CID Holdco, Inc. 8-K

What Happened

• On April 24, 2026, CID Holdco, Inc. completed the first closing under a Note Purchase Agreement (dated April 17, 2026) with White Lion Capital, LLC and issued a Senior Secured Convertible Promissory Note with an original principal amount of $287,500. The note carried a 20% original issue discount, producing cash proceeds of $230,000 (of which $20,000 was withheld for legal fees). The filing also reports the related unregistered sale of securities under Item 3.02.
• The Note bears interest at 8% per year (first six months’ interest accrues immediately and is guaranteed), matures six months after issuance, and must be applied to make CID’s scheduled monthly payments under an earlier senior secured note to J.J. Astor & Co. The Note is a second-priority secured obligation (behind J.J. Astor’s first-priority lien).

Key Details

• Original principal: $287,500; cash proceeds to CID: $230,000; $20,000 withheld for legal fees.
• Interest rate: 8% annually; six months’ interest accrues immediately and is guaranteed; maturity = six months from issue.
• Conversion: Holder may convert into CID common stock at a variable price equal to 80% of the lowest daily VWAP during the 15 trading-day lookback prior to conversion; beneficial ownership cap initially 4.99% (can be increased to 9.99% with 61 days’ notice).
• Default and security: Note is second-priority lien behind J.J. Astor; on default the Note becomes immediately due and payable and Holder may convert at a $0.01 per share default conversion price.

Why It Matters

• This transaction provides CID with short-term cash (net $230,000) but increases secured obligations and creates potential equity dilution if the Holder converts the Note. The 80%-of-lowest-VWAP conversion formula and the very low default conversion price ($0.01) could materially dilute existing shareholders if conversion occurs, especially in a default.
• The Note’s six-month maturity and second-priority lien status mean CID faces near-term refinancing or repayment pressure while remaining junior to J.J. Astor’s secured claim. The filing’s Item 3.02 disclosure confirms these securities were sold in a transaction exempt from registration. Investors should watch for further filings about additional closings, any increases to the ownership cap, payments to J.J. Astor, or refinancing moves.