CDT

CDT Equity Inc. (CDT) - Q3 2025 10-Q Summary

Business Context and Reporting Period

This Quarterly Report covers the period ended September 30, 2025. CDT Equity Inc. (formerly Conduit Pharmaceuticals Inc.) operates as a data-driven pharmaceutical development and digital asset treasury management company. The company focuses on advancing deprioritized clinical-stage compounds using AI and solid-form chemistry. As of the filing date, the company is classified as an emerging growth company and a smaller reporting company.

Key Financial Metrics

Note: All figures in millions unless otherwise noted. The company reported no revenue for the periods presented.

Material Changes vs. Prior Period

• Liquidity Improvement: Cash and cash equivalents increased significantly from $0.55 million at year-end 2024 to $3.84 million at September 30, 2025, driven by $18.0 million in proceeds from the At-The-Market (ATM) offering program.
• Expense Volatility: General and Administrative (G&A) expenses surged 102% in Q3 2025 compared to Q3 2024, primarily due to increased legal fees ($1.4 million increase) and stock-based compensation ($1.0 million increase). Research and Development (R&D) expenses decreased 50% in Q3 2025 due to the absence of a large one-time license fee paid in the prior year.
• Debt Reduction: The fair value of convertible notes payable decreased from $5.86 million (Dec 31, 2024) to $1.73 million (Sep 30, 2025) following partial conversions to equity and repayments.
• Digital Asset Strategy: The company initiated a digital asset treasury strategy, purchasing approximately $1.0 million in Bitcoin during the period.

Guidance, Outlook, and Risks

• Going Concern Warning: Management has concluded there is substantial doubt regarding the company's ability to continue as a going concern for at least 12 months from the filing date. The company has an accumulated deficit of $47.0 million and expects to continue generating operating losses.
• Funding Strategy: The company plans to fund operations through public/private equity or debt financings. The $23.9 million ATM program has been fully utilized as of the filing date. Management is also exploring a strategic shift toward a digital asset treasury management model.
• Legal Contingencies:
  • Strand Hanson Claim: A trial concluded in October 2025 regarding a claim for $2 million in advisory fees; a determination is expected in Q1 2026. A $0.4 million liability has been accrued.
  • Patent Dispute: St George Street Capital has challenged the company's sole ownership of the AZD 1656 co-crystal patent. The range of loss is not estimable, and no accrual has been made.
• Internal Controls: Disclosure controls and procedures were deemed not effective due to material weaknesses identified in the prior 10-K that remain unremediated.

Investor Verification Checklist

• Cash Runway: Verify the sufficiency of the $3.84 million cash balance against the stated $11.7 million working capital requirement for the next 12 months.
• ATM Program Status: Confirm the full utilization of the $23.9 million ATM facility and the availability of alternative financing sources.
• Related Party Transactions: Review the significant R&D expenses paid to related parties (Sarborg, Manoira, Corvus) totaling over $3.6 million YTD 2025.
• Convertible Note Terms: Assess the remaining $3.4 million principal/interest on the A.G.P. Convertible Note due November 2025 and the risk of forced conversion or default.
• Legal Outcomes: Monitor the Q1 2026 ruling on the Strand Hanson litigation and the status of the AZD 1656 patent dispute.