CID Holdco, Inc. 8-K

What Happened

• On April 17, 2026 CID Holdco, Inc. (DAIC) entered a series of financing agreements with White Lion Capital, LLC that include: a Common Stock Purchase Agreement (CSPA) giving the company the right to sell up to $10,000,000 of common stock through Dec 31, 2028; a Note Purchase Agreement and senior secured convertible promissory notes with up to $2,875,000 principal (reflecting a 20% original issue discount for $2,300,000 net proceeds) to be funded in tranches; and a Common Stock Purchase Warrant permitting purchase of up to $2,000,000 of common stock. The company also agreed to file a Form S‑1 registration statement within 15 business days and to issue commitment shares equal to a $120,000 fee once the registration statement is effective.

Key Details

• Equity facility: up to $10,000,000 available under the CSPA (commitment period through Dec 31, 2028); company-directed rapid and VWAP purchase mechanics for share sales.
• Convertible notes: up to $2,875,000 principal (20% OID; $2,300,000 net) funded in up to ten $230,000 tranches; 8% annual interest; each tranche matures 6 months after funding; convertible at 80% of the lowest daily VWAP over the 15 trading days before conversion.
• Dilution & limits: Nasdaq exchange cap limits issuance to 19.99% of outstanding shares unless shareholder approval obtained; White Lion’s beneficial ownership limit is 4.99% (can be raised to 9.99% by agreement). Company must seek stockholder approval by May 15, 2026.
• Protections & remedies: Notes are senior secured (second-priority lien behind J.J. Astor obligations); default conversion price may drop to $0.01 per share on uncured defaults; failure to timely file the registration statement or hold the shareholder vote triggers $250,000 liquidated damages each.
• Warrant and fees: Commitment Warrant allows up to $2,000,000 of purchases at 99% of prior close, 5‑year term; Commitment Shares equal to $120,000 issued upon registration effectiveness.

Why It Matters

• This financing provides CID Holdco with immediate capital options (equity sales, convertible notes, and a warrant), but it also creates potential dilution if shares are issued or notes convert. The Nasdaq 19.99% exchange cap and the requirement to obtain shareholder approval by May 15, 2026 are material near‑term corporate actions investors should watch.
• The notes are secured and intended in part to service existing J.J. Astor debt, and contain aggressive conversion/default terms (including a $0.01 default conversion price) that could be highly dilutive if defaults occur. The company faces specific timing and filing obligations (Form S‑1 within 15 business days) and liquidated damages if registration or the stockholder meeting are not timely — factors that could affect near‑term liquidity and corporate governance.