Company: CDT
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001641172-25-024140
Chunk: 98

Company: CDT Equity Inc.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 8
Chunk 98
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could also not occur prior to receipt of stockholder approval to provide for such conversion, 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. Further, A.G.P. will not be entitled to receive the Company’s Common Stock upon conversion, if such conversion
would result in A.G.P. owning greater than 9.99% of the Company’s then currently outstanding Common Stock. A.G.P. is also entitled
to resale registration rights as identified in the A.G.P. Convertible Note. As of January 25, 2025, the Company had sufficient authorized
shares of Common Stock to permit the entire conversion of the A.G.P. Convertible Note and the Company had also received shareholder
approval to allow for the entire conversion of the convertible promissory note.

    16

The
Company may prepay the A.G.P. Convertible Note in whole or in part. In the event of certain Events of Default (as defined in the
A.G.P. Convertible Note), all outstanding principal and accrued interest under the A.G.P. Convertible Note will become, or may
become at A.G.P.’s election, immediately due and payable to the A.G.P.

The
Company elected to account for the A.G.P. Convertible Note at fair value under ASC 825. The Company determined that the substantive conversion
option within the A.G.P. Convertible Note falls 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 A.G.P. Convertible Note, and any changes in fair value are reported
in the current period’s condensed consolidated statements of operations and comprehensive loss. The change in fair value attributable
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.

The
Company determined the fair value of the A.G.P. Convertible