Company: CDT
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001641172-25-010405
Chunk: 33

Company: CDT Equity Inc.
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 1
Chunk 33
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The
Sarborg Service Agreement provides Sarborg with registration rights for any Common Stock of Conduit that Sarborg receives as consideration
under the Sarborg Service Agreement. In such event, Conduit will use commercially reasonable efforts to (i) file a registration statement
covering the resale of the Common Stock within 60 days after the issuance; and (ii) ensure that such registration statement becomes effective
within 90 days after filing. This Agreement also includes confidentiality obligations, representations and warranties, indemnification,
limitation of liability, and insurance requirements.

In
consideration of the services, Conduit agreed to pay Sarborg an initial cash payment of $0.2
million and $0.2
million payable through the issuance of 22,727
shares of common stock, determined by the closing price on the day preceding the execution of the Sarborg Service Agreement.
The initial cash payment of $0.2 million was made on December 20, 2024, and the 22,727 shares of common stock were issued on January
17, 2025. Further milestone payments payable in conjunction with the achievement of certain milestones over the term of the Sarborg
Service Agreement, totaling up to $1.8
million, are payable in cash or shares, at the discretion of Conduit. Sarborg will be reimbursed for pre-approved, necessary, and
reasonable out-of-pocket expenses directly incurred in connection with the performance of the services.

Management
determined that the cost incurred under the Sarborg Service Agreement should be recorded to research and development expense in the condensed
consolidated statement of operations and comprehensive income loss, as the Sarborg Service Agreement is designed to provide the Company
with software/dashboard to aid in research and development activities. The initial cash payment of $0.2 million and issuance of 22,727
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 months ended March 31, 2025, the Company recorded amortization expense of $0.1 million
with research and development expense in the condensed consolidated statement of operations and comprehensive income loss.

During
the three months ended March 31, 2025, Sarborg was paid $1.1 million for completed milestones under the Sarborg Service Agreement. The
Company recorded the $1.1 million in expense within research and development expense in the condensed consolidated statement of operations
and comprehensive