CID HoldCo, Inc. Announces Envoy Acquisition Term Sheet, Convertible Note

What Happened

• CID HoldCo, Inc. (DAIC) filed an 8‑K reporting three material events in mid‑September 2026: (1) issuance of a $550,000 unsecured convertible promissory note to H Capital (the H Capital Note) on September 10, 2026; (2) entry into a legally binding Term Sheet on September 14, 2026 to acquire 100% of Envoy Technologies, Inc. from BladeRanger Ltd.; and (3) a Settlement Agreement on September 15, 2026 with LHT I, LLC that converts $1,086,785.29 of lender claims into 2,815,506 shares at $0.386 per share and transfers certain assets to the lender. Also on September 15, 2026 CID presented a compliance plan to a Nasdaq Hearings Panel regarding continued‑listing deficiencies, including failure to meet minimum market‑value thresholds and a delinquent Form 10‑Q.

Key Details

• H Capital Note: $550,000 original principal (Holder paid $500,000 at issuance reflecting a 10% original issue discount); 8% annual interest; six‑month maturity; convertible into common stock at the lower of $1.50 or 90% of the 10‑day VWAP, with a $0.50 floor; beneficial ownership limit 4.99% (can increase to 9.99% after 61 days); conversion caps tied to shareholder approval; defaults include reduction of conversion price to $0.01 and $500/day liquidated damages for late share delivery.
• Envoy acquisition (Term Sheet): at closing CID will issue 10,833,333 "Envoy‑Side Shares" (~67.3% of post‑closing fully diluted equity based on 15,986,606 shares). BladeRanger receives 233,543 common shares pre‑closing (9.99%) and Series C Convertible Preferred (stated value $6.00) totaling the balance; Blink receives 2,166,667 Series C Preferred (20% of Envoy‑Side Shares). Closing targeted by October 6, 2026; shareholder approval (per Nasdaq Rules 5635) required for certain share issuances and targeted for January 2027.
• Settlement with LHT I, LLC: $924,615.88 principal + $132,169.41 interest + $30,000 fees = $1,086,785.29 converted into 2,815,506 common shares at $0.386/share; certain assets transferred to the lender and liens released; transition services agreement to be put in place for transferred assets.
• Nasdaq hearing/Listing risk: CID presented a compliance plan on Sept 15, 2026 for failure to meet Nasdaq market‑value tests (minimum MVS $50M and public float $15M) and for a delinquent Form 10‑Q (Q2 2026). The outcome is uncertain; failure to regain compliance could lead to delisting.

Why It Matters

• The Envoy deal, if completed, would be transformative in ownership structure: the proposed issuance would give Envoy‑side stakeholders a large majority (~67%) of the company on a fully diluted basis, and Series C preferred stock mechanics and conversion caps mean significant shareholder approval and Nasdaq compliance steps are required before many of those shares can convert to common stock.
• The H Capital Note supplies near‑term funding ($500K cash received) but is short‑term (six months) and dilutive if converted; its conversion formula, ownership caps, and steep default remedies (conversion price cut to $0.01) are material to investors assessing dilution and downside risk.
• The LHT settlement clears ~$1.09M of claims in exchange for common shares and asset transfers, which removes certain secured claims and releases liens but increases outstanding common shares.
• The Nasdaq hearing and the company’s failure to timely file a required Form 10‑Q present real listing risk; investors should monitor the Hearings Panel decision and subsequent shareholder approvals required for key issuances and conversions.

Keywords: acquisition, merger, convertible note, debt conversion, Nasdaq hearing, dilution, shareholder approval, Envoy, H Capital, LHT.