Company: CDT
Filing Date: 2025-03-28
Form Type: 10-K
Source: 0001641172-25-001246
Chunk: 11

Company: CDT Equity Inc.
Filing Date: 2025-03-28
Form: 10-K
Item: Item 1A
Chunk 11
---
 design and operating effectiveness of internal controls and assisting with the remediation of deficiencies
when funding and additional liquidity becomes available, as necessary. The primary costs associated with such measures are corresponding
recruiting and additional salary and consulting costs, which are difficult to estimate but which may be significant. These additional
resources and procedures are intended to enable us to broaden the scope and quality of our internal review of underlying information
related to financial reporting and to formalize and enhance our internal control procedures.

The
material weaknesses will not be considered remediated until a remediation plan has been fully implemented, the applicable controls
operate for a sufficient period of time, and we have concluded, through testing, that the newly implemented and enhanced controls are
operating effectively. A failure to implement and maintain effective internal control over financial reporting could result
in errors in our financial statements that could result in a restatement of our financial statements and could cause us to fail to meet
our reporting obligations, any of which could diminish investor confidence in us and cause a decline in the price of our common stock.

Our
independent registered public accounting firm will not be required to formally attest to the effectiveness of our internal control over
financial reporting until after we are no longer an “emerging growth company,” as defined in the JOBS Act. At such time,
our independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level
at which our internal control over financial reporting is documented, designed, or operating.

36

There
is a risk that we will fail to maintain an effective system of internal controls and our ability to produce timely and accurate financial
statements or comply with applicable regulations could be adversely affected. We may identify material weaknesses in our internal controls
over financing reporting which we may not be able to remedy in a timely manner.

As
a public company, we operate in an increasingly demanding regulatory environment, which requires us to comply with the Sarbanes-Oxley
Act, the regulations of Nasdaq, the rules and regulations of the SEC, expanded disclosure requirements, accelerated reporting requirements,
and more complex accounting rules. Responsibilities required by the Sarbanes-Oxley Act include establishing corporate oversight and adequate
internal control over financial reporting and disclosure controls and procedures. Effective internal controls are necessary for us to
produce reliable financial reports and are important to help prevent financial fraud.

We
may discover additional weaknesses in our system of internal financial and accounting controls and procedures that could result in a
material misstatement of our