GRDX

Business Context and Reporting Period

Company: GridAI Technologies Corp. (formerly Entero Therapeutics, Inc.)
Filing Type: Form 8-K (Current Report)
Date of Report: May 14, 2026
Reporting Period: Event date May 14, 2026
Business Context: The Company entered into a Debt Settlement and Subscription Agreement to resolve a default on a Revolving Loan Agreement with 1396974 BC Ltd. that matured on January 31, 2026.

Key Financial Metrics

This filing does not provide comprehensive financial statements (revenue, profit, cash flow, or margins). The following specific financial figures relate to the debt settlement:

• Total Debt Obligation Demanded: $1,014,675 (Principal: $700,000 + Interest + 20% Default Penalty).
• Cash Payment Component: $800,000 (Principal: $700,000 + Accrued Interest: $100,000).
• Equity Component: Issuance of 71,482 shares of common stock.
• Deemed Share Price: $3.25 per share.
• Debt Satisfied by Equity: $232,315 (Remaining accrued interest obligations).

Material Changes

The primary material change is the resolution of a loan default through a hybrid cash-and-equity settlement:

• Default Status: The Company was in default as of April 1, 2026, following the maturity date of January 31, 2026, triggering a demand for $1,014,675.
• Settlement Terms: The Company negotiated a reduction in the total obligation from the demanded $1,014,675 to a settlement value of $1,032,315 (comprising $800,000 cash and $232,315 in equity value), effectively waiving the 20% default penalty and restructuring the interest payment.
• Capital Structure Impact: The Company issued 71,482 new shares of common stock to satisfy a portion of the debt.

Guidance, Outlook, and Risks

Management Commentary: The filing confirms the execution of the Settlement Agreement to satisfy obligations to the Lender. No forward-looking guidance or outlook is provided in this document.
Risks and Contingencies:

• Liquidity Risk: The Company was unable to repay the loan principal and interest by the maturity date, indicating potential liquidity constraints.
• Dilution Risk: The issuance of 71,482 shares to settle debt results in dilution to existing shareholders.
• Legal Contingency: The settlement resolves the immediate default and demand letter issued on April 1, 2026.

Unusual Items: The 20% default penalty was waived as part of the settlement negotiation.

Investor Verification Checklist

• Verify the exact number of shares issued (71,482) and the resulting dilution impact on outstanding share count.
• Confirm the cash outflow of $800,000 and its impact on the Company's current liquidity position.
• Review the full text of the Debt Settlement and Subscription Agreement (Exhibit 10.1) for any covenants or future obligations.
• Assess the Company's ability to meet future debt obligations given the recent default history.
• Check for any subsequent filings regarding the registration of the newly issued shares.