Company: CDT
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001641172-25-024140
Chunk: 19

Company: CDT Equity Inc.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 1
Chunk 19
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57  
     - 

    Change
    in fair value 
     1,034   
     (6)
  
    Balance
    as of June 30, 2025 
    $1,882  
    $1 
  
    Ending
    balance 
    $1,882  
    $1 

During
the three and six months ended June 30, 2025, there were no transfers between Level 1 and Level 2, nor into or out of Level 3.

Convertible
Notes Payable

As
discussed in Note 4, on October 31, 2024, the Company and Nirland agreed to amend the Senior Secured Promissory Note entered into by
the Company and Nirland on August 6, 2024 (the “August 2024 Nirland Note”), whereby the August 2024 Nirland Note was amended
to 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. The August 2024 Nirland Note
was then amended for a second time on November 22, 2024. On February 12, 2025, the August 2024 Nirland Note was repaid in full.

Additionally,
as discussed in Note 4, during November 2024, the Company issued to A.G.P./Alliance Global Partners (“A.G.P.”) a convertible promissory note (the “A.G.P. Convertible
Note”) in the principal amount of $5.7 million to evidence the A.G.P.’s currently owed deferred commission payable.

The
Company elected to account for the August 2024 Nirland Note and A.G.P. Convertible Note (collectively the “Convertible Notes Payable”)
at fair value. The fair value of the Convertible Notes Payable is estimated each period using a binomial lattice model. Significant estimates
in the binomial lattice model include the Company’s stock price, volatility, risk-free rate, corporate bond yield, credit spread,
probability of default, and recovery upon default.

As
of June 30, 2025, no obligations remain under the August 2024 Nirland Note (refer to Note 4 for details) and therefore only the fair
value of the A.G.P. Convertible Note was estimated using a