Company: CDT
Filing Date: 2025-03-28
Form Type: 10-K
Source: 0001641172-25-001246
Chunk: 514

Company: CDT Equity Inc.
Filing Date: 2025-03-28
Form: 10-K
Item: Item 5
Chunk 514
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 These material weaknesses primarily relate
to the following:

    ●
    The segregation of duties is limited and heavily reliant on interim personnel and third-party consultants to perform these activities.

    ●
    The Company lacks a formal process for review and approval of significant transactions and accounts on a contemporaneous basis and there have been numerous, recurring errors in account balances and disclosures.

    ●
    The Company has not designed adequate and appropriate internal controls
    under an appropriate internal control over financial reporting framework.

    ●
    The Company did not appropriately review and evaluate the accounting implications of all material transactions that occurred in the audit period which resulted in a restatement of previous periods.

    ●
    The review controls around certain related party transactions did no operate
consistently and the review of such transactions was not always contemporaneously documented.

70

If
these material weaknesses are not remediated, it could result in a misstatement of account balances or disclosures that would result
in a material misstatement to the annual or interim financial statements that would not be prevented or detected. We are reviewing
measures designed to improve our internal control over financial reporting to remediate these material weaknesses, although they
have not been fully remediated as of the date of this filing. We anticipate hiring additional qualified accounting personnel with
experience with complex GAAP and SEC rules while, meanwhile, continuing to engage consultants to assist with our financial statement
close process, segregating duties among accounting personnel to enable adequate review controls, further developing and documenting
our accounting policies, and designing, implementing, and/or expanding IT systems and application controls in our systems relevant
to the preparation of the consolidated financial statements. We also expect to engage an external advisor to assist with evaluating
and documenting the design and operating effectiveness of internal controls and assisting with the remediation of deficiencies, as
necessary if sufficient capital resources become available.

The ability to perform these remediation plans are dependent on
our ability to enhance funding and liquidity. The primary
costs associated with such measures are corresponding recruiting and additional salary and consulting costs, which are difficult to
estimate but which may be significant. These additional resources and procedures are intended to enable us to broaden the scope and
quality of our internal review of underlying information related to financial reporting and to formalize and enhance our internal
control procedures.

The
material weaknesses will not be considered remediated until a remediation plan has been fully implemented, the applicable controls
operate for a sufficient period of time, and we have concluded, through testing, that the newly