CO-DIAGNOSTICS, INC. Form 8-K (Dec. 21, 2021)

Summary

Current report on Form 8-K of Co-Diagnostics, Inc. (CODX) reporting an event dated December 21, 2021. Under Item 1.01, CODX entered into separate Agreements and Plans of Merger with Idaho Molecular, Inc. and Advanced Conceptions, Inc., each to become a wholly owned subsidiary, in connection with a Joint Development & License Agreement dated as of or about February 15, 2021. Each lists 1,650,000 shares of CODX common stock, an additional 708,500 shares subject to forfeiture if certain milestones have not been satisfied on or before January 1, 2027, and warrants for 232,500 shares at $9.125. Issuances are capped at 19.99% of shares outstanding unless stockholders approve or The NASDAQ Stock Market grants a waiver. The signature block carries /s/ Brian Brown, Chief Financial Officer, dated December 23, 2021.

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UNITED
STATES

SECURITIES
AND EXCHANGE COMMISSION

Washington,
D.C. 20549

FORM 8-K

CURRENT
REPORT

Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date
of Report (Date of earliest event reported): December 21, 2021

CO-DIAGNOSTICS,
INC.

(Exact
name of registrant as specified in its charter)

Utah | 001-38148 | 46-2609363
(State
 or other jurisdiction of
 incorporation) | (Commission File
 Number) | (IRS
 Employer Identification
 No.)

2401
S. Foothill Drive , Suite D

Salt
Lake City , UT 84109

(Address
of principal executive offices, including Zip Code)

Registrant’s
telephone number, including area code: (801) 438-1036

N/A

(Former
name or former address, if changed since last report)

Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under
any of the following provisions:

☐ | Written
 communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ | Soliciting
 material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ | Pre-commencement
 communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ | Pre-commencement
 communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities
registered pursuant to Section 12(b) of the Act:

Title
 of each class: | Trading
 Symbol(s): | Name
 of each exchange on which registered:
Common
 Stock, par value $0.001 per share | CODX | The NASDAQ Capital Market

Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

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 13(a) of the Exchange Act. ☐

Item
 1.01 | Entry
 into a Material Definitive Agreement

Background
Information:

Co-Diagnostics,
Inc. (“CODX”) and Advanced Conceptions, Inc. (“ACI”) are parties to that certain Joint Development & License
Agreement, dated as of or about February 15, 2021 (the “Development Agreement”). ACI has delegated by subcontract certain
of its obligations under the Development Agreement to Idaho Molecular, Inc. (“Idaho Molecular”). The aim of the Development
Agreement is to develop an at-home/point-of-care testing device (the “Purpose”). In furtherance of the Purpose, the respective
boards of directors of CODX, ACI and Idaho Molecular have approved a transaction in which each of ACI and Idaho Molecular will become
wholly owned subsidiaries of CODX.

I. | Agreement
 and Plan of Merger with Idaho Molecular, Inc.

On
December 21, 2021, CODX entered into an Agreement and Plan of Merger (the “IM Merger Agreement”) with IDMO Acquisition
Corp., an Idaho corporation and a wholly-owned subsidiary of the CODX (“IM Merger Sub”), Idaho Molecular, and the Company
Representative named therein. Pursuant to the IM Merger Agreement, IM Merger Sub will be merged with and into Idaho Molecular (the “IM
Merger”) with Idaho Molecular surviving the IM Merger and becoming a wholly owned subsidiary of CODX.

Merger
Consideration

At
the effective time of the IM Merger, all the outstanding shares of capital stock of Idaho Molecular shall be cancelled and converted
into the right to receive, in the aggregate: 1,650,000 shares of CODX common Stock, par value $0.001 per share (“CODX Common
Stock”), which number may be adjusted upward or downward at closing based on Idaho Molecular’s net cash at the time of closing;
an additional 708,500 shares of CODX Common Stock that is subject to a right of forfeiture in favor of CODX if certain milestones have
not been satisfied on or before January 1, 2027 and the right of forfeiture has not been released due to the occurrence of certain events
described in the IM Merger Agreement (the “IM Milestone Stock Consideration”); and warrants to purchase 232,500 shares
of CODX Common Stock (the “IM Warrants”), at an exercise price of $9.125 per Warrant that are also subject to a right
of forfeiture if certain milestones have not been satisfied on or before January 1, 2027 and the right of forfeiture has not been released
due to the occurrence of certain events described in the IM Merger Agreement (the “IM Warrants”, together with the
IM Milestone Stock Consideration shall be referred to as the “IM Milestone Consideration”).

NASDAQ
Cap

The
IM Merger Agreement further provides that under no circumstances shall the aggregate number of shares of CODX Common Stock, including
CODX Common Stock issuable upon the exercise of the IM Warrants, including shares issuable under the ACI Merger Agreement
described below, exceed, in the aggregate, 19.99% of the total number of shares of CODX Common Stock outstanding or of the voting
power of CODX (the “IM NASDAQ Cap”) unless CODX has obtained either (x) its stockholders’ approval of the issuance
of more than such number of shares of CODX Common Stock, or (y) a waiver from The NASDAQ Stock Market of the CODX’s compliance
with Rule 5635(d). To the extent that the issuance of any number of shares of CODX Common Stock would exceed the IM NASDAQ Cap,
then CODX, in lieu of issuing such additional shares of CODX Common Stock that would exceed the IM NASDAQ Cap, CODX will
pay cash instead of CODX Common Stock.

Representations
and Warranties

The
IM Merger Agreement contains representations, warranties, and covenants of the parties customary for a transaction of this type, including,
among other things, a covenant of Idaho Molecular not to pursue other acquisition proposals or to provide information or enter into discussions
in connection with other acquisition proposals. Additionally, CODX has agreed to cause CODX Common Stock and shares of CODX
Common Stock underlying the IM Warrants to be registered under the Securities Act of 1933, as amended (the “Securities
Act”), by preparing and filing a registration statement with the Securities and Exchange Commission no later than May 15, 2022,
and to cause such registration statement to become effective prior to July 1, 2022.

Closing
Conditions

Completion
of the IM Merger is subject to the simultaneous closing of the merger of ACI as described below and customary closing conditions,
including, Idaho Molecular obtaining the requisite stockholder approval of the IM Merger.

Stockholder
Support Agreement

Contemporaneously
with the execution and delivery of the IM Merger Agreement, certain stockholders (the “IM Supporting Stockholders”)
of Idaho Molecular entered into the Stockholder Support Agreement pursuant to which IM Supporting Stockholders have irrevocably
agreed to vote in favor of the IM Merger Agreement and agreed to certain transfer restrictions with respect to their Idaho Molecular
shares.

CODX
Funding Commitment.

Following
the closing, CODX has committed to expend resources towards and continue funding the projects, purposes, objectives, and operations contemplated
in the Development Agreement. Should CODX breach or fail to perform its development obligations the Right of Forfeiture of the IM
Milestone Consideration described above shall terminate.

Termination
Provisions

The
IM Merger Agreement also includes termination provisions for both CODX and Idaho Molecular, including the right to terminate by mutual
consent and the right of either party to terminate the IM Merger Agreement if the closing has not occurred on or prior to December 31,
2021.

Voting
Agreement and Transfer Restrictions

As
part of the IM Merger, CODX and certain stockholders of Idaho Molecular (collectively, the “IM Key Holders”)
will execute and deliver a voting agreement (the “IM Voting Agreement”), pursuant to which the IM Key Holders
agree, among other things, that at any annual or special meeting of CODX’s stockholders held in order to elect directors to the
CODX board of directors, to vote all shares of CODX Common Stock held by them for the directors nominated by the current CODX board.
Further, under the IM Voting Agreement each IM Key Holder agrees to vote its shares in favor of removal of any director
of CODX should the holders of two-thirds (2/3) of the outstanding shares of CODX Common Stock then held by the CODX stockholders
request the removal of a director. The IM Voting Agreement terminates upon the earlier to occur of (a) eighteen months (18) months
from the date of the IM Voting Agreement or (b) a sale of CODX. In addition, while the IM Voting Agreement is in effect
the IM Key Holders agree to certain limitations or prohibitions on transfer of their CODX Common Stock, including
restrictions on the number of shares they may sell during any ninety (90) period once a registration statement covering the resale of
such shares has been declared effective by the SEC.

Restrictive
Covenants Agreements

Certain
key personnel of Idaho Molecular will also enter into a Restrictive Covenants Agreement with CODX providing for certain confidentiality
obligations and limited restrictions on engaging in certain competitive actives.

The
foregoing description of the IM Merger Agreement and the transactions contemplated by the IM Merger Agreement does not purport to be
a complete description thereof and is qualified in its entirety by reference to the full text of the IM Merger Agreement, which is attached
hereto as Exhibit 2.1 and incorporated herein by reference. The IM Merger Agreement has been attached to provide investors with information
regarding its terms. It is not intended to provide any other factual information about the Development Agreement described above or of
CODX, Idaho Molecular or their respective subsidiaries and affiliates. The IM Merger Agreement contains representations and warranties
by each of the parties to the IM Merger Agreement, which were made only for purposes of that agreement and as of specified dates. The
representations, warranties and covenants in the IM Merger Agreement were made solely for the benefit of the parties to the IM Merger
Agreement and are subject to limitations agreed upon by the contracting parties. Investors should not rely on the representations, warranties
and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of CODX, Idaho Molecular or
any of their respective subsidiaries or affiliates. Moreover, information concerning the subject matter of the representations, warranties
and covenants may change after the date of the IM Merger Agreement, which subsequent information may or may not be fully reflected in
CODX’s public disclosures.

II. | Agreement
 and Plan of Merger with Advanced Conceptions, Inc.

On
December 21, 2021, CODX entered into an Agreement and Plan of Merger (the “ACI Merger Agreement”) with ACI Acquisition
Corp., an Idaho corporation and a wholly-owned subsidiary of CODX (“ACI Merger Sub”), ACI, and the Company Representative
named therein. Pursuant to the ACI Merger Agreement, ACI Merger Sub will be merged with and into ACI (the “ACI
Merger”) with ACI surviving the ACI Merger and becoming a wholly owned subsidiary of CODX.

Merger
Consideration

At the effective time of the ACI Merger, all
the outstanding shares of capital stock of ACI shall be cancelled and converted into the right to receive, in the aggregate: 1,650,000
shares of CODX Common Stock, which number may be adjusted upward or downward at closing based on ACI’s net cash at
the time of closing; an additional 708,500 shares of CODX Common Stock that is subject to a right of forfeiture in favor of CODX if certain
milestones have not been satisfied on or before January 1, 2027 and the right of forfeiture has not been released due to the occurrence
of certain events described in the ACI Merger Agreement (the “ACI Milestone Stock
Consideration ”); and warrants to purchase 232,500 shares of CODX Common Stock (the “ACI Warrants ”),
at an exercise price of $9.125 per Warrant that are also subject to a right of forfeiture if certain milestones have not been satisfied
on or before January 1, 2027 and the right of forfeiture has not been released due to the occurrence of certain events described in the
ACI Merger Agreement (the “ACI Warrants ”, together with the
ACI Milestone Stock Consideration shall be referred to as the “ACI Milestone Consideration ”).

NASDAQ
Cap

The
ACI Merger Agreement further provides that under no circumstances shall the aggregate number of shares of CODX Common Stock, including
CODX Common Stock issuable upon the exercise of the ACI Warrants, including shares issuable under the IM Merger Agreement
described above, exceed, in the aggregate, 19.99% of the total number of shares of CODX Common Stock outstanding or of the voting
power of CODX (the “ACI NASDAQ Cap”) unless CODX has obtained either (x) its stockholders’ approval of the issuance
of more than such number of shares of CODX Common Stock, or (y) a waiver from The NASDAQ Stock Market of the CODX’s compliance
with Rule 5635(d). To the extent that the issuance of any number of shares of CODX Common Stock would exceed the ACI NASDAQ Cap,
then CODX, in lieu of issuing such additional shares of CODX Common Stock that would exceed the ACI NASDAQ Cap, CODX will
pay cash instead of CODX Common Stock.

Representations
and Warranties

The
ACI Merger Agreement contains representations, warranties, and covenants of the parties customary for a transaction of this type, including,
among other things, a covenant of ACI not to pursue other acquisition proposals or to provide information or enter into discussions
in connection with other acquisition proposals. Additionally, CODX has agreed to cause the CODX Common Stock and shares of CODX
Common Stock underlying the ACI Warrants to be registered under the Securities Act, by preparing and filing
a registration statement with the Securities and Exchange Commission no later than May 15, 2022, and to cause such registration statement
to become effective prior to July 1, 2022.

Closing
Conditions

Completion
of the ACI Merger is subject to the closing of the IM Merger as described above and customary closing conditions, including,
ACI obtaining the requisite stockholder approval of the ACI Merger.

Stockholder
Support Agreement

Contemporaneously
with the execution and delivery of the ACI Merger Agreement, the largest stockholder o(the “ACI Supporting Stockholder”)
of ACI entered into the Stockholder Support Agreement pursuant to which the ACI Supporting Stockholder has irrevocably
agreed to vote in favor of the ACI Merger Agreement and agreed to certain transfer restrictions with respect to their ACI shares.

CODX
Funding Commitment.

Following
the closing, CODX has committed to expend resources towards and continue funding the projects, purposes, objectives, and operations contemplated
in the Development Agreement. Should CODX breach or fail to perform its development obligations the of Right of Forfeiture of the Milestone
Consideration described above shall terminate.

Termination
Provisions

The
ACI Merger Agreement also includes termination provisions for both CODX and ACI, including the right to terminate by mutual consent
and the right of either party to terminate the ACI Merger Agreement if the closing has not occurred on or prior to December 31, 2021.

Voting
Agreement and Transfer Restrictions

In
connection with the ACI Merger Agreement, CODX and certain stockholders of ACI (collectively, the “ACI Key Holders”)
will enter into a voting agreement (the “ACI Voting Agreement”), pursuant to which the ACI Key Holders will
agree, among other things, that at any annual or special meeting of CODX’s stockholders held in order to elect directors to the
CODX board of directors, to vote all shares of CODX Common Stock held by them for the directors nominated by the current CODX board.
Further, under the ACI Voting Agreement each ACI Key Holder agrees to vote his or its shares in favor of removal of any
director of CODX should the holders of two-thirds (2/3) of the outstanding shares of CODX Common Stock then held by the CODX stockholders
request the removal of a director. The ACI Voting Agreement terminates upon the earlier to occur of (a) eighteen months (18) months
from the date of the ACI Voting Agreement or (b) a sale of CODX. In addition, while the ACI Voting Agreement is in effect
the ACI Key Holders agreed to certain prohibitions on transfer of their CODX Common Stock including restrictions on the
number of shares they may sell during any ninety (90) period once a registration statement covering the resale of such shares has been
declared effective by the SEC.

Restrictive
Covenants Agreements

Certain
key personnel of ACI will also enter into a Restrictive Covenants Agreement with CODX providing for certain confidentiality obligations
and restrictions on engaging in certain competitive actives.

The
foregoing description of the ACI Merger Agreement and the transactions contemplated by the ACI Merger Agreement does not purport to be
a complete description thereof and is qualified in its entirety by reference to the full text of the ACI Merger Agreement, which is attached
hereto as Exhibit 2.2 and incorporated herein by reference. The ACI Merger Agreement has been attached to provide investors with information
regarding its terms. It is not intended to provide any other factual information about the Development Agreement described above or of
CODX, ACI or their respective subsidiaries and affiliates. The ACI Merger Agreement contains representations and warranties by
each of the parties to the ACI Merger Agreement, which were made only for purposes of that agreement and as of specified dates. The representations,
warranties and covenants in the ACI Merger Agreement were made solely for the benefit of the parties to the ACI Merger Agreement, are
subject to limitations agreed upon by the contracting parties. Investors should not rely on the representations, warranties and covenants
or any descriptions thereof as characterizations of the actual state of facts or condition of CODX, ACI or any of their respective
subsidiaries or affiliates. Moreover, information concerning the subject matter of the representations, warranties and covenants may
change after the date of the ACI Merger Agreement, which subsequent information may or may not be fully reflected in CODX’s public
disclosures.

Item 3.02 | Unregistered Sales of Equity Securities.

The disclosure set forth
above in Item 1.01 of this Current Report on Form 8-K is incorporated by reference herein. The shares of CODX Common Stock, IM Warrants
and ACI Warrants to be issued in connection with the transactions described in Item 1.01 will not be registered under the Securities
Act, and will be issued in reliance on the exemption from registration requirements thereof provided by Section 4(a)(2) of the Securities
Act and/or Regulation D promulgated thereunder as a transaction by an issuer not involving a public offering.

Item
 7.01 | Regulation
 FD Disclosure

On
December 22, 2021, CODX issued a press release announcing the execution of the merger agreements. A copy of the press release
is furnished as Exhibit 99.1 to this report and is incorporated herein by reference.

Item
 9.01 | Financial
 Statements and Exhibits.

EXHIBIT
INDEX

Exhibit
 No. | Description
2.1* + | Agreement
 and Plan of Merger by and between Co-Diagnostics, Inc, IDMO Acquisition Corp., Idaho Molecular Inc., and Company Representative dated
 as of December 21, 2021.
2.2* + | Agreement and Plan of Merger by and between Co-Diagnostics, Inc, ACI Acquisition Corp., Advanced Conceptions, Inc., and Company Representative dated as of December 21, 2021.
99.1 | Press
 Release dated December 22, 2021.

*
Schedules and exhibits to these Exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company agrees to furnish
supplementally a copy of any omitted schedule or exhibit to the SEC upon request.

+ Portions of Exhibit 2.1 and Exhibit 2.2 have been omitted as they contain information that (i) is not material and (ii) is the
type of information the issuer both customarily and actually treats as private and confidential.

SIGNATURES

Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.

CO-DIAGNOSTICS,
 INC.
Date: | December
 23, 2021 | By: | /s/
 Brian Brown
Brian
 Brown
Chief
 Financial Officer
(Principal
 Financial and Accounting Officer)

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