Company: CDT
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001641172-25-010405
Chunk: 90

Company: CDT Equity Inc.
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 8
Chunk 90
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to instrument-specific credit risk, if any, will be recognize within other comprehensive income each reporting period. As an accounting
policy, the Company elected to present interest expense separately from other changes in the A.G.P. Convertible Note’s fair value.
Interest expense will be presented within Interest expense, net, while the other changes in the fair value with be presented within other
income (expense), net in the condensed consolidated statements of operations and comprehensive loss.

    15

The
Company determined the fair value of the A.G.P. Convertible Note to be $3.4 million
as of November 25, 2024 through the use of a binomial lattice model. See Note 2 for additional information regarding the fair value
measurement of the A.G.P Convertible Promissory Note. As of December 31, 2024, $6.1 million
of principal and accrued interest remained outstanding and the A.G.P. Convertible Note had a fair value of $3.0 million.

On
March 31, 2025, A.G.P. exercised their conversion option and converted $0.4
million of principal and interest in exchange for 430,000
shares of common stock. As of March 31, 2025, the Company’s common stock price was trading below the Conversion Price Floor.
For the purpose of the March 31, 2025 conversion, the Company waived the Conversion Price Floor and allowed A.G.P. to convert at a
price of $0.89/share (prior trading day closing stock price). Upon conversion, the Company recorded a $0.2
million loss on the change in fair value based on the difference between (i) the fair value of the common stock issued and (ii) the
percentage of total principal and interest converted (6.54%),
multiplied by the December 31, 2024 valuation of $3.0
million.

Additionally,
on March 31, 2025, the Company remeasured the fair value of the A.G.P. Convertible Note through the use of a binomial lattice model and
calculated a fair value of approximately $2.7
million. For the three months ended March 31,
2025, the Company recorded a $0.2 million
gain in the change in fair value of the A.G.P. Convertible Note and interest expense of approximately $0.1
million. As of March 31, 2025, there was approximately