CDT Equity Inc. 10-Q

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. Unregistered Sales of Equity Securities No underwriting discounts or commissions were paid with respect to the below issuances, which were conducted as non-public transactions and, as transactions by an issuer not involving a public offering, are exempt from registration under the Securities Act in reliance upon Section 4(a)(2) of the Securities Act. On November 16, 2021, Murphy Canyon Acquisition Sponsor, LLC, our sponsor, purchased 4,312,500 founder shares for an aggregate purchase price of $25,000, or approximately $0.006 per share. On January 26, 2022, the Sponsor surrendered and forfeited 1,006,250 Founder Shares for no consideration, following which the Sponsor holds 3,306,250 Founder Shares. Simultaneously with the closing of the initial public offering, we consummated the private sale to the sponsor of 754,000 units at a price of $10.00 per unit for total proceeds of $7,540,000. Each unit is comprised of one Class A share and one warrant. Each warrant is exercisable to purchase one share of Class A common stock at a price of $11.50 per share, subject to adjustment. The private placement units are identical to the units sold in the initial public offering, except that (a) the private placement units and their component securities will not be transferable, assignable or saleable until 30 days after the consummation of the Company’s initial business combination except to permitted transferees and (b) the warrants and rights included as a component of the private placement units, so long as they are held by the sponsor or its permitted transferees, will be entitled to registration rights, respectively. Use of Proceeds On February 7, 2022, we consummated our initial public offering of 13,225,000 units, which included 1,725,000 units issued pursuant to the full exercise by the underwriters of their over-allotment option. Each unit consists of one share of Class A common stock, par value $0.0001 per share, and one redeemable warrant, with each whole warrant entitling the holder thereof to purchase one share of Class A common stock for $11.50 per share. The units were sold at a price of $10.00 per unit, generating gross proceeds to us of $132,250,000. A.G.P. acted as sole book-running manager and The Benchmark Company, LLC acted as co-manager of the initial public offering. The securities in the offering were registered under the Securities Act on registration statement on Form S-1 (No. 333-262036). The SEC declared the registration statements effective on February 2, 2022. Simultaneously with the closing of our initial public offering, we completed the private sale of an aggregate of 754,000 placement units to the sponsor at a purchase price of $10.00 per placement unit, generating gross proceeds to us of $7,540,000. This issuance of placement units was be made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act. The placement units are identical to the units sold in the initial public offering, except that (a) the placement units and their component securities will not be transferable, assignable or saleable until 30 days after the consummation of the Company’s initial business combination except to permitted transferees and (b) the warrants and rights included as a component of the placement units, so long as they are held by the sponsor or its permitted transferees, will be entitled to registration rights, respectively. Following the closing of the initial public offering, an amount of $139,790,000 from the net proceeds of the sale of the units in the initial public offering and the sale of the placement units to the sponsor was to be placed in a Trust Account. This resulted in an overfunding of the Trust Account of $4,895,000. As such, subsequent to the initial funding of the Trust Account, $2,000,000 was transferred to our operating cash account and $2,895,000 was used to pay offering costs, including $2,745,000 of underwriting discounts and expenses. The proceeds held in the Trust Account are invested only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act of 1940, as amended, which invest only in direct U.S. government treasury obligations. In connection with the initial public offering, we incurred $7,738,161 in transaction costs, including $2,645,000 of underwriting discounts and commission, $4,628,750 of deferred underwriting fees and $464,411 of other offering costs. There has been no material change in the planned use of the proceeds from the initial public offering and private placement as is described in our final prospectus dated February 2, 2022 and filed with the SEC on February 4, 2022. Item 3. Defaults Upon Senior Securities. None. Item 4. Mine Safety Disclosures. Not Applicable.