$6.5M Co-Diagnostics Securities Class Action Settlement (CODX)

What Changed Recently?

This settlement arrived on the eve of trial, after four years of litigation in which the case survived every attempt to end it. The complaint was filed on August 16, 2022. The court appointed a lead plaintiff and lead counsel on August 9, 2023, the Consolidated Amended Class Action Complaint followed on September 21, 2023, and on February 5, 2024 the court granted in part and denied in part the Defendants' motion to dismiss. The class was certified on November 12, 2024, and on January 24, 2025 the court denied the Defendants' motion to decertify it.

The turning point came on January 14, 2026, when the court granted in part the lead plaintiff's motion for partial summary judgment and denied the Defendants' summary judgment motion in its entirety, leaving the case set for trial. Kobre & Kim LLP appeared as trial co-counsel in June 2026.

Settlement talks had been running alongside the litigation since June 2024. A full-day mediation before Jed Melnick of JAMS on October 18, 2024 ended without a deal, but the discussions continued, and on July 28, 2026 the parties signed a binding term sheet at $6.5 million. The Stipulation was executed on August 14, 2026, the court granted preliminary approval on August 17, 2026, and notice went out to the Class in September 2026.

None of that is a finding against anyone. The Defendants have denied and continue to deny all assertions of wrongdoing or liability, deny that the Class suffered damages, and deny that the price of Co-Diagnostics securities was artificially inflated. The notice states that the settlement should not be seen as an admission or concession, and that the Defendants agreed to it solely to avoid the uncertainty, burden and expense of further litigation.

What the Case Alleged

The action claimed violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and SEC Rule 10b-5 against Co-Diagnostics, Inc. and two of its officers, Dwight H. Egan and Brian L. Brown.

The operative complaint alleged that in press releases and on earnings calls with investors the Defendants made material misstatements and omissions about demand for the company's core product, the Logix Smart COVID-19 Test. Specifically, it alleged that at the time of the statements demand for the test had already collapsed, and that the Defendants' positive statements about that demand therefore lacked a reasonable basis. The complaint alleged that when the truth emerged, the share price fell.

These are allegations that were never tested at trial. All Defendants deny them, and no court has found any Defendant liable.

Who Qualifies?

The Class, as certified by the court, covers all persons and entities who purchased the publicly traded securities of Co-Diagnostics during the period from May 12, 2022 through the close of the market on August 11, 2022 (4:00 p.m. ET), inclusive, and were damaged as a result. In practical terms that means investors who bought or otherwise acquired Co-Diagnostics common stock or call options during that window, or who sold (wrote) Co-Diagnostics put options during it.

A few points decide most eligibility questions:

• Options count, but only in one direction each. Call options must have been purchased or acquired during the class period; put options must have been sold or written during it. Purchased puts and written calls are assigned a Recognized Loss Amount of zero.
• Holding Co-Diagnostics through a mutual fund does not make you a Class Member. You had to trade in your own account, though the fund itself may be a Class Member.
• Receiving a notice does not mean you are eligible or that you will be paid. The parties and the administrator have no access to your trading records, which is why a Claim Form and documentation are required.