Company: CDT
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001641172-25-024140
Chunk: 94

Company: CDT Equity Inc.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 8
Chunk 94
---
 shares were registered for resale in September 2024. In the event the Company completes
any public or private equity or debt financing, the Company shall be required to mandatorily prepay (“Mandatory Prepayment
Right”), any amounts that may be then outstanding under the August 2024 Nirland Note, within two business days following the
closing of such financing, in an amount of no less than 75%
of the net proceeds received. Per the terms of the August 2024 Nirland Note, the Company was prohibited from entering into a
variable rate transaction without prior written consent from Nirland. The August 2024 Nirland Note bore 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 was scheduled to mature 12 months from August 6, 2024.

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) provide 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) remove Nirland’s Mandatory Prepayment Right, and (iii) remove 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
would be determined by dividing (x) such conversion amount by (y) the conversion price. Conversion amount means two and one quarter times
the sum of (x) 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 with respect to such portion of the principal amount, if any. Conversion price means, as of any
conversion date or other date of determination, $10.00, subject to adjustment as provided within the amended agreement.

The
Company evaluated the conversion feature of this note offering for embedded derivatives in accordance with ASC Topic 815, Derivatives
and Hedging, and the substantial premium model in accordance with ASC Topic 470, Debt. Based on our assessment, separate
accounting for the conversion feature of this note