Company: CDT
Filing Date: 2025-11-13
Form Type: 10-Q
Source: 0001493152-25-022373
Chunk: 10

Company: CDT Equity Inc.
Filing Date: 2025-11-13
Form: 10-Q
Item: Part I, Item 8
Chunk 10
---
, Earnings Per Share. Basic net loss per share is computed
by dividing the net loss by the number of weighted-average common shares outstanding for the period. Diluted net loss is computed by
adjusting net loss based on the impact of any dilutive instruments. Diluted net loss per share is computed by dividing the diluted net
loss by the number of weighted-average common shares outstanding for the period including the effect, if dilutive, of any instruments
that can be settled in common shares. When computing diluted net loss per share, the numerator is adjusted to eliminate the effects that
have been recorded in net loss (net of tax, if any) attributable to any liability-classified dilutive instruments.

Warrants

The
Company determines the accounting classification of Warrants as either liability or equity by first assessing whether the Warrants meet
liability classification in accordance with ASC Topic 480, Distinguishing Liabilities from Equity (“ASC 480”). Under
ASC 480, a financial instrument that embodies an unconditional obligation, or a financial instrument other than an outstanding share
that embodies a conditional obligation, that the issuer must or may settle by issuing a variable number of its equity shares must be
classified as a liability (or an asset in some circumstances) if, at inception, the monetary value of the obligation is based solely
or predominantly on any one of the following: (a) a fixed monetary amount known at inception; (b) variations in something other than
the fair value of the issuer’s equity shares; or (c) variations inversely related to changes in the fair value of the issuer’s
equity shares.

If
financial instruments, such as the Warrants, are not required to be classified as liabilities under ASC 480, the Company assesses whether
such instruments are indexed to the Company’s own stock under ASC 815-40. In order for an instrument to be considered indexed to
an entity’s own stock, its settlement amount must always equal the difference between the following: (a) the fair value of a fixed
number of the Company’s equity shares, and (b) a fixed monetary amount or a fixed amount of a debt instrument issued by the Company.
The Company determined that the settlement amount of the Equity Classified Warrants would equal the difference between the fair value
of a fixed number of shares and a fixed monetary amount (or a fixed amount of a debt instrument) and must be classified as equity, while
the settlement amount of the Liability Classified Warrants would not equal the