Company: CDT
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001641172-25-010405
Chunk: 13

Company: CDT Equity Inc.
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 1
Chunk 13
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 recorded the entire hybrid financial instrument at fair value under the guidance in ASC 825, Financial Instruments. As a result,
the August 2024 Nirland Note was recorded at fair value subsequent to the Second Amendment and the A.G.P. Convertible Note was recorded
at fair value upon issuance. The notes will subsequently be remeasured at fair value each reporting date until settled or converted.
The Company reports interest expense, including accrued interest, related to the convertible debt under the fair value option, separately
from within the change in fair value of the convertible debt in the accompanying condensed consolidated statement of operations and comprehensive
loss. Any changes in fair value caused by instrument-specific credit risk are presented separately in other comprehensive income.

Research
and Development

Research
and development expenses consist primarily of costs incurred in connection with the research and development of our clinical assets and
programs, see Note 7 for further discussion of research and development expense. Conduit holds all licenses to conduct clinical research
through a third-party pharmaceutical company. The Company expenses research and development costs and intangible assets acquired that
have no alternative future use as incurred. These expenses include:

    ●
    expenses
    incurred under agreements with organizations that support the Company’s drug discovery and development activities;

    ●
    expenses
    incurred in connection with the preclinical and clinical development of the Company’s clinical assets and programs, including
    under agreements with contract research organizations, or CROs;

    ●
    costs
    related to contract manufacturing organizations, or CMOs, that are primarily engaged to provide drug substance and product for our
    clinical trials, research and development programs, as well as investigative sites and consultants that conduct the Company’s
    clinical trials, nonclinical studies and other scientific development services;

    ●
    the
    costs of acquiring and manufacturing nonclinical and clinical trial materials, including manufacturing registration and validation
    batches;

    ●
    employee-related
    expenses, including salaries, related benefits and equity-based compensation expense, for employees engaged in research and development
    functions;

    ●
    acquisition
    costs related to the purchase of licensed intellectual property;

    ●
    costs
    related to compliance with quality and regulatory requirements;

    ●
    payments
    made under third-party licensing agreements; and

    ●
    direct
    and allocated costs related to facilities, information technology, personnel and other overhead.

Advance
payments that we make for goods or