Company: CDT
Filing Date: 2025-03-28
Form Type: 10-K
Source: 0001641172-25-001246
Chunk: 1180

Company: CDT Equity Inc.
Filing Date: 2025-03-28
Form: 10-K
Item: Item 13
Chunk 1180
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 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 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 a liability.

The
Equity Classified Warrants are recorded in stockholders’ deficit and the Liability Classified Warrants are recorded as liabilities
in the Consolidated Balance Sheet. The Liability Classified Warrants are remeasured each period with changes in fair value recorded in
the Consolidated Statements of Operations and Comprehensive Income (Loss).

Foreign
Currency Translation

The
Company translated the assets and liabilities of foreign subsidiaries from their respective functional currency, the British pound, to
United States dollars at the appropriate spot rates as of the balance sheet date. Income and expenses of operations are translated to
United States dollars using weighted average exchange rates during the year. The foreign subsidiaries use the local currency as their
functional currency. The effects of foreign currency translation adjustments are included as a component of accumulated other comprehensive
income in the accompanying consolidated statements of changes in stockholders’ deficit. Non-monetary items in the subsidiaries’
functional currency are re-measured into the reporting currency at the historical exchange rate (i.e., the rate of exchange at the date
of the transaction).

    F-12

Emerging
Growth Company Status

The
Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under
the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of
the JOBS