Company: CDT
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001641172-25-024140
Chunk: 23

Company: CDT Equity Inc.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 1
Chunk 23
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 held a special meeting of the stockholders
to approve the full conversion of the August 2024 Nirland Note on or before January 9, 2025, then the Company was obligated to pay Nirland
a penalty of $0.1 million per day until the special meeting was held. In addition, the existing conversion rate was amended to be two
and one half times the sum of (x) the portion of the principal to be converted, redeemed or otherwise with respect to which this determination
is being made and (y) all accrued and unpaid interest (including default interest) with respect to such portion of the principal amount,
if any divided by $0.10, prior to the Reverse Stock Split, (or following any reverse splits that may occur in a ratio greater than 10
to 1, the lower of such reverse split price and the market price per share at the time of the Conversion Date, but in no event less than
$1.00), subject to adjustment as provided therein and to take into account any future share splits or reverse splits to maintain the
economic equivalence of the conversion rights as at the amendment effective date. The Company notes that the reverse split provision
in the preceding sentence was tripped following the January Reverse Stock Split.

As
of the Second Amendment, the Company elected to account for the August 2024 Nirland Note at fair value under ASC 825. The Company determined
that the amendment to the conversion features present in the Second Amendment fall under the guidance within ASC 825 that notes that
if a significant modification of debt occurs an entity is able to make an accounting election on that date to account for that debt under
the fair value option. At the end of each reporting period, the Company calculates the fair value of the August 2024 Nirland Note, and
any changes in fair value are reported in the current period’s condensed consolidated statements of operations and comprehensive
loss.

    15

The
Company remeasured the fair value of the August 2024 Nirland Note as of the Second Amendment date and calculated a fair value of $4.5
million using a binomial lattice model. On December 9, 2024, and prior to obtaining shareholder approval, Nirland exercised their conversion
option and converted $0.1 million of principal for 1,533 shares of Common Stock pursuant to the rules and regulations of the Nasdaq.
As of December 31, 2024, $2.6 million of principal and accrued