8-K/A: CDT Equity Inc. Amends 8-K to Include Sarborg Financials

CDT Equity Inc. filed an amendment to its Form 8-K to include audited financial statements for Sarborg Limited and pro forma financial information following its investment.

Summary

• CDT Equity Inc. has filed an amendment (Form 8-K/A) to its original report dated February 19, 2026, to include the audited financial statements of Sarborg Limited, a Cayman Islands company, for the fiscal years ended December 31, 2025 and 2024.
• The amendment also includes unaudited pro forma consolidated financial information reflecting the investment in Sarborg.
• Sarborg Limited, founded on October 28, 2024, focuses on algorithmic and cybernetic technologies, developing autonomous AI platforms. It reported a net loss of $0.5 million for the year ended December 31, 2025, and $0.3 million for its inception period (October 28 December 31, 2024).
• The pro forma condensed consolidated balance sheet as of December 31, 2025, shows total assets of $128.5 million and total liabilities of $20.8 million, resulting in a net equity of $107.7 million.
• The pro forma condensed consolidated statement of operations for the year ended December 31, 2025, indicates a net loss of $39.3 million.
• CDT Equity Inc. accounts for its 20% investment in Sarborg under the equity method, recognizing a $0.1 million loss on the investment for 2025.

Sentiment

Score: 4

Explanation: StockSavvy.ai views this as a neutral to slightly negative score due to the significant net losses reported by Sarborg Limited and the pro forma combined entity, despite the strategic acquisition and future potential.

Positives

• CDT Equity Inc. is expanding its operations through a strategic investment in Sarborg Limited, a company focused on advanced AI and cybernetic technologies.
• Sarborg Limited has developed proprietary algorithmic machine learning technology for identifying and decoding biological, chemical, and industrial signatures.
• The pro forma combined entity shows significant assets ($128.5 million) and equity ($107.7 million) as of December 31, 2025, reflecting the investment.
• Sarborg's technology aims to uncover hidden relationships, drug repurposing opportunities, and disease insights across various sectors.
• CDT Equity Inc. is leveraging AI-powered disease mapping in partnership with Sarborg to identify new therapeutic applications for existing compounds.

Negatives

• Sarborg Limited incurred a net loss of $0.5 million for the year ended December 31, 2025, and $0.3 million for its inception period.
• Sarborg Limited had minimal cash and cash equivalents ($10 thousand as of December 31, 2025) and faces going concern issues, though management believes its plans will alleviate doubt.
• The pro forma combined entity reported a substantial net loss of $39.3 million for the year ended December 31, 2025.
• CDT Equity Inc. recognized a $0.1 million loss related to its equity method investment in Sarborg for the year ended December 31, 2025.
• A significant portion of Sarborg's revenue ($4.6 million out of $4.6 million in 2025) was derived from related party transactions with CDT Equity.

Risks

• Sarborg Limited faces going concern risks due to operating losses and insufficient cash, although management plans to secure additional funding.
• The company is subject to risks common to development-stage companies in life sciences and AI, including uncertainties in clinical outcomes, regulatory approvals, and intellectual property protection.
• There is uncertainty regarding when, if ever, Sarborg will realize significant revenue from commercialization.
• The pro forma financial information is presented for illustrative purposes and is not indicative of future results.
• The investment in Sarborg is accounted for under the equity method, meaning CDT Equity Inc.'s financial results are impacted by Sarborg's performance, including its losses.

Future Outlook

The filing does not provide specific forward-looking statements or guidance from CDT Equity Inc. regarding future performance. However, the pro forma financial information suggests a significant combined net loss for the year ended December 31, 2025, indicating a need for future growth and profitability.

Management Comments

• Management has determined that it does not have sufficient cash and other sources of liquidity to fund its current business plan. These factors raise substantial doubt regarding the Company's ability to continue as a going concern for at least the next 12 months.
• Management's plans to alleviate the conditions that raise substantial doubt include debt and equity financings, as well as a guaranty from the Company's founder to fund potential cash flow shortfalls over the 18 months following the issuance of these financial statements.
• Management has concluded that these plans are probable of being effectively implemented and probable of mitigating the conditions that raised substantial doubt. Accordingly, the Company has determined that substantial doubt regarding the Company's ability to continue as a going concern has been alleviated.

Industry Context

StockSavvy.ai notes that the acquisition of Sarborg Limited by CDT Equity Inc. aligns with a broader trend in the pharmaceutical and biotechnology sectors of leveraging artificial intelligence and advanced data analytics to accelerate drug discovery and development, particularly in identifying new therapeutic applications for existing compounds.

Comparison to Industry Standards

• The financial performance of Sarborg Limited, with a net loss of $0.5 million on $4.6 million in revenue for 2025, indicates a typical early-stage technology company in the AI and biotech space. Many companies in this sector operate at a loss while investing heavily in R&D.
• The pro forma combined net loss of $39.3 million for CDT Equity Inc. is substantial but not unusual for companies undergoing significant acquisitions or investing heavily in growth initiatives, especially in the pharmaceutical development pipeline.
• Sarborg's focus on algorithmic and cybernetic technologies for decision-support tools and AI platforms is a rapidly evolving area. Benchmarking against specific competitors is difficult without more detailed information on Sarborg's proprietary technology and market penetration, but the sector is characterized by high R&D expenditure and long development cycles.

Related Party Transactions

• All of Sarborg Limited's revenues during 2025 ($4.6 million) and the inception period ($0.1 million) were from agreements with CDT Equity.
• CDT Equity paid Sarborg $0.2 million in cash and $0.2 million in CDT Common Stock under the Original Service Agreement.
• CDT Equity paid Sarborg $1.65 million in CDT Common Stock under the Additional Agreement.
• Sarborg received $0.3 million in cash for services under the First Addendum to the Additional Agreement with CDT Equity.
• Sarborg recognized $0.3 million in revenue related to the Second Addendum to the Additional Agreement with CDT Equity.
• Sarborg incurred $12,000 in interest expense on a $100,000 short-term loan from Prospect Finance Limited, a related party.
• Mark Taylor, Founder and Director of Sarborg, is the sole director of Prospect Capital Management Limited, which provided advisory services to Sarborg, incurring $2.8 million in expenses in 2025.
• One member of Sarborg's Board of Directors is also a director and controlling Principal of Manoira Corporation, with whom Sarborg entered into a Patent Assignment Agreement.

Stakeholder Impact

• Shareholders of CDT Equity Inc. may see potential long-term value creation from the integration of Sarborg's AI technology, but also face increased risk due to the combined entity's net losses and Sarborg's going concern issues.
• Creditors of Sarborg Limited may be concerned about its ability to meet its obligations, although management plans are in place to address going concern issues.
• Employees of both CDT Equity Inc. and Sarborg Limited may experience changes in roles and responsibilities as the companies integrate their operations and technologies.

Next Steps

• CDT Equity Inc. will need to raise at least $20 million through its at-the-market facility program to release the deferred $8 million cash consideration to Sarborg.
• The company will continue to integrate Sarborg's AI and cybernetic technologies into its operations.
• Further development and commercialization of Sarborg's autonomous AI platforms are expected.

Key Dates

Recommendation

The acquisition of Sarborg Limited by CDT Equity Inc. presents a strategic move into the AI and advanced technology space, which could offer significant long-term growth potential. However, the substantial pro forma net losses, Sarborg's going concern issues, and the reliance on related-party transactions introduce considerable risk. The current financial performance and the need for future capital raises suggest a 'hold' recommendation, pending clearer evidence of profitability and successful integration.

Keywords

Sarborg Limited, CDT Equity Inc., AI, Cybernetic Technologies, Algorithmic, Financial Statements, Pro Forma, Acquisition