Company: CDT
Filing Date: 2025-08-14
Form Type: 10-Q/A
Source: 0001641172-25-024123
Chunk: 26

Company: CDT Equity Inc.
Filing Date: 2025-08-14
Form: 10-Q/A
Chunk 26
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 Nirland Note, and subsequent issuance of the Company’s Common Stock, pursuant to the stockholder approval rules
under the rules and regulations of The Nasdaq Stock Market. If the Company had not 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, effective January 25, 2025, following the 1-for-100 reverse stock split that occurred on that date.

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.

The Company remeasured the fair value of the August 2024 Nirland Note as of the Second Amendment date and calculated a fair value of $ 4.5million using a binomial lattice model. On December 9, 2024, and prior to obtaining shareholder approval, Nirland exercised their conversion option