Company: CDT
Filing Date: 2025-11-13
Form Type: 10-Q
Source: 0001493152-25-022373
Chunk: 15

Company: CDT Equity Inc.
Filing Date: 2025-11-13
Form: 10-Q
Item: Part I, Item 8
Chunk 15
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During
the three and nine months ended September 30, 2025, there were no transfers between Level 1 and Level 2, nor into or out of Level 3.

Digital
Assets

Digital assets are
measured at fair value on a recurring basis using quoted prices in their principal market (Level 1 inputs). The Company has designated
a principal market based on the market the Company has access to and that has the greatest volume and level of orderly transactions for
BTC. The Company reassesses its principal market when facts and circumstances change, including but not limited to when new markets become
accessible, or the volume/activity in the current principal market declines.

Convertible
Notes Payable

As
discussed in Note 5, 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 September 30, 2025, no obligations remain under the August 2024 Nirland Note (refer to