CDT Equity Inc. Material Event: Understanding the Reverse Stock Split

CDT Equity Inc. is restructuring its shares to meet exchange listing rules. This summary explains what this means for your investment.

1. What happened?

CDT Equity Inc. announced a 1-for-25 reverse stock split. This combines 25 existing shares into one new share. As of March 24, 2026, the total number of shares will drop from 125 million to 5 million. While you will own fewer shares, your percentage of ownership in the company remains the same. The total market value of the company does not change because of this split.

2. When does it take effect?

The split takes effect after the market closes on March 26, 2026. You will see your new share count and a proportionally higher price per share in your brokerage account when the market opens on March 27, 2026.

3. Why is the company doing this?

The company must keep its stock price above $1.00 to remain listed on the Nasdaq. Its shares have traded below this threshold for 30 days, risking removal from the exchange. By combining shares to artificially boost the price, the company aims to meet these requirements and avoid being demoted to the "Pink Sheets," where trading is typically less active and less transparent.

4. What does this mean for your investment?

It is important to recognize that this is a cosmetic change, not a business improvement. It reflects that the company’s market value has dropped significantly over the past year. While this move keeps the company on the major exchange, it does not address the underlying challenges, such as recent financial losses and stagnant sales growth.

5. How are you affected?

• Investors: Your share count will decrease by 96%. If the split results in a fractional share, the company will pay you cash for that fraction based on the closing price.
• Traders: Expect increased volatility. Historically, reverse splits can trigger selling pressure. Some investors may exit their positions due to the negative signal, and short-sellers may target the company, viewing the split as a sign of financial weakness.

6. What do you need to do?

You do not need to take any action; your brokerage will handle the conversion automatically.

7. Key Takeaways for Your Strategy

• Don’t panic: The split is purely mathematical. You still own the same percentage of the company as you did before.
• Look past the price: A higher share price does not mean the business is performing better. Focus on the fundamentals: the company has struggled to grow revenue beyond $15 million and carries $40 million in long-term debt.
• Watch the burn rate: This split buys the company time. Keep a close eye on the next quarterly report to see if management has a concrete plan to improve profit margins and reduce their current spending rate of over $2 million per quarter.

Disclaimer: This information is for educational purposes and does not constitute financial advice. Always conduct your own research before making investment decisions.