CDT Equity Inc.

Previous wording

On December 12, 2024, Sarborg and the Company entered into an agreement (the “Sarborg Agreement”) designed to address longstanding challenges in the pharmaceutical sector, in particular by reducing human error in critical decision-making processes in both clinical development and asset identification. By integrating Sarborg’s signature intelligence technology, the Company aims to enhance efficiency, lower costs, and accelerate timelines by minimizing human intervention, ultimately optimizing the drug development cycle and giving the Company a competitive advantage in the sector. Through this relationship, the Company will gain access to cutting-edge predictive models and dashboards, enabling the Company to evaluate drug candidates, streamline clinical trials, and optimize asset management with real-time data. These tools will drive faster, more accurate decisions, improving efficiency and reducing costs. By leveraging these insights, the Company can differentiate itself in a competitive sector and gain unique data-driven insights that position the Company for success across both its current and future asset portfolio. Our collaboration with Sarborg enables us to apply proprietary algorithms utilizing AI-powered disease mapping to identify novel re-purposing opportunities across a database of more than 3,000 disease signatures. Sarborg’s insights have directly informed two new combination patent filings, strengthening our intellectual property portfolio. In addition, the Company has initiated pre-clinical in-vitro models to explore new indications, guided by AI-insights without human intervention. We will seek an exit through third-party license deals following successful in vitro and in vivo pre-clinical trials, entering into agreements with third parties to pursue further development, FDA approval, commercialization, and marketing of our assets. We continue to evaluate novel artificial intelligence and cybernetics approaches to drug re-purposing, intellectual property, and asset selection to give the Company a competitive advantage. Sarborg is considered to be a related party of CDT, as Dr. Andrew Regan, Chief Executive Officer of CDT, also sits on the board of directors of Sarborg, and Chele Chiavacci Farley, a director of CDT is also a shareholder of Sarborg.

Current wording

On December 12, 2024, Sarborg and the Company entered into an agreement (the “Sarborg Agreement”) designed to address longstanding challenges in the pharmaceutical sector, in particular by reducing human error in critical decision-making processes in both clinical development and asset identification. By integrating Sarborg’s signature intelligence technology, the Company aims to enhance efficiency, lower costs, and accelerate timelines by minimizing human intervention, ultimately optimizing the drug development cycle and giving the Company a competitive advantage in the sector. Through this relationship, the Company will gain access to cutting-edge predictive models and dashboards, enabling the Company to evaluate drug candidates, streamline clinical trials, and optimize asset management with real-time data. These tools will drive faster, more accurate decisions, improving efficiency and reducing costs. By leveraging these insights, the Company can differentiate itself in a competitive sector and gain unique data-driven insights that position the Company for success across both its current and future asset portfolio. Our collaboration with Sarborg enables us to apply proprietary algorithms utilizing AI-powered disease mapping to identify novel re-purposing opportunities across a database of more than 3,000 disease signatures. Sarborg’s insights have directly informed two new combination patent filings, strengthening our intellectual property portfolio. In addition, the Company has initiated pre-clinical in-vitro models to explore new indications, guided by AI-insights without human intervention. We will seek an exit through third-party license deals following successful in vitro and in vivo pre-clinical trials, entering into agreements with third parties to pursue further development, FDA approval, commercialization, and marketing of our assets. We continue to evaluate novel artificial intelligence and cybernetics approaches to drug re-purposing, intellectual property, and asset selection to give the Company a competitive advantage. Sarborg is considered to be a related party of CDT, as Dr. Andrew Regan, Chief Executive Officer of CDT, also sits on the board of directors of Sarborg and is a shareholder of Sarborg through his ownership of Corvus, Chele Chiavacci Farley, a director of CDT is also a shareholder of Sarborg and Ulrik Olsen, a director of CDT is also a shareholder of Sarborg.

Previous wording

The Company effected four reverse stock splits of its common stock pursuant to amendments to the Company’s Second Amended and Restated Certificate of Incorporation that were previously approved by the Company’s stockholders and authorized by the Board of Directors. The reverse stock splits were implemented as follows: a 1-for-100 reverse stock split effective January 24, 2025, a 1-for-15 reverse stock split effective May 19, 2025, a 1-for-8 reverse stock split effective October 10, 2025 and a 1-for-25 reverse stock split effective March 26, 2026.

Current wording

The Company effected five reverse stock splits of its common stock pursuant to amendments to the Company’s Second Amended and Restated Certificate of Incorporation that were previously approved by the Company’s stockholders and authorized by the Board of Directors. The reverse stock splits were implemented as follows: a 1-for-100 reverse stock split effective January 24, 2025, a 1-for-15 reverse stock split effective May 19, 2025, a 1-for-8 reverse stock split effective October 10, 2025, a 1-for-25 reverse stock split effective March 26, 2026, a 1-for-10 reverse stock split effective July 20, 2026.

Previous wording

Reverse stock splits were applied sequentially at their respective effective dates (resulting in a cumulative effect equivalent to an approximate 1-for-300,000 reverse stock split).

Current wording

Reverse stock splits were applied sequentially at their respective effective dates (resulting in a cumulative effect equivalent to an approximate 1-for-3,000,000 reverse stock split).

Previous wording

As a result of the aggregate of the reverse stock splits, every 300,000 shares of our common stock issued or outstanding were automatically reclassified into and became one new share of common stock. The number of our issued and outstanding shares of common stock, when accounting for the reverse stock splits, was 4,722,457 and 92,140 shares as of March 31, 2026 and December 31, 2025, respectively.

Current wording

As a result of the aggregate of the reverse stock splits, every 3,000,000 shares of our common stock issued or outstanding were automatically reclassified into and became one new share of common stock. The number of our issued and outstanding shares of common stock, when accounting for the reverse stock splits, was 631,080 and 9,214 shares as of June 30, 2026 and December 31, 2025, respectively.

Previous wording

We incurred approximately $0.8 million and $0.9 million on research and development activities during the three months ended March 31, 2026 and March 31, 2025, respectively. Our research and development activities have been focused on developing co-crystals of AZD1656 to increase patent life as well as purchasing technology to help us determine the feasibility that AZD1656, and potentially other de-prioritized assets, may reach commercialization. Some of this work was completed by third-party CROs but all intellectual property is retained by us. We currently have one pending international patent application and two pending national patent applications. The successful completion of clinical trials increases the value of clinical assets and may lead to the commercialization and/or licensing of such assets to other pharmaceutical companies. There is no assurance that any clinical trials on the assets owned or licensed by us will be successful.

Current wording

We incurred approximately $0.3 million and $1.1 million on research and development activities during the three and six months ended June 30, 2026, respectively. We incurred approximately $1.8 million and $2.8 million on research and development activities during the three and six months ended June 30, 2025, respectively. Our research and development activities have been focused on developing co-crystals of AZD1656 to increase patent life as well as purchasing technology to help us determine the feasibility that AZD1656, and potentially other de-prioritized assets, may reach commercialization. Some of this work was completed by third-party CROs but all intellectual property is retained by us. We currently have one pending international patent application and two pending national patent applications. The successful completion of clinical trials increases the value of clinical assets and may lead to the commercialization and/or licensing of such assets to other pharmaceutical companies. There is no assurance that any clinical trials on the assets owned or licensed by us will be successful.

Previous wording

Other income (expenses), net consists of change in the fair value of options, change in fair value of convertible notes, change in fair value of digital assets and expense incurred upon the issuance of warrants during the three months ended March 31, 2026.

Current wording

Other income (expenses), net consists of change in the fair value of options, change in fair value of convertible notes and expense incurred upon the issuance of warrants during the six months ended June 30, 2026.

Previous wording

Research and development expenses decreased by $0.1 million, or 15%, to $0.8 million for the three months ended March 31, 2026, as compared to $0.9 million for the three months ended March 31, 2025. The decrease was primarily attributable to a $0.2 million decrease in expense related to our transactions with Sarborg and a $0.1 million decrease related to Charles River activity. The decrease was partially offset by an increase of $0.1 million related to the Thesprogen agreement entered into during 2026 and an increase of $48 thousand related to a third-party consultant’s research and development activity.

Current wording

Research and development expenses decreased by $1.6 million, or 84%, to $0.3 million for the three months ended June 30, 2026, as compared to $1.9 million for the three months ended June 30, 2025. The decrease was primarily attributable to a $1.5 million decrease in expense related to our transactions with Sarborg and a $0.1 million decrease related to the Thesprogen agreement during the three months ended June 30, 2026.

Previous wording

General and administrative expenses increased by $0.2 million, or 7%, to $2.9 million for the three months ended March 31, 2026, compared to $2.7 million for the three months ended March 31, 2025. The increase was primarily driven by a $0.2 million increase in audit and accounting fees and a $0.2 million increase in travel expense, partially offset by a $0.2 million decrease in salaries and stock based compensation, a $0.1 million decrease in insurance expense and a $47 thousand decrease in legal expense.

Current wording

General and administrative expenses decreased by $0.4 million, or 13%, to $2.7 million for the three months ended June 30, 2026, compared to $3.1 million for the three months ended June 30, 2025. The decrease was primarily driven by a $0.6 million decrease in legal and professional fees, and a $0.3 million decrease in salaries and stock-based compensation and $0.1 million decrease in insurance expense, partially offset by a $0.3 million increase in audit and accounting fees and a $0.3 million increase in other general and administrative expenses.

Previous wording

For further details refer to Note 14 in the unaudited condensed consolidated financial statements for the three months ended March 31, 2026 and March 31, 2025 included elsewhere in this document.

Current wording

For further details refer to Note 14 in the unaudited condensed consolidated financial statements included elsewhere in this document.

Previous wording

Other expense, net decreased by $0.7 million or 70%, to $0.3 million for the three months ended March 31, 2026, compared to a $1.0 million for the three months ended March 31, 2025. The decrease was primarily driven by a decrease of $1.6 million of expense for the net changes in fair value of convertible notes payable, partially offset by $0.4 million change in the gain upon a waiver of accrued interest, $0.3 million change in gain upon debt extinguishment, $0.1 million change on the gain on change in the fair value of warrants, and a $0.1 million change on the gain on the issuance of shares for services.

Current wording

Other expense, net decreased by $0.2 million or 8%, to $1.8 million for the six months ended June 30, 2026, compared to $2.0 million for the six months ended June 30, 2025. The decrease was primarily driven by a decrease of $0.9 million of expense for the net changes in fair value, loss upon conversion and extinguishment of convertible notes payable, partially offset by a decrease of $0.4 million in the gain upon a waiver of accrued interest, $0.1 million change on the gain on change in the fair value of warrants, and a $0.1 million change on the gain on the issuance of shares for services.

Previous wording

Interest expense, net decreased by $0.1 million, or 72%, to $0.1 million for the three months ended March 31, 2026, as compared to $0.2 million for the three months ended March 31, 2025. The decrease was driven by a decrease of the principal outstanding on the A.G.P. Convertible Note as a result of conversions, decrease of the principal outstanding on the August 2024 Nirland Note and October 2025 Nirland Note as a result of conversions and repayment in full during the three months ended March 31, 2025, and a decrease of $65 thousand of debt issuance cost amortization related to the Convertible Promissory Note Payable, partially offset by $23 thousand of interest expense related to the Ascent Note which was entered into during the three months ended March 31, 2026.

Current wording

Interest expense, net decreased by $167,000, or 72%, to $66,000 for the six months ended June 30, 2026, as compared to $233,000 for the six months ended June 30, 2025. The decrease was driven by a $102,000 million decrease of the from a decrease in the principal outstanding on the A.G.P. Convertible Note due to conversions and settlement during the six months ended June 30 2026, a $33,000 decrease as a result of the settlement of the August 2024 Nirland Note and October 2025 Nirland Note during the six months ended June 30, 2025, and a decrease of $65,000 million of debt issuance cost amortization related to the Convertible Promissory Note Payable, partially offset by $28,000 of interest expense related to the Ascent Note which was entered into during the three months ended June 30, 2026.

Previous wording

Management assesses liquidity in terms of our ability to generate cash to fund operating, investing and financing activities. Since our inception, and in line with our growth strategy, we have prepared our financial statements assuming we will continue as a going concern. Since our inception, we have incurred net losses and experienced negative cash flows from operations. To date, our primary sources of capital have been through convertible debt, private placements of equity securities and the Sales Agreement with A.G.P., dated October 23, 2024, as amended. During the three months ended March 31, 2026 and 2025, we incurred operating losses of $3.7 million and $3.6 million, respectively.

Current wording

Management assesses liquidity in terms of our ability to generate cash to fund operating, investing and financing activities. Since our inception, and in line with our growth strategy, we have prepared our financial statements assuming we will continue as a going concern. Since our inception, we have incurred net losses and experienced negative cash flows from operations. To date, our primary sources of capital have been through convertible debt, private placements of equity securities and the Sales Agreement with A.G.P. During the six months ended June 30, 2026 and 2025, we incurred operating losses of $6.7 million and $8.6 million, respectively.

Previous wording

As consideration for the purchase, the Company has agreed to issue to the investors, in the aggregate: (i) 23,920 shares of the Company’s Common Stock, exercise price of $0.0025 per share and (ii) pre-funded warrants (the to purchase up to 4,399,156 shares of Common. In addition, the Company has agreed to pay Sarborg cash consideration of $8 million, with the cash portion of the consideration deferred until such time as the Company raises no less than $20 million through the use of an at-the-market facility program. As of March 31, 2026, the $8 million cash portion of consideration for our investment in Sarborg was still outstanding. We expect to raise the funds through an at-the-market facility program and repay the $8 million within 12 months of the issuance of the financial statements.

Current wording

As consideration for the purchase, the Company has agreed to issue to the investors, in the aggregate: (i) 2,392 shares of the Company’s Common Stock, exercise price of $0.025 per share and (ii) pre-funded warrants to purchase up to 439,915 shares of Common Stock. In addition, the Company has agreed to pay Sarborg cash consideration of $8 million, with the cash portion of the consideration deferred until such time as the Company raises no less than $20 million through the use of an at-the-market facility program. As of June 30, 2026, the $8 million cash portion of consideration for our investment in Sarborg was still outstanding. We expect to raise the funds through an at-the-market facility program and repay the $8 million within 12 months of the issuance of the financial statements.

Previous wording

During the three months ended March 31, 2026, the holder of the A.G.P. Convertible Note converted $0.7 million of principal and interest into 25,760 shares of the Company’s Common Stock, respectively. As of March 31, 2026, there was approximately $1.9 million in outstanding principal and interest remaining.

Current wording

During the six months ended June 30, 2026, the holder of the A.G.P. Convertible Note converted the remaining $2.5 million of principal and interest into 129,911 shares of the Company’s Common Stock.

Previous wording

The Note is payable to the Lender over twenty-four equal weekly installments of $82 thousand commencing on June 18, 2026, which may be paid in cash or, at the option of the Company once an applicable resale registration statement is declared effective by the Securities and Exchange Commission covering the resale of any shares of the Company’s common stock, par value $0.0001 per share that may be received on such conversion.

Current wording

The Note is payable to the Lender over twenty-four equal weekly installments of $82,000 commencing on July 10, 2026, which may be paid in cash or, at the option of the Company once an applicable resale registration statement is declared effective by the Securities and Exchange Commission covering the resale of any shares of the Company’s common stock, par value $0.0001 per share that may be received on such conversion.

Previous wording

Additionally, the Company issued the Lender, common stock purchase warrants to purchase 912,500 shares of the Company’s Common Stock at an exercise price of $0.72 per share. The Warrants will become exercisable beginning on the effective date of stockholder approval of the issuance of the Warrant Shares (such date, the “Stockholder Approval Date”) and will expire five years after the Stockholder Approval Date.

Current wording

Additionally, the Company issued the Lender, common stock purchase warrants to purchase 91,250 shares of the Company’s Common Stock at an exercise price of $7.20 per share. The Warrants will become exercisable beginning on the effective date of stockholder approval of the issuance of the Warrant Shares (such date, the “Stockholder Approval Date”) and will expire five years after the Stockholder Approval Date.

Previous wording

We currently anticipate that cash required for working capital for the next 12 months is approximately $19.5 million, which includes forecasted research and development costs of $0.1 million, forecasted general and administrative costs of $6.2 million, current liabilities of $11.2 million and convertible promissory notes payable, if not converted prior to maturity of $2.0 million. We do not anticipate being able to fund required working capital for the next 12 months with cash and cash equivalents on hand and current borrowings. Management believes that we will be able to fund cash required for the next 12 months through borrowings and equity raises. We have historically been able to access funds through the issuance of debt, and more recently our at the market offering program through the Sales Agreement and believe we can continue to obtain funding through such debt financing agreements and Sales agreement as needed to meet cash requirements for the next 12 months.

Current wording

We currently anticipate that cash required for working capital for the next 12 months is approximately $21.0 million, which includes forecasted research and development costs of $40,000 forecasted general and administrative costs of $6.1 million, current liabilities of $12.5 million and convertible promissory notes payable, if not converted prior to maturity of $2.4 million. We do not anticipate being able to fund required working capital for the next 12 months with cash and cash equivalents on hand and current borrowings. Management believes that we will be able to fund cash required for the next 12 months through borrowings and equity raises. We have historically been able to access funds through the issuance of debt, and more recently our at the market offering program through the Sales Agreement and believe we can continue to obtain funding through such debt financing agreements and Sales agreement as needed to meet cash requirements for the next 12 months.

Previous wording

Net cash used in operating activities for the three months ended March 31, 2026, was $1.9 million, resulting primarily from a net loss of $4.1 million, adjusted for non-cash items including: a $0.3 million loss on the change in fair value of convertible notes payable, $0.5 million of amortization expense, $0.5 million issuance of common stock for services, $0.3 million of amortization of directors and officers insurance, $0.2 million of stock-based compensation, a $0.1 million loss on equity method investment, $0.1 million of non-cash lease expense and depreciation expense. The net cash inflow from changes in operating assets and liabilities amounted to $0.1 million.

Current wording

Net cash used in operating activities for the six months ended June 30, 2026, was $2.4 million, resulting primarily from a net loss of $8.7 million, adjusted for non-cash items including: a $0.7 million loss on the change in fair value of convertible notes payable, $1.0 million of amortization expense, $0.5 million issuance of common stock for services, $0.6 million of amortization of directors and officers insurance, $0.4 million of stock-based compensation, $1.1 million loss on debt extinguishment, $0.2 million loss on equity method investment, $0.1 million of non-cash lease expense, $0.1 million of non-cash interest expense and a $1.5 million cash inflow from operating assets and liabilities. The $1.5 million cash inflow from operating assets and liabilities is primarily due to a $1.8 million cash inflow from accounts payable, a $0.4 million cash inflow from accrued expenses, partially offset by a $0.7 million cash outflow from prepaid expenses and other current assets and a $0.1 million cash outflow from operating lease liabilities.

Previous wording

Net cash used in operating activities for the three months ended March 31, 2025, was $3.9 million, resulting primarily from a net loss of $4.8 million, adjusted for non-cash items including a $1.8 million loss on the change in fair value of convertible notes payable, a $0.3 million gain on debt extinguishment, $0.3 million gain on waiver of accrued interest, a $0.1 million gain on change in fair value of warrant liability, $0.2 million of stock-based compensation expense, $0.2 million of non-cash interest expense, $0.2 million of amortization expense, $0.4 million of prepaid directors and officers insurance amortization and a $1.6 million cash outflow from operating assets and liabilities. The $1.6 million cash outflow from operating assets and liabilities is primarily due to a $0.7 million cash outflow from accounts payable, a $0.2 million cash outflow from accrued expenses and other current liabilities, and a $0.3 million cash outflow from prepaid expenses and other current assets.

Current wording

Net cash used in operating activities for the six months ended June 30, 2025, was $6.5 million, resulting primarily from a net loss of $10.8 million, adjusted for non-cash items including a $0.4 million gain on waiver of accrued interest, $0.3 million gain on debt extinguishment, $0.1 change in fair value of derivative warrant liability, a $2.9 million change in fair value of convertible notes, $1.8 million of amortization expense, $0.4 million of stock-based compensation, $0.2 million of non-cash interest expense, and a $0.2 million cash outflow from operating assets and liabilities. The $0.2 million cash outflow from operating assets and liabilities is primarily due to a $0.2 million cash outflow from accounts payable, a $0.1 million cash outflow from accrued expenses and other current liabilities and a $0.1 million cash outflow from operating lease liabilities, partially offset by a $0.2 million cash inflow from prepaid expenses and other current assets.

Previous wording

No cash was used in investing activities for the three months ended March 31, 2026.

Current wording

No cash was used in investing activities for the six months ended June 30, 2026.

Previous wording

Net cash used in investing activities for the three months ended March 31, 2025 was $0.4 million, resulting from purchases of property, plant and equipment totaling $0.4 million.

Current wording

Net cash used in investing activities for the six months ended June 30, 2025, was $0.4 million, resulting from $0.4 million in diagnostic asset purchases and purchases of property, plant and equipment.

Previous wording

Net cash provided by financing activities for the three months ended March 31, 2025 was $5.9 million, resulting from proceeds from the issuance of common shares related to the ATM program of $8.1 million. This was offset by repayments of convertible notes payable of $1.6 million, and repayments of notes payable of $0.6 million.

Current wording

Net cash provided by financing activities for the six months ended June 30, 2026, was $1.7 million, resulting from proceeds received from the issuance of convertible notes payable of $1.8 million, and from proceeds from the issuance of common shares related to the ATM program of $0.4 million, partially offset by repayments of notes payable to related parties of $0.5 million.

Previous wording

Investments are accounted for under the cost or equity method of accounting, under which the Company records its proportionate share of the investee’s earnings and losses within earnings and evaluates the investment for impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable. The determination of whether a decline in value is other-than-temporary requires significant judgment regarding the investee’s financial condition, operating performance, business prospects, market conditions, and estimated recoverable value.

Current wording

The Company’s current investment is accounted for under the equity method of accounting, under which the Company records its proportionate share of the investee’s earnings and losses within earnings and evaluates the investment for impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable. The determination of whether a decline in value is other-than-temporary requires significant judgment regarding the investee’s financial condition, operating performance, business prospects, market conditions, and estimated recoverable value.