Company: CDT
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001641172-25-024140
Chunk: 13

Company: CDT Equity Inc.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 1
Chunk 13
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 would require the exclusion from cash and cash equivalents.

Fair
Value Measurements

ASC
Topic 820, Fair Value Measurements and Disclosures, defines fair value, establishes a framework for measuring fair value, and
expands disclosures about fair value measurements. Fair value is to be determined based on the exchange price that would be received
for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability
in an orderly transaction between market participants. In determining fair value, the Company used various valuation approaches. A fair
value hierarchy has been established for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes
the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are those that
market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company.

Unobservable
inputs reflect the Company’s assumption about the inputs that market participants would use in pricing the asset or liability developed
based on the best information available in the circumstances. The fair value hierarchy is categorized into three levels, based on the
inputs, as follows:

    ●
    Level
    1-Valuations based on quoted prices for identical instruments in active markets. Since valuations are based on quoted prices that
    are readily and regularly available in an active market, valuation of these instruments does not entail a significant degree of judgment.

    ●
    Level
    2-Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for either similar instruments
    in active markets, identical or similar instruments in markets that are not active, or model-derived valuations whose inputs or significant
    value drivers are observable or can be corroborated by observable market data.

    ●
    Level
    3-Valuations based on inputs that are unobservable. These valuations require significant judgment.

    8

The
Company’s Level 1 assets consist of cash and cash equivalents in the accompanying balance sheets, convertible notes payable and
the value of accrued expenses and other current liabilities approximate fair value due to the short-term nature of these assets and liabilities.

As
of June 30, 2025, the Company has two financial liabilities, warrant liabilities for which the fair value is determined based on Level
2 and Level 3 inputs, and convertible debt carried at fair value for which the fair value is determined based on Level 3 input.