CID Holdco, Inc. 8-K

What Happened

• CID Holdco, Inc. (DAIC) filed an 8-K disclosing that on June 26, 2026 it entered a Note Purchase Agreement and issued a $500,000 Senior Secured Convertible Promissory Note to Phillips Equities & Trust, LLC; proceeds were funded at closing. SEE ID, Inc. (a wholly owned subsidiary) guarantees the obligations; DOT Works, Inc. joined only for certain reps and covenants. The Company also entered a Registration Rights Agreement requiring an S-1 filing within 45 days to register shares issuable on conversion.
• The Note bears interest at 6% per year, matures 12 months after funding, is convertible at the lender’s option into common stock at a variable price equal to 80% of the lowest daily VWAP during the five consecutive trading days before conversion notice, and is subject to a beneficial ownership cap of 4.99% (increaseable to 9.99% with 61 days’ notice). The Note is secured by a second-priority lien (subordinated to obligations to J.J. Astor, which were assigned to the Lender). The Company may not prepay the Note without lender consent and is restricted from incurring senior or pari passu debt while the Note is outstanding (other than the J.J. Astor obligations).
• The filing also confirms termination of the White Lion senior secured convertible notes (fully converted/satisfied and liens released) and discloses that Nasdaq has notified the Company it regained compliance with the $1.00 minimum bid-price requirement (12 consecutive business days ending June 22, 2026).

Key Details

• Note principal: $500,000; interest rate: 6% per annum; maturity: 12 months from funding (funded June 26, 2026).
• Conversion: at lender option to common stock at 80% of the lowest daily VWAP in a 5-day lookback; conversion limited to 4.99% ownership (can increase to 9.99% with notice).
• Security: senior secured obligation with second-priority liens on all assets and IP, subordinated to J.J. Astor obligations (now assigned to the Lender).
• White Lion Notes: confirmed fully converted/cancelled and all liens and related lender rights released; Nasdaq: regained bid-price compliance through June 22, 2026.

Why It Matters

• Financing and dilution: the $500K note provides near-term cash but can convert into equity at a steep discount (80% of a 5-day low VWAP), which could dilute existing shareholders if converted. The ownership cap limits immediate dilution but conversion beyond that requires stockholder approvals or notice-based adjustments.
• Credit and flexibility: the note’s secured and senior status (even as a second-priority lien) and restrictions on incurring senior or pari passu debt may limit the company’s ability to raise other types of financing while the note is outstanding.
• Balance-sheet and listing effects: termination of the White Lion notes removes earlier liens and lender rights, simplifying obligations; Nasdaq bid-price compliance reduces immediate delisting risk but other listing-standard deficiencies (MVLS/MVPHS) remain under evaluation.
• Use of proceeds is restricted (working capital, transaction expenses, D&O insurance/tail, or lender-approved uses), which narrows how the company can deploy the funds.