Company: CDT
Filing Date: 2025-03-28
Form Type: 10-K
Source: 0001641172-25-001246
Chunk: 1274

Company: CDT Equity Inc.
Filing Date: 2025-03-28
Form: 10-K
Item: Item 16
Chunk 1274
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 proceeds received. Per the terms of the August 2024 Nirland Note, the Company is prohibited from entering into a variable
rate transaction without prior written consent from Nirland. The August 2024 Nirland Note bears interest at a rate of 12% per annum,
accruing daily on a 365-day basis, payable monthly in arrears as cash, or accrued at Nirland’s discretion. The August 2024
Nirland Note matures 12 months from August 6, 2024.

As noted above, the Company issued to Nirland 125,000 shares
of the Company’s Common Stock on August 6, 2024. The Company determined that loan agreement and share issuance should were part
of a basket transaction and allocated the net proceeds on a relative fair value basis. Of the total $2.2 net proceeds, $1.2 million
was allocated to the August 2024 Nirland Note including $1.5 million gross proceeds, less $0.3 million Original Issue Discount
(“OID”). The remaining $1.0 million was allocated to the common stock, including $1.2 million gross proceeds less
$0.2 OID. The $1.2 million allocated to the common stock was considered to be a discount on the August 2024 Nirland Note making
the balance of the note to be $2.7 million note payable, less a total debt discount of $1.5 million. The debt discount will
be amortized to interest expense using the effective interest method over the life of the note.

On
October 31, 2024, the Company and Nirland amended the August 2024 Nirland Note (the “First Amendment”), whereby the August
2024 Nirland Note was amended to (i) provides for the conversion of the August 2024 Nirland Note into shares of Common Stock, at Nirland’s
discretion, in a multiple of any unpaid amounts, if not otherwise previously paid, pursuant to the conversion rate contained therein,
(ii) removes Nirland’s Mandatory Prepayment Right, and (iii) removes Nirland’s right of first refusal to participate in any
future equity or debt offerings of the Company. The number of shares of Common Stock issuable upon conversion of any Conversion Amount
pursuant to shall be determined by dividing (x) such conversion amount by (y) the conversion price. Conversion amount means two