8-K: Co-Diagnostics Amends Equity Distribution Agreement, Adds Clear Street as Sales Agent

Co-Diagnostics amends its equity distribution agreement to include Clear Street LLC as a sales agent, potentially offering up to $17,111,650 in common stock.

Summary

• Co-Diagnostics, Inc. has amended and restated its Equity Distribution Agreement, originally established on March 16, 2023, with Piper Sandler & Co.
• The amendment, effective April 25, 2025, adds Clear Street LLC as a sales agent.
• Under the amended agreement, Co-Diagnostics may offer and sell shares of its common stock, with an aggregate offering price of up to $17,111,650.
• Sales commissions will be divided equally between Piper Sandler and Clear Street.
• As of April 25, 2025, the company has already sold 833,806 shares under the original Equity Distribution Agreement.
• The company has filed a revised Plan of Distribution to reflect the amended agreement and the appointment of Clear Street as a sales agent.
• The company will pay the Sales Agents commissions for their services in acting as sales agents in the sale of our common stock.
• The Sales Agents will be entitled to compensation in an amount equal to 3.0% of the gross sales price of all common stock sold through them as sales agents under the Equity Distribution Agreement.
• The company has also agreed to reimburse the Sales Agents for the out-of-pocket reasonable fees and disbursements of their legal counsel, in an amount not to exceed $125,000 in connection with the establishment of this at-the-market offering program, $35,000 in connection with the execution of this Equity Distribution Agreement, $54,000 with respect to the quarter ended September 30, 2024, and $15,000 for each applicable quarter subsequent to the quarter ended December 31, 2024.
• The company estimates that the total expenses for this offering, excluding compensation and reimbursements payable to the Sales Agents under the terms of the Equity Distribution Agreement, will be approximately $250,000.

Sentiment

Score: 6

Explanation: The sentiment is neutral. The announcement is a routine financial transaction (amending an existing equity distribution agreement) with both potential benefits (access to capital) and risks (dilution, expenses).

Positives

• The addition of Clear Street LLC as a sales agent could broaden the distribution network for Co-Diagnostics' common stock.
• The amendment provides Co-Diagnostics with continued access to capital through the sale of its common stock.
• The company has already sold 833,806 shares under the original Equity Distribution Agreement.

Negatives

• The company will incur additional expenses related to sales commissions and legal counsel fees.
• The offering of additional shares may dilute existing shareholders' equity.
• The company estimates that the total expenses for this offering, excluding compensation and reimbursements payable to the Sales Agents under the terms of the Equity Distribution Agreement, will be approximately $250,000.

Risks

• There is no guarantee that the sales agents will be successful in selling the shares at the desired price or within the desired timeframe.
• Market conditions and investor sentiment could impact the demand for Co-Diagnostics' common stock.
• The company's stock price could be negatively affected by the offering of additional shares.
• The company may be in possession of material non-public information, the Company and the Agents agree that (i) no sale of Shares will take place, (ii) the Company shall not request the sale of any Shares, and (iii) the Agents shall not be obligated to sell or offer to sell any Shares.

Future Outlook

Co-Diagnostics intends to continue utilizing the Equity Distribution Agreement to raise capital through the sale of its common stock, subject to market conditions and the company's needs.

Industry Context

At-the-market (ATM) offerings are a common method for publicly traded companies, particularly in the biotech and diagnostics sectors, to raise capital incrementally. This approach allows companies to take advantage of market fluctuations and investor demand without the need for a traditional underwritten offering.

Comparison to Industry Standards

• The 3.0% sales commission is within the typical range for ATM offerings, which generally fall between 1% and 5%.
• Similar companies, such as Exact Sciences and QuidelOrtho, have utilized ATM offerings to fund research and development, acquisitions, or general corporate purposes.
• The legal counsel fee reimbursement structure is also consistent with industry practices for ATM agreements.

Stakeholder Impact

• Shareholders may experience dilution of their ownership stake.
• The company may have additional capital to fund operations and growth.
• The sales agents will receive commissions for their services.

Next Steps

• Co-Diagnostics will file quarterly reports disclosing the number of shares sold, net proceeds, and compensation paid to the sales agents.
• The sales agents will begin selling shares of common stock on behalf of Co-Diagnostics, subject to the terms of the agreement and market conditions.

Key Dates

Keywords

equity distribution agreement, Co-Diagnostics, Piper Sandler, Clear Street, common stock, sales agent, offering, securities