Company: CDT
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001641172-25-010405
Chunk: 26

Company: CDT Equity Inc.
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 1
Chunk 26
---
 as provided therein and to take into account any future share splits or reverse splits. The
Company notes that the reverse split provision in the preceding sentence was tripped, effective January 25, 2025, following the
1-for-100 reverse stock split that occurred on that date.

Per the terms of the
A.G.P. Convertible Note, conversion could not occur prior to the Company having sufficiently authorized shares of common stock to
permit the entire conversion of the convertible promissory note. In addition, the conversion of the convertible promissory note
could also not occur prior to receipt of stockholder approval to provide for such conversion of the convertible promissory note, 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 convertible promissory note. As of January 25, 2025, the Company had sufficient authorized shares of common stock to permit
the entire conversion of the convertible promissory note and the Company has also received shareholder approval to allow for the
entire conversion of the convertible promissory note.

The
Company may prepay the convertible promissory note in whole or in part. In the event of certain Events of Default (as defined in the
convertible promissory note), all outstanding principal and accrued interest under the 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