Company: CDT
Filing Date: 2025-11-13
Form Type: 10-Q
Source: 0001493152-25-022373
Chunk: 60

Company: CDT Equity Inc.
Filing Date: 2025-11-13
Form: 10-Q
Item: Part I, Item 8
Chunk 60
---
 point. We computed the
notes payoff at maturity and at intermediate decision nodes based upon the better of (i) conversion or (ii) repayment of principal and
interest.

The
significant inputs and assumptions used to estimate the fair value include: (i) the Company’s stock price; (ii) the term of the
convertible debt; (iii) the sum of the notes’ principal and unpaid accrued interest; (iv) expected volatility; (v) risk-free interest
rate; (vi) the corporate bond yield; (vii) the credit spread; (viii) probability of default; and (ix) the estimated recovery upon default.
Any change to the unobservable inputs to estimate fair value could produce significantly higher or lower fair value measurements and
result in a material change within the financial statements.

The
convertible debt will subsequently be remeasured at fair value each reporting date until settled or converted.

Contingencies

In
the ordinary course of business, we are involved in various legal proceedings that are complex in nature and have outcomes that are difficult
to predict. We describe our legal proceedings and other matters that are significant or that we believe could become significant in Note
15 to the consolidated financial statements. We record accruals for loss contingencies to the extent that we conclude it is probable
that a liability has been incurred, and the amount of the related loss can be reasonably estimated. We evaluate, on a quarterly basis,
developments in legal proceedings and other matters that could cause an increase or decrease in the amount of liability that has been
accrued previously or modifications to contingency disclosures that are considered material.

35

Emerging
Growth Company Status and Smaller Reporting Company Status

The
Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under
the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of
the JOBS Act until such time as those standards apply to private companies. The Company has elected to use this extended transition period
for complying with new or revised accounting standards that have different effective dates for public and private companies until the
earlier of the date that: (i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended
transition period provided in the JOBS Act. As a result, these financial statements may not be comparable to companies that comply with