In-depth Analysis of the Investment Impact of Co-Diagnostics (CODX) 1-for-30 Reverse Stock Split

Co-Diagnostics (CODX)'s announced 1-for-30 reverse stock split is a clear signal that the company is in severe financial distress. With a current share price of $0.20, far below Nasdaq’s minimum bid requirement of $1, this reverse split is a last-ditch effort to maintain listing status [0]. Data shows that over the past 501 trading days, the stock price was below the $1 threshold for 54.3% of the time [0], reflecting the company’s long-term failure to meet exchange requirements. This corporate action has a

on shareholder value and the outlook for the company’s financial health.

---

• Current Share Price:
  $0.20 (as of December 30, 2025) [0]
• Nasdaq Minimum Requirement:
  $1.00 (Listing Rule 5550(a)(2))
• Gap:
  Share price needs to rise by
  400%
  to meet the minimum compliance requirement
• Non-Compliant Days:
  54.3% of trading days in the past 2 years with share price below $1 [0]

The chart below clearly shows CODX’s persistent struggle to stay above the $1 threshold during 2024-2025 (red shaded area indicates non-compliant periods). The chart shows the share price plummeted from $1.30 in early 2024 to the current $0.20, a drop of 84.80% [0].

Indicator	Before Split	After Split (Theoretical)
Share Price	$0.20	$6.00
Number of Shares Held (Assuming 1000 Shares)	1,000 Shares	33 Shares
Total Market Value	$200	$200 (Unchanged)
Company Market Cap	$6.61M	$6.61M (Unchanged)

A reverse stock split the company’s fundamentals or the total value of shareholders’ holdings; it only increases the per-share price through mathematical adjustment.

---

• Single-Day Plunge:
  -14.79% [0]
• 5-Day Drop:
  -18.62% [0]
• 1-Month Drop:
  -47.30% [0]
• YTD Drop:
  -72.97% [0]

This sharp decline reflects the market’s

interpretation of the reverse split, indicating investors have lost confidence in management and view it as a sign of deeper financial distress.

Based on research and historical data analysis:

• Barnes & Noble Education Case:
  After completing a 1-for-100 reverse split in 2024, the share price jumped from $2 to $20 instantly but then
  plummeted sharply
  [1]
• Academic Research:
  Companies after reverse stock splits typically experience
  negative abnormal stock returns
  [1]
• Survival Rate:
  Many companies that conduct reverse splits eventually
  fail to survive
  , as reverse splits are often a sign of the “end of the lifecycle” [1]

The market interprets reverse splits as a , which can form a self-fulfilling vicious cycle.

• Reduced Liquidity:
  Number of shares decreases by 29.67x (30:1), potentially leading to significant decline in trading liquidity
• Concentrated Voting Rights:
  Number of shareholders will actually decrease, and small shareholders may be forced to exit
• Psychological Impact:
  The “false prosperity” of share price jumping from $0.20 to $6.00 masks the reality of deteriorating fundamentals

---

Financial Indicator	CODX Value	Health Standard	Gap
Net Profit Margin	-6,336.27%	>10%	-6,346 Percentage Points
Operating Margin	-6,995.70%	>5%	-7,001 Percentage Points
ROE	-70.27%	>15%	-85 Percentage Points
EPS (TTM)	-$0.98	Positive	Severe Negative

For every $1 of revenue generated, the company loses $63.36, a situation that is in any business model.

• Q1 2025: $50,277
• Q2 2025: $162,910
• Q3 2025: $145,380
• FY2024 Full Year: $770,048 [0]

• CODX Market Cap:
  $6.61M
• Biotech Industry Average: Usually >$1B
• Gap: CODX’s market cap cannot even support R&D spending of a small biotech company

• Current Ratio:
  3.81 (Health Standard: >2.0)
• Quick Ratio:
  3.51 (Health Standard: >1.5)

Despite healthy liquidity ratios, the company is continuously “burning cash”:

• Free Cash Flow:
  -$29.9M (Latest Annual) [0]
• Cash Burn Rate:
  At the current loss rate, liquidity may be exhausted within 12-18 months

Dimension	Rating	Key Issues
Profitability	F	Huge losses, no signs of improvement
Growth	F	Tiny revenue scale, declining trend
Liquidity	B	尚可 in short term, but堪忧 long term
Debt Risk	B	Low leverage, but no profit to support debt capacity
Overall Rating	D+	Severe financial distress, high survival risk

---

Co-Diagnostics is a molecular diagnostics company that develops molecular tools for infectious disease testing, cancer screening liquid biopsies, and agricultural applications [1].

Co-Primers Technology (Proprietary PCR Platform)

• November:
  Selected Maxim Group as financial advisor (exploring strategic alternatives) [1]
• November:
  Launched clinical evaluation of upper respiratory multiplex point-of-care test (attempting to enter FDA market) [1]
• November:
  Delivered a speech at international tuberculosis conference (attempting to build international presence) [1]
• December:
  Joint venture CoSara invited to participate in Indian tuberculosis diagnosis course (limited progress) [1]

These moves indicate the company is , but all are in early stages and far from generating commercial revenue.

• Buy:
  2 (40%)
• Hold:
  3 (60%)

$6.00 (implies a rise from current $0.20) [0]

• November 24, 2025: HC Wainwright maintained “Neutral” rating
• October 28, 2025: D. Boral Capital maintained “Buy” rating
• December 2, 2025: Zacks upgraded to Buy #2 [1]

Despite “Buy” ratings, the huge gap between the target price of $6.00 and current $0.20 reflects among analysts about the company’s prospects.

---

• Support Level:
  $0.18 (Historical Low) [0]
• Resistance Level:
  $0.30 (Recent High) [0]
• 52-Week Range:
  $0.18 - $1.55 [0]
• Trend:
  Sideways/No Clear Trend [0]

• KDJ:
  Oversold Opportunity Zone
• RSI:
  Oversold Opportunity Zone
• MACD:
  No Crossover (Bearish) [0]

Scenario	Probability	Post-Split Price	Logic
Extremely Bearish	40%	<$3.00	Deteriorating fundamentals, market loss of confidence
Bearish	35%	$3.00-$5.00	Rebound after compliance, but no fundamental support
Neutral	20%	$5.00-$7.00	Short-term compliance success, but long-term uncertainty
Bullish	5%	>$7.00	Requires major business breakthrough (FDA approval, etc.)

Historically, [1].

---

• ✗ 14.79% plunge in share price (announcement day) [0]
• ✗ 96.67% reduction in number of shares held (30:1 ratio)
• ✗ Reduced liquidity
• ✗ Diminished market confidence

• ✗ Probability of continued share price decline 1 year after reverse split >50%
• ✗ Company may face delisting risk (if unable to maintain above $1)
• ✗ May need more reverse splits or financing in the future

• If you are a long-term holder, the reverse split is a
  strong exit signal
• Consider reducing or liquidating positions after split takes effect (share price temporarily rebounds to ~$6)

• Only consider holding if you can承受
  100% principal loss
• This is essentially
  high-risk speculation
  rather than investment

• Consider shifting funds to peer companies with healthy finances and strong growth
• If optimistic about the molecular diagnostics track, choose
  industry leaders
  such as:
  • Abbott Laboratories (ABT)
  • Thermo Fisher Scientific (TMO)
  • Hologic (HOLX)

If you choose to continue holding, closely monitor:

Indicator	Alert Value	Current Status
Share Price	<$1.00 (post-split)	❌ To be observed
Quarterly Revenue	<Expected	❌ $145K (extremely low)
Cash Reserves	<6 months of operations	❌ FCF -$29.9M
FDA Progress	No progress	⚠️ Clinical evaluation stage
Delisting Notice	Received notice	⚠️ High risk

---

##7. Conclusion: The True Meaning of Reverse Split

###7.1 Interpretation of Management Signals

1. Admission of Failure:
   Management admits inability to boost share price through business growth
2. Last Resort:
   This is a last-ditch effort to avoid delisting, not an active strategic choice
3. Time Pressure:
   Company faces urgent pressure from Nasdaq compliance deadlines
4. Lack of Confidence:
   If management had confidence in business prospects, it would focus on operations rather than technical share price manipulation

###7.2 Investment Implications

Co-Diagnostics’ 1-for-30 reverse stock split is a , not an investment opportunity.

• ✗
  Catastrophic
  financial fundamentals: -6,336% net profit margin, $770K revenue scale
• ✗
  Poor
  share price performance: 97.99% drop over 5 years, 72.10% drop over 1 year
• ✗
  Adverse
  historical evidence: Companies after reverse splits usually perform poorly
• ✗
  Slow
  business progress: No commercial products, minimal revenue
• ✓ Only bright spot:尚可 liquidity ratios (but unsustainable)

###7.3 Final Recommendations

Investor Type	Recommendation
Long-Term Value Investors	Strong Sell - Does not meet any value investment criteria
Growth Investors	Avoid - No growth, declining revenue
Speculative/Short-Term Investors	Extreme Caution - Only consider if you can承受 100% loss
Institutional Investors	Avoid - Extremely unreasonable risk/reward ratio

---

This report is based on public data and analysis tools and does not constitute investment advice. Stock investment involves risks; please make decisions based on your own risk tolerance and investment objectives. Reverse stock split is a major corporate event; it is recommended to consult a professional financial advisor.

---

[0] Jinling API Data - Including real-time quotes, financial analysis, technical analysis, company overview, and historical price data

[1] Investopedia - “Reverse Stock Split Explained: Definition, Process, and Examples” (https://www.investopedia.com/terms/r/reversesplit.asp) - Definition, process, and historical cases of reverse stock splits

[2] Seeking Alpha - “Co-Diagnostics announces 1-for-30 reverse stock split” (https://seekingalpha.com/news/4535856-co-diagnostics-announces-1-for-30-reverse-stock-split) - Reverse stock split announcement

[3] Yahoo Finance - “Co-Diagnostics Initiates Clinical Evaluations for Upper Respiratory Multiplex Point-of-Care Test” (https://finance.yahoo.com/news/co-diagnostics-initiates-clinical-evaluations-140000217.html) - FDA clinical evaluation progress

[4] ResearchGate - “Survivability following Reverse Stock Splits” (https://www.researchgate.net/publication/285782918_Survivability_following_Reverse_Stock_Splits_What_Determines_the_Fate_of_Non-Surviving_Firms) - Academic research on survival rate of companies after reverse splits

[5] CNN Business - CODX Stock Quote and News (https://www.cnn.com/markets/stocks/CODX) - Recent news and analyst rating changes