Company: CDT
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001641172-25-010405
Chunk: 65

Company: CDT Equity Inc.
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 1
Chunk 65
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 officer, we conducted an evaluation
of the effectiveness of our disclosure controls and procedures as of the end of the fiscal quarter ended March 31, 2025 and for the comparison
fiscal quarter ended March 31, 2024, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on this evaluation,
our principal executive officer and principal financial officer concluded that during the periods covered by this Quarterly Report, our
disclosure controls and procedures were not effective, due to material weaknesses previously identified and not yet remediated as of
the end of both such periods.

Changes
in Internal Control over Financial Reporting

There
have been no changes to in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of
the Exchange Act) during the most recent fiscal quarter.

37

PART
II - OTHER INFORMATION

Item
1. Legal Proceedings.

Other
than as set forth below, we are not currently party to or aware of being subject to any material legal proceedings. However, we may from
time to time become a party to various legal proceedings arising in the ordinary course of our business, which could have a material
adverse effect on our business, financial condition, or results of operations. Regardless of outcome, litigation could impact our business
due to defense and settlement costs, diversion of management resources and other factors.

In
August 2023, prior to the Business Combination, our now wholly-owned subsidiary, Conduit Pharmaceuticals Limited, received a letter from
Strand Hanson Limited (“Strand”) claiming it was owed advisory fees pursuant to a previously executed letter. Conduit rejected
the claim from Strand and disputed the substance of the letter in full. Following such rejection, on September 7, 2023, Strand filed
a claim in the Business and Property Courts of England and Wales claiming it is entitled to be paid the sum of $2 million and, as a result
of the completion of the Business Combination, to be issued 65,000 shares of common stock. As of March 31, 2025, the potential contingency
is considered probable and reasonably estimable and as such, the Company accrued an estimated liability of $0.4 million in the accompanying
financial statements. The trial in this matter remains scheduled for October 20, 2025. We intend to vigorously defend against these claims.
Regardless of its outcome,