Co-Diagnostics, Inc. (NASDAQ:CODX) shares plunged over 50% on Tuesday after the company announced a $7 million direct offering and a new Saudi-based joint venture.
The selloff suggested investors were more focused on the prospect of near-term dilution than the company’s longer-term global expansion plans.
The company stated that it entered into a securities purchase agreement with institutional investors to sell 12.7 million shares of common stock, or equivalent pre-funded warrants, for 55 cents per share.
Also Read: Co-Diagnostics Stock Plunges 28% In Pre-Market Despite Strategic Saudi Partnership
Gross proceeds are expected to total about $7 million before fees and expenses. Funds will go toward working capital and general corporate purposes.
Maxim Group LLC is acting as the sole placement agent for the deal, which is scheduled to close on or before October 29, pending customary conditions. The offering is being made under Co-Diagnostics’ shelf registration statement filed with the U.S. Securities and Exchange Commission.
Middle East Expansion
Separately, Co-Diagnostics signed a definitive agreement with Arabian Eagle to establish CoMira Diagnostics, a Saudi joint venture that will manufacture, assemble, and distribute Co-Dx technologies, including the company’s next-generation PCR platform.
The partnership supports Saudi Vision 2030 by focusing on healthcare innovation, industrial diversification, and localization of technology.
CoMira will seek regulatory approval from the Saudi Food & Drug Authority, which could open doors to additional markets across the region.
The joint venture holds exclusive rights to manufacture and commercialize Co-Dx diagnostic products in Saudi Arabia and 18 other countries.
In a separate filing, Co-Diagnostics disclosed an at-the-market equity offering program of up to $10 million through an Equity Distribution Agreement with Maxim Group LLC. Under the agreement, Maxim will act as the sole sales agent, earning a 3% commission on gross sales of the company’s common stock.
Price Action: CODX shares were trading lower by 53.21% to $0.5895 at last check Tuesday.
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