Company: CDT
Filing Date: 2025-08-14
Form Type: 10-Q/A
Source: 0001641172-25-024123
Chunk: 29

Company: CDT Equity Inc.
Filing Date: 2025-08-14
Form: 10-Q/A
Chunk 29
---
. 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.

| 16 |

The Company determined the fair value of the A.G.P. Convertible Note to be $ 3.4million as of November 25, 2024 through the use of a binomial lattice model. See Note 3 for additional information regarding the fair value measurement of the A.G.P Convertible Promissory Note. As of December 31, 2024, $ 6.1million of principal and accrued interest remained outstanding and the A.G.P. Convertible Note had a fair value of $ 3.0million.

On March 31, 2025, A.G.P. exercised their conversion option and converted $ 0.4 million of principal and interest for 430,000shares of common stock. 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 $ 2.7million. For the three months ended March 31, 2025, the Company recorded a $ 0.2million gain in the change in fair value of the A.G.P