Company: CDT
Filing Date: 2025-03-28
Form Type: 10-K
Source: 0001641172-25-001246
Chunk: 974

Company: CDT Equity Inc.
Filing Date: 2025-03-28
Form: 10-K
Item: Item 9C
Chunk 974
---
 from Equity (“ASC 480”). Under ASC 480, a
financial instrument that embodies an unconditional obligation, or a financial instrument other than an outstanding share that embodies
a conditional obligation, that the issuer must or may settle by issuing a variable number of its equity shares must be classified as
a liability (or an asset in some circumstances) if, at inception, the monetary value of the obligation is based solely or predominantly
on any one of the following: (a) a fixed monetary amount known at inception; (b) variations in something other than the fair value of
the issuer’s equity shares; or (c) variations inversely 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