Zhongchao Inc. (NASDAQ: ZCMD) will execute a 1‑for‑8 reverse stock split effective March 2, 2026. The consolidation will increase the par value of each share from $0.001 to $0.008 and will be reflected under the same ticker symbol but with a new CUSIP number, G9897X123.
Prior to the split the company had 25,754,124 Class A shares and 4,999,772 Class B shares outstanding. After the consolidation, the outstanding shares will be approximately 3,219,267 Class A shares and 624,972 Class B shares, with any fractional shares rounded up to the nearest whole share. Shareholders will retain proportional ownership and voting rights, and the capital structure and dividend policy will remain unchanged.
The reverse split is intended to bring the company back into compliance with Nasdaq’s minimum bid price rule (Rule 5550(a)(2)). A deficiency notice was issued on November 28, 2025 after the bid price fell below $1.00 from October 9 to November 26, 2025. The company has until May 28, 2026 to regain compliance, and the 1‑for‑8 consolidation is a key step in meeting that deadline.
Zhongchao operates a platform‑based internet technology business that serves patients with cancer and other major diseases in China. The company’s financial profile shows a high Altman Z‑Score and strong liquidity ratios (current and quick ratios of 8.15) with no debt, but it has experienced declining revenue and profitability, reflected in an operating margin of –8.9% and a net margin of –12.95%. A Beneish M‑Score of –1.48 raises concerns about potential financial manipulation. The company previously completed a 1‑for‑10 reverse split on February 29, 2024, indicating a recurring challenge in maintaining a share price above the Nasdaq threshold.
The consolidation is a cosmetic adjustment that does not address the underlying business challenges driving the low share price. While it restores compliance with listing requirements, investors may view the reverse split as a signal of distress. The company’s capital structure and dividend policy remain unchanged, and the move is primarily a regulatory compliance measure rather than a strategic shift in operations or growth prospects.
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