CDT Equity Issues $6.75M Secured Convertible Note; Stock Falls 46%

What happened

CDT Equity Inc., a pharmaceutical preparations company traded on Nasdaq under the ticker CDT, filed a Form 8-K with the Securities and Exchange Commission on October 13, 2026, describing an agreement dated October 6, 2026, according to the filing.

Under the agreement, the company issued a senior secured convertible note to J.J. Astor & Co. with a principal amount of $6,750,000, the filing states. The note is to be funded in two tranches, matures on March 24, 2027, and is payable in 24 weekly installments of $168,750 each beginning October 14, 2026, subject to increase if the second tranche funds.

The company received $3,000,000 in the first tranche, corresponding to $4,050,000 of the principal amount, before closing fees, with net proceeds of $2,869,850, per the filing. A second tranche of $2,000,000, against the remaining $2,700,000 of principal, is conditioned on items including effectiveness of a resale registration statement, stockholder approval, no event of default, and a closing bid price of at least $3.00 for the five trading days before that closing, the filing says.

Alongside the note, the company issued warrants to purchase 225,000 shares of common stock at $0.9177 per share, exercisable immediately and expiring five years after issuance, according to the filing. The company said it issued the note and warrants, and expects to issue conversion and warrant shares, in reliance on the Section 4(a)(2) exemption from Securities Act registration for transactions not involving a public offering.

In the same session, CDT shares closed at $0.2418, down 46.27% from the prior close of $0.45, on volume of 20,864,414 shares versus an average of 230,217, according to the price data.

The financing terms

The note is convertible into common stock at a price equal to the greater of 70% of the lowest closing price over the 20 trading days before conversion, or a floor price of $0.18354, subject to adjustment, the filing states. Beginning December 11, 2026 and every six months after, the floor resets to 20% of the lowest closing price over the prior 20 trading days, but that reset cannot raise the floor, and the floor automatically resets to any lower price at which the company sells or issues common stock or equivalents.

The note also amends an existing note and loan agreement to reset the existing note's floor to the lower of $0.18354 and its then-current floor, under the same adjustment terms, according to the filing. The lender cannot convert into a position exceeding 4.99% of outstanding shares, a cap it may raise to 9.99% or 19.99% by written notice, the filing says.

The note is secured by a first priority lien on the collateral of the company and CDT Equity Ltd. as subsidiary guarantor, per the filing. The company must apply 80% of net proceeds from its at-the-market offering program with A.G.P./Alliance Global Partners from sales on or after October 6, 2026 first to this note until paid in full, and only then to the existing note; it must also apply 100% of proceeds from certain stock or stock-equivalent sales and, without duplication, 80% of net proceeds of other financings within one business day toward prepaying the note while continuing required installment payments on the existing note.

Issuance of conversion shares and warrant shares requires stockholder approval under Nasdaq rules to the extent required, and the company agreed to hold a stockholder meeting for that approval no later than November 13, 2026, according to the filing.

What this means

A Form 8-K is the current-report form public companies file with the SEC when specified events occur between quarterly reports. The item numbers in this filing show what the company is reporting: Item 1.01 for entry into a material definitive agreement, Item 2.03 for creating a direct financial obligation, Item 3.02 for unregistered sales of equity securities, and Item 9.01 for exhibits, which here include the note and warrant documents.

A convertible note is a corporate bond that the holder can exchange for stock instead of waiting to be repaid in cash. This one is secured, meaning it is backed by a first claim on specified company and subsidiary assets, and senior, meaning it ranks ahead of other obligations on those assets. The 24 weekly installments of $168,750 mean the company is scheduled to pay down principal roughly every week rather than in one lump sum at maturity.

The conversion formula sets a discounted reference price: 70% of the lowest recent closing price, with the $0.18354 floor as the lowest conversion price until it resets lower. A floor price put in place this way limits how far the conversion price can fall, while the reset to 20% of a recent low on a semiannual schedule can lower it further if the share price declines. Conversion shares would add to the share count, which is why the company is seeking stockholder approval as required by Nasdaq rules.

Warrants are separate instruments giving the holder the right, not the obligation, to buy shares at a set price; here, 225,000 shares at $0.9177 each, above the current $0.2418 close, so exercising them only makes sense if the shares rise above that level before the warrants expire in five years.

The Section 4(a)(2) exemption lets a company sell securities to a limited set of investors without registering the sale with the SEC, provided it is not a public offering. It does not exempt the resale of those shares into the market, which is why the filing mentions a resale registration statement as a condition for the second tranche.

The filing does not state why the share price fell 46.27% on the day of disclosure, and the documents provided do not attribute the move to a specific cause.