Company: CDT
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001641172-25-010405
Chunk: 108

Company: CDT Equity Inc.
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 8
Chunk 108
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 each case vesting only if the holder agrees to continue to have its shares of common stock remain locked up pursuant to the April
Lock-Up Agreement on such date.

    25

Liability
Classified Warrants

The
PIPE Warrants, A.G.P. Warrants, and the A.G.P 2024 Warrants (collectively the “Liability Classified Warrants”), are classified as derivative liabilities because they do not meet the criteria in ASC 815-40 to be considered indexed to the entity’s
own stock as the warrants could be settled for an amount that is not equal to the difference between the fair value of a fixed number
of the entity’s shares and a fixed monetary amount. The Liability Classified Warrants are initially measured at fair value and
are remeasured at fair value at subsequent financial reporting period end dates and upon exercise (see Note 3 for additional information
regarding fair value).

For
the three months ended March 31, 2025 and March 31, 2024, the Company remeasured the fair value of the Liability Classified Warrants
and recorded a gain on the change in the fair value of $0.1 million and $19,000,  respectively. The gains were recorded to other
income (expense), net, on the condensed consolidated statements of operations and comprehensive loss. As of March 31, 2025 and December
31, 2024, the condensed consolidated balance sheets contained warrant liabilities of $8,000 and $0.1 million, respectively.

PIPE
Warrants and A.G.P. Warrants 

Upon
closing of the Merger, 20,000 PIPE Warrants were issued to the PIPE Investors pursuant to subscription agreements. The warrants provide
the PIPE Investors the right to purchase up to 20,000 shares of Common Stock at an exercise price of $1,150. Additionally, on the Closing
Date of the Merger, the Company issued 540 A.G.P. Warrants to an advisor for services provided directly related to the Merger. The warrants
provide the advisor the right to purchase up to 540 shares of Common Stock at an exercise price of $1,100 per share.

The
warrants issued to the PIPE Investors and the advisor contain materially the same terms and are exercisable for a period of five years,
beginning on October 22, 2023.

On
December 11, 2024, the Company reduced the exercise price of the PIPE Warrants to be