Company: CDT
Filing Date: 2025-03-28
Form Type: 10-K
Source: 0001641172-25-001246
Chunk: 871

Company: CDT Equity Inc.
Filing Date: 2025-03-28
Form: 10-K
Item: Item 9B
Chunk 871
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 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 may 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, following the A.G.P.’s ability
to convert the convertible promissory note, if at all, 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.

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 consolidated statements of operations and comprehensive income
(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 consolidated statements of
operations and comprehensive income (loss).

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