What changed in this filing

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Item 1. Financial Statements

2026-08-12 compared with 2026-07-15 · 709 added, 564 removed, 516 unchanged (71% of the section changed)

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thousands, except share and per share amounts)

March 31, 2026

June 30, 2026

December 31, 2025

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Total current liabilities

warrant liability

Total liabilities

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Common stock, par value $ 0.0001 ;

250,000,000 shares authorized at March 31, 2026 and December 31, 2025, respectively, 4,722,457 shares and 92,140 shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively

250,000,000 shares authorized at June 30, 2026 and December 31, 2025, 631,080 shares and 9,214 shares issued and outstanding at June 30, 2026 and December 31, 2025, respectively

Preferred stock, par value $ 0.0001 ;

1,000,000 shares authorized at March 31, 2026 and December 31, 2025, respectively;

nil shares issued and outstanding at March 31, 2026 and December 31, 2025

1,000,000 shares authorized at June 30, 2026 and December 31, 2025;

nil shares issued and outstanding at June 30, 2026 and December 31, 2025

Additional paid-in capital

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thousands, except share and per share amounts)

Three Months ended March 31,

Three Months ended June 30,

Six Months ended June 30

Operating expenses:

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$ ( 10,940.11 )

$ ( 31,615.84 )

Basic and diluted weighted-average common shares outstanding

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accompanying notes are an integral part of these condensed consolidated financial statements.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

the Three and Six Months Ended June 30, 2026 and 2025

thousands, except share amounts)

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stockholders’

Balance at April 1, 2025

Issuance of common stock for services

Issuance of common stock under the ATM Program

Issuance of common stock upon exercise of conversion option

Stock-based compensation

Share repurchases

Foreign currency translation adjustment

Balance at June 30, 2025

comprehensive

stockholders’

Balance at January 1, 2025

Issuance of Common Stock for

Issuance of Common Stock upon

exercise of conversion option

Issuance of common stock for services

Issuance of common stock under the ATM Program

Issuance of Common Stock upon exercise of conversion option

Stock-based compensation

Shares issued for equity line

Issuance of common stock upon

Issuance of warrants upon investment

Exercise of warrants attributable

to investment

Exercise of warrants attributable

to the sale of previously controlled subsidiary

Foreign currency translation

at March 31, 2026

Share repurchases

Foreign currency translation adjustment

Balance at June 30, 2025

comprehensive

stockholders’

Balance at April 1, 2026

Issuance of common stock under the ATM Program

Issuance of common stock upon exercise of conversion option

Stock-based compensation

Shares issued for equity line of credit

Foreign currency translation adjustment

Balance at June 30, 2026

comprehensive

stockholders’

Balance at January 1, 2026

Issuance of Common Stock for

Issuance of Common Stock under

the ATM Program

Issuance of Common Stock upon

exercise of conversion option

Issuance of common stock for services

Issuance of common stock under the ATM Program

Issuance of common stock upon exercise of conversion option

Stock-based compensation

Foreign currency translation

at March 31, 2025

Shares issued for equity line of credit

Issuance of common stock upon investment

Issuance of warrants upon investment

Exercise of warrants attributable to investment

Exercise of warrants attributable to the sale of previously

controlled subsidiary

Foreign currency translation adjustment

Balance at June 30, 2026

accompanying notes are an integral part of these condensed consolidated financial statements.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months ended March 31,

Six Months ended June 30,

Cash flows from operating activities:

Adjustments to reconcile net loss to net cash used in operating activities:

Loss on debt extinguishment, net

Unrealized foreign exchange gain

Loss (gain) on debt extinguishment, net

Unrealized foreign exchange (gain) loss

Change in fair value of convertible notes payable

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Non-cash interest expense

Operating lease obligations

Non-cash lease expense

Depreciation expense

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Repayment of convertible notes payable

Purchases of treasury stock

Net cash flows provided by financing activities

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Issuance of common stock upon exercise of conversion option

Issuance of common stock for services

Issuance of common stock for investment in related party

Deferred cash payable for investment in related party

Issuance of pre-funded warrants for investment in related

Issuance of pre-funded warrants for investment in related party

Issuance of warrants upon the issuance of convertible note

accompanying notes are an integral part of these condensed consolidated financial statements.

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therapeutic assets through scientific innovation and strategic partnerships.

September 25, 2023, the Company’s Common Stock commenced trading on the Nasdaq Capital Market under the

symbol “CDT”.

The Company completed four reverse stock splits:

a 1-for-100 split effective January 24, 2025 (the “January Reverse Stock

Split”), a 1-for-15 split effective May 19, 2025 (the “May Reverse Stock Split”), a 1-for-8 split effective October

10, 2025 (the “October Reverse Stock Split”) and a 1-for-25 reverse stock split effective March 26, 2026 (the “March

2026 Reverse Stock Split”).

The January Reverse Stock Split, May Reverse Stock Split, October Reverse Stock Split and March 2026

Reverse Stock Split are reflected collectively (the “Reverse Stock Splits”).

Each split reduced the number of issued and

outstanding shares without affecting the number of authorized shares or the par value of the Common Stock.

No fractional shares were

instead, stockholders received cash in lieu of fractional shares based on the respective post-split closing share prices.

share and per-share information has been retroactively adjusted to reflect the Reverse Stock Splits for all periods presented.

September 25, 2023, the Company’s Common Stock commenced trading on the Nasdaq Capital Market under the symbol “CDT”.

Company completed five reverse stock splits:

a 1-for-100 split effective January 24, 2025 (the “January 2025 Reverse Stock Split”),

a 1-for-15 split effective May 19, 2025 (the “May 2025 Reverse Stock Split”), a 1-for-8 split effective October 10, 2025

(the “October 2025 Reverse Stock Split”), a 1-for-25 reverse stock split effective March 26, 2026 (the “March 2026

Reverse Stock Split”), and a 1-for-10 reverse stock split effective July 20, 2026 (the “July 2026 Reverse Stock Split”).

The January 2025 Reverse Stock Split, May 2025 Reverse Stock Split, October 2025 Reverse Stock Split, March 2026 Reverse Stock Split,

and July 2026 are reflected collectively (the “Reverse Stock Splits”).

Each split reduced the number of issued and outstanding

shares without affecting the number of authorized shares or the par value of the Common Stock.

No fractional shares were issued;

stockholders received cash in lieu of fractional shares based on the respective post-split closing share prices.

All share and per-share

information has been retroactively adjusted to reflect the Reverse Stock Splits for all periods presented.

historical share and per-share amounts reflected throughout the accompanying unaudited consolidated financial statements and related

disclosures as of and for the three months ended March 31, 2026 and 2025 have been retroactively adjusted to reflect the January

Reverse Stock Split, May Reverse Stock Split, October Reverse Stock Split and March 2026 Reverse Stock Split as if the Reverse Stock

Splits occurred as of the earliest period presented.

disclosures as of and for the six months ended June 30, 2026 and 2025 have been retroactively adjusted to reflect the January 2025 Reverse

Stock Split, May 2025 Reverse Stock Split, October 2025 Reverse Stock Split, March 2026 Reverse Stock Split and July 2026 Reverse Stock

Split as if the Reverse Stock Splits occurred as of the earliest period presented.

Liquidity and Going Concern

accordance with ASC 205-40, Going Concern, the Company has evaluated whether there are conditions and events, considered in the

aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the

date the unaudited condensed consolidated financial statements are issued.

Since its inception, the Company has generated

significant losses and as of March 31, 2026, the Company had an accumulated deficit of $ 72.4 million.

As of March 31, 2026, the Company had cash and cash equivalents of $ 0.1 million.

For the three months ended March 31, 2026, the Company had net operating losses of $ 3.7 million,

and cash used in operating activities of $ 1.9 million.

accordance with ASC 205-40, Going Concern, the Company has evaluated whether there are conditions and events, considered in the aggregate,

that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date the unaudited

condensed consolidated financial statements are issued.

Since its inception, the Company has generated significant losses and as of June

30, 2026, the Company had an accumulated deficit of $ 77.0

As of June 30, 2026, the Company had cash and cash

equivalents of $ 0.7

For the six months ended June 30, 2026, the Company

had net operating losses of $ 6.7

million, and cash used in operating activities of $ 2.4

has determined that it does not currently have sufficient cash and other sources of liquidity to fund its current business plan.

These factors raise substantial doubt regarding the Company’s ability to continue as a going concern for at least the next 12

months from the financial statement filing date.

factors raise substantial doubt regarding the Company’s ability to continue as a going concern for at least the next 12 months

from the financial statement filing date.

Company’s expectation is to generate operating losses and negative operating cash flows in the future and will need additional

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The Company currently has approximately $ 73.6

million available funds from the Sales Agreement as of the financial statement release date.

However, there is no assurance that such

funding will be available when needed.

million available funds from the Sales Agreement as of the financial statement release date when accounting for the $2.4 million due to J.J.

Astor via the convertible note agreement entered into during the

six months ended June 30, 2026 (the “J.J.

Astor Note”).

The available funds from the Sales Agreement is subject to further

reduction in the event of default.

However, there is no assurance that

such funding will be available when needed.

If additional funding is not available when required, the Company would need to delay or

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material adverse effect on the Company and its financial condition.

unaudited condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern and

do not include adjustments to reflect the possible effects on the recoverability and classification of assets or the amounts and

classification of liabilities that may result from the outcome of this uncertainty.

See Note 7 and Note 18 for further discussion of the J.J.

unaudited condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern and do

not include adjustments to reflect the possible effects on the recoverability and classification of assets or the amounts and classification

of liabilities that may result from the outcome of this uncertainty.

Basis of Presentation and Summary of Significant Accounting Policies

of Presentation

accompanying unaudited condensed consolidated financial statements have been prepared by the Company in accordance with accounting

principles generally accepted in the United States of America (“U.S.

GAAP”) as set forth by the Financial Accounting

Standards Board (“FASB”) and pursuant to the rules and regulations of the United States Securities and Exchange

Commission (“SEC”).

accompanying unaudited condensed consolidated financial statements have been prepared by the Company in accordance with accounting principles

generally accepted in the United States of America (“U.S.

GAAP”) as set forth by the Financial Accounting Standards Board

(“FASB”) and pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”).

References to U.S.

GAAP issued by the FASB in these notes to the accompanying unaudited condensed

consolidated financial statements are to the FASB Accounting Standards Codifications (“ASC”) and Accounting Standards

Updates (“ASUs”).

GAAP issued by the FASB in these notes to the accompanying unaudited condensed consolidated financial statements are

to the FASB Accounting Standards Codifications (“ASC”) and Accounting Standards Updates (“ASUs”).

accompanying unaudited condensed consolidated financial statements and related notes have been prepared in accordance with U.S.

for interim financial information, and with the rules and regulations of the SEC set forth in Article 8 of Regulation S-X.

Accordingly, they do not include all of the information and footnotes required by U.S.

they do not include all of the information and footnotes required by U.S.

GAAP for complete financial statements.

unaudited interim financial statements furnished reflect all adjustments (consisting of normal recurring accruals) which are, in the

opinion of management, necessary to a fair statement of the results for the interim periods presented.

Unaudited interim results are

not necessarily indicative of the results for the full fiscal year.

These unaudited condensed consolidated financial statements

should be read along with our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on April 15, 2026.

The consolidated balance sheet as of December 31, 2025 was derived from the audited consolidated financial statements as of and for

the year then ended.

The unaudited interim

financial statements furnished reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management,

necessary to a fair statement of the results for the interim periods presented.

Unaudited interim results are not necessarily indicative

of the results for the full fiscal year.

These unaudited condensed consolidated financial statements should be read along with our Annual

Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on April 15, 2026.

The consolidated balance sheet as of

December 31, 2025 was derived from the audited consolidated financial statements as of and for the year then ended.

of Consolidation

accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries

Conduit UK Management Ltd.

(United Kingdom) and Taamja Limited, formerly Conduit Pharmaceuticals, Ltd.

accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned

subsidiaries CDT Equity Limited, formerly Conduit UK Management Ltd.

(United Kingdom) and Taamja Limited, formerly Conduit

Pharmaceuticals, Ltd.

(Cayman Islands).

As used herein,

references to the “Company” or “CDT” include references to CDT Equity Inc.

As used herein, references to the “Company” or “CDT” include

references to CDT Equity Inc.

and its subsidiaries.

All intercompany

balances and transactions have been eliminated in consolidation.

All intercompany balances and transactions have been eliminated in

consolidation.

Risks and Uncertainties

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preclinical and clinical testing and regulatory approval prior to commercialization.

These efforts will require significant amounts of

These efforts may require significant amounts of

additional capital, adequate personnel, infrastructure, and extensive compliance and reporting capabilities.

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Company licenses clinical assets from AstraZeneca (see Note 8 for further detail).

A breach or other termination of such agreements

could have a material adverse effect on the Company’s business, financial condition, operating results, and prospects.

A breach or other termination of such agreements could

have a material adverse effect on the Company’s business, financial condition, operating results, and prospects.

preparation of financial statements in conformity with U.S.

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Fair value is to be determined based on the exchange price that would be received

for an asset or paid in order 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

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.

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.

for an asset or paid in order 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.

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.

inputs reflect the Company’s assumption about the inputs that market participants would use in pricing the asset or liability developed

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and other current liabilities approximate fair value due to the short-term nature of these assets and liabilities.

of March 31, 2026 and December 31, 2025, the Company had three financial liabilities, warrant liabilities for which the fair value is

determined based on Level 2 and Level 3 inputs, and two convertible notes carried at fair value for which the fair value is determined

based on Level 3 inputs.

The Level 2 inputs are valued based on observable inputs other than quoted prices included in Level 1, such as

quoted prices for similar instruments in active markets.

The Level 3 inputs are based on unobservable inputs and require

significant judgment.

Company has elected the fair value measurement option for convertible debt with embedded derivatives that would otherwise require

bifurcation and has recorded the entire hybrid financial instrument at fair value under the guidance in ASC 825, Financial

of June 30, 2026 the Company had three financial liabilities, two warrant liabilities, one of which is immaterial, for which the

fair value is determined based on Level 2 and Level 3 inputs, and one convertible note carried at fair value for which the fair

value is based on Level 3 inputs.

As of December 31, 2025, the Company had two financial liabilities, a warrant liability, which was immaterial, for

which the fair value is determined based on Level 2 and Level 3 inputs, and one convertible note carried at fair value for which

the fair value is determined based on Level 3 inputs.

The Level 2 inputs are valued based on observable inputs other than quoted

prices included in Level 1, such as quoted prices for similar instruments in active markets.

The Level 3 inputs are based on

unobservable inputs and require significant judgment.

Company has elected the fair value measurement option for each convertible debt note with embedded derivatives that would otherwise

require bifurcation and has recorded the entire hybrid financial instrument at fair value under the guidance in ASC 825, Financial

Instruments .

As a result, the March 2026 note (“Ascent Note”) with Ascent Partners LLC (“Ascent”) and

Convertible Note was recorded at fair value upon issuance.

The notes will subsequently be remeasured at fair value each

reporting date until settled or converted.

The Company reports interest expense, including accrued interest, related to the

convertible debt under the fair value option, separately from within the change in fair value of the convertible debt in the

accompanying unaudited condensed consolidated statement of operations and comprehensive loss.

Any changes in fair value caused by

instrument-specific credit risk are presented separately in other comprehensive income.

During the period ended March 31, 2026, the

Company did not record any changes in fair value related to instrument-specific credit risk.

accordance with ASC 323, Investments – Equity

Method and Joint Ventures (“ASC 323”),

the Company accounts for investments in entities over which it has the ability to exercise significant influence, but does not hold a

controlling financial interest, using the equity method of accounting.

Significant influence is generally presumed to exist when the

Company owns between 20% and 50% of the outstanding voting stock of the investee.

Investments in which the Company does not have the

ability to exercise significant influence are accounted for in accordance with ASC 321, Investments – Equity Securities

Investments are initially recorded at cost and subsequently adjusted to recognize the Company’s share of the

investee’s net income or loss, with distributions recorded as reductions to the investment’s carrying amount.

records its share of the results of these investees within other expense, net in the unaudited condensed consolidated statements of operations

As a result, the March 2026 note (“Ascent Note”) with Ascent Partners LLC (“Ascent”), the

June 2026 note (“J.J.

Astor Note”) with J.J.

and the A.G.P.

Convertible Note was recorded at fair value

upon issuance.

The notes will subsequently be remeasured at fair value each reporting date until settled or converted.

reports interest expense, including accrued interest, related to the convertible debt under the fair value option, separately from

within the change in fair value of the convertible debt in the accompanying unaudited condensed consolidated statement of operations

and comprehensive loss.

Any changes in fair value caused by instrument-specific credit risk are presented separately in other

comprehensive income.

During the period ended June 30, 2026, the Company did not record any changes in fair value related to

instrument-specific credit risk.

accordance with ASC 323, Investments – Equity Method and Joint Ventures (“ASC 323”), the Company accounts for

investments in entities over which it has the ability to exercise significant influence, but does not hold a controlling financial interest,

using the equity method of accounting.

Significant influence is generally presumed to exist when the Company owns between 20% and 50%

of the outstanding voting stock of the investee.

Investments in which the Company does not have the ability to exercise significant influence

are accounted for in accordance with ASC 321, Investments – Equity Securities (“ASC 321”).

are initially recorded at cost and subsequently adjusted to recognize the Company’s share of the investee’s net income or

loss, with distributions recorded as reductions to the investment’s carrying amount.

The Company records its share of the results

of these investees in the unaudited condensed consolidated statements of operations and comprehensive loss.

Company evaluates its investments for impairment whenever events or changes in circumstances indicate that the carrying amount may not

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to be other-than-temporary.

There was no impairment of Sarborg identified or recorded during the three months ended March 31, 2026.

January 16, 2026, the Company entered into a directed stock purchase agreement (the “Purchase Agreement”) with an

institutional investor relating to an equity line of credit facility (the “ELOC”).

Pursuant to the ELOC, the Company

will have the right from time to time at its option to sell to the purchaser up to $ 25

million of the Company’s Common Stock, par value $ 0.0001

There was no impairment of Sarborg identified or recorded during the six months ended June 30, 2026.

January 16, 2026, the Company entered into a directed stock purchase agreement (the “Purchase Agreement”) with an institutional

investor relating to an equity line of credit facility (the “ELOC”).

Pursuant to the ELOC, the Company will have the right

from time to time at its option to sell to the purchaser up to $ 25 million of the Company’s Common Stock, par value $ 0.0001 per

Purchase Agreement is subject to certain customary conditions and limitations, including that (i) the Purchaser shall not be obligated

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average price for the Common Stock on an advance notice date is less than a floor price of $ 15 .

On each six-month anniversary, the

floor price will adjust to the lower of the Nasdaq Official Closing Price for the day prior to the relevant adjustment date, and the

average of the Nasdaq Official Closing Price for the five-day period prior to the relevant adjustment date.

On each six-month anniversary, the floor

price will adjust to the lower of the Nasdaq Official Closing Price for the day prior to the relevant adjustment date, and the average

of the Nasdaq Official Closing Price for the five-day period prior to the relevant adjustment date.

March 3, 2026, the Company and the institutional investor entered into an amendment to the ELOC.

The amendment updated the definition

of the regular price floor from the minimum price as of the date of this agreement to $ 0.60 with no adjustment for reverse splits where applicable within the ELOC.

No consideration

was payable in connection with the amendment.

the three months ended March 31, 2026, the Company did not utilize the ELOC.

of the regular price floor from the minimum price as of the date of this agreement to $ 0.60 with no adjustment for reverse splits where

applicable within the ELOC.

No consideration was payable in connection with the amendment.

May 15, 2026, the “Company entered into the second amendment (the “Amendment No.

2”) to the Purchase Agreement, dated January

Pursuant to Amendment No.

2, the parties mutually agreed to set the gross purchase price to be paid without the consent of

the Purchaser at any closing of a regular purchase at $ 0.5 million.

Amendment No.

2 also extends the Adjustment Period, as defined in

the Purchase Agreement, to such time as the Purchaser has entered into committed and binding trades to sell all of the shares it purchased

under the Purchase Agreement.

April 2026, the Company sold 3,000 shares of the Company’s Common Stock for proceeds of $ 0.1 million pursuant to the ELOC.

Currency Translation

Company translates the assets and liabilities of foreign subsidiaries from their respective functional currency, the British pound,

to United States dollars at the appropriate spot rates as of the balance sheet date.

Income and expenses of operations are

translated to United States dollars using weighted average exchange rates during the year.

The foreign subsidiaries use the local

currency as their functional currency.

The effects of foreign currency translation adjustments are included as a component of

accumulated other comprehensive income in the accompanying unaudited condensed consolidated statements of changes in

stockholders’ equity (deficit).

Non-monetary items in the subsidiaries’ functional currency are re-measured into the

reporting currency at the historical exchange rate (i.e., the rate of exchange at the date of the transaction).

Company translates the assets and liabilities of foreign subsidiaries from their respective functional currency, the British pound, to

United States dollars at the appropriate spot rates as of the balance sheet date.

Income and expenses of operations are translated to

United States dollars using weighted average exchange rates during the year.

The foreign subsidiaries use the local currency as their

functional currency.

The effects of foreign currency translation adjustments are included as a component of accumulated other comprehensive

income in the accompanying unaudited condensed consolidated statements of changes in stockholders’ equity (deficit).

items in the subsidiaries’ functional currency are re-measured into the reporting currency at the historical exchange rate (i.e.,

the rate of exchange at the date of the transaction).

Issued Accounting Standards Adopted

July 2025, the FASB issued ASU 2025-05, Financial Instruments-Credit Losses (Topic 326):

Measurement of Credit Losses for

Accounts Receivable and Contract Assets .

This ASU introduces a practical expedient for estimating expected credit losses on

current accounts receivable and current contract assets arising from transactions accounted for under ASC 606, Revenue from

Contracts with Customers .

Under the expedient, entities may assume that the current conditions applied in determining credit

loss allowances remain unchanged for the remaining life of those assets.

Measurement of Credit Losses for Accounts

Receivable and Contract Assets .

This ASU introduces a practical expedient for estimating expected credit losses on current accounts

receivable and current contract assets arising from transactions accounted for under ASC 606, Revenue from Contracts with Customers .

Under the expedient, entities may assume that the current conditions applied in determining credit loss allowances remain unchanged for

the remaining life of those assets.

This ASU is required to be adopted on a prospective basis.

ASU 2025-05 is effective for annual reporting periods beginning after December 15, 2025, including interim periods within those

years, with early adoption permitted.

The Company adopted this standard, effective January 1, 2026.

The adoption of ASU 2025-05 did

not have a material impact on the Company’s unaudited condensed consolidated financial statements.

ASU 2025-05 is effective for annual reporting

periods beginning after December 15, 2025, including interim periods within those years, with early adoption permitted.

The Company adopted

this standard, effective January 1, 2026.

The adoption of ASU 2025-05 did not have a material impact on the Company’s unaudited

condensed consolidated financial statements.

Issued Accounting Standards Not Yet Adopted

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impact that the adoption of ASU 2024-03 will have on its consolidated financial statements and disclosures.

February 19, 2026, the Company acquired a 20.0 %

equity interest in Sarborg, a Cayman Islands-based related party, for total consideration of $ 123 million.

Total consideration consisted of 23,920 shares

of the Company’s Common Stock, pre-funded warrants to purchase up to 4,399,156 shares

of the Company’s Common Stock and $ 8 million

of cash, payable upon the Company raising no less than $ 20 million

February 19, 2026, the Company acquired a 20.0 % equity interest in Sarborg, a Cayman Islands-based related party, for total consideration

of $ 123 million.

Total consideration consisted of 2,392 shares of the Company’s Common Stock, pre-funded warrants to purchase up

to 439,915 shares of the Company’s Common Stock and $ 8 million of cash, payable upon the Company raising no less than $ 20 million

through the use of an at-the-market facility program (the “Sales Agreement”).

The Company expects to raise the $ 20 million

and pay the investors of Sarborg the $ 8 million

cash consideration within the next 12 months.

and pay the investors of Sarborg the $ 8 million cash consideration within the next 12 months, subject to equity market conditions and the trading of the Company’s Common Stock.

pre-funded warrants portion of the consideration transferred have an exercise price of $ 0.025 per share, subject to adjustment as set

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on the date of the Securities Purchase Agreement.

On March 19, 2026, all 4,399,156 of the pre-funded warrants were exercised through

a cashless exercise into 4,398,218 shares of the Company’s Common Stock.

On March 19, 2026, all 439,915 of the pre-funded warrants were exercised through a

cashless exercise into 439,821 shares of the Company’s Common Stock.

See Note 16 for further discussion of the pre-funded warrants

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The Company will account for the investment at its carrying value less any impairment.

the three months ended March 31, 2026, the Company recognized a loss of approximately $ 68 thousand, representing its proportionate share

of Sarborg’s results of operations during the three months ended March 31, 2026.

As of March 31, 2026, the carrying value of the

Company’s investment in Sarborg was approximately $ 122.9 million.

Company evaluated the equity method investment for impairment as of March 31, 2026 and determined that the decline in the Company’s

share price triggered that an impairment indicator was present.

Based on the impairment indicator present, the Company evaluated Sarborg

for impairment and determined no impairment existed as of March 31, 2026.

The Company will continue to periodically assess the equity

method investment for impairment and record an impairment if deemed necessary in accordance with ASC 323.

to the Company’s review of the transactions and financial statements for the quarter ended March 31, 2026, and in conjunction with

discussions with the Company’s auditors, management determined that the accounting treatment for the Sarborg transaction requires

the three and six months ended June 30, 2026, the Company recognized a loss of $ 0.1

million and $ 0.2

million, respectively, representing its proportionate share of Sarborg’s results of operations during the three and six months

ended June 30, 2026.

As of June 30, 2026, the carrying value of the Company’s investment in Sarborg was approximately $ 122.8

Company evaluated the equity method investment for impairment as of June 30, 2026, and determined that the decline in the

Company’s share price triggered that an impairment indicator was present.

Based on the impairment indicator present, the

Company evaluated Sarborg for impairment and determined there were no factors present at Sarborg that would indicate an impairment

existed as of June 30, 2026.

Furthermore, during the six months ended June 30, 2026, Sarborg sold shares to a third party investor

at a per share value in excess of the Company’s cost basis in the shares of Sarborg.

The Company will continue to periodically

assess the equity method investment for impairment and record an impairment if deemed necessary in accordance with ASC

to the Company’s review of the transactions and financial statements for the six months ended June 30, 2026, and in conjunction

with discussions with the Company’s auditors, management determined that the accounting treatment for the Sarborg transaction requires

the filing of Sarborg’s historical financial statements pursuant to applicable SEC reporting requirements.

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to file such historical financial statements in an amendment to the Company’s Current Report on Form 8-K filed on February 24,

2026, as promptly as practicable.

2026, and Current Report on Form 8-K filed on July 31, 2026, as promptly as practicable.

investment in Sarborg has been accounted for using the equity method as follows:

of Investment in Sarborg Using Cost Method

March 31, 2026

June 30, 2026

Balance as of April 1, 2026

Investment in Sarborg

Loss on equity investment in Sarborg

Impairment on equity investment in Sarborg

Balance as of June 30, 2026

June 30, 2026

Balance as of December 31, 2025

2 unchanged sentences

Impairment on equity investment in Sarborg

Balance as of March 31, 2026

Balance as of June 30, 2026

following table presents the summarized financial information for Sarborg:

of Financial Information for Sarborg

March 31, 2026

June 30, 2026

Current assets

1 unchanged sentence

Current liabilities

Non-current liabilities

Total liabilities

Net liabilities

Company share of net liabilities

Company share of net assets

Company share of net loss

following table presents, as of March 31, 2026, the Company’s assets and liabilities subject to measurement at fair value on a

recurring basis (in thousands):

following table presents, as of June 30, 2026, the Company’s assets and liabilities subject to measurement at fair value on a recurring

basis (in thousands):

Schedule of Assets Subject to Measurement at Fair Value on Recurring Basis

Fair Value Measurements as of March 31, 2026

Fair Value Measurements as of June 30, 2026

Cash equivalents

Convertible notes payable, at fair value

Derivative warrant liability

Total Liabilities

9 unchanged sentences

Notes Payable

Classified Warrants

Balance as of December 31, 2025

2 unchanged sentences

Interest expense

Cash repayment

Change in fair value

Balance as of March 31, 2026

the three months ended March 31, 2026, there were no transfers between Level 1 and Level 2, nor into or out of Level 3.

Balance as of June 30, 2026

the six months ended June 30, 2026, there were no transfers between Level 1 and Level 2, nor into or out of Level 3.

Notes Payable

November 2024, the Company issued to Alliance Global Partners (“A.G.P.”) a convertible promissory note (the “A.G.P.

Convertible Note”) in the principal amount of $5.7 million to evidence the A.G.P.’s currently owed deferred commission payable.

Additionally,

as discussed in Note 3 and Note 7, during March 2026, the Company issued to Ascent a convertible promissory note in the principal amount

of $0.6 million.

Company elected to account for the Ascent Note and A.G.P.

Convertible Note (collectively the “Convertible Notes Payable”)

at fair value.

The fair value of the Convertible Notes Payable is estimated each period using a binomial lattice model.

Significant estimates

in the binomial lattice model include the Company’s stock price, volatility, risk-free rate, corporate bond yield, credit spread,

probability of default, and recovery upon default.

November 2024, the Company issued to Alliance Global Partners (“A.G.P.”) a convertible promissory note (the

Convertible Note”) in the principal amount of $ 5.7

million to evidence the A.G.P.’s currently owed deferred commission payable.

Convertible Note has been repaid in full as of June 30, 2026.

discussed in Note 3 and Note 7, during March 2026, the Company issued to Ascent a convertible promissory note (the “Ascent

Note”) in the principal amount of $ 0.6

Subsequently, in June 2026 the Company repaid the outstanding indebtedness of the Ascent Note of $ 0.4

million and issued the J.J.

Astor Note in the principal amount of $ 2.0

million, and received net proceeds of $ 1.5

million, funded in two tranches during June 2026.

Company elected to account for the Ascent Note, the A.G.P.

Convertible Note, and the JJ Astor Convertible Note (collectively the

“Convertible Notes Payable”) at fair value.

The fair value of the Convertible Notes Payable is estimated each period

using a discounted cash flow model in conjunction with a Bond plus Call model.

Significant estimates in the binomial lattice model include the Company’s stock price,

volatility, risk-free rate, corporate bond yield, credit spread, probability of default, and recovery upon default.

following table outlines the range of significant unobservable inputs used in calculating the fair value of the A.G.P.

Convertible Note

as of March 31, 2026, and December 31, 2025:

as of May 29, 2026, when the note was paid off in full, and December 31, 2025:

Schedule of Fair Value of Assumptions

December 31, 2025

Corporate bond yield

2 unchanged sentences

Recovery upon default

following table outlines the range of significant unobservable inputs used in calculating the fair value of the Ascent Note as of March

31, 2026, and at inception of the Ascent Note on March 3, 2026:

Due to the close proximity between the inception of the J.J.

Astor Note and June 30, 2026, the Company believes the fair value of

Astor Note on June 11, 2026 approximates the fair of the J.J.

Astor Note on June 30, 2026.

As such, the Company did not

obtain an additional valuation on June 30, 2026.

The following table outlines the range of significant unobservable inputs used in

calculating the fair value of the J.J.

Astor Note as of June 11,

Schedule of Fair Value of Assumptions

June 11, 2026

Probability of default

Recovery upon default

Balance Sheet Details

expenses and other current assets consisted of the following as of March 31, 2026 and December 31, 2025 (in thousands):

Schedule of Balance Sheet Details

March 31, 2026

expenses and other current assets consisted of the following as of June 30, 2026 and December 31, 2025 (in thousands):

of Balance Sheet Details

June 30, 2026

December 31, 2025

3 unchanged sentences

Total prepaid expenses and other current assets

expenses and other current liabilities consisted of the following as of March 31, 2026 and December 31, 2025 (in thousands):

Schedule of Accrued Expenses and Other Current Liabilities

March 31, 2026

expenses and other current liabilities consisted of the following as of June 30, 2026 and December 31, 2025 (in thousands):

of Accrued Expenses and Other Current Liabilities

June 30, 2026

December 31, 2025

2 unchanged sentences

Investment payable

Accrued board of directors’ fees, year to date

Accrued other

3 unchanged sentences

was a financial advisor to both Murphy Canyon Acquisition Corp.

(“MURF”) and Old Conduit in connection with the merger

transaction (the “merger”).

(“MURF”) and Old Conduit in connection with the merger transaction

(the “merger”).

Upon the completion of the Merger, A.G.P.:

(i) received a cash fee of $ 6.5 million, 867 shares

of Common Stock, and warrants to purchase 36 shares

of Common Stock at an exercise price of $ 16,500 per

share pursuant to its engagement agreement with Old Conduit entered into on August 2, 2022, and (ii) agreed to defer payment, to be

paid in the future under certain circumstances by a date no later than March 21, 2025, of $ 5.7 million

of fees plus annual interest of 5.5 %

(the “Deferred Commission Payable”) as a result of its engagement for MURF’s IPO.

During the three months ended

March 31, 2025, the Company reached an agreement with A.G.P.

(i) received a cash fee of $ 6.5 million, 87 shares of Common

Stock, and warrants to purchase 4 shares of Common Stock at an exercise price of $ 160,500 per share pursuant to its engagement agreement

with Old Conduit entered into on August 2, 2022, and (ii) agreed to defer payment, to be paid in the future under certain circumstances

by a date no later than March 21, 2025, of $ 5.7 million of fees plus annual interest of 5.5 % (the “Deferred Commission Payable”)

as a result of its engagement for MURF’s IPO.

During the six months ended June 30, 2025, the Company reached an agreement with

to waive all previously accrued interest.

As such, the Company removed

accrued interest of $ 0.4 million

and recorded other income of $ 0.4 million

for the three months ended March 31, 2025.

As such, the Company removed accrued interest of $ 0.4 million and recorded other income

of $ 0.4 million for the six months ended June 30, 2025.

November 25, 2024, the Company issued to A.G.P.

Convertible Note in the principal amount of $ 5.7

million to evidence A.G.P.’s currently owed Deferred

Commission Payable, at which time the Deferred Commission Payable balance was removed.

Unless earlier converted as specified in the Convertible

Note, the principal amount, plus all accrued but unpaid interest, was due on November 25, 2025 (the “Maturity Date”).

convertible promissory note accrued interest at 5.5 %

On March 31, 2026, the Company remeasured the fair value of the A.G.P.

Convertible Note through the use of a binomial

lattice model and calculated a fair value of approximately $ 0.5 million.

See Note 5 for additional information regarding the fair value

measurement of the A.G.P Convertible Note.

the three months ended March 31, 2026, the holder of the A.G.P.

Convertible Note in the principal amount of $ 5.7 million to evidence A.G.P.’s

currently owed Deferred Commission Payable, at which time the Deferred Commission Payable balance was removed.

Unless earlier converted

as specified in the Convertible Note, the principal amount, plus all accrued but unpaid interest, was due on November 25, 2025 (the “Maturity

The convertible promissory note accrued interest at 5.5 % per annum.

the three months ended June 30, 2026, the holder of the A.G.P.

Convertible Note converted the remaining principal and interest into 127,335

shares of the Company’s Common Stock.

Prior to the conversion the A.G.P.

Convertible Note was overdue but not considered to be

in default by either party.

the six months ended June 30, 2026, the holder of the A.G.P.

Convertible Note converted $ 2.5 million of principal and interest into 129,911

25,760 shares of the Company’s Common Stock, respectively.

shares of the Company’s Common Stock.

the three months ended March 31, 2025, the holder of the A.G.P.

1 unchanged sentence

14 shares of the Company’s Common Stock.

As of March 31, 2025, the Company’s Common Stock price was trading

below the Conversion Price Floor.

For the purpose of the March 31, 2025 conversion, the Company waived the Conversion Price Floor and

allowed A.G.P.

to convert at the prior trading days closing stock price.

Upon conversion, the Company recorded a $ 0.2 million loss on

the change in fair value based on the difference between (i) the fair value of the Common Stock issued and (ii) the percentage of total

principal and interest converted ( 6.54 %), multiplied by the December 31, 2024 valuation of $ 3.0 million.

the three months ended March 31, 2026, the Company recorded a $ 0.1 million gain in the change in fair value of the A.G.P.

Note and interest expense of approximately $ 25 thousand.

For the three months ended March 31, 2025, the Company recorded a $ 0.1 million

gain in the change in fair value of the A.G.P.

As of March 31, 2025, the Company’s Common Stock price was trading below the Conversion

For the purpose of the March 31, 2025 conversion, the Company waived the Conversion Price Floor and allowed A.G.P.

at the prior trading days closing stock price.

Upon conversion, the Company recorded a $ 0.2 million loss on the change in fair value

based on the difference between (i) the fair value of the Common Stock issued and (ii) the percentage of total principal and interest

converted ( 6.54 %), multiplied by the December 31, 2024 valuation of $ 3.0 million.

April 11, 2025, April 16, 2025, June 2, 2025, June 17, 2025, and June 26, 2025, the holder of the A.G.P.

Convertible Note converted $

0.5 million, $ 0.8 million, $ 0.1 million,$ 0.2 million, and $ 0.2 million of principal and interest into 14 , 35 , 20 , 45 , and 5 shares of

the Company’s Common Stock, respectively.

As of April 16, 2025, the Company’s Common Stock price was trading below the Conversion

For the purpose of the April 16, 2025 conversion, the Company waived the Conversion Price Floor and allowed A.G.P.

at the April 16, 2025 closing stock price.

May 29, 2026, the holder of the A.G.P.

Convertible Note converted $ 1.1 million of principal and interest into 113,740 shares of the Company’s

Common Stock and the A.G.P.

Convertible Note was considered repaid in full.

the three months ended June 30, 2026, the Company recorded a $ 28,000 loss in the change in fair value of the A.G.P.

Convertible Note and interest expense of approximately $ 8,000 .

For the three months ended June 30, 2025, the Company recorded a $ 0.1 million loss in the change in fair value of the A.G.P.

Convertible Note and interest expense of approximately $ 0.1 million.

As of March 31, 2026,

there was approximately $ 1.9 million in outstanding principal and interest remaining.

During June 2026, the holder of

Convertible Note converted the remaining principal and interest into 1,273,375 shares of the Company’s Common Stock.

Prior to the conversion the A.G.P.

Convertible Note was overdue but not considered to be in default by either party.

March 3, 2026, the Company issued to Ascent a convertible promissory note, defined above as the Ascent Note, with an aggregate principal

amount of $ 0.6 million.

The Ascent Note has a maturity date of four months from the date of issuance and carries interest at a rate of

the six months ended June 30, 2026, the Company recorded a $ 0.1

million loss in the change in fair value of the A.G.P.

Note and interest expense of approximately $ 33,000 .

For the six months ended June 30, 2025, the Company recorded a $ 0.1 million gain in the change in fair value of the A.G.P.

Note and interest expense of approximately $ 0.1 million.

As of June 30, 2026, there was no

outstanding principal and interest remaining on the A.G.P.

Convertible Note.

March 3, 2026, the Company issued to Ascent a convertible promissory note, defined above as the Ascent Note, with an aggregate

principal amount of $ 0.6

million , with the Company receiving cash proceeds, net of discounts and fees, of $ 0.5 million.

Ascent Note had a maturity date of four months from the date of issuance and carried interest at a rate of 10 %

annually, which is payable monthly from the issuance date of the Note until the sooner of the maturity date or the date the Ascent

Note is fully repaid or converted into shares of the Company’s Common Stock.

Company received net cash proceeds of approximately $ 0.5

The Ascent Note was accounted for under the fair value

option elected pursuant to ASC 825 and was initially recognized at its estimated fair value.

As a result, the original issue discount

and lender-related fees were reflected in the initial fair value measurement and were not separately recognized as debt discounts or

debt issuance costs.

The Company subsequently remeasured the Ascent Note to fair value at reporting date, with changes in fair value

recognized in earnings, except for the portion attributable to instrument-specific credit risk, which is recognized in other comprehensive

any time prior to the full payment of the convertible promissory note, Ascent, at its sole discretion, may elect to have all or any portion

of the outstanding principal amount and all interest accrued converted into shares of the Company’s common stock, at a conversion

price equal to the lower of the closing price of the Company’s Common Stock on the date shareholder approval is obtained, which

has not yet occurred, or the dollar volume-weighted average price of the Company’s Common Stock for the five trading days immediately

preceding the date of such delivery.

The conversion price is subject to change, proportionate to any stock splits that may occur.

conversion of the convertible promissory note may not occur prior to the Company having sufficiently authorized shares of common stock

to permit the entire conversion of the convertible promissory note.

In addition, the conversion of the convertible promissory note may

also not occur prior to receipt of stockholder approval to provide for such conversion of the convertible promissory note, and subsequent

issuance of the Company’s common stock, pursuant to the stockholder approval rules under the rules and regulations of The Nasdaq

Stock Market.

Further, following Ascent’s ability to convert the convertible promissory note, if at all, Ascent will not be entitled

to receive the Company’s common stock upon conversion, if such conversion would result in Ascent owning greater than 9.99 % of the

Company’s then currently outstanding common stock.

Ascent is also entitled to resale registration rights as identified within the

convertible promissory note.

Company may prepay the convertible promissory note in whole or in part.

In the event of certain Events of Default (as defined in the

convertible promissory note), all outstanding principal and accrued interest under the convertible promissory note will become, or may

become, at Ascent’s election, immediately due and payable to Ascent within five days of an Event of Default.

the three months ended March 31, 2026, the Company recognized approximately $ 4 thousand

of contractual interest expense related to the Ascent Note.

As of March 31, 2026, the Company remeasured the Ascent Note to an estimated

fair value of approximately $ 0.2 million, with the resulting fair value adjustment recognized in the condensed consolidated statement of operations and comprehensive loss.

May 15, 2026, the Company and Ascent entered into an amendment (the “Note Amendment”) to Ascent Note, originally issued on

March 3, 2026.

Pursuant to the Note Amendment, 90% of the proceeds raised by the Company in any debt or equity financing or capital-raising

transaction, including pursuant to the ELOC, may be retained by the Company, with the remaining 10% required to go towards payment of

amounts due under the Ascent Note.

any time prior to the full payment of the convertible promissory note, Ascent, at its sole discretion, could have elected to have all

or any portion of the outstanding principal amount and all interest accrued converted into shares of the Company’s common stock,

at a conversion price equal to the lower of the closing price of the Company’s Common Stock on the date shareholder approval is

obtained, which has not yet occurred, or the dollar volume-weighted average price of the Company’s Common Stock for the five trading

days immediately preceding the date of such delivery.

The conversion price is subject to change, proportionate to any stock splits that

The conversion of the convertible promissory could not have occurred prior to the Company having sufficiently authorized shares

of common stock to permit the entire conversion of the convertible promissory note.

In addition, the conversion of the convertible promissory

note could also not have occurred prior to receipt of stockholder approval to provide for such conversion of the convertible promissory

note, and subsequent issuance of the Company’s common stock, pursuant to the stockholder approval rules under the rules and regulations

of The Nasdaq Stock Market.

Further, following Ascent’s ability to convert the convertible promissory note, if at all, Ascent will

not be entitled to receive the Company’s common stock upon conversion, if such conversion would result in Ascent owning greater

than 9.99 % of the Company’s then currently outstanding common stock.

Ascent was also entitled to resale registration rights as

identified within the convertible promissory note.

June 2026, with funds received from the J.J Astor Note (see below), the Company repaid $ 0.5

million of principal and interest against the Ascent Note.

No principal or interest remained following the repayment and the Ascent

note is considered settled by both parties.

both the three and six months ended June 30, 2026, the Company recognized approximately $ 11,000

of contractual interest expense related to the

See Note 3 and Note 5 for further discussion of the Ascent Note.

June 11, 2026, the Company issued a senior secured convertible promissory note to J.J.

Astor & Co, defined above as the J.J.

Astor Note, in the principal amount of $ 2.0 million

with proceeds of $ 1.5

million, funded in two tranches.

On June 30, 2026, the Company amended the agreement to close the second tranche of the loan.

Astor Note had a maturity date of December 28, 2026, with repayment terms of twenty-four equal weekly installment payments of

to commence on July 10, 2026.

may be paid in cash or, at the option of the Company commencing six months following the closing, in shares of the Company’s Common

Stock, at a conversion price equal to the greater of:

(a) Ninety Percent (90%) of the lowest volume-weighted average price

(“VWAP”) of the Company’s Common Stock over the ten consecutive trading days immediately preceding the date of conversion;

or (b) the applicable Nasdaq Floor Price (the “Conversion Price Formula”).

The conversion price is subject to further adjustments

is the Company’s Common Stock is trading below the Nasdaq price floor.

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

any time prior to the full payment of the convertible promissory note, J.J., at its sole discretion, can elect to have all or any portion

of the then-outstanding balance converted into shares of the Company’s common stock, at a conversion price equal to the greater

of 90% of the lowest volume-weighted average price of the Company’s common stock over the ten consecutive trading days immediately

preceding the date of conversion or the applicable floor price subject to Nasdaq Rule 5635(d).

Astor Note was accounted for under the fair value option elected pursuant to ASC 825 and was initially recognized at its estimated

As a result, the original issue discount and lender-related fees were reflected in the initial fair value measurement and

were not separately recognized as debt discounts or debt issuance costs.

The Company subsequently remeasured the J.J.

Astor Note to fair

value at the reporting date, with changes in fair value recognized in earnings, except for the portion attributable to instrument-specific

credit risk, which is recognized in other comprehensive income.

the three and six months ended June 30, 2026, the Company did not recognize interest expense related to the J.J.

and Third Amendment to J.J.

Astor Convertible Note

July 31, 2026, the Company entered into a second amendment to the J.J.

Astor Note discussed in Footnote 7.

The Company failed to make

three scheduled weekly installment payments of $ 82,000 due July 17, July 24, and July 31, 2026, totaling $ 246,000 , and had not filed

the required resale registration statement by its deadline.

this amendment, the lender agreed to treat these matters as an accommodation, rather than an event of default, but expressly reserved

all rights if any future payment default occurs.

connection with the accommodation, the total principal balance was increased by a $ 378,000

restructuring premium, to a total amended principal balance due to J.J.

Astor of $ 2.4 million

and increased the default interest rate from 19 %

per annum upon any future event of default.

The amendment reschedules repayment into 23 weekly installments of approximately $ 104,000

commencing August 19, 2026 through a new maturity date of January 15, 2027.

The amendment also updates the registration statement

filing requirement deadline to August 31, 2026, with any further delay constituting an immediate event of default.

It increases the required share

of the Company’s ATM program net proceeds from offerings due to J.J.

Astor to 90% and requires the Company to effect weekly ATM

program financing and generate net proceeds of at least $ 115,000 per week.

The amendment also revised the

note’s conversion terms to a conversion price equal to the greater of 70% of the lowest volume-weighted average price of the Company’s

common stock over the twenty consecutive trading days immediately preceding the date of conversion or the applicable floor price subject

to Nasdaq Rule 5635(d).

and requires the Company to seek stockholder approval to increase authorized shares and reserve shares equal to

200% of the amounts issuable upon conversion in full of the amended principal balance.

3, 2026, the Company and J.J.

entered into a third amendment to the Amended Note and Amended Loan Agreement (the “Third

Pursuant to the Third Amendment, J.J.

Astor advanced $ 200,000 to the Company, subject to fees, and increased the outstanding

principal balance of the Amended Note to approximately $ 2.5 million.

Additionally, the Company has also issued J.J.

Astor warrants to

purchase up to 37,500 shares of the Company’s common stock at a purchase price of $ 7.20 , in the same form of warrant issued to on

June 11, 2026.

Moreover, the definition of “Floor Price” in the Amended Note and the Amended Loan Agreement shall be adjusted

to equal twenty percent of the lowest volume-weighted average price of the Company’s common stock during the twenty (20) consecutive

trading days immediately preceding the date the Floor Price adjusts, which shall adjust every six months commencing December 11, 2026.

The issuance of any or all of the shares under the J.J.

Astor Note, including the shares issuable upon exercise of

the warrants issued in connection therewith, in the aggregate in excess of 19.99% of the current number of outstanding shares of common

stock of the Company is subject to stockholder approval under applicable rules and regulations of The Nasdaq Stock Market LLC, to the

extent required by such rules and regulations (“Stockholder Approval”).

3 and Note 5 for further discussion of the J.J.

Research and Development Expense

27 unchanged sentences

issuance of 1 shares of Common Stock, determined by the closing price on the day preceding the execution of the Sarborg Service Agreement.

The initial cash payment of $0.2 million was made on December 20, 2024, and the 7 shares of Common Stock were issued on January 17, 2025.

The initial cash payment of $ 0.2 million was made on December 20, 2024, and the share of Common Stock was issued on January 17, 2025.

Further milestone payments payable in conjunction with the achievement of certain milestones over the term of the Sarborg Service Agreement,

totaling up to $ 1.8 million.

Sarborg will be reimbursed for pre-approved, necessary, and reasonable out-of-pocket expenses directly incurred

Sarborg was reimbursed for pre-approved, necessary, and reasonable out-of-pocket expenses directly incurred

in connection with the performance of the services.

Company made an initial cash payment of $ 0.2 million and issued 7 shares of Common Stock in connection with the Sarborg Service Agreement.

Company made an initial cash payment of $ 0.2 million and issued 1 share of Common Stock in connection with the Sarborg Service Agreement.

These costs were capitalized as prepaid expenses and are being amortized to research and development expense over the initial term of

the agreement.

For the three months ended March 31, 2026, and March 31, 2025, the Company recorded amortization expense of nil and $ 0.1

million, respectively, in research and development expenses in the consolidated statement of operations and comprehensive loss.

balance remained as of March 31, 2026.

No research and development expense was recorded during the three and six months ended June 30, 2026.

For the three and

six months ended June 30, 2025, the Company recorded amortization expense of $ 0.1 million and $ 0.2 million, respectively, in research

and development expenses in the consolidated statement of operations and comprehensive loss.

No prepaid balance remained as of June 30,

the Sarborg Service Agreement, the Company will be provided with a dashboard that will be utilized for both the Company’s existing

10 unchanged sentences

dashboard was placed in service on March 18, 2025.

During the three months ended March 31, 2026 and March 31, 2025, the Company recorded

$ 50 thousand and $ 7 thousand of amortization expense, respectively.

During both the three and six months ended June 30, 2026 the Company recorded $ 0.1

million in amortization expense.

During both the three and six months ended June 30, 2025, the Company recorded $ 0.1 million in amortization

other costs under the Sarborg Service Agreement shall be expensed as incurred and recorded within research and development expense in

1 unchanged sentence

and development activities.

the three months ended March 31, 2026 and March 31, 2025, Sarborg was paid nil and $ 1.1 million for completed milestones under the Sarborg

Service Agreement.

were no payments made to Sarborg related to the Sarborg Service Agreement during the three and six months ended June 30, 2026.

the three and six months ended June 30, 2025, Sarborg was paid $ 0.5 million and $ 1.2 million, respectively, for completed milestones

under the Sarborg Service Agreement.

Additional Agreement

March 31, 2025, the Company entered into an additional license and use agreement (the “Sarborg Additional Agreement”)

with Sarborg, a related party, covering certain additional deliverables and incorporating a new scope of work focused on analysis of

the Company’s acquired AstraZeneca assets.

The term of the Sarborg Additional Agreement is for six months and provides for the

payment, in aggregate, of $ 2.0 million,

which includes an up-front license fee for the term of such agreement, in cash or stock at the Company’s election at the

closing price on the day preceding the effective date of such agreement.

March 31, 2025, the Company entered into an additional license and use agreement (the “Sarborg Additional Agreement”) with

Sarborg, a related party, covering certain additional deliverables and incorporating a new scope of work focused on analysis of the Company’s

acquired AstraZeneca assets.

The term of the Sarborg Additional Agreement is for six months and provides for the payment, in aggregate,

of $ 2.0 million, which includes an up-front license fee for the term of such agreement, in cash or stock at the Company’s election

at the closing price on the day preceding the effective date of such agreement.

On March 31, 2025, the Company prepaid $ 1.65 million

of the Sarborg Additional Agreement through the issuance of 617 fully

vested unregistered shares of Common Stock.

The Company recorded the shares issued under the Sarborg Additional Agreement at their

fair value, as determined by the closing price of the Company’s Common Stock on March 30, 2025, $ 2,669.87 .

Effective June 24, 2025, the term was extended to be 12 months from the effective date of the Sarborg Additional Agreement at no

additional cost to the Company.

Effective October 1, 2025, the term was extended to be 12 months from the previous extension date of

May 2, 2025 to extend the term of the license to March 31, 2027 at no additional cost to the Company.

The Company recorded the fair

value of $ 1.5 million

as prepaid within the consolidated balance sheet as of March 31, 2025.

For the three months ended March 31, 2026 and March 31, 2025,

the Company recognized $ 0.1 million

and nil expense

related to the amortization of the Sarborg Additional Agreement.

of the Sarborg Additional Agreement through the issuance of 61 fully vested unregistered shares of Common Stock.

The Company recorded

the shares issued under the Sarborg Additional Agreement at their fair value, as determined by the closing price of the Company’s

Common Stock on March 30, 2025, $ 26,698.70 .

Effective June 24, 2025, the term was extended to be 12 months from the effective date of

the Sarborg Additional Agreement at no additional cost to the Company.

Effective October 1, 2025, the term was extended to be 12 months

from the previous extension date of May 2, 2025 to extend the term of the license to March 31, 2027 at no additional cost to the Company.

The Company recorded the fair value of $ 1.5 million as prepaid within the consolidated balance sheet as of March 31, 2025.

For the three

and six months ended June 30, 2026, the Company recognized $ 0.1 million and $ 0.2 million, respective, in expense related to the amortization

of the Sarborg Additional Agreement.

During both the three and six months ended June 30, 2025, the Company recorded research and development

expense of $ 0.4 million related to amortization of the Sarborg Additional Agreement.

Second Additional Agreement

4 unchanged sentences

and the remaining balance due as mutually agreed by the parties.

During the three months ended March 31, 2026, the Company recorded $ 0.4

million of expense related to the Second Additional Agreement.

total, the Company recorded $ 0.6 million and $ 0.7 million of research and development expense and amortization for the three months ended

March 31, 2026 and March 31, 2025, respectively, all of which related to services and costs incurred through the Sarborg Agreement, Sarborg

Additional Agreement and the Sarborg Second Additional Agreement, collectively.

During the three and six months ended June 30, 2026, the Company recorded

nil and $ 0.4 million, respectively, of expense related to the Second Additional Agreement.

total, the Company recorded $ 0.1

million and $ 0.6

million, respectively, of research and development expense

and amortization for the three and six months ended June 30, 2026, all of which related services and costs incurred through the

Sarborg Additional Agreement and the Sarborg Second Additional Agreement, collectively.

total, the Company recorded $ 1.6

million and $ 2.3 million during both the three and six months ended June 30, 2025, all of which related to services and costs

incurred through the Sarborg Service Agreement and Sarborg Additional Agreement, collectively.

Joint Development Agreement

June 3, 2025, the Company entered into a joint development agreement (the “Joint Development Agreement”) with Manoira Corporation

(“Manoira”) for a term of one year, which will be automatically renewed for successive one-year terms unless advance termination

notice is provided in accordance with the terms of the Joint Development Agreement.

Manoira is an entity controlled by Dr.

Andrew Regan,

of which he is sole director, and is therefore considered a related party of the Company.

Refer to Note 13 for additional details.

June 3, 2025, the Company entered into a joint development agreement (the “Joint Development Agreement”) with Manoira

Corporation (“Manoira”) for a term of one year, which will be automatically renewed for successive one-year terms unless

advance termination notice is provided in accordance with the terms of the Joint Development Agreement.

Manoira is an entity

controlled by Dr.

Andrew Regan, of which he is the sole director, and is therefore considered a related party of the Company.

to Note 13 for additional details.

to the Joint Development Agreement, CDT granted Manoira a non-exclusive, non-transferable, non-sublicensable, fully paid-up, royalty-free

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the right to distribute, market, promote or sell the products or services that are related to or incorporate the CDT Assets.

June 3, 2025, in exchange for the approximate $ 0.5

million of consideration to be paid by CDT under the Joint Development Agreement, CDT issued to Manoira 774

shares of its Common Stock, (the “Consideration Shares”) valued at the closing price of the Common Stock immediately

preceding execution of the Joint Development Agreement.

The Company recorded the shares issued under the Joint Development Agreement

at their fair value, as determined by the closing price of the Company’s Common Stock on June 3, 2025, $ 646 .

The Company recorded the fair value of $ 0.4

million as prepaid within the unaudited condensed consolidated balance sheets.

During the three months ended March 31, 2026, the

Company recorded nil

of amortization expense as no significant work was performed by Manoira in relation to the Joint Development Agreement.

the three months ended March 31, 2026, the Company did not record any amortization expense related to research and development activities.

June 3, 2025, in exchange for the approximate $ 0.5 million of consideration to be paid by CDT under the Joint Development Agreement,

CDT issued to Manoira 77 shares of its Common Stock, (the “Consideration Shares”) valued at the closing price of the Common

Stock immediately preceding execution of the Joint Development Agreement.

The Company recorded the shares issued under the Joint Development

Agreement at their fair value, as determined by the closing price of the Company’s Common Stock on June 3, 2025, $ 7,880 .

recorded the fair value of $ 0.4 million as prepaid within the unaudited condensed consolidated balance sheets.

During the six months

ended June 30, 2026, and June 30, 2025 the Company recorded nil of amortization expense as no significant work was performed by Manoira

in relation to the Joint Development Agreement.

the six months ended June 30, 2026, the Company did not record any amortization expense related to research and development activities.

Share Based Compensation

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Pursuant to the 2023 Plan’s “evergreen” provision, on February 6, 2025 and January 10,

2024, the Company increased the number of shares of Common Stock available for issuance under the 2023 Plan by 23 and 12 shares, respectively.

2024, the Company increased the number of shares of Common Stock available for issuance under the 2023 Plan by 2 and 1 share(s), respectively.

The number of authorized shares will automatically increase on January 1, 2026 and continuing annually on each anniversary thereof through

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January 1, 2026, in accordance with the 2023 Plan, the number of authorized shares under the 2023 plan increased by 463 shares.

of March 31, 2026, there were 5,842 shares of Common Stock available for issuance under the 2023 Plan.

June 30, 2026, there were 583 shares of Common Stock available for issuance under the 2023 Plan.

of Directors Shares

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under the Director Compensation Program, in the form of fully vested shares of Common Stock.

In total, $ 0.1

million of unpaid retainers was settled through the issuance 53

unregistered shares of Common Stock (the “Retainer Shares”).

The Company recorded the Retainer Shares at their fair

value, as determined by intraday share prices of the Company’s Common Stock on March 31, 2025.

In relation to the Retainer

Shares, the Company recorded $ 0.1

million of expense within general & administration expense in the unaudited condensed consolidated statement of operations and

comprehensive loss during the three months ended March 31, 2025, respectively.

Company did no t grant stock options during the three months ended March 31 2026 or March 31, 2025.

In total, $ 0.1 million of unpaid retainers

was settled through the issuance of 5 unregistered shares of Common Stock (the “Retainer Shares”).

The Company recorded the

Retainer Shares at their fair value, as determined by intraday share prices of the Company’s Common Stock on March 31, 2025.

relation to the Retainer Shares, the Company recorded $ 0.1 million of expense within general & administration expense in the unaudited

condensed consolidated statement of operations and comprehensive loss during the three and six months ended June 30, 2025, respectively.

Company did no t grant stock options during the three and six months ended June 30, 2026 or June 30, 2025.

Company accounts for forfeitures as they occur, which may result in the reversal of compensation costs in subsequent periods as the forfeitures

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Cancelled/forfeited

Outstanding at March 31, 2026

Outstanding at June 30, 2026

aggregate intrinsic value of options is calculated as the difference between the exercise price of the underlying options and the fair

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Common Stock.

As of March 31, 2026, the total compensation cost related to non-vested option awards not yet recognized was $ 1.4 million

As of June 30, 2026, the total compensation cost related to non-vested option awards not yet recognized was $ 1.3 million

with a weighted average remaining vesting period of 0.88 years.

the three months ended March 31, 2026 and 2025, there was a total of $ 0.2

million and $ 0.2

million, respectively, recorded in stock-based compensation expense recognized within general and administrative expenses on the

unaudited condensed consolidated statements of operations and comprehensive loss, respectively.

the three and six months ended June 30, 2026, there was $ 0.2 million and $ 0.4 million, respectively, and for the three and six months

ended June 30, 2025, there was $ 0.2 million and $ 0.4 million, respectively, recognized for stock-based compensation expense

within general and administrative expenses on the unaudited condensed consolidated statements of operations and comprehensive loss.

July 4, 2025, the United States Congress passed the budget reconciliation bill H.R.

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of the Section 163(j) interest limitation to an EBITDA basis, and the introduction of a 1% charitable contribution deduction floor.

of March 31, 2026, the immediate expensing of R&D costs under Section 174, the continuation of 100% bonus depreciation, and the restoration

of June 30, 2026, the immediate expensing of R&D costs under Section 174, the continuation of 100% bonus depreciation, and the restoration

of the EBITDA-based Section 163(j) limitation are expected to decrease cash taxes in the short term and generate a federal net operating

These changes did not have a material impact on the Company’s effective tax rate.

the three months ended March 31, 2026, and 2025, the Company’s effective tax rate was 0.0 % due to the current year tax loss and

valuation allowance established against the Company’s net deferred tax assets, and due to operating in a zero tax jurisdiction,

respectively.

the six months ended June 30, 2026, and 2025, the Company’s effective tax rate was 0.0 % due to the current year tax loss and valuation

allowance established against the Company’s net deferred tax assets, and due to operating in a zero tax jurisdiction, respectively.

Common Stock and Preferred Stock

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any shares of Common Stock sold under the Sales Agreement.

the three months ended March 31, 2026 and 2025, the Company sold nil and 1,448 shares of the Company’s Common Stock through the

Sales Agreement, respectively.

For the three months ended March 31, 2025, the Company received proceeds of $ 8.2 million, net of commissions

payable to A.G.P.

the six months ended June 30, 2026, the Company sold 28,501 shares of the Company’s Common Stock through the Sales Agreement and

received proceeds of $ 0.4 million.

During the six months ended June 30, 2025, the Company sold 737 shares of the Company’s Common

Stock received proceeds of $ 11.9 million, net of commissions payable to A.G.P.

of $ 0.4 million.

discussed in Note 4, on February 19, 2026, the Company made an investment in Sarborg to acquire 20 % of the outstanding shares of Sarborg

from its investors.

The Company issued Sarborg 23,920 shares of the Company’s Common Stock at a closing share price of $ 26 on February

18, 2026, totaling $ 0.6 million as a portion of the total consideration transferred for the investment.

discussed in Note 4, on February 19, 2026, the Company made an investment in Sarborg to acquire 20 %

of the outstanding shares of Sarborg from its investors.

The Company issued Sarborg 2,392

shares of the Company’s Common Stock on February 18,

2026, totaling $ 0.6

million as a portion of the total consideration transferred

for the investment.

In connection with the investment in Sarborg, the Company also issued Pre-Funded Warrants to purchase up to 439,915

shares of the Company’s Common Stock at an exercise price of $ 0.025 per Pre-Funded Warrant.

The Pre-Funded Warrants mirror the

terms of the Pre-Funded Warrants issued to Corvus and are exercisable at any time on or after shareholder approval (the “Shareholder

Approval Date”) and remains outstanding until exercised in full.

The exercise price is considered nominal, and the holder is only

required to pay the exercise price upon exercise to receive the underlying common shares.

The Pre-Funded Warrants do not expire.

On March 19, 2026, all 439,915 of the pre-funded warrants were exercised through a cashless exercise into 439,821

shares of the Company’s Common Stock.

Net Loss Per Share Attributable to Common Stockholders

dilutive securities (upon conversion) that were not included in the diluted per share calculations because they would have been anti-dilutive

were as follows:

of Potentially Dilutive Securities

Convertible Promissory Notes Payable

Stock Options

Convertible Note

March 2024 Warrants

April 2024 Warrants

2024 Warrants

Antidilutive Securities

were 33 and 82 as of June 30, 2026 and June 30, 2025, respectively.

Related Party Transactions

Capital Limited

Capital Limited (“Corvus”) is a significant investor in the Company through subscribing to 1 common share prior to the

closing of the Merger on September 22, 2023.

The shares held by Corvus on the closing date of the Merger were exchanged for shares

of Conduit Pharmaceuticals Inc.

Capital Limited (“Corvus”) is a significant investor in the Company through subscribing to 1 common share prior to the closing

of the Merger on September 22, 2023.

The share held by Corvus on the closing date of the Merger were exchanged for shares of Conduit

Pharmaceuticals Inc.

common stock.

The Chief Executive Officer of the Company is also the principal owner of Corvus.

Occasionally, Corvus provides advisory services to the Company and is paid a fee for the

As of March 31, 2026, and December 31, 2025, no advisory fees were due to Corvus.

the three months ended March 31, 2026 and 2025, the Company incurred director travel expenses payable to members of the Board of Directors

of approximately $ 0.2

million and $ 0.1

million, respectively.

Occasionally, Corvus

provides advisory services to the Company and is paid a fee for the services.

As of June 30, 2026, and December 31, 2025, no advisory

fees were due to Corvus.

the three and six months ended June 30, 2026, the Company incurred director travel expenses payable to of $ 0.2 million and $ 0.4 million,

respectively.

For the three and six months ended June 30, 2025, the Company incurred director travel expenses payable of $ 0.3 million

and $ 0.3 million, respectively.

August 6, 2024, the Company entered into the August 2024 Nirland Note with Nirland, a related party of the Company.

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2024 Nirland Note for a second time.

During the three months ended March 31, 2025, the Company repaid Nirland through conversions and

a final cash payment.

During the six months ended June 30, 2025, the Company repaid Nirland through conversions and a

final cash payment.

December 12, 2024 and March 31, 2025, the Company entered into the Sarborg Service Agreement and the Sarborg Additional Agreement, respectively.

During 2025, the Company and Sarborg also executed the First and Second Addendum to the Sarborg Additional Agreement.

Andrew Regan, Chief

Executive Officer and a member of the Company’s Board of Directors, also serves on the board of directors of Sarborg but does not

hold an equity interest in Sarborg.

the three months ended March 31, 2026 and 2025, the Company recorded approximately $ 0.6 million and $ 0.7 million, respectively, as research

and development expense related to the Sarborg arrangements.

During the three months ended March 31, 2025, the Company also recorded

approximately $ 0.4 million as an acquired diagnostic asset with alternative future use.

March 31, 2025, the Company issued 618 fully

vested unregistered shares of Common Stock to prepay amounts due under the Sarborg Additional Agreement.

The shares had a fair value

of approximately $ 1.5 million

and were recorded as a prepaid asset within the unaudited condensed consolidated balance sheets.

As of March 31, 2026 and December

31, 2025, the remaining prepaid balance was $ 0.5 million

and $ 0.6 million,

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.

the three months ended June 30, 2026 and 2025, the Company recorded $ 0.1

million and $ 1.6

million, respectively, as research and development expense

related to the Sarborg arrangements.

During the six months ended June 30,2026 and 2025, the Company recorded $ 0.6 million and $ 2.3

million, respectively, as research and development

expense related to the Sarborg arrangements.

March 31, 2025, the Company issued 61 fully vested unregistered shares of Common Stock to prepay amounts due under the Sarborg Additional

The shares had a fair value of approximately $ 1.5 million and were recorded as a prepaid asset within the unaudited condensed

consolidated balance sheets.

As of June 30, 2026 and December 31, 2025, the remaining prepaid balance was $ 0.4 million and $ 0.6 million,

respectively.

Refer to Note 8 for additional information regarding the Company’s agreements with Sarborg.

for discussion of the Company’s investment in Sarborg.

June 3, 2025, the Company entered into a joint development agreement (the “Joint Development Agreement”) with Manoira

Andrew Regan, Chief Executive Officer and member of the Board, also is a director and controlling member of

Through the Joint Development Agreement, the Company and Manoira intend to jointly evaluate AZD1656, and any of its

derivatives, as well as AZD5658, in animal health indications and produce transitional data to inform the Company’s human

clinical programs while exploring veterinary market opportunities.

The Company delivered shares of the Company’s Common Stock

worth $ 0.5 million

to Manoira as its contribution to the Joint Development Agreement, with Manoira bearing all subsequent costs incurred during the

joint development period.

During the three months ended March 31, 2026 and 2025, there were no research and development expenses

recorded in the unaudited condensed consolidated statement of operations and comprehensive loss.

As of March 31, 2026, the Company

has a $ 0.3 million

prepaid expense related to the Joint Development Agreement recorded in the unaudited condensed consolidated balance sheet.

As of December 31, 2025, the Company had a $ 0.3 million prepaid expense

related to the Joint Development Agreement recorded in the consolidated balance sheet.

Note 8 for additional details.

See Note 4 for discussion

of the Company’s investment in Sarborg.

June 3, 2025, the Company entered into a joint development agreement (the “Joint Development Agreement”) with Manoira Corporation.

Andrew Regan, Chief Executive Officer and member of the Board, also is a director and controlling member of Manoira.

Joint Development Agreement, the Company and Manoira intend to jointly evaluate AZD1656, and any of its derivatives, as well as AZD5658,

in animal health indications and produce transitional data to inform the Company’s human clinical programs while exploring veterinary

market opportunities.

The Company delivered shares of the Company’s Common Stock worth $ 0.5 million to Manoira as its contribution

to the Joint Development Agreement, with Manoira bearing all subsequent costs incurred during the joint development period.

six months ended June 30, 2026 and 2025, there were no research and development expenses recorded in the unaudited condensed consolidated

statement of operations and comprehensive loss.

As of June 30, 2026, the Company has a $ 0.3 million prepaid expense related to the Joint

Development Agreement recorded in the unaudited condensed consolidated balance sheet.

As of December 31, 2025, the Company had a $ 0.3

million prepaid expense related to the Joint Development Agreement recorded in the consolidated balance sheet.

Refer to Note 8 for additional

Other Expense, net

following table presents other income (expense), net, for the three months ended March 31, 2026 and 2025 (in thousands):

following table presents other income (expense), net, for the three and six months ended June 30, 2026 and 2025 (in thousands):

of Other Expense, Net

the three months ended March 31,

For the three months ended June

the six months ended June 30,

Other income:

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Loss on equity method investment

Loss on debt extinguishment

Total other expense

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Company is subject to certain claims and contingent liabilities that arise in the normal course of business.

While we do not expect

that the ultimate resolution of any of these pending actions will have a material effect on our unaudited consolidated results of

operations, financial position or cash flows, litigation is subject to inherent uncertainties.

As such, there can be no assurance

that any legal action, pending or otherwise, does not become material in the future.

While we do not expect that

the ultimate resolution of any of these pending actions will have a material effect on our unaudited consolidated results of operations,

financial position or cash flows, litigation is subject to inherent uncertainties.

As such, there can be no assurance that any legal

action, pending or otherwise, does not become material in the future.

September 7, 2023, following the merger between Conduit Pharmaceuticals Limited and Conduit Merger Sub, Inc., a Cayman Islands exempted

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to the issuance of the judgment, the Company completed the sale of CPL to Corvus, pursuant to the Sale and Purchase Agreement.

Note 16 for further discussion of the sale of CPL in relation to the Strand litigation.

In connection with the transaction, the

Company obtained legal advice and structured the arrangement such that CPL retained the obligation associated with the Strand

litigation following the sale on December 8, 2025.

However, in accordance to the principles of consolidation as discussed in Note 3,

the Company evaluated the accounting implications of the transaction, including the assessment of isolation, and concluded that the

arrangement did not satisfy isolation of the Company from CPL.

Accordingly, in connection with the judgment, Conduit Pharmaceuticals

Limited recorded a $ 9.6 million

16 for further discussion of the sale of CPL in relation to the Strand litigation.

In connection with the transaction, the Company obtained

legal advice and structured the arrangement such that CPL retained the obligation associated with the Strand litigation following the

sale on December 8, 2025.

However, in accordance to the principles of consolidation as discussed in Note 3, the Company evaluated the

accounting implications of the transaction, including the assessment of isolation, and concluded that the arrangement did not satisfy

isolation of the Company from CPL.

Accordingly, in connection with the judgment, Conduit Pharmaceuticals Limited recorded a $ 9.6 million

litigation liability and it is included in the Company’s consolidated balance sheet.

To date, no legal action against the

Company has commenced to enforce the judgment against the Company and the Company will continue to vigorously defend its position

as it relates to the litigation with Strand.

during November and December 2024, the Company received a letter from St George Street Capital and formal complaints filed with the

Intellectual Property Office claiming the Company was incorrectly assigned the US Application, and was not the correct owner, of the

AZD 1656 co-crystal patent.

In January 2025, Conduit issued a counter statement to the Intellectual Property Office disputing the

claim filed by St George Street Capital.

The litigation challenges the registration of the patent and the Company does not believe

there to be any financial implications from the litigation.

As of March 31, 2026, the damages sought by St George Street Capital are

non-monetary and the potential contingency is not considered probable.

As such, the Company has not accrued a loss contingency in the

accompanying unaudited condensed consolidated financial statements.

To date, no legal action against the Company

has commenced to enforce the judgment against the Company and the Company will continue to vigorously defend its position as it relates

to the litigation with Strand.

during November and December 2024, the Company received a letter from St George Street Capital and formal complaints filed with the Intellectual

Property Office claiming the Company was incorrectly assigned the US Application, and was not the correct owner, of the AZD 1656 co-crystal

In January 2025, Conduit issued a counter statement to the Intellectual Property Office disputing the claim filed by St George

Street Capital.

The litigation challenges the registration of the patent and the Company does not believe there to be any financial implications

from the litigation.

As of June 30, 2026, the damages sought by St George Street Capital are non-monetary and the potential contingency

is not considered probable.

As such, the Company has not accrued a loss contingency in the accompanying unaudited condensed consolidated

financial statements.

We intend to vigorously defend against these IP claims.

Regardless of the eventual outcome, the patent dispute may impact our business due to, among other things, legal costs and the

diversion of the attention of our management.

Company has a lease agreement for approximately 2,100

square feet of space in Cambridge, England, with a term from March 2024 to January 2027.

As of March 31, 2026, the Company has a

right-of-use asset of $ 0.1

million and a corresponding lease liability of $ 0.1

million recorded on the unaudited condensed consolidated balance sheets.

The full balance of the $ 0.1

million in lease liability is classified as short-term.

As of March 31, 2026, the Company has $ 0.1

million in future minimum lease payments remaining.

Regardless of the eventual outcome, the patent dispute

may impact our business due to, among other things, legal costs and the diversion of the attention of our management.

Company has a lease agreement for approximately 2,100 square feet of space in Cambridge, England, with a term from March 2024 to January

As of June 30, 2026, the Company has a right-of-use asset of $ 0.1 million and a corresponding lease liability of $ 0.1 million recorded

on the unaudited condensed consolidated balance sheets.

The full balance of the $ 0.1 million in lease liability is classified as short-term.

As of June 30, 2026, the Company has $ 0.1 million in future minimum lease payments remaining.

Warrants – Corvus and Sarborg

connection with the Sale and Purchase Agreement with Corvus, the Company issued Pre-Funded Warrants to purchase up to 147,432

shares of the Company’s Common Stock at an exercise price

per Pre-Funded Warrant.

The Pre-Funded Warrants are exercisable

at any time on or after shareholder approval (the “Shareholder Approval Date”) and remains outstanding until exercised in

The exercise price is considered nominal, and the holder is only required to pay the exercise price upon exercise to receive the

underlying common shares.

connection with the Sale and Purchase Agreement with Corvus, the Company issued Pre-Funded Warrants to purchase up to 14,743 shares of

the Company’s Common Stock at an exercise price of $ 0.025 per Pre-Funded Warrant.

The Pre-Funded Warrants are exercisable at any

time on or after shareholder approval (the “Shareholder Approval Date”) and remains outstanding until exercised in full.

The exercise price is considered nominal, and the holder is only required to pay the exercise price upon exercise to receive the underlying

common shares.

The Pre-Funded Warrants do not expire.

On March 24, 2026, all 147,432 of the Pre-Funded Warrants were exercised through a cashless exercise into 147,401 shares of the Company’s

March 24, 2026, all 14,743 of the Pre-Funded Warrants were exercised through a cashless exercise into 14,740 shares of the Company’s

Common Stock.

connection with the investment in Sarborg, the Company issued Pre-Funded Warrants to purchase up to 4,399,156

shares of the Company’s Common Stock at an exercise price

per Pre-Funded Warrant.

The Pre-Funded Warrants mirror the

terms of the Pre-Funded Warrants issued to Corvus and are exercisable at any time on or after shareholder approval (the “Shareholder

Approval Date”) and remains outstanding until exercised in full.

The exercise price is considered nominal, and the holder is only

required to pay the exercise price upon exercise to receive the underlying common shares.

connection with the investment in Sarborg, the Company issued Pre-Funded Warrants to purchase up to 439,915 shares of the Company’s

Common Stock at an exercise price of $ .025 per Pre-Funded Warrant.

The Pre-Funded Warrants mirror the terms of the Pre-Funded Warrants

issued to Corvus and are exercisable at any time on or after shareholder approval (the “Shareholder Approval Date”) and remains

outstanding until exercised in full.

The exercise price is considered nominal, and the holder is only required to pay the exercise price

upon exercise to receive the underlying common shares.

The Pre-Funded Warrants do not expire.

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Common Stock.

Company has one

operating segment focused on the research and development of clinical assets.

Warrants – J.J.

On June 11, 2026, in connection

with the J.J.

Astor Note, the Company issued J.J.

Astor, 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.

See Note 7 for further

discussion of the J.J.

Company has one operating segment focused on the research and development of clinical assets.

The accounting policies of the single operating

segment are identical to those described in Note 1.

The Chief Operating Decision Maker (“CODM”), which the Company has

identified as Dr.

Andrew Regan, Chief Executive Officer, manages the Company’s operations on a consolidated basis, assesses

performance for the operating segment and decides how to allocate resources based on consolidated net loss, which is reported on the

unaudited condensed consolidated statements of operations and comprehensive loss.

Depreciation expense, amortization expense,

stock-based compensation expense, gain or loss from equity method investments and non-cash lease expense are significant noncash

items included in consolidated net loss reviewed by the CODM and are reported on the unaudited condensed consolidated statements of

The measure of segment assets is reported on the consolidated balance sheets as total consolidated assets.

for additions to long-lived assets, which include purchases of property and equipment, are included in total consolidated assets

The Chief Operating Decision Maker (“CODM”), which the Company has identified

Andrew Regan, Chief Executive Officer, manages the Company’s operations on a consolidated basis, assesses performance for

the operating segment and decides how to allocate resources based on consolidated net loss, which is reported on the unaudited condensed

consolidated statements of operations and comprehensive loss.

Depreciation expense, amortization expense, stock-based compensation expense,

gain or loss from equity method investments and non-cash lease expense are significant noncash items included in consolidated net loss

reviewed by the CODM and are reported on the unaudited condensed consolidated statements of cash flows.

The measure of segment assets

is reported on the consolidated balance sheets as total consolidated assets.

Expenditures for additions to long-lived assets, which include

purchases of property and equipment, are included in total consolidated assets reviewed by the CODM and are reported on the unaudited

condensed consolidated statements of cash flows.

CODM uses consolidated net loss and budget-to-actual variances to assess the operating segment’s performance and determine whether

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(Dollar amounts in thousands)

Months ended March 31,

Three months ended June 30,

Six months ended June 30,

(Dollar amounts in thousands)

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General and administrative expenses – accounting & audit fees

General and administrative expenses – salaries, payroll and SBC

General and administrative expenses – salaries, payroll and stock based compensation

General and administrative expenses - other

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Operating loss

Other Expenses:

Other income (expenses):

Other expense

5 unchanged sentences

Subsequent Events

Conversion of A.G.P.

Convertible Note

April and June 2026, the holder of the A.G.P.

convertible note converted $ 1.6

million of principal and interest into 1,273,375

Transaction with Investors of Sarborg Limited

July 30, 2026, the Company entered into a Securities Purchase Agreement with shareholders of Sarborg.

The investors of Sarborg agreed to sell to the Company, and the Company agreed to acquire from the shareholders of Sarborg, an aggregate of 270

shares of Sarborg, representing approximately 4.76 %

of the outstanding shares of Sarborg.

consideration for the purchase, the Company has agreed to issue to the shareholders of Sarborg, in the aggregate:

pre-funded warrants to purchase up

to 12,131,770 shares of the Company’s Common Stock.

pre-funded warrants portion of the consideration transferred have an exercise price of $ 0.0001 per share, subject to adjustment as set

forth therein and may not be exercised until such time as the Company obtains the requisite approval from its stockholders in accordance

with applicable Nasdaq rules and requirements, including approval for the issuance of the pre-funded warrant shares upon exercise of

the pre-funded warrants, as a whole and in the aggregate, in excess of 19.99% of the Common Stock or the voting power that was outstanding

on the date of the Securities Purchase Agreement.

Agreement with NJS Foresight Bio-Advisory

July 30, 2026, the Company agreed to a variation of the previous agreement with NJS Foresight Bio-Advisory (“NJS”) to compensate

NJS with an additional $ 0.1 million, payable with 33,582 shares of the Company’s Common Stock for services performed to date.

shares are fully vested, fully paid and nonassessable upon issuance.

Agreement with Thesprogen

July 30, 2026, the Company agreed to a variation of the previous agreement with Thesprogen to compensate Thesprogen with an additional

$ 0.1 million, payable with 33,582 shares of the Company’s Common Stock for services performed to date.

All shares are fully vested,

fully paid and nonassessable upon issuance.

to Letter Agreement with Maxim Group LLC

July 29, 2026, the Company and Maxim entered into an amendment to the original agreement dated February 6, 2026.

The amendment

updated the first sentence of section 3(b) of the original agreement which stated the Company will issue Maxim or its designees 13,000

shares of the Company’s Common Stock is replaced with the Company will issue Maxim or its designees 25,000

shares of the Company’s Common Stock.

Following the conversions,

there is no remaining outstanding principal or interest balances and the A.G.P Convertible Note was considered settled by both parties.

During April 2026, the Company

has sold 39,907 shares of the Company’s Common Stock for total gross proceeds of $ 0.1 million pursuant to the ELOC.

Amendment No.2

May 15, 2026, the “Company entered into the second amendment (the “Amendment No.

2”) to the ELOC agreement, dated January

Pursuant to Amendment No.

2, the parties mutually agreed to set the gross purchase price to be paid without the consent of

the Purchaser at any closing of a regular purchase at $ 0.5 million.

Amendment No.

2 also extends the Adjustment Period, as defined in

the Purchase Agreement, to such time as the Purchaser has entered into committed and binding trades to sell all of the shares it purchased

under the Purchase Agreement.

Amendment to the Ascent Note

May 15, 2026, the Company and Ascent entered into an amendment (the “Note Amendment”) to Ascent Note, originally issued on

March 3, 2026.

Pursuant to the Note Amendment, 90% of the proceeds raised by the Company in any debt or equity financing or capital-raising

transaction, including pursuant to the ELOC, may be retained by the Company, with the remaining 10% required to go towards payment of

amounts due under the Ascent Note.

Agreement with A.G.P.

May 2026, the Company sold 275,121

shares of Common Stock under the Sales Agreement and generated

$ 0.4 million

in net proceeds after paying an immaterial amount

of fees to A.G.P.

Secured Promissory Note with J.J.

June 11, 2026, the Company issued a senior secured convertible promissory note (the “Note”) to J.J.

(the “Lender”), in the principal amount of $ 2.0 million.

The Company will receive net proceeds of $ 1.5 million, before deduction

of closing fees and was funded in two tranches.

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.

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

Note Settlement

During June 2026, with funds

received from the Note from J.J.

Astor, the Company repaid $ 0.5 million of principal and interest against the Ascent Note.

or interest remained following the repayment and the Ascent note is considered settled by both parties.

Consulting Agreement with

On July 24, 2026, the Company

and EX ANIMO Ltd (“EX-ANIMO”) entered into a consulting agreement.

The Company agreed to issue $ 0.1 million of the Company’s

Common Stock, totaling 32,110 shares, in exchange for consulting services to be rendered.

Shares Issued for Legal

On July 30, 2026,

the Company issued 31,373 shares of the Company’s Common Stock for to a legal service provider for services rendered during

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements