CDT Equity Inc. Amends Sarborg Investment; Issues then Repays Note

What Happened
CDT Equity Inc. (CDT) filed an 8‑K reporting an August 31, 2026 amendment to its February 19, 2026 Securities Purchase Agreement with Sarborg Limited and the issuance (and subsequent repayment) of a short‑term senior secured convertible note to J.J. Astor & Co. The amendment modifies payment terms for CDT’s agreed $8.0 million purchase of a 20% equity interest in Sarborg, reducing near‑term cash outlay by allowing up to $1.75 million to be paid in CDT common stock and by crediting certain Sarborg audit costs against the cash due. On August 31, 2026, CDT issued 650,000 shares to Sarborg as a partial stock payment. Separately, CDT issued a $541,620 senior secured convertible promissory note to J.J. Astor & Co. on August 31, 2026 (net proceeds to CDT of $375,002), along with warrants for 237,000 shares; that note was repaid in full on September 4, 2026.

Key Details

• $8.0 million total consideration for a 20% interest in Sarborg; up to $1.75 million of that may be paid in CDT common stock (subject to a 4.99% beneficial ownership limit).
• 650,000 shares issued to Sarborg on August 31, 2026 to partially satisfy the stock portion of the payment.
• Issued a $541,620 senior secured convertible note to J.J. Astor & Co.; CDT received $401,200 before fees ($375,002 net); the note was repaid in full on September 4, 2026.
• Lender received warrants to purchase 237,000 shares at $1.69 per share (5‑year term); conversion and warrant exercise are subject to ownership limits and Nasdaq approval thresholds.

Why It Matters

• The Sarborg amendment reduces immediate cash needs by substituting equity and by crediting audit costs, but it also dilutes existing shareholders through the issuance of common stock (650,000 shares issued immediately).
• The short‑term convertible note provided bridge financing but was paid off quickly; however, the related 237,000 warrant exposure could lead to future dilution if exercised. Warrant shares above certain thresholds require shareholder approval.
• CDT will use proceeds from its at‑the‑market (ATM) program to make scheduled payments (minimum $150,000 per month) toward the remaining cash consideration for Sarborg, with any balance due by May 31, 2027, which ties future cash flow/ATM issuance to these obligations.
• Investors should note continued obligations under the company’s existing senior secured convertible note (installment payments remain due) and monitor potential dilution from future stock issuances or warrant exercises.