Company: CDT
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001641172-25-024140
Chunk: 105

Company: CDT Equity Inc.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 8
Chunk 105
---
-approved, necessary, and
reasonable out-of-pocket expenses directly incurred in connection with the performance of the services.

The initial cash
payment of $0.2 million
and issuance of 1,515 shares
of Common Stock were recorded to prepaid expense and will be amortized over the initial term of the Sarborg Service Agreement to
research and development expense. For the three and six months ended June 30, 2025, the Company recorded amortization expense of
$0.1 million
and $0.2 million,
respectively, with research and development expense in the condensed consolidated statement of operations and comprehensive income
loss, respectively. As of June 30, 2025, $0.2
million of the prepaid balance remains within the condensed consolidated balance sheets.

Under the Sarborg Service Agreement, the
Company will be provided with a dashboard that will be utilized for both the Company’s existing and future asset portfolio. Specifically,
the dashboard includes a clinical trial monitoring functionality and a
dynamic pharmaceutical patent landscape module to assess both the Company’s current assets undergoing clinical trials and delisted
patents in the marketplace that may be overlooked by other market participants. These features will be used by management to monitor progress,
assess trial status, identify new opportunities, and support decision-making across all current and future development programs. The Company
assessed the guidance in ASC 730 and determined that $0.4 million of total cost of the acquired asset should be capitalized as the dashboard
is considered a purchased diagnostic asset with alternative future use. Management determined that the dashboard has a useful life of
two years. The dashboard was placed in service on March 18, 2025. During the three and six months ended June 30, 2025, the Company recorded
$50 thousand and $57 thousand in amortization expense, respectively.

All
other costs under the Sarborg Service Agreement shall be expensed as incurred and recorded within research and development expense in
the condensed consolidated statement of operations and comprehensive income loss, as the services are designed to aid in the Company’s
research and development activities.

During
the three and six months ended June 30, 2025, Sarborg was paid $0.5 million and $1.2 million, respectively, for completed milestones under the Sarborg
Service Agreement and had an outstanding payable balance of $0.2 million as of June 30, 2025. The Company recorded $0.7 million and $1.5 million in expense within