Business Context and Reporting Period
Company: CDT Equity Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: June 11, 2026
Event: Entry into a Material Definitive Agreement involving a senior secured convertible promissory note and warrant issuance.
Key Financial Metrics and Transaction Terms
- Principal Amount: $1,971,000 (Senior Secured Convertible Promissory Note).
- Net Proceeds Received: $1,460,000 (before deduction of closing fees), funded in two tranches.
- Repayment Schedule: 24 equal weekly installments of $82,125, commencing June 18, 2026.
- Interest Rate: 0% unless an event of default occurs; default interest rate is 19% per annum, compounded daily.
- Warrants Issued: 912,500 shares at an exercise price of $0.72 per share.
- Collateral: First priority lien on all rights, title, and interest in the Company's and its UK Subsidiary's assets.
Material Changes and Obligations
The filing discloses a new direct financial obligation and potential equity dilution not present in prior periods.
- Repayment Source: 80% of net proceeds from the Company's existing Sales Agreement with A.G.P./Alliance Global Partners must be used to pay weekly installments. Thereafter, 50% of net proceeds from that Sales Agreement must be used to satisfy the Note.
- Conversion Terms: Conversion rights commence six months post-closing (December 11, 2026) subject to shareholder approval. The conversion price is the greater of 90% of the lowest VWAP over the preceding 10 trading days or the Nasdaq floor price.
- Default Penalties: Upon default, the outstanding balance increases to 120% of the owed amount, and the 19% default interest rate applies.
- Registration Rights: The Company must file a resale registration statement by July 26, 2026, covering conversion shares and warrant shares.
Outlook, Risks, and Contingencies
- Shareholder Approval Requirement: Issuance of Conversion Shares and Warrant Shares exceeding 19.99% of outstanding common stock requires shareholder approval. The Company must convene a meeting within 30 days of filing its 2026 Annual Report on Form 10-K.
- Liquidity Risk: Repayment is heavily dependent on the success of the existing Sales Agreement with A.G.P. Failure to generate sufficient proceeds could trigger a default.
- Dilution Risk: The transaction includes warrants and potential conversion shares, subject to a 4.99% beneficial ownership limit (increasable to 9.99%) for the Lender.
- Unregistered Securities: The Note and Warrants were issued under Section 4(a)(2) of the Securities Act as a transaction not involving a public offering.
Investor Verification Checklist
- Verify the status and effectiveness of the resale registration statement required by July 26, 2026.
- Monitor the Company's net proceeds from the A.G.P. Sales Agreement to ensure sufficient cash flow for weekly $82,125 payments.
- Confirm the date and outcome of the shareholder meeting required to approve the issuance of shares exceeding the 19.99% threshold.
- Review the full text of the Loan Agreement (Exhibit 10.1) and Security Agreement (Exhibit 10.4) for specific definitions of "Collateral" and "Event of Default."
- Check for any subsequent filings regarding the funding of the two tranches of the $1,460,000 loan.