices significantly below the price at which they invested.
You may experience future dilution as a result of future equity offerings.
In order to raise additional capital, we may in the future offer additional shares of our common stock or other securities convertible into or exchangeable for our common stock. We cannot assure you that we will be able to sell shares or other securities in any other offering at a price per share that is equal to or greater than the price per share paid by investors in this offering, and investors purchasing shares or other securities in the future could have rights superior to existing stockholders. The price per share at which we sell additional shares of our common stock or other securities convertible into or exchangeable for our common stock in future transactions may be higher or lower than the price per share in this offering.
Our management might apply the net proceeds from this offering in ways with which you do not agree and in ways that may impair the value of your investment.
We currently intend to use the net proceeds from the sale of securities offered by this prospectus for working capital and other general corporate purposes, including expanding our sales and marketing, capital expenditures, facilities expansion, and development of existing and new products. We may use a portion of the net proceeds to acquire complementary business or products, technologies or businesses or to repay indebtedness we may incur from time to time; however, we currently have no binding agreements or commitments to complete any such transactions or to make any such indebtedness repayments from the proceeds of this offering, although we do look for such acquisition opportunities.
The timing and amount of our actual expenditures will be based on many factors, including cash flows from operations and the anticipated growth of our business. As a result, our management will have broad discretion to allocate the net proceeds of the offerings. We might apply these proceeds in ways with which you do not agree, or in ways that do not yield a favorable return. If our management applies these proceeds in a manner that does not yield a significant return, if any, on our investment of these net proceeds, it could compromise our ability to pursue our growth strategy and adversely affect the market price of our common stock.
It is not possible to predict the actual number of shares we will sell under the Equity Distribution Agreement or the gross proceeds resulting from those sales.
Subject to certain limitations in the Equity Distribution Agreement and compliance with applicable law, we have the discretion to deliver instructions to Piper Sandler to sell shares of our common stock at any time throughout the term of the Equity Distribution Agreement. The number of shares that are sold through Piper Sandler after our instructions will fluctuate based on a number of factors, including the market price of our common stock during the sales period, the limits we set with Piper Sandler in any instructions to sell shares, and the demand for our common stock during the sales period. Because the price per share of each share sold will fluctuate during this offering, it is not currently possible to predict the number of shares that will be sold or the gross proceeds to be raised in connection with those sales.
The common stock offered hereby will be sold in “at the market offerings,” and investors who buy shares at different times will likely pay different prices.
Investors who purchase shares in this offering at different times will likely pay different prices, and so may experience different levels of dilution and different outcomes in their investment results. We will have discretion, subject to market demand, to vary the timing, prices, and numbers of shares sold in this offering. In addition, subject to the final determination by our Board of Directors, there is no minimum or maximum sales price for shares to be sold in this offering. Investors may experience a decline in the value of the shares they purchase in this offering as a result of sales made at prices lower than the prices they paid.
Sales of a significant number of shares of our common stock in the public markets, or the perception that such sales could occur, could depress the market price of our common stock.
Sales of a significant number of shares of our common stock in the public markets, or the perception that such sales could occur as a result of our utilization of our shelf registration statement, the Equity Distribution Agreement or otherwise could depress the market price of our common stock and impair our ability to raise capital through the sale of additional equity securities. We cannot predict the effect that future sales of our common stock or the market perception that we are permitted to sell a significant number of our securities would have on the market price of our common stock.
We may issue and sell shares of our common stock having aggregate sales proceeds of up to $50,000,000 from time to time. Because there is no minimum offering price for the shares that we may offer from time to time, the actual total public offering amount, commissions to Piper Sandler and proceeds to us, if any, are not determinable at this time. There can be no assurance that we will sell any shares under or fully utilize the Equity Distribution Agreement with Piper Sandler as a source of financing.
We currently intend to use the net proceeds from the sale of securities offered by this prospectus for working capital and other general corporate purposes, including expanding our sales and marketing, capital expenditures, facilities expansion, and development of existing and new products. We may use a portion of the net proceeds to acquire complementary business or products, technologies or businesses or to repay indebtedness we may incur from time to time; however, we currently have no binding agreements or commitments to complete any such transactions or to make any such indebtedness repayments from the proceeds of this offering, although we do look for such acquisition opportunities. The timing and amount of our actual expenditures will be based on many factors, including cash flows from operations and the anticipated growth of our business. As a result, our management will have broad discretion to allocate the net proceeds of the offerings.
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If you invest in our common stock in this offering, your ownership interest will be diluted to the extent of the difference between the public offering price per share of our common stock and the as-adjustedas adjusted net tangible book value per share of our common stock immediately after this offering. The
Our net tangible book value as of our common stock on June 30, 2020,December 31, 2022 was approximately $33,357,493$87.4 million or $1.19$2.83 per share of common stock. We calculate netshare. Net tangible book value per share is determined by dividing the net tangible book value, which isour total tangible assets, less total liabilities, by the number of outstanding shares of our common stock.stock outstanding as of December 31, 2022. Dilution with respect to net tangible book value per share represents the difference between the amount per share paid by purchasers of shares of common stock in this offering and the net tangible book value per share of our common stock immediately after this offering.
After giving effect to the sale of 17,182,130 shares of our common stock pursuant toin this prospectus in the aggregate amount of $ [●]offering at an assumed offering price of [●]$2.91 per share, the last reported sale price of our common stock on the Nasdaq Capital Market on [●], 2020,March 15, 2023 for aggregate gross proceeds of $50,000,000, and after deducting commissions which, for purposes of estimating dilution per share to new investors in this offering, we have assumed to be [●]% of the gross sales price per share sold, and estimated aggregate offering expenses payable by us, our as adjusted net tangible book value as of June 30, 2020December 31, 2022 would have been approximately $ [●] ,$135.9 million, or $ [●]$2.83 per share of common stock.share. This represents an immediate increase in the net tangible book valuedilution of $ [●]$0.08 per share to investors purchasing our existing stockholders and an immediate dilutioncommon stock in net tangible book value of $ [●] per share to new investors.this offering at the assumed public offering price. The following table illustrates this dilution on a per share dilution:basis:
| Assumed offering price per share | $ | |||
| Net tangible book value per share as of June 30, 2020 | $ | 1.19 | ||
| Increase in net tangible book value per share after this offering | $ | |||
| As-adjusted net tangible book value per share after this offering | $ | |||
| Dilution per share to new investors in this offering | $ | |||
| Assumed public offering price per share | $ | 2.91 | ||||||
| Net tangible book value per share of as of December 31, 2022 | $ | 2.83 | ||||||
| Increase in net tangible book value per share attributable to this offering | $ | 0.00 | ||||||
| As adjusted net tangible book value per share as of December 31, 2022, after giving effect to this offering | $ | 2.83 | ||||||
| Dilution per share to investors purchasing our common stock in this offering | $ | 0.08 |
The above discussion and table are based on 27,991,04230,872,607 shares of our common stock outstanding as of June 30, 2020December 31, 2022 and excludes the following:exclude as of December 31, 2022:
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The table above assumes for illustrative purposes that an aggregate of 17,182,130 shares of our common stock are offered during the term of the Equity Distribution Agreement with Piper Sandler at a price of $2.91 per share, the last reported sale price of our common stock on the Nasdaq Capital Market on March 15, 2023, for aggregate gross proceeds of $50,000,000. The shares subject to the Equity Distribution Agreement with Piper Sandler are being sold from time to time at various prices.
An increase of $0.10 per share in the price at which the shares are sold from the assumed offering price of $2.91 per share shown in the table above, assuming all of our common stock in the aggregate amount of $50,000,000 during the term of the Equity Distribution Agreement with Piper Sandler is sold at that price, would increase our as adjusted net tangible book value per share after the offering to $2.86 per share and would increase the dilution in net tangible book value per share to new investors in this offering to $0.15 per share, after deducting commissions and estimated aggregate offering expenses payable by us.
A decrease of $0.10 per share in the price at which the shares are sold from the assumed offering price of $2.91 per share shown in the table above, assuming all of our common stock in the aggregate amount of $50,000,000 during the term of the Equity Distribution Agreement with Piper Sandler is sold at that price, would decrease our as adjusted net tangible book value per share after the offering to $2.79 per share and would result in dilution in net tangible book value per share to new investors in this offering of $0.02 per share, after deducting commissions and estimated aggregate offering expenses payable by us. This information is supplied for illustrative purposes only.
To the extent that anystock options and common stock warrants outstanding as of December 31, 2022 have been or may be exercised or other shares issued, investors purchasing our common stock in this offering may experience further dilution. In addition, we may choose to raise additional capital due to market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. To the extent that additional capital is raised through the sale of equity, convertible debt securities or other securities exchangeable for common stock, the issuance of these outstanding options are exercised, there will besecurities could result in further dilution to new investors.our stockholders.
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PLANDESCRIPTION OF DISTRIBUTIONCAPITAL STOCK
As of the date of this prospectus, our Articles of Incorporation, as amended, authorize us to issue 100,000,000 shares of common stock, par value $0.001 per share and 5,000,000 shares of preferred stock, par value $0.001 per share. The following is a summary of the rights of our common and preferred stock and some of the provisions of our Articles of Incorporation, as amended, our Amended and Restated Bylaws, and the Utah Revised Business Corporation Act (the “URBCA”). Because it is only a summary, it does not contain all the information that may be important to you and is subject to and qualified in its entirety by our Articles of Incorporation, as amended, and our Amended and Restated Bylaws, a copy of each of which has been incorporated as an exhibit to the registration statement of which this prospectus forms a part. We urge to you read each of the Articles of Incorporation, as amended, and the Amended and Restated Bylaws described herein in their entirety for a complete description of the rights and preferences of our securities.
Common Stock
As of December 31, 2022 there were 30,872,607 shares of common stock outstanding. In addition, as of December 31, 2022 there were: (i) 1,040,572 shares of common stock subject to outstanding options; (ii) 2,426,725 shares of common stock subject to unvested outstanding restricted stock units; (iii) 6,210,790 shares of common stock available for future issuance under 2015 Amended and Restated Long Term Incentive Plan; and 485,000 shares of common stock reserved for future issuance under outstanding common stock purchase warrants.
Holders of our common stock are entitled to one vote for each share held of record on all matters submitted to a vote of the shareholders, and do not have cumulative voting rights. Accordingly, the holders of a majority of the shares of our common stock entitled to vote can elect all of the directors standing for election. Subject to preferences that may sell the securitiesbe applicable to any outstanding shares of preferred stock, holders of our common stock are entitled to receive ratably such dividends, if any, as may be declared from time to time by our Board of Directors out of funds legally available for dividend payments. All outstanding shares of our common stock are fully paid and nonassessable, and any shares of our common stock to be sold pursuant to underwritten public offerings, direct salesthis prospectus will be fully paid and nonassessable. The holders of common stock have no preferences or rights of conversion, exchange, pre-emption or other subscription rights. There are no redemption or sinking fund provisions applicable to our common stock. In the public, negotiated transactions, block tradesevent of any liquidation, dissolution or winding-up of our affairs, holders of our common stock will be entitled to share ratably in our assets that are remaining after payment or provision for payment of all of our debts and obligations and after liquidation payments to holders of outstanding shares of preferred stock, if any.
The transfer agent and registrar for our common stock is VStock Transfer LLC located at 18 Lafayette Pl, Woodmere, New York 11598. Our common stock is listed on the Nasdaq Capital Market under the symbol “CODX”.
Articles of Incorporation and Amended and Restated Bylaws
Shareholders’ rights and related matters are governed by our Articles of Incorporation, as amended, Amended and Restated Bylaws and Utah law, including the URBCA. An amendment to our Articles of Incorporation, as amended, must be approved by holders of a combinationmajority of these methods. Weour outstanding common and our preferred stock, if any, except for certain limited amendments that can be effected by the Board of Directors without shareholder approval. Our Amended and Restated Bylaws may sellbe amended or repealed by the securitiesBoard of Directors by the affirmative vote of a majority of the directors then in office or by our shareholders at any annual meeting of shareholders, or special meeting of shareholders called for such purpose, by the affirmative vote of at least seventy-five percent (75%) of the shares present in person or represented by proxy at such meeting and entitled to vote on such amendment or through underwritersrepeal, voting together as a single class; provided, however, that if the Board of Directors recommends that stockholders approve such amendment or dealers, through agents,repeal at such meeting of stockholders, such amendment or directlyrepeal shall only require the affirmative vote of a majority of the shares present in person or represented by proxy at such meeting and entitled to vote on such amendment or repeal, voting together as a single class.
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Board of Directors
Our Amended and Restated Bylaws provide that the number of directors must fall within a range between three (3) and ten (10), the exact number to be fixed by resolution of our Board of Directors. Our Board of Directors has adopted a resolution limiting the current size of the board to 5 persons.
Preferred Stock
Our Board of Directors has the authority under our Articles of Incorporation, as amended, without further action by our shareholders, to issue up to 5,000,000 shares of preferred stock in one or more purchasers. We may distribute securitiesseries, to establish from time to time the number of shares to be included in each such series, to fix the rights, preferences, privileges and restrictions of the shares of each wholly unissued series, including dividend rights, conversion rights, voting rights, terms of redemption, liquidation preference and sinking fund terms, and to increase or decrease the number of shares of any such series (but not below the number of shares of such series then outstanding).
Our Board of Directors may authorize the issuance of preferred stock with voting or conversion rights that could have the effect of restricting dividends on our common stock, diluting the voting power of our common stock, impairing the liquidation rights of our common stock or otherwise adversely affecting the rights of holders of our common stock. The issuance of preferred stock, while providing flexibility in connection with possible acquisitions and other corporate purposes, could, among other things, have the effect of delaying, deferring or preventing a change of control and may adversely affect the market price of our common stock. As of December 31, 2022, no shares of preferred stock were outstanding, and we have no current plans to issue any preferred stock.
Warrants
The following summary of the material terms of our existing warrants is not intended to be complete and is qualified by reference to our Articles of Incorporation, as amended, and Amended and Restated Bylaws and the warrant-related documents described herein which are exhibits to the registration statement of which this prospectus is a part. We urge you to read each of the Articles of Incorporation, as amended, and Amended and Restated Bylaws and the warrant-related documents described herein in their entirety for a complete description of the rights and preferences of the warrants.
Contingent Consideration Warrants
On December 31, 2021, we completed our acquisitions (the “Acquisitions”) of Advanced Conceptions, Inc. (“ACI”) and Idaho Molecular Inc. (“IdMo”), pursuant to (i) an Agreement and Plan of Merger (as amended, the “ACI Merger Agreement”) with ACI Acquisition Corp., an Idaho corporation and our wholly-owned subsidiary, ACI, and the Company Representative named therein and (ii) an Agreement and Plan of Merger (as amended, the “IM Merger Agreement” and together with the ACI Merger Agreement, the “Merger Agreements”) with IDMO Acquisition Corp., an Idaho corporation and our wholly-owned subsidiary (“IM Merger Sub”), IdMo, and the Company Representative named therein.
Upon the completion of the Acquisitions, all outstanding shares of ACI and Idaho Molecular common stock were initially exchanged for approximately 3.2 million shares of common stock and contingent consideration that includes up to approximately 1.4 million shares of common stock and approximately 456,000 warrants to purchase shares of common stock. During 2022, we finalized negotiations with one remaining shareholder of ACI. Following the resolution with the remaining shareholder, the total number of shares issued as purchase consideration in the Acquisitions was approximately 3.3 million shares. Additionally, the aggregate purchase consideration for the Acquisitions included contingent consideration of up to approximately 1.4 million shares and 465,000 warrants (the “Contingent Consideration Warrants”) to purchase shares of common stock. The contingent consideration is based on the achievement of certain milestones, which include regulatory approval for identified products, as well as production and net revenue targets.
The material terms and provisions of the Contingent Consideration Warrants are summarized below. This summary of some provisions of the Contingent Consideration Warrants is not complete. For the complete terms of the Contingent Consideration Warrants, you should refer to the warrant agreements filed as Exhibit 4.7 and Exhibit 4.8 to the registration statement of which this prospectus forms a part. Pursuant to the warrant agreements between us and VStock Transfer, LLC, as warrant agent, the Contingent Consideration Warrants were issued in book-entry form.
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Exercise. The Contingent Consideration Warrants have an initial exercise price equal to $9.125 per share. The Contingent Consideration Warrants become exercisable, subject to certain conditions, upon the achievement of certain milestones described in the Merger Agreements, or the earlier of (in each case provided that such event occurs prior to January 1, 2027) (i) a change of control, as defined in the Merger Agreements, (ii) the consummation of a transaction or series of transactions in which we or any of our affiliates sell all or substantially all of the assets relating to the design, engineering and development of a prototype highly sensitive and rapid response home saliva and/or nasal swab diagnostic platform and receptacle kits for, among other things, polymerase chain reaction (PCR) testing and pathogen detection (“Working Prototype”) for the ultimate manufacturing, commercialization and marketing of home use, consumer diagnostic kits based off the Working Prototype and the related saliva receptacle cups containing our pathogen detection technology (the “Project”), and (iii) our failure to satisfy certain funding commitments relating to the Project. Notwithstanding the foregoing, the Contingent Consideration Warrants will expire at 5:0 pm Eastern Time on January 1, 2027.
The holder of a Contingent Consideration Warrant is not deemed a holder of our underlying common stock until such warrant is exercised. The holders must pay the exercise price in cash upon exercise of the Contingent Consideration Warrants, unless such holders are utilizing the cashless exercise provision of the Contingent Consideration Warrants. Prior to the exercise of any Contingent Consideration Warrants to purchase common stock, holders of the Contingent Consideration Warrants do not have any of the rights of holders of the common stock purchasable upon exercise, including the right to vote, except as set forth therein.
Stock Dividends and Stock Splits. The exercise price and the number of shares issuable upon exercise of the Contingent Consideration Warrants is subject to appropriate adjustment in the event of recapitalization events, stock dividends, stock splits, stock combinations, reclassifications, reorganizations or similar events affecting our common stock.
Merger or Consolidation. In the event we consummate a merger or consolidation with or into another person or other reorganization event in which we are not the surviving entity, the holders of the Contingent Consideration Warrants will be entitled to receive upon exercise of such Contingent Consideration Warrants the same kind and amount of securities, cash or property which the holders would have received had they exercised their Contingent Consideration Warrants immediately prior to such fundamental transaction.
Registration Rights. The Contingent Consideration Warrants include registration rights requiring the company to maintain a registration statement registering the resale of the shares of common stock underlying the Contingent Consideration Warrants, until such time as such shares of common stock can be freely sold under Rule 144 of the Securities Act. If we fail to satisfy such registration rights, we may be required to pay partial liquidated damages equal to the product of 2.0% multiplied by the aggregate consideration paid to the holder in the Acquisitions.
The Contingent Consideration Warrants are not listed on any securities exchange, and we do not intend to apply for listing of the Contingent Consideration Warrants on any securities exchange or other trading system.
Coltrin Warrants
In October 2019 and February 2020, we issued an aggregate of 50,000 warrants to Coltrin & Associates, Inc. public relations services (the “Coltrin Warrants”). The material terms and provisions of the Coltrin Warrants are summarized below. This summary of some provisions of the Coltrin Warrants is not complete. For the complete terms of the Coltrin Warrants, you should refer to the warrant agreements filed as Exhibit 4.9, Exhibit 4.10, Exhibit 4.11, and Exhibit 4.12 to the registration statement of which this prospectus forms a part.
Exercise. The Coltrin Warrants have an initial exercise price equal to $1.40 per share. The 30,000 Coltrin Warrants issued in October 2019 expire in October 2024. The 20,000 Coltrin Warrants issued in February 2020 expire in February 2025. The holder of a Coltrin Warrant is not deemed a holder of our underlying common stock until such warrant is exercised. The holders must pay the exercise price in cash upon exercise of the Coltrin Warrants, unless such holders are utilizing the cashless exercise provision of the Coltrin Warrants issued in October 2019. Prior to the exercise of any Coltrin Warrants to purchase common stock, holders of the Coltrin Warrants do not have any of the rights of holders of the common stock purchasable upon exercise, including the right to vote, except as set forth therein.
Stock Dividends and Stock Splits. The exercise price and the number of shares issuable upon exercise of the Contingent Consideration Warrants is subject to appropriate adjustment in the event of recapitalization events, stock dividends, stock splits, stock combinations, reclassifications, reorganizations or similar events affecting our common stock.
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Fundamental Transaction. In the event we consummate a Fundamental Transaction, as defined in the Coltrin Warrants, the holders of the Coltrin Warrants will be entitled to receive upon exercise of such Contingent warrants the same kind and amount of securities, cash or property which the holders would have received had they exercised their warrants immediately prior to such fundamental transaction. Any successor to us or surviving entity shall assume the obligations under the November 2018 Warrants. Additionally, as more transactions:fully described in the Coltrin Warrants, in the event of certain Fundamental Transactions, the holders of the Coltrin Warrants will be entitled to receive cash consideration in an amount equal to the value of such Fundamental Transaction per share of common stock outstanding less the exercise price of the Coltrin Warrants.
Purchase Rights. If at any time we grant, issue, or sell any options, convertible securities, or other rights to purchase shares, warrants, securities, or other property pro rata to the record holders of any class of our common stock (the “Purchase Rights”), the holders of the Coltrin Warrants will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the holder could have acquired if the holder had held the number of shares of common stock acquirable upon complete exercise of the Coltrin Warrants (without regard to any beneficial ownership limitations) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of common stock are to be determined for the grant, issue or sale of such Purchase Rights.
Distributions. In addition to the adjustments described above, if we declare or make any dividend or other distribution of our assets to holders of common stock, then the holders of the Coltrin Warrants will be entitled to participate in such distribution to the same extent that the holder would have participated therein if the holder had held the number of shares of common stock acquirable upon the complete exercise of their Coltrin Warrants immediately before the date on which a record is taken for such distribution, or, if no such record is taken, the date as of which the record holders of common stock are to be determined for the participation in such distribution.
The Coltrin Warrants are not listed on any securities exchange, and we do not intend to apply for listing of the Coltrin Warrants on any securities exchange or other trading system.
Effects of Anti-Takeover Provisions of our Articles of Incorporation, as amended, and Amended and Restated Bylaws
Some provisions of our Articles of Incorporation, as amended, and Amended and Restated Bylaws could make the acquisition of control of us and/or the removal of our existing management more difficult, including those that provide as follows:
| ● | our directors may only be removed for cause, and only with a the vote of the holders of at least 75 percent of the voting power of the then outstanding shares entitled to vote as a | |
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A prospectus supplement or supplements (and any related free writing prospectus that we may authorize to be provided to you) will describe the terms of the offering of the securities, including, to the extent applicable:
| Directors by the | ||
| directors then in office or by our shareholders at any annual meeting of shareholders, or special meeting of shareholders called for such purpose, by the | ||
| ● | any | |
| ● | special meetings of the stockholders may be called only by the Board of Directors pursuant to a resolution approved by the affirmative vote of a majority of the directors then in office.; |
| ● | our Board of Directors may create new directorships and may appoint new directors to serve for the full term of the class of directors in which the new directorship was created and may fill vacancies on our Board of Directors occurring for any | |
| ● | our Board of Directors may issue shares of preferred stock without any | |
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Indemnification
Additionally, we will indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise against expenses (including attorneys’ fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit, if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the judicial court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the court shall deem proper.
We have entered into separate indemnification agreements with our executive officers and directors, in addition to the indemnification provided for in our Amended and Restated Bylaws. These agreements, among other things, require us to indemnify our executive officers and directors for certain expenses, including attorneys’ fees incurred by an executive officer or director in any action or proceeding arising out of their services as one of our executive officers or directors, or as an executive officer or director of any of our subsidiaries or any other company or enterprise to which the person provides services at our request.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our officers, directors and controlling persons pursuant to the foregoing provisions, we have been advised that in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.
Defensive Provisions of Utah Law
Certain provisions of Utah law summarized below may be considered to have an anti-takeover effect and may delay, deter, or prevent a tender offer, proxy contest or other takeover attempt that shareholders might consider to be in their best interest, including a takeover attempt that might result in the payment of a premium over the market price of our common stock.
The Utah Control Shares Acquisition Act, or the Control Shares Act, provides that, when a person or group acquires control of shares of a corporation that is subject to the Control Shares Act equal to or in excess of 20%, 33 1/3% or a majority of the voting power of the corporation, the acquiring person is not permitted to vote the shares unless a majority of the corporation’s shares, excluding shares held by the acquiring person or by the officers and employee-directors of the corporation, approve a resolution granting the acquiring person the right to vote the shares. As a public company headquartered in Utah, the Control Shares Act will apply to acquisitions of our common stock that cause an acquiring person to exceed the specified thresholds. Although a corporation may opt out of the Control Shares Act, we have not elected to opt out of the Control Shares Act.
Section 728 of the URBCA prohibits cumulative voting in the election of directors. Cumulative voting could facilitate a shareholder or group of shareholders in electing one or more candidates to our Board of Directors in opposition to our slate of proposed directors.
Part 18 of the URBCA is an anti-takeover provision that makes it difficult to effect a hostile takeover of an SEC-registered Utah corporation. It does so by generally prohibiting business combinations between a Utah corporation and a shareholder holding 20% or more of the corporation’s shares until the interested shareholder has been an interested shareholder for at least five years. The following exceptions apply: (1) the business combination or acquisition of shares by the interested shareholder was approved by the board of the corporation before the date the interested shareholder crossed the 20% ownership threshold; (2) the business combination is approved by a majority of the disinterested shareholders, provided that the business combination still may not occur earlier than five years after the interested shareholder’s share acquisition date; or (3) the purchase price of the business combination meets certain “fair price” thresholds.
Defensive Provisions in Articles or Bylaws
Our Amended and Restated Bylaws set forth procedures for shareholders to recommend nominees to the Company’s Board of Directors. Nominations of persons for election to the Board of Directors to be considered by the stockholders may be made at an annual meeting of stockholders (i) pursuant to the Company’s notice of meeting, (ii) by or at the direction of the Board of Directors, or (iii) by any stockholder of the Company who (A) was a stockholder of record at the time of giving of the notice, (B) is entitled to vote with respect to such matter at the meeting, and (C) complies with the notice procedures set forth in the Amended and Restated Bylaws.
The following is a summary of key provisions from our Amended and Restated Bylaws. For nominations to be properly brought before an annual meeting by a stockholder, the stockholder making such nominations must have given timely notice in writing to the secretary of the Company. To be timely, a stockholder’s notice shall be delivered to the secretary at the principal executive offices of the Company not later than the close of business on the 75th day nor earlier than the close of business on the 125th day prior to the first anniversary of the preceding year’s annual meeting; provided, however, that in the event that the date of the annual meeting is more than 30 days before or more than 60 days after such anniversary date, notice by the stockholder to be timely must be so delivered not later than the close of business on the later of (x) the 75th day prior to the scheduled date of such annual meeting or (y) the 15th day following the day on which public announcement of the date of such meeting is first made by the Company. To be in proper form, a stockholder’s notice to the secretary must: set forth, as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made (A) the name and address of such stockholder, as they appear on the Company’s books, and of such beneficial owner, if any, (B) the class or series and number of shares of the Company that are, directly or indirectly, owned beneficially and of record by such stockholder and such beneficial owner, if any, as of the date of such notice, and (C) any other information relating to such stockholder and beneficial owner, if any, that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for, as applicable, the proposal and/or for the election of directors in a contested election pursuant to Section 14 of the Exchange Act, and the rules and regulations promulgated thereunder.
Our Amended and Restated Bylaws provide that special meetings of the stockholders may be called only by the Board of Directors pursuant to a resolution approved by the affirmative vote of a majority of the directors then in office. Only those matters set forth in the notice of the special meeting may be considered or acted upon at a special meeting of stockholders of the corporation, unless otherwise required by law. This restriction on the calling of special shareholders’ meetings may deter hostile takeovers by making it more difficult for a person or entity to obtain immediate control of the corporation between annual meetings.
Our Articles of Incorporation, as amended, authorize the issuance of 100,000,000 shares of common stock and 5,000,000 shares of preferred stock. Shares were authorized to provide our Board of Directors with as much flexibility as possible to effect, among other transactions, financings, acquisitions, share dividends, and the exercise of employee stock options. However, these additional authorized shares may also be used by the Board of Directors, to the extent consistent with its fiduciary duty, to deter future attempts to gain control of the Company. As a result of the ability to issue additional shares, our Board of Directors has the power to issue shares to persons friendly to management in order to attempt to block a tender offer, merger or other transaction by which a third party seeks control of the Company, and thereby allow members of management to retain their positions.
The matters described above may be considered to have an anti-takeover effect and may delay, defer or prevent a tender offer or other takeover attempt that a shareholder might consider to be in such shareholder’s best interest, including such an attempt as might result in the receipt of a premium over the market price for the common stock held by such shareholder.
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Limitations of Liability and Disclosure of SEC Position On Indemnification for Securities Act Liabilities
Pursuant to our Amended and Restated Bylaws, we will, to the fullest extent permitted by the URBCA indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that he is or was a director or officer of the corporation, or is or was serving at the request of the corporation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement (if such settlement is approved in advance by the corporation, which approval shall not be unreasonably withheld) actually and reasonably incurred by him in connection with such action, suit, or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit, or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interest of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful.
Additionally, the will indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise against expenses (including attorneys’ fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit, if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the judicial court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the court shall deem proper.
We have entered into separate indemnification agreements with our executive officers and directors, in addition to the indemnification provided for in our Amended and Restated Bylaws. These agreements, among other things, require us to indemnify our executive officers and directors for certain expenses, including attorneys’ fees incurred by an executive officer or director in any action or proceeding arising out of their services as one of our executive officers or directors, or as an executive officer or director of any of our subsidiaries or any other company or enterprise to which the person provides services at our request.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our officers, directors and controlling persons pursuant to the foregoing provisions, we have been advised that in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.
Transfer Agent and Registrar
The transfer agent and registrar for our common stock is VStock Transfer LLC located at 18 Lafayette Pl, Woodmere, New York 11598.
Stock Market Listing
Our common stock is listed on the Nasdaq Capital Market under the symbol “CODX”.
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Only underwriters named in the prospectus supplement will be underwriters of the securities offered by the prospectus supplement.PLAN OF DISTRIBUTION
If underwriters are used inWe have entered into the sale, they will acquire the securities for their own accountEquity Distribution Agreement with Piper Sandler, as our sales agent, pursuant to which we may issue and may resell the securitiessell from time to time in one or more transactions at a fixed publicshares of our common stock having an aggregate offering price of up to $50,000,000 through Piper Sandler.
This prospectus only relates to up to $50,000,000 of shares of our common stock that we may issue and sell from time to time under the Equity Distribution Agreement. We will be required to file another prospectus or at varying prices determined atprospectus supplement in the timeevent we want to offer more than $50,000,000 in shares of sale. The obligationsour common stock in accordance with the terms of the underwritersEquity Distribution Agreement.
Piper Sandler will use commercially reasonable efforts to purchasesell on our behalf all shares of our common stock requested to be sold by us, consistent with its normal trading and sales practices and applicable laws and regulations, under the securities will beterms and subject to the conditions set forth in the applicable underwriting agreement.Equity Distribution Agreement. We may offerinstruct Piper Sandler not to sell our common stock if the securitiessales cannot be effected at or above the price designated by us in any instruction. We or Piper Sandler may suspend the offering of our common stock upon proper notice and subject to other conditions, as further described in the public through underwriting syndicates represented by managing underwriters or by underwriters withoutEquity Distribution Agreement.
Upon delivery of a syndicate. Subjectplacement notice, and subject to certainour instructions in that notice and the terms and conditions the underwriters will be obligated to purchase all of the securities offered by the prospectus supplement, other than securities coveredEquity Distribution Agreement generally, Piper Sandler may sell our common stock by any optionmethod permitted by law that is deemed to purchase additional securities from us. Any public offering price and any discounts or concessions allowed or reallowed or paid to dealers may change from time to time. We may use underwriters with whom we have a material relationship. We will describebe an “at the market offering” as defined in the prospectus supplement, naming the underwriter, the nature of any such relationship.
We may sell securities directly or through agents we designate from time to time. We will name any agent involved in the offering and sale of securities and we will describe any commissions we will pay the agent in the prospectus supplement. Unless the prospectus supplement states otherwise, our agent will act on a best-efforts basis for the period of its appointment.
We may authorize agents or underwriters to solicit offers by certain types of institutional investors to purchase securities from us at the public offering price set forth in the prospectus supplement pursuant to delayed delivery contracts providing for payment and delivery on a specified date in the future. We will describe the conditions to these contracts and the commissions we must pay for solicitation of these contracts in the prospectus supplement.
We may provide agents and underwriters with indemnification against civil liabilities, including liabilitiesRule 415(a)(4) promulgated under the Securities Act, including sales made directly on or contributionthrough the Nasdaq Capital Market or on any other existing trading market for our common stock. Piper Sandler will provide written confirmation to us no later than the opening of trading on the Nasdaq Capital Market on the day following each day in which our common stock is sold under the Equity Distribution Agreement. Each such confirmation will include the number of shares of our common stock sold on such day, the volume-weighted average price of the shares sold, the net proceeds to us and the compensation payable by us to Piper Sandler in connection with respectsuch sales.
We will pay Piper Sandler commissions for its services in acting as sales agent in the sale of our common stock. Piper Sandler will be entitled to paymentscompensation in an amount up to 3.0% of the gross sales price of all common stock sold through it as sales agent under the Equity Distribution Agreement. We have also agreed to reimburse Piper Sandler for the out-of-pocket reasonable fees and disbursements of its legal counsel, in an amount not to exceed $125,000, in connection with the establishment of this at-the-market offering program. In accordance with Financial Industry Regulatory Authority, Inc. Rule 5110, these reimbursed fees and expenses are deemed sales compensation in connection with this offering. We estimate that the agentstotal expenses for this offering, excluding compensation and reimbursements payable to Piper Sandler under the terms of the Equity Distribution Agreement, will be approximately $228,500.
Settlement for sales of our common stock will occur on the second business day following the date on which any such sales are made, or underwriterson some other date that is agreed upon by us and Piper Sandler in connection with a particular transaction, in return for payment of the net proceeds to us. There is no arrangement for funds to be received in an escrow, trust or similar arrangement.
We will report at least quarterly the number of shares of our common stock sold through Piper Sandler, as sales agent, under the Equity Distribution Agreement, and the net proceeds to us in connection with such sales.
Piper Sandler and its affiliates may make with respectin the future provide various investment banking, commercial banking, fiduciary and advisory services for us for which they may receive, customary fees and expenses. Piper Sandler and its affiliates may from time to these liabilities. Agents and underwriters maytime engage in other transactions with orand perform services for us in the ordinary course of their business.
All securities we may offer, other thanIn connection with the sale of our common stock on our behalf, Piper Sandler will be new issuesdeemed to be an underwriter within the meaning of securities with no established trading market. Any underwritersthe Securities Act, and the compensation paid by us to Piper Sandler will be deemed to be underwriting commissions or discounts. We have agreed to indemnify Piper Sandler against specified liabilities, including liabilities under the Securities Act, or to contribute to payments that Piper Sandler may be required to make a market in these securities, butbecause of such liabilities.
The offering of our common stock pursuant to the Equity Distribution Agreement will notterminate upon the termination of the Equity Distribution Agreement. The Equity Distribution Agreement may be obligated to do so and may discontinue any market makingterminated by Piper Sandler or us at any time withoutupon specified prior written notice. We cannot guarantee the liquidity of the trading markets for any securities.
Any underwriter may engage in over-allotment, stabilizing transactions, short-covering transactions and penalty bids in accordance with Regulation M under the Securities Exchange Actsummary of 1934 (“Exchange Act”). Over-allotment involves sales in excessprovisions of the offering size, which createEquity Distribution Agreement above does not purport to be a short position. Stabilizing transactions permit bids to purchase the underlying security so long as the stabilizing bids do not exceed a specified maximum price. Syndicate-covering or other short-covering transactions involve purchasescomplete statement of the securities, either through exerciseEquity Distribution Agreement terms and conditions. A copy of the over-allotment option or in the open market after the distributionEquity Distribution Agreement is completed, to cover short positions. Penalty bids permit the underwriters to reclaim a selling concession from a dealer when the securities originally sold by the dealer are purchased in a stabilizing or covering transaction to cover short positions. Those activities may cause the price of the securities to be higher than it would otherwise be. If commenced, the underwriters may discontinue any of the activities at any time.
Any underwriters or agents that are qualified market makers on the Nasdaq Capital Market may engage in passive market making transactions in the common stock on the Nasdaq Capital Market in accordance with Regulation M under the Exchange Act, during the business day priorfiled as an exhibit to the pricingregistration statement of the offering, before the commencement of offers or sales of the common stock. Passive market makers must comply with applicable volume and price limitations and must be identified as passive market makers. In general,which this prospectus forms a passive market maker must display its bid at a price not in excess of the highest independent bid for such security; if all independent bids are lowered below the passive market maker’s bid, however, the passive market maker’s bid must then be lowered when certain purchase limits are exceeded. Passive market making may stabilize the market price of the securities at a level above that which might otherwise prevail in the open market and, if commenced, may be discontinued at any time.part.
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In compliance with guidelines of
Dorsey & Whitney LLP, Salt Lake City, Utah will pass for us upon the Financial Industry Regulatory Authority, or FINRA, the maximum consideration or discount to be received by any FINRA member or independent broker dealer may not exceed 8% of the aggregate amountvalidity of the securities being offered pursuant toby this prospectusprospectus. Mintz, Levin, Cohn, Ferris, Glovsky and any applicable prospectus supplement.Popeo, P.C., New York, New York, is counsel for Piper Sandler in connection with this offering.
The validityconsolidated financial statements of the issuance of the securities offered hereby will be passed upon for usCo-Diagnostics, Inc., incorporated by Carmel, Milazzo & Feil LLP locatedreference herein incorporated by reference in New York, New York. Additional legal matters may be passed upon for us or any underwriters, dealers or agents,this prospectus, have been audited by counsel that we will name in the applicable prospectus supplement.
Haynie & Company, an independent registered public accounting firm, has audited our consolidated financial statements for the years ended December 31, 2019 and 2018 as set forthstated in their report dated March 30, 2020, included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019 and filed with the Commission on March 30, 2020 and which is incorporated by reference in this prospectus. Ourreport. Such financial statements are incorporated by reference herein in reliance on Haynie & Company and its respectiveupon the report of such firm, given itstheir authority as an expertexperts in accounting and auditing matters.auditing.
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the information requirements of the Exchange Act and, in accordance therewith, file annual, quarterly and special reports, proxy statements and other information with the SEC. These documents may be accessed through the SEC’s electronic data gathering, analysis and retrieval system via electronic means, including the SEC’s home page on the Internet (www.sec.gov). Copies of certain information filed by us with the SEC are also available on our website at www.carparts.com/investor. The information contained on our website is not incorporated by reference into this prospectus and, therefore, is not part of this prospectus or any accompanying prospectus supplement.
This prospectus is part of thea registration statement on Form S-3 that we have filed with the CommissionSEC under the Securities Act and does not contain all of theAct. Certain information set forth in the registration statement. Whenever a reference is madestatement has been omitted from this prospectus in accordance with SEC rules and regulations. For more detail about us and any securities that may be offered by this prospectus, you may examine the registration statement on Form S-3 and the exhibits filed with it at the locations listed in the previous paragraph. Please be aware that statements in this prospectus referring to any of our contracts, agreementsa contract or other documents, the reference may not be completedocument are summaries and you should refer to the exhibits that are part of the registration statement or the exhibits to the reports or other document incorporated into this prospectus for a copy of suchthe contract agreement or other document. Because we are subject to the information and reporting requirements under the Exchange Act, we file annual, quarterly and special reports, proxy statements and other information with the Commission. Our filings with the Commission are available to the public over the Commission’s website at http://www.sec.gov. You may also read and copy any document we file with the SEC at its public reference facility at 100 F Street, N.E., Washington, D.C., 20549, on official business days during the hours of 10 a.m. to 3 p.m. You may also obtain copies of the documents at prescribed rates by writing to the Public Reference Section of the SEC at 100 F Street, N.E., Washington, D.C., 20549. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference facility. In addition, you can find more information about us on our website at http://codiagnostics.com.
INCORPORATION OF DOCUMENTS BY REFERENCE
We have filed a registration statement on Form S-3 with the Securities and Exchange Commission under the Securities Act. The SEC allows us to incorporate by reference the information and reports we file with it, which means that we can disclose important information to you by referring you to thesethose documents. The information incorporated by reference is an important part of this prospectus. The information incorporated by reference is considered to be a part of this prospectus, and any applicable prospectus supplement, and information that we file later with the SEC will automatically update and supersede the information already incorporated by reference.contained in this prospectus and any accompanying prospectus supplement. We are incorporatingincorporate by reference the documents listed below whichthat we have alreadypreviously filed with the SEC, and any future filings we make with the SEC under Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, including all filings made after the date of the filing and the date of the effectiveness of the registration statement of which this prospectus forms a part, until the termination of the offering, except as to any portion of any future annual or quarterly report to stockholders or document or current report furnished under current Item 2.02 or 7.01 or any related Item 9.01 of Form 8-K that is not deemed filed under such provisions:SEC:
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We also incorporate by reference allinto this prospectus additional documents that we may file with the Securities and Exchange CommissionSEC under the terms of Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, thatexcluding, in each case, information deemed furnished and not filed, until we sell all of the securities we are madeoffering or the termination of the offering. All reports and other documents filed by us pursuant to the Exchange Act after the date of the initial registration statement butand prior to effectiveness of the registration statement and after the dateshall be deemed to be incorporated by reference into this prospectus. Any statements contained in a previously filed document incorporated by reference into this prospectus is deemed to be modified or superseded for purposes of this prospectus but prior to the termination of the offering of the securities coveredextent that a statement contained in this prospectus, or in a subsequently filed document also incorporated by this prospectus. We are not, however, incorporating, in each case, any documentsreference herein, modifies or informationsupersedes that we are deemed to furnish and not file in accordance with Securities and Exchange Commission rules.statement.
You may request, and weWe will provide you with,to each person, including any beneficial owner, to whom a prospectus is delivered, without charge upon written or oral request, a copy of these filings, at no cost,any or all of the information that has been incorporated by calling us at (801) 438-1036 orreference into this prospectus but not delivered with the prospectus, including exhibits that are specifically incorporated by writing to us at the following address:
reference into such documents. Requests should be directed to: Corporate Secretary, Co-Diagnostics, Inc
Inc., 2401 S.S Foothill Drive, Suite D,
Salt Lake City, UtahUT 84109 and our telephone number is (801) 438-1036.
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Attn: Dwight H. Egan, President and Chief Executive Officer
Up to $50,000,000
Common Stock
PROSPECTUS
Piper Sandler
____________, 2023
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.Distribution
The following table sets forth an estimate of the feesestimated costs and expenses, relating to the issuance and distribution of the securities being registered hereby, other than underwriting discounts and commissions, all of which shall be bornepayable by the Registrant.registrant in connection with the offering of the securities being registered. All of such fees and expenses,the amounts shown are estimates, except for the SEC registration fee and the FINRA filing fee, are estimated:fee.
| SEC registration fee | $ | 10,910 | $ | 5,510.00 | ||||
| Transfer agent’s fees and expenses | $ | * | ||||||
| FINRA Filing Fee | * | |||||||
| Accounting fees and expenses | * | |||||||
| Legal fees and expenses | $ | * | * | |||||
| Printing fees and expenses | $ | * | ||||||
| Accounting fees and expenses | $ | * | ||||||
| Miscellaneous fees and expenses | $ | * | ||||||
| Miscellaneous expenses | * | |||||||
| Total | $ | * | * | |||||
*These fees and expenses dependare calculated based on the securities offered and the number of issuances and amount of securities offered and accordingly cannot be estimated at this time andtime. An estimate of the aggregate amount of these expenses will be reflected in the applicable prospectus supplement.
Item 15. Indemnification of Officers and Directors.Directors
The Company’sPursuant to our Amended and Restated Bylaws, provide thatwe will, to the fullest extent permitted by the Utah Revised Business Corporation Act (the “Act”“Utah Statute”), indemnify our directors and officers with respect to expenses, settlements, judgments and fines in suits (including actions brought against a director or anyofficer in the name of the corporation, commonly referred to as a derivative action) in which such person was made a party by reason of the fact that he or she is or was a director or officer, or being or having been such a director or officer, such person was serving as a director, officer, associate or other applicable law, as eitheragent (i) for an enterprise of which we hold the majority of shares entitled to vote in the election of its directors, or (ii) at our request, for another enterprise. No such indemnification may be amended,given if the acts or omissions of the person are finally adjudged to be intentional misconduct or a director shall have no liability to the Company or its shareholders for monetary damages for conduct, any action taken, or any failure to take any action as a director. As permitted by the Act, directors will not be personallyknowing violation of law, if such person is liable to the Company or the Company’s shareholderscorporation for monetary damages for any action taken or any failure to take action as a director except liability for (a) the amount of a financial benefit received by a director to which he’s not entitled; (b) an intentional infliction of harm on the Company or its shareholders; (c) an unlawful distribution, in violation of Section 16-10a-842 of the Act; or (d) an intentional violation of criminal law.if such person personally received a benefit to which he or she was not entitled.
These limitations of liability do not alter director liability under the federal securities laws and do not affect the availability of equitable remedies, such as an injunction or rescission.
In addition, the Bylaws provide that:
The Company hasWe have entered into separate indemnification agreements with each of the Company’s executive officers and directors. These agreements provide that, subject to limited exceptions and among other things, the Company will indemnify each of itsour executive officers and directors, in addition to the fullest extent permittedindemnification provided for in our bylaws. These agreements, among other things, require us to indemnify our executive officers and directors for certain expenses, including attorneys’ fees incurred by law and advance expenses to each indemnityan executive officer or director in connection with any action or proceeding in which a right to indemnification is available.
The Company maintains general liability insurance that covers certain liabilities of its directors and officers arising out of claims based on actstheir services as one of our executive officers or omissions in their capacities as directors, or as an executive officer or director of any of our subsidiaries or any other company or enterprise to which the person provides services at our request.
Section 908 of the Utah Statute also permits a Utah corporation to purchase and maintain insurance on behalf of its officers including liabilities under the Securities Act. and directors. Our Amended and Restated Bylaws permit us to purchase such insurance on behalf of our officers and directors. We maintain a policy of liability insurance for our officers and directors.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to officers, directors officers, orand controlling persons who controlof the Company pursuant to the foregoing provisions, the Company has been informedadvised that
in the opinion of the Commission,SEC, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.
Item 16. Exhibits
The exhibits listed on the accompanying Exhibit Index are filed or incorporated by reference as part of this registration statement and such Exhibit Index is incorporated by reference.
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These provisions may discourage shareholders from bringing a lawsuit against the Company’s directors for breach of their fiduciary duty, or may have the practical effect in some cases of eliminating the Company’s shareholders’ ability to collect monetary damages from its directors and officers. These provisions may also have the effect of reducing the likelihood of derivative litigation against directors and officers, even though such an action, if successful, might otherwise benefit the Company and its shareholders. Furthermore, a shareholder’s investment may be adversely affected to the extent the Company pays the costs of settlement and damage awards against directors and officers pursuant to these indemnification provisions.
Item 16. Exhibits.
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*To be filed by amendment or as an exhibit to a report pursuant to Section 13(a), 13(c) or 15(d) of the Securities Exchange Act of 1934.
Item 17. Undertakings.Undertakings
| (a) | The undersigned registrant hereby undertakes: | ||||
| To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: | |||||
| (i) | To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; | ||||
| (ii) | To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent | ||||
| (iii) | To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; | ||||
Provided, however, that the undertakings set forth in paragraphs (1)(i), (1)(ii) and (1)(iii) above do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the SEC by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, that are incorporated by reference in this registration statement or are contained in a form of prospectus filed pursuant to Rule 424(b) that is part of this registration statement.
| 2. | That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. | ||
| To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. | |||
| That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser: | |||
| (i) | Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and |
| (ii) | Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by |
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| That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser: | |||
| (i) | |||
| (ii) | |||
| (iii) | |||
| (iv) | |||
| (b) | |||
| Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the | |||
| (d) | That, for purposes of determining any liability under the Securities Act of 1933: | ||
| (i) | The information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective; and | |
| (ii) | Each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
| (e) | The undersigned registrant hereby undertakes to file, if applicable, an application for the purpose of determining the eligibility of the trustee to act under subsection (a) of Section 310 of the Trust Indenture Act of 1939 (“Act”) in accordance with the rules and regulations prescribed by the SEC under Section 305(b)(2) of the Act. |
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EXHIBIT INDEX
Exhibit Number | Exhibit Description | Filed with this Report | Incorporated by Reference | Filing Date | SEC File/Reg. Number | |||||
| 1.1* | Form of Underwriting Agreement | |||||||||
| 1.2 | Equity Distribution Agreement, dated as of March 16, 2023 by and between the Registrant and Piper Sandler & Co. | X | ||||||||
| 3.1 | Articles of Incorporation | Draft Registration Statement (Exhibit 3.1) | 01/12/17 | 377-01467 | ||||||
| 3.1.1 | Amendment to the Articles of Incorporation | Draft Registration Statement (Exhibit 3.1.1) | 01/12/17 | 377-01467 | ||||||
| 3.1.2 | Articles of Amendment to Articles of Incorporation | Form 8-K (Exhibit 3.2) | 01/03/19 | 001-38148 | ||||||
| 3.1.3 | Articles of Amendment | Form 10-K (Exhibit 3.1.3) | 03/24/22 | 001-38148 | ||||||
| 3.2 | Amended and Restated Bylaws of Co-Diagnostics, Inc. | Form 8-K (Exhibit 3.1) | 04/01/22 | 001-38148 | ||||||
| 4.1 | Form of Indenture | X | ||||||||
| 4.2* | Form of Debt Securities | |||||||||
| 4.3* | Form of Warrant Agreement and Warrant Certificate | |||||||||
| 4.4* | Form of Preferred Stock Certificate and Form of Amendment to Articles of Incorporation describing the designation of Preferred Stock | |||||||||
| 4.5* | Form of Unit Agreement and Unit Certificate | |||||||||
| 4.6* | Form of Rights Certificate | |||||||||
| 4.7 | Warrant Agreement between Co-Diagnostics, Inc and VStock Transfer, LLC. Dated December 31, 2021 (ACI Warrant) | Form 10-K (Exhibit 10.6) | 03/24/22 | 001-38148 | ||||||
| 4.8 | Warrant Agreement between Co-Diagnostics, Inc and VStock Transfer, LLC. Dated December 31, 2021 (IDMO Warrant) | Form 10-K (Exhibit 10.7) | 03/24/22 | 001-38148 | ||||||
| 4.9 | Common Stock Purchase Warrant issued to Coltrin & Associates dated October 31, 2019 | X |
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| 4.10 | Common Stock Purchase Warrant issued to Coltrin & Associates dated February 6, 2020 | X | ||||||||
| 4.11 | Common Stock Purchase Warrant issued to Coltrin & Associates dated February 6, 2020 | X | ||||||||
| 4.12 | Amendment dated July 31, 2020 to Common Stock Purchase Warrant issued to Coltrin & Associates dated October 31, 2019 | X | ||||||||
| 5.1 | Opinion of Dorsey & Whitney LLP relating to the base prospectus | X | ||||||||
| 5.2 | Opinion of Dorsey & Whitney LLP relating to the equity distribution agreement prospectus | X | ||||||||
| 23.1 | Consent of Independent Registered Public Accounting Firm, | X | ||||||||
| 23.2 | Consent of Dorsey & Whitney LLP (included in Exhibit 5.1) | X | ||||||||
| 23.3 | Consent of Dorsey & Whitney LLP (included in Exhibit 5.2) | X | ||||||||
| 24.1 | Power of Attorney (included in signature page) | X | ||||||||
| 25.1* | Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of Trustee under the Indenture | |||||||||
| 107 | Filing Fee Table | X |
| * | To be filed by amendment or as an exhibit to a report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and incorporated herein by reference. |
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the registrantRegistrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statementregistration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Salt Lake City, State of Utah, on October 23, 2020.March 16, 2023.
| CO-DIAGNOSTICS, INC. | ||
| /s/ | ||
| Dwight | ||
| President and Chief Executive Officer | ||
Each person whose signature appears below hereby constitutes and appoints each of Dwight H. Egan and Reed L. Benson, and each of them, as theirBrian Brown, his or her true and lawful attorneys-in-factattorney-in-fact and agents,agent with full powerpowers of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any orand all amendments or supplements(including post-effective amendments) to this registration statement whether pre-effective or post-effective, including any subsequentand all additional registration statement for the same offering which may be filed understatements pursuant to Rule 462(b) underof the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-factattorney-in-fact and agents, and each of them,agent full power and authority to do and perform each and every act and thing requisite and necessary or appropriate to be done with respect to this registration statement or any amendments or supplements hereto in about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that all said attorneys-in-factattorney-in-fact and agents, or any of them, or thisagent or his or her substitute or substitutes, may lawfully do or cause to be done by virtue thereof.hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
| /s/ | Chief Executive Officer, President and Director | March 16, 2023 | ||
| Dwight Egan | (Principal Executive Officer) | |||
| /s/ | Chief Financial Officer | March 16, 2023 | ||
| Brian Brown | (Principal Financial and Accounting Officer) | |||
| /s/ | Director | |||
| Eugene Durenard | ||||
| /s/ | Director | |||
| Edward Murphy | ||||
| /s/ | Director | |||
| James Nelson | ||||
| /s/ | Director | |||
| Richard |