Company: CDT
Filing Date: 2025-03-28
Form Type: 10-K
Source: 0001641172-25-001246
Chunk: 863

Company: CDT Equity Inc.
Filing Date: 2025-03-28
Form: 10-K
Item: Item 9B
Chunk 863
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Biotechnology Holdings PLC

On
February 11, 2022, the Company entered into an agreement with Cizzle PLC (“Cizzle”) whereby Cizzle agreed to purchase a percentage
of future revenue earned in AZD 1656, should it reach the commercialization stage. Total consideration under the agreement is specified
as $1.6 million (£1.2 million), consisting of the issuance of the fair value of 25.0 million new common shares in Cizzle on the
date of the agreement and the fair value of 22.0 million shares to be issued at the earlier of Cizzle’s shareholder approval or
one year from the date of the agreement. The 22.0 million shares were received by the Company in the fourth quarter of 2022 and were
subsequently sold within the fourth quarter of 2022. The Company recorded a liability related to deferred revenue of $1.4 million for
the consideration received from Cizzle as of December 31, 2022.

The
payments received for the sale of future revenue were classified as a liability related to the future sale of revenue. Under ASC 470-10-25,
a seller of future revenue should evaluate whether the proceeds received should be accounted for as debt or deferred income. In assessing
the factors that created a rebuttable presumption of debt within the guidance, the Company determined that there were factors present
to overcome the debt presumption and deferred income classification to be appropriate. The main factors the Company considered were that
the transactions in form were sales, and not debt transactions. Each agreement does not guarantee a return to each purchaser, the return
is based solely on future performance of AZD 1656 should it reach commercialization, with neither purchaser having an involvement in
generating future cash flows from AZD 1656.

On
December 15, 2022, the Company entered into an agreement with Cizzle whereby the Company granted Cizzle the option, but not the obligation,
to sell its economic interest in AZD 1656 back to the Company. The agreement contained an option period of nine months from the date
of the agreement for Cizzle to notify the Company of its intent to exercise the option to sell its economic interest in AZD 1656. Upon
closing of the agreement, Cizzle agreed to pay the Company an option fee of $0.1 million (£0.1 million).

On
September 26, 2023, Cizzle exercised its option to sell back its indirect