CDT Equity (CDT) risk factors, FY2025 10-K

Risks Related to Our Business and Industry

1. 01We have incurred significant net losses since our inception and we anticipate future losses and negative cash flow. It is uncertain if or when we will become profitable
2. 02As a result of our limited operating history, we may not be able to correctly estimate, operating expenses, need for investment capital, or stability of operations, which could lead to cash shortfalls
3. 03We may not be successful in our efforts to use and expand our development platform to build a pipeline of clinical assets
4. 04Clinical drug development for our clinical assets is very expensive, time-consuming, difficult to design and implement, and uncertain. Our clinical trials may fail to adequately demonstrate the safety and efficacy of our clinical assets, which could prevent or delay regulatory approval and commercialization
5. 05Any delay, limitation, or denial in any applicable regulatory approval for any of our clinical assets would delay or adversely impact commercialization of our clinical assets and would harm our business, financial condition, operating results, and prospects22% rewritten
6. 06If we do not develop and implement all required accounting practices and policies, we may be unable to provide the financial information required of a U.S. publicly traded company in a timely and reliable manner
7. 07We may face product liability exposure, and if successful claims are brought against us, we may incur substantial liability if our insurance coverage for those claims is inadequate
8. 08Our reliance on contract manufacturers and suppliers further exposes us to the possibility that they, or third parties with access to their facilities, will have access to and may misappropriate our trade secrets or other proprietary information
9. 09We may choose not to continue developing or commercializing any of our clinical assets at any time during development or after approval, which would reduce or eliminate our potential return on investment for those clinical assets
10. 10If we fail to attract and retain management and other key personnel, we may be unable to continue to successfully develop or commercialize our clinical assets or otherwise implement our business plan
11. 11We currently have limited marketing capabilities and no sales organization. If we do not establish sales and marketing capabilities on our own or through third parties, we will be limited in our commercialization to license deals with third parties following successful Phase II trials
12. 12Our failure to successfully in-license, acquire, develop, and market additional clinical assets or approved products would impair our ability to grow our business
13. 13Accordingly, there can be no assurance that we will undertake or successfully complete any transactions of the nature described above, and any transaction that we do complete could harm our business, financial condition, operating results, and prospects
14. 14Our operating results may fluctuate significantly, which makes our future operating results difficult to predict and could cause our operating results to fall below expectations
15. 15Fluctuations in foreign currency could have an effect on our reported results of operations
16. 16Our operating results and liquidity needs could be negatively affected by market fluctuations and economic downturn
17. 17We are increasingly dependent on information technology, and our systems and infrastructure face certain risks, including cybersecurity and data leakage risks
18. 18Our business and operations would suffer in the event of failures in our internal computer systems

Risks Related to Intellectual Property

1. 19Failure to adequately protect our intellectual property could adversely affect our business, financial condition, and operating results
2. 20We have registered the domain name for the website that we use in our business, which is www.cdtequity.com. The inclusion of the website address in this Annual Report does not include or incorporate by reference the information on the Company’s website into this document
3. 21We may be unable to continue to use the domain name that we use in our business or prevent third parties from acquiring and using domain names that infringe on, are similar to, or otherwise decrease the value of our brand, trademarks, or service marks
4. 22We may not be able to protect our intellectual property rights throughout the world
5. 23Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment, and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements
6. 24If we fail to comply with our obligations under our intellectual property license agreements, we could lose license rights that are important to our business
7. 25If we are sued for infringing intellectual property rights of third parties, it will be costly and time-consuming, and an unfavorable outcome in that litigation could have a material adverse effect on our business
8. 26We may become involved in lawsuits to protect or enforce our patents or other intellectual property or the patents of our licensors, or other claims may be made against us, which could be expensive and time-consuming27% rewritten
9. 27We consider proprietary trade secrets or confidential know-how and unpatented know-how to be important to our business. We may rely on trade secrets or confidential know-how to protect our technology, especially where we believe that patent protection is of limited value
10. 28We may be subject to claims that our employees, consultants, or independent contractors have wrongfully used or disclosed to us alleged trade secrets of their former employers or their former or current customers
11. 29If our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our markets of interest and our business may be adversely affected
12. 30Our proprietary information may be lost, or we may suffer security breaches41% rewritten

Risks Related to Securities Markets and Investment in Our Stock

1. 31If we do not maintain our trading market’s listing requirements, Nasdaq may delist our securities from trading on its exchange92% rewritten
2. 32The current expectation is that we will retain our future earnings to fund the development and growth of our business. As a result, capital appreciation, if any, of the shares of our common stock will be stockholders’ sole source of gain, if any, for the foreseeable future
3. 33Our charter documents and Delaware law could prevent a takeover that stockholders consider favorable and could also reduce the market price of our common stock
4. 34If securities or industry analysts do not publish or cease publishing research or reports about us, our business, or our market, or if they adversely change their recommendations or publish negative reports regarding our business or our common stock, our share price and trading volume could decline
5. 35We are an “emerging growth company” and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our securities less attractive to investors
6. 36Our Certificate of Incorporation and Bylaws provides that we will indemnify our directors and officers, in each case to the fullest extent permitted by Delaware law

Risks Related to Finances and Capital Requirements

1. 37We will require substantial additional funding in the future, which may not be available to us on acceptable terms, or at all, and, if not so available, may require us to delay, limit, reduce, or cease our operations35% rewritten
2. 38We will continue to incur significant increased costs as a result of operating as a public company, and our management will be required to devote substantial time to new compliance initiatives30% rewritten