CDT Equity Inc. 10-Q

Item 1. Financial Statements. CDT EQUITY INC. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share amounts) June 30, 2026 December 31, 2025 ASSETS Current assets Cash and cash equivalents $ 747 $ 1,509 Prepaid R&D services- related party (see Note 8 and Note 13) 649 881 Prepaid R&D services 387 166 Prepaid expenses and other current assets 1,155 1,823 Total current assets 2,938 4,379 Equity method investments 122,846 - Operating lease right-of-use assets, net 64 142 Equipment and clinical assets, net 158 269 Prepaid expenses and other long-term assets 702 860 Total assets $ 126,708 $ 5,650 LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) Current liabilities Accounts payable $ 3,725 $ 1,913 Investment payable 8,000 - Accrued expenses and other current liabilities 802 538 Accrued litigation liability 9,642 9,594 Operating lease liability, current portion 45 115 Convertible promissory notes payable at fair value 1,137 660 Convertible promissory notes payable at fair value - - Notes payable - - Total current liabilities 23,351 12,820 Derivative warrant liability 264 - Total liabilities 23,615 12,820 Commitments and contingencies (see Note 15) - - Stockholders’ equity (deficit) Common stock, par value $ 0.0001 ; 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 June 30, 2026 and December 31, 2025; nil shares issued and outstanding at June 30, 2026 and December 31, 2025 - - Additional paid-in capital 179,964 61,171 Accumulated deficit ( 77,029 ) ( 68,325 ) Accumulated other comprehensive income (loss) 158 ( 16 ) Total stockholders’ equity (deficit) 103,093 ( 7,170 ) Total liabilities and stockholders’ equity (deficit) $ 126,708 $ 5,650 The accompanying notes are an integral part of these condensed consolidated financial statements. 1 CDT EQUITY INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (unaudited) (in thousands, except share and per share amounts) 2026 2025 2026 2025 Three Months ended June 30, Six Months ended June 30 2026 2025 2026 2025 Operating expenses: Research and development expenses $ 302 $ 1,860 $ 1,080 $ 2,776 General and administrative expenses 2,700 3,092 5,578 5,792 Total operating expenses 3,002 4,952 6,658 8,568 Operating loss ( 3,002 ) ( 4,952 ) ( 6,658 ) ( 8,568 ) Other income (expense): Other expense, net ( 1,536 ) ( 1,023 ) ( 1,826 ) ( 1,992 ) Loss on equity method investment ( 86 ) - ( 154 ) - Interest income - 4 - 12 Interest expense ( 17 ) ( 57 ) ( 66 ) ( 233 ) Total other expense, net ( 1,639 ) ( 1,076 ) ( 2,046 ) ( 2,213 ) Net loss $ ( 4,641 ) $ ( 6,028 ) $ ( 8,704 ) $ ( 10,781 ) Basic and diluted net loss per share $ ( 8.71 ) $ ( 10,940.11 ) $ ( 28.60 ) $ ( 31,615.84 ) Basic and diluted weighted-average common shares outstanding 532,999 551 304,293 341 Comprehensive loss: Foreign currency translation adjustment ( 73 ) ( 77 ) 174 ( 145 ) Total comprehensive loss $ ( 4,714 ) $ ( 6,105 ) $ ( 8,530 ) $ ( 10,926 ) The accompanying notes are an integral part of these condensed consolidated financial statements. 2 CDT EQUITY INC. CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY For the Three and Six Months Ended June 30, 2026 and 2025 (unaudited) (in thousands, except share amounts) Shares Amount Stock capital deficit income (deficit) Common stock Treasury Additional paid-in Accumulated Accumulated other comprehensive Total stockholders’ equity Shares Amount Stock capital deficit income (deficit) Balance at April 1, 2025 315 $ - $ - $ 36,588 $ ( 33,854 ) $ 346 $ 3,080 Issuance of common stock for services 129 - - 740 - - 740 Issuance of common stock under the ATM Program 593 - - 3,887 - - 3,887 Issuance of common stock upon exercise of conversion option 165 - - 1,873 - - 1,873 Stock-based compensation - - - 160 - - 160 Share repurchases - - ( 106 ) - - - ( 106 ) Foreign currency translation adjustment - - - - - ( 77 ) ( 77 ) Net loss - - - - ( 6,028 ) - ( 6,028 ) Balance at June 30, 2025 1,202 $ - $ ( 106 ) $ 43,248 $ ( 39,882 ) $ 269 $ 3,529 Common stock Treasury Additional paid-in Accumulated Accumulated other comprehensive Total stockholders’ equity Shares Amount Stock capital deficit income (deficit) Balance at January 1, 2025 46 $ - $ - $ 21,894 $ ( 29,101 ) $ 414 $ ( 6,793 ) Issuance of common stock for services 210 - - 2,952 - - 2,952 Issuance of common stock under the ATM Program 737 - - 12,055 - - 12,055 Issuance of Common Stock upon exercise of conversion option 209 - - 5,953 - - 5,953 Stock-based compensation - - 394 - - 394 Share repurchases - - ( 106 ) ( 106 ) Foreign currency translation adjustment - - - - ( 145 ) ( 145 ) Net loss - - - ( 10,781 ) - ( 10,781 ) Balance at June 30, 2025 1,202 $ - ( 106 ) $ 43,248 $ ( 39,882 ) $ 269 $ 3,529 3 Shares Amount capital deficit income (deficit) Common stock Additional paid-in Accumulated Accumulated other comprehensive Total stockholders’ equity Shares Amount capital deficit income (deficit) Balance at April 1, 2026 472,244 $ - $ 177,608 $ ( 72,388 ) $ 231 $ 105,451 Issuance of common stock under the ATM Program 28,501 - 355 - - 355 Issuance of common stock upon exercise of conversion option 127,335 - 1,709 - - 1,709 Stock-based compensation - - 200 - - 200 Shares issued for equity line of credit 3,000 - 92 - - 92 Foreign currency translation adjustment - - - - ( 73 ) ( 73 ) Net loss - - - ( 4,641 ) - ( 4,641 ) Balance at June 30, 2026 631,080 $ - $ 179,964 $ ( 77,029 ) $ 158 $ 103,093 Common stock Additional paid-in Accumulated Accumulated other comprehensive Total stockholders’ equity Shares Amount capital deficit income (deficit) Balance at January 1, 2026 9,214 $ - $ 61,171 $ ( 68,325 ) $ ( 16 ) $ ( 7,170 ) Issuance of common stock for services 2,685 - 530 - - 530 Issuance of common stock under the ATM Program 28,501 - 355 355 Issuance of common stock upon exercise of conversion option 129,911 - 2,418 - - 2,418 Stock-based compensation - - 398 - - 398 Shares issued for equity line of credit 3,816 - 92 - - 92 Issuance of common stock upon investment 2,392 - 622 - - 622 Issuance of warrants upon investment - 114,378 114,378 Exercise of warrants attributable to investment 439,821 - - - - - Exercise of warrants attributable to the sale of previously controlled subsidiary 14,740 - - - - - Foreign currency translation adjustment - - - - 174 174 Net loss - - - ( 8,704 ) - ( 8,704 ) Balance at June 30, 2026 631,080 $ - $ 179,964 $ ( 77,029 ) $ 158 $ 103,093 The accompanying notes are an integral part of these condensed consolidated financial statements. 4 CDT EQUITY INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (in thousands) 2026 2025 Six Months ended June 30, 2026 2025 Cash flows from operating activities: Net loss $ ( 8,704 ) $ ( 10,781 ) Adjustments to reconcile net loss to net cash used in operating activities: Loss (gain) on debt extinguishment, net 1,073 ( 278 ) Unrealized foreign exchange (gain) loss - ( 27 ) Change in fair value of convertible notes payable 733 2,875 Gain on change in fair value of derivative warrant liability - ( 137 ) Loss on equity method investment 154 - Gain on waiver of accrued interest - ( 371 ) Stock-based compensation expense 398 394 Non-cash interest expense 126 224 Non-cash lease expense 70 60 Depreciation expense 12 10 Amortization of financed directors and officers insurance 621 739 Issuance of common stock for services 530 - Amortization expense 1,008 1,015 Changes in operating assets and liabilities: Prepaid expenses and other current assets ( 669 ) 198 Accounts payable 1,833 ( 236 ) Accrued expenses and other liabilities 446 ( 136 ) Lease liability ( 69 ) ( 58 ) Net cash flows used in operating activities ( 2,438 ) ( 6,509 ) Cash flows from investing activities: Purchases of equipment and clinical assets - ( 405 ) Net cash flows used in investing activities - ( 405 ) Cash flows from financing activities: Net proceeds from the issuance of notes payable 1,801 - Proceeds from issuance of common shares related to the ATM program 355 11,948 Repayment of notes payable – related parties ( 482 ) ( 425 ) Repayment of notes payable - ( 156 ) Repayment of convertible notes payable – related parties - ( 927 ) Repayment of convertible notes payable - ( 650 ) Purchases of treasury stock ( 106 ) Net cash flows provided by financing activities 1,674 9,684 Net change in cash and cash equivalents before effect of exchange rate changes ( 764 ) 2,770 Effect of exchange rate changes on cash and cash equivalents 2 8 Net change in cash ( 762 ) 2,778 Cash and cash equivalents at beginning of period 1,509 554 Cash and cash equivalents at end of period $ 747 $ 3,332 Supplemental cash flow information: Cash paid for interest $ 11 $ - Cash paid for taxes $ - $ - Non-cash investing and financing activities Issuance of common stock upon exercise of conversion option $ 2,418 $ 5,950 Issuance of common stock for services 530 2,951 Issuance of common stock for investment in related party $ 622 $ - Deferred cash payable for investment in related party $ 8,000 $ - Issuance of pre-funded warrants for investment in related party $ 114,378 $ - Issuance of warrants upon the issuance of convertible note $ 264 $ - The accompanying notes are an integral part of these condensed consolidated financial statements. 5 CDT EQUITY INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1. Nature of the Business CDT Equity Inc., formerly Conduit Pharmaceuticals Inc., a Delaware corporation (“CDT”, “CDT Equity” or the “Company”), is a data-driven pharmaceutical development and digital asset treasury management company focused on identifying, enhancing, and advancing high-potential therapeutic assets through scientific innovation and strategic partnerships. The Company has evolved into a broader, more agile platform that leverages artificial intelligence, solid-form chemistry, and efficient asset repositioning to accelerate the development of novel treatments. The Company’s strategy is centered on unlocking the untapped value of clinical-stage compounds, particularly those deprioritized by larger pharmaceutical companies with strong, supporting Phase I safety data. Through advanced co-crystallization and solid-form technologies developed at our Cambridge facilities, the Company improves drug properties and extends patent life by up to 20 years. In partnership with Sarborg Limited, the Company also applies AI-powered disease mapping to rapidly identify new therapeutic applications for existing compounds. The Company’s pipeline includes candidates that target autoimmune disorders, as well as idiopathic male infertility, oncology, dermatology, and animal health. Ongoing in vitro and in vivo studies, guided by AI insights, are designed to support licensing and commercialization partnerships. The Company will seek an exit through third-party license deals following successful in vitro and in vivo pre-clinical trials, by entering into agreements with third-parties to pursue further development, FDA approval, commercialization and marketing of the Company’s assets. Operating with a lean, asset-agnostic model, CDT Equity prioritizes speed, adaptability, and capital efficiency. We avoid the cost burden of late-stage clinical trials, focusing instead on high-leverage development strategies. Effective August 5, 2025, the Company changed its name from Conduit Pharmaceuticals Inc. to CDT Equity Inc. Our change to CDT Equity Inc. reflects the evolution of our strategy as a data-driven biotech development company focused on identifying, enhancing, and advancing high-potential therapeutic assets through scientific innovation and strategic partnerships. On September 25, 2023, the Company’s Common Stock commenced trading on the Nasdaq Capital Market under the symbol “CDT”. Reverse Stock Splits The 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; instead, 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. All historical share and per-share amounts reflected throughout the accompanying unaudited consolidated financial statements and related 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. 6 2. Liquidity and Going Concern In 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 million. As of June 30, 2026, the Company had cash and cash equivalents of $ 0.7 million. 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 million. Management 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. The Company’s expectation is to generate operating losses and negative operating cash flows in the future and will need additional funding to support its current business plan in addition to the funds available from the at the market offering program (the “Sales Agreement”). The Company currently has approximately $ 73.6 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 curtail its operations and its research and development activities until such funding is received, all of which could have a material adverse effect on the Company and its financial condition. See Note 7 and Note 18 for further discussion of the J.J. Astor Note. These 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. 3. Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation The 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”). The accompanying unaudited condensed consolidated financial statements and related notes have been prepared in accordance with U.S. GAAP 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. GAAP for complete financial statements. 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. Principles of Consolidation The 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. and its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. 7 Other Risks and Uncertainties The Company is subject to risks common to companies in the development stage and pharmaceutical industry including, but not limited to, uncertainties related to pre-clinical and clinical outcomes competitor products, regulatory approvals, dependence on key products, dependence on key suppliers and protection of intellectual property rights (see Note 15 for details on a claim against our AZD 1656 co-crystal patent). Clinical assets currently under development will require significant additional research and development efforts, including extensive preclinical and clinical testing and regulatory approval prior to commercialization. These efforts may require significant amounts of additional capital, adequate personnel, infrastructure, and extensive compliance and reporting capabilities. Even if the Company’s efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from royalties or product sales. The 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. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and related disclosures of contingent assets and liabilities at the date of the financial statements as well as the reported amounts of revenues and expenses during the reporting period. Estimates are based on several factors including the facts and circumstances available at the time the estimates are made, historical experience, risk of loss, general economic conditions and trends, and the assessment of the probable future outcome. Actual results could differ materially from such estimates. Estimates and assumptions are reviewed periodically by management and changes in estimates are made as management becomes aware of changes in circumstances surrounding the estimates. The effects of changes are reflected in the financial statements in the period that they are determined. Our significant accounting policies that involve significant judgment and estimates include accounting for the fair value of convertible notes payable, stock based compensation, contingencies, equity method investment and going concern. Fair Value Measurements ASC Topic 820, Fair Value Measurements and Disclosures , defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. Fair value is to be determined based on the exchange price that would be received for an asset or paid 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. A fair value hierarchy has been established for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are those that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs reflect the Company’s assumption about the inputs that market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The fair value hierarchy is categorized into three levels, based on the inputs, as follows: ● Level 1-Valuations based on quoted prices for identical instruments in active markets. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these instruments does not entail a significant degree of judgment. ● Level 2-Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for either similar instruments in active markets, identical or similar instruments in markets that are not active, or model-derived valuations whose inputs or significant value drivers are observable or can be corroborated by observable market data. ● Level 3-Valuations based on inputs that are unobservable. These valuations require significant judgment. 8 The Company’s Level 1 assets consist of cash and cash equivalents in the accompanying balance sheets, the value of accrued expenses and other current liabilities approximate fair value due to the short-term nature of these assets and liabilities. As of June 30, 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. Fair Value Option The 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”), the June 2026 note (“J.J. Astor Note”) with J.J. Astor & Co. 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. 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 June 30, 2026, the Company did not record any changes in fair value related to instrument-specific credit risk. Investments In 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”). 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. The Company records its share of the results of these investees in the unaudited condensed consolidated statements of operations and comprehensive loss. The Company evaluates its investments for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Any impairment is recognized in earnings for the amount by which the carrying value exceeds fair value and is determined to be other-than-temporary. There was no impairment of Sarborg identified or recorded during the six months ended June 30, 2026. ELOC On 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 share. The Purchase Agreement is subject to certain customary conditions and limitations, including that (i) the Purchaser shall not be obligated to purchase or acquire any shares of Common Stock that would result in its beneficial ownership exceeding 9.99% of the Company’s then-outstanding voting power and (ii) the Purchaser shall not be obligated to purchase shares of Common Stock if the volume weighted 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. 9 On 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. On May 15, 2026, the “Company entered into the second amendment (the “Amendment No. 2”) to the Purchase Agreement, dated January 16, 2026. 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. During April 2026, the Company sold 3,000 shares of the Company’s Common Stock for proceeds of $ 0.1 million pursuant to the ELOC. Foreign Currency Translation The 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). Recently Issued Accounting Standards Adopted In 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. 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. Recently Issued Accounting Standards Not Yet Adopted In December 2025, the FASB issued Accounting Standards Update No. 2025-11, Interim Reporting (Topic 270) Narrow-Scope Improvements (“ASU 2025-11”), to improve the navigability and clarity of interim reporting guidance in the FASB Accounting Standards Codification and clarify when Topic 270 applies. The amendments add a comprehensive list of interim disclosure requirements currently required by GAAP and a new disclosure principle requiring an entity to disclose events since the end of the most recent fiscal year that have a material impact on the entity’s interim financial statements. ASU 2025-11 is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027, for public business entities and after December 15, 2028 for entities other than public business entities. Early adoption is permitted. The Company is currently evaluating the potential impact of adopting ASU 2025-11 on our interim reporting practices and related disclosures. 10 In November 2024, the FASB issued ASU 2024-03 , Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses , which is intended to provide more detailed information about specified categories of expenses (purchases of inventory, employee compensation, depreciation and amortization) included in certain expense captions presented on the consolidated statements of operations and comprehensive income (loss). The guidance in this ASU is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The amendments may be applied either (1) prospectively to financial statements issued for periods after the effective date of this ASU or (2) retrospectively to all prior periods presented in the consolidated financial statements. The Company is currently evaluating the impact that the adoption of ASU 2024-03 will have on its consolidated financial statements and disclosures. 4. Investments On 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, subject to equity market conditions and the trading of the Company’s Common Stock. The pre-funded warrants portion of the consideration transferred have an exercise price of $ 0.025 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. 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 issued to the investors of Sarborg. The Company determined that it does have the ability to exercise significant influence over Sarborg through its ownership interest and participation in certain strategic and operating decisions and, accordingly, accounts for this investment under the equity method of accounting in accordance with ASC 323. The Company will account for the investment at its carrying value less any impairment. For 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 million. The 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 323. Subsequent 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. The Company intends to file such historical financial statements in an amendment to the Company’s Current Report on Form 8-K filed on February 24, 2026, and Current Report on Form 8-K filed on July 31, 2026, as promptly as practicable. The investment in Sarborg has been accounted for using the equity method as follows: Schedule of Investment in Sarborg Using Cost Method June 30, 2026 Balance as of April 1, 2026 $ 122,932 Investment in Sarborg Loss on equity investment in Sarborg ( 86 ) Impairment on equity investment in Sarborg - Balance as of June 30, 2026 $ 122,846 June 30, 2026 Balance as of December 31, 2025 $ - Investment in Sarborg 123,000 Loss on equity investment in Sarborg ( 154 ) Impairment on equity investment in Sarborg - Balance as of June 30, 2026 $ 122,846 11 The following table presents the summarized financial information for Sarborg: Summary of Financial Information for Sarborg June 30, 2026 Current assets $ 372 Non-current assets $ 65,035 Total assets $ 65,407 Current liabilities $ 395 Non-current liabilities 195 Total liabilities $ 590 Net assets $ 64,817 Company share of net assets $ 12,963 Revenue $ 641 Net loss $ ( 768 ) Company share of net loss $ ( 154 ) 5. Fair Value The 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 June 30, 2026 Level 1 Level 2 Level 3 Total Assets: Cash equivalents $ - $ - $ - $ - Total Assets $ - $ - $ - $ - Liabilities: Convertible notes payable, at fair value $ - $ - $ 1,137 $ 1,137 Derivative warrant liability $ - $ 264 $ - $ 264 Total Liabilities $ - $ 264 $ 1,137 $ 1,401 The following table presents as of December 31, 2025 the Company’s assets and liabilities subject to measurement at fair value on a recurring basis (in thousands): Fair Value Measurements as of December 31, 2025 Level 1 Level 2 Level 3 Total Assets: Cash equivalents $ 739 $ - $ - $ 739 Total Assets $ 739 $ - $ - $ 739 Liabilities: Convertible notes payable, at fair value $ - $ - $ 660 $ 660 Total Liabilities $ - $ - $ 660 $ 660 12 The following table presents additional information about the Convertible Notes Payable subject to measurement at fair value on a recurring basis and warrant liabilities, for which the Company used significant unobservable inputs (Level 3) (in thousands): Schedule of Additional Information About the Financial Liabilities Subject To Measurement at Fair Value Convertible Notes Payable Balance as of December 31, 2025 $ 660 Fair value at issuance 1,606 Conversion of convertible notes ( 681 ) Interest expense 126 Cash repayment ( 186 ) Change in fair value ( 388 ) Balance as of June 30, 2026 $ 1,137 During the six months ended June 30, 2026, there were no transfers between Level 1 and Level 2, nor into or out of Level 3. Convertible Notes Payable During 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. The A.G.P. Convertible Note has been repaid in full as of June 30, 2026. As 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 million. 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. The 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. The following table outlines the range of significant unobservable inputs used in calculating the fair value of the A.G.P. Convertible Note as of May 29, 2026, when the note was paid off in full, and December 31, 2025: Schedule of Fair Value of Assumptions May 29, 2026 December 31, 2025 Stock Price $ 10.40 $ 32 Term (years) 0.15 0.40 Corporate bond yield 16.3 % 5.5 % Credit Spread 26.2 % 26.2 % Probability of default 70 % 70 % Recovery upon default 0 % 0 % Volatility 194 % 135 % 13 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 the J.J. 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, 2026: Schedule of Fair Value of Assumptions June 11, 2026 Stock Price $ 7.20 Term (years) .52 Market yield 30.56 % Probability of default 57.5 % Recovery upon default 20 % Volatility 172 % 6. Balance Sheet Details Prepaid expenses and other current assets consisted of the following as of June 30, 2026 and December 31, 2025 (in thousands): Schedule of Balance Sheet Details As of June 30, 2026 As of December 31, 2025 Prepaid expenses $ 436 $ 833 Tax receivable 167 - Prepaid directors’ and officers’ insurance 552 990 Total prepaid expenses and other current assets $ 1,155 $ 1,823 Accrued expenses and other current liabilities consisted of the following as of June 30, 2026 and December 31, 2025 (in thousands): Schedule of Accrued Expenses and Other Current Liabilities As of June 30, 2026 As of December 31, 2025 Accrued professional fees $ 125 $ 388 Accrued legal contingency 9,642 9,594 HMRC payable 360 136 Investment payable 8,000 - Accrued board of directors’ fees, year to date 206 - Accrued other 111 14 Total accrued expenses and other current liabilities $ 18,444 $ 10,132 7. Convertible Notes Payable A.G.P. Convertible Note A.G.P was a financial advisor to both Murphy Canyon Acquisition Corp. (“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, 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 A.G.P. 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 six months ended June 30, 2025. On November 25, 2024, the Company issued to A.G.P. 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 Date”). The convertible promissory note accrued interest at 5.5 % per annum. 14 During 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. During 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 shares of the Company’s Common Stock. During the three months ended March 31, 2025, the holder of the A.G.P. Convertible Note converted $ 0.4 million of principal and interest into 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. On 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 Price Floor. For the purpose of the April 16, 2025 conversion, the Company waived the Conversion Price Floor and allowed A.G.P. to convert at the April 16, 2025 closing stock price. On 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. For 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. For 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. Convertible 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. Convertible 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. Ascent Note On 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. The 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. On 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. 15 At 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 may occur. 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. During 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. During both the three and six months ended June 30, 2026, the Company recognized approximately $ 11,000 of contractual interest expense related to the Ascent Note. See Note 3 and Note 5 for further discussion of the Ascent Note. J.J. Astor Note On 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. The J.J. Astor Note had a maturity date of December 28, 2026, with repayment terms of twenty-four equal weekly installment payments of $ 82,125 to commence on July 10, 2026. Repayments 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 Date. At 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). The J.J. Astor 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 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. 16 During the three and six months ended June 30, 2026, the Company did not recognize interest expense related to the J.J. Astor Note. Second and Third Amendment to J.J. Astor Convertible Note On 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. Under 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. In 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 % to 24 % 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. On August 3, 2026, the Company and J.J. Astor & Co. entered into a third amendment to the Amended Note and Amended Loan Agreement (the “Third Amendment”). 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”). See Note 3 and Note 5 for further discussion of the J.J. Astor Note. 8. Research and Development Expense Sarborg Service Agreement – Related Party On December 12, 2024, the Company entered into a Services Agreement (the “Sarborg Service Agreement”) with Sarborg Limited (“Sarborg”), a Cayman Islands company and related party of the Company. See Note 13 for further reference to the relationship between the Company and Sarborg. Under the terms of the Sarborg Service Agreement, Sarborg will provide algorithmic and cybernetic technology services to CDT, including the development of decision-support tools and advanced cybernetic systems tailored to enhance CDT’s decision-making processes and maximize the value of its pharmaceutical asset portfolio. The Sarborg Service Agreement has an initial term of 12 months, which commenced on the effective date, and may be renewed or extended upon mutual written agreement of the parties. Either party may terminate the Sarborg Service Agreement for any reason upon 90 days’ written notice or immediately upon written notice if the other party breaches any material term of the Sarborg Service Agreement and fails to cure such breach within thirty days or becomes insolvent, files for bankruptcy, or is placed under the control of a receiver, trustee, or similar authority. The Sarborg Service Agreement includes provisions for the ownership and use of intellectual property. Sarborg will own its pre-existing intellectual property rights, including proprietary tools and methodologies used in the performance of the services. CDT will own all deliverables resulting from the services performed by Sarborg under the Sarborg Service Agreement. The Sarborg Service Agreement provides Sarborg with registration rights for any Common Stock of CDT that Sarborg receives as consideration under the Sarborg Service Agreement. In such event, CDT will use commercially reasonable efforts to (i) file a registration statement covering the resale of the Common Stock within 60 days after the issuance; and (ii) ensure that such registration statement becomes effective within 90 days after filing. This Agreement also includes confidentiality obligations, representations and warranties, indemnification, limitation of liability, and insurance requirements. In consideration of the services, CDT agreed to pay Sarborg an initial cash payment of $ 0.2 million and $ 0.2 million payable through the 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 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 was reimbursed for pre-approved, necessary, and reasonable out-of-pocket expenses directly incurred in connection with the performance of the services. The 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. 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, 2026. 17 Under the Sarborg Service Agreement, the Company will be provided with a dashboard that will be utilized for both the Company’s existing and future asset portfolio. Specifically, the dashboard includes a clinical trial monitoring functionality and a dynamic pharmaceutical patent landscape module to assess both the Company’s current assets undergoing clinical trials and delisted patents in the marketplace that may be overlooked by other market participants. These features will be used by management to monitor progress, assess trial status, identify new opportunities, and support decision-making across all current and future development programs. The Company assessed the guidance in ASC 730 and determined that $ 0.4 million of total cost of the acquired asset should be capitalized as the dashboard is considered a purchased diagnostic asset with alternative future use. Management determined that the dashboard has a useful life of two years. The dashboard was placed in service on March 18, 2025. 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 expense. All other costs under the Sarborg Service Agreement shall be expensed as incurred and recorded within research and development expense in the consolidated statement of operations and comprehensive loss, as the services are designed to aid in the Company’s research and development activities. There were no payments made to Sarborg related to the Sarborg Service Agreement during the three and six months ended June 30, 2026. During 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. Sarborg Additional Agreement Effective 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 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. Sarborg Second Additional Agreement Effective January 2, 2026, the Company and Sarborg entered into the Second Additional Agreement (the “Second Additional Agreement”). The Second Additional Agreement has a term of six weeks and can be renewed upon the mutual written agreement of both parties. Total consideration payable from the Company to Sarborg totals $ 0.4 million, with $ 0.2 million due, and paid, upon execution of the Second Additional Agreement and the remaining balance due as mutually agreed by the parties. 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. In 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. In 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. 18 Manoira Joint Development Agreement On 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. Refer to Note 13 for additional details. Pursuant to the Joint Development Agreement, CDT granted Manoira a non-exclusive, non-transferable, non-sublicensable, fully paid-up, royalty-free license to the intellectual property rights related to the pharmaceutical compounds known individually and together as AZD1656 and AZD5658 (the “CDT Assets”). Manoira will evaluate the CDT Assets’ applicability in animal health, explore veterinary market opportunities, and provide data from the evaluations to inform CDT’s human clinical programs. The license does not grant Manoira the right to distribute, market, promote or sell the products or services that are related to or incorporate the CDT Assets. Effective 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 . The Company 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. Through the six months ended June 30, 2026, the Company did not record any amortization expense related to research and development activities. 9. Share Based Compensation On September 22, 2023, in connection with the Merger, the Company adopted the CDT Equity Inc. 2023 Stock Incentive Plan (the “2023 Plan”). The 2023 Plan became effective upon the closing of the Merger. The 2023 Plan initially provided for the issuance of up to 3 shares of Common Stock. 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 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 (and including) January 1, 2033, equal to the lesser of (i) 5 % of the shares of Common Stock outstanding on the last day of the immediately preceding fiscal year and (ii) such smaller number of shares of Common Stock as determined by the Board or the applicable committee of the Board. The 2023 Plan allows for awards to be issued to employees and non-employee directors in the form of options, stock appreciation rights, restricted stock, restricted stock units (“RSUs”), performance stock units, dividend equivalents, other stock-based, or other cash-based awards. On August 5, 2025, at the Company’s 2025 Annual Meeting of Stockholders, stockholders approved an amendment and restatement of the Company’s 2023 Stock Incentive Plan (as amended, the “Amended 2023 Stock Incentive Plan”) to authorize an additional 1,000 shares of Common Stock for awards under the Amended 2023 Stock Incentive Plan. The Amended 2023 Stock Incentive Plan was recommended and approved by the Board on July 8, 2025. On January 1, 2026, in accordance with the 2023 Plan, the number of authorized shares under the 2023 plan increased by 463 shares. As of June 30, 2026, there were 583 shares of Common Stock available for issuance under the 2023 Plan. Board of Directors Shares On March 30, 2025, certain non-employee directors elected to receive their unpaid cash retainers due through the period ended June 30, 2025, 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 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. 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 and six months ended June 30, 2025, respectively. 19 Stock Options The Company did no t grant stock options during the three and six months ended June 30, 2026 or June 30, 2025. The Company accounts for forfeitures as they occur, which may result in the reversal of compensation costs in subsequent periods as the forfeitures arise. The following table summarizes stock option activity for the 2023 Plan: Schedule of Stock Option Activity Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (years) Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2025 25 $ 195,153 7.97 $ - Granted - $ - - $ - Cancelled/forfeited - $ - - $ - Exercised - $ - - $ - Outstanding at June 30, 2026 25 $ 195,153 7.97 $ - Exercisable 24 $ 120,540 8.14 $ - Unvested 1 $ 1,908,034 7.60 $ - The aggregate intrinsic value of options is calculated as the difference between the exercise price of the underlying options and the fair value of the Company’s Common Stock for those options that had exercise prices lower than the fair value of the Company’s Common Stock. 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. For 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. 10. Income Taxes On July 4, 2025, the United States Congress passed the budget reconciliation bill H.R. 1, known as the One Big Beautiful Bill Act (“OBBBA”). Key provisions include the repeal of Section 174 R&D capitalization requirements, the extension of 100% bonus depreciation, restoration of the Section 163(j) interest limitation to an EBITDA basis, and the introduction of a 1% charitable contribution deduction floor. As 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 loss. These changes did not have a material impact on the Company’s effective tax rate. For 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. 20 11. Common Stock and Preferred Stock At-the-Market Offering On October 23, 2024, the Company entered into the Sales Agreement with A.G.P. (the “Sales Agreement”) relating to the sale of shares of the Company’s Common Stock. In accordance with the terms of the Sales Agreement, the Company may offer and sell shares of our Common Stock having an aggregate offering price of up to $ 23.9 million from time to time through A.G.P., acting as our sales agent or principal. The compensation to A.G.P. for sales of Common Stock sold pursuant to the Sales Agreement will be equal to 3.0 % of the gross proceeds of any shares of Common Stock sold under the Sales Agreement. During 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. Investment in Sarborg As 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. 12. Net Loss Per Share Attributable to Common Stockholders Potentially dilutive securities (upon conversion) that were not included in the diluted per share calculations because they would have been anti-dilutive were 33 and 82 as of June 30, 2026 and June 30, 2025, respectively. 13. Related Party Transactions Corvus Capital Limited Corvus 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 services. As of June 30, 2026, and December 31, 2025, no advisory fees were due to Corvus. For 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. 21 Nirland On August 6, 2024, the Company entered into the August 2024 Nirland Note with Nirland, a related party of the Company. The Company determined that Nirland was a related party due to Nirland’s ownership interest in the Company concurrently with the execution of the August 2024 Nirland Note. Additionally, on October 28, 2024, the Company issued the October 2024 Nirland Note to Nirland, and on October 31, 2024, the Company and Nirland amended the August 2024 Nirland Note, and on November 22, 2024, the Company and Nirland amended the August 2024 Nirland Note for a second time. During the six months ended June 30, 2025, the Company repaid Nirland through conversions and a final cash payment. Sarborg On 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. 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. During 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. On March 31, 2025, the Company issued 61 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 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. See Note 4 for discussion of the Company’s investment in Sarborg. Manoira On June 3, 2025, the Company entered into a joint development agreement (the “Joint Development Agreement”) with Manoira Corporation. Dr. Andrew Regan, Chief Executive Officer and member of the Board, also is a director and controlling member of Manoira. 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 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 details. 22 14. Other Expense, net The following table presents other income (expense), net, for the three and six months ended June 30, 2026 and 2025 (in thousands): Schedule of Other Expense, Net 2026 2025 2026 2025 For the three months ended June 30, For the six months ended June 30, 2026 2025 2026 2025 Other income: Unrealized foreign currency transaction gain $ - $ 4 $ 1 $ 27 Gain on change in fair value of derivative warrant liability - 7 - 137 Gain on change in fair value of convertible notes payable - - - - Interest income - 4 - 12 Gain on debt extinguishment - - - 278 Gain on waiver of accrued interest - - - 371 Gain on the issuance of shares for services - - - 70 Total other income: - 15 1 895 Other expense: Loss on the change in fair value of convertible notes payable 443 1,034 733 2,875 Interest expense 17 57 66 233 Loss on equity method investment 86 - 154 - Loss on debt extinguishment 1,073 1,073 Other 20 - 21 - Total other expense 1,639 1,091 2,047 3,108 Total other expense, net $ ( 1,639 ) $ ( 1,076 ) $ ( 2,046 ) $ ( 2,213 ) 15. Commitments and Contingencies Legal Proceedings The 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. On September 7, 2023, following the merger between Conduit Pharmaceuticals Limited and Conduit Merger Sub, Inc., a Cayman Islands exempted company, Strand filed a claim in the Business and Property Courts of England and Wales claiming it was entitled to be paid the sum of $ 2 million and, as a result of the completion of the Business Combination, to be issued 21 shares of the Company’s Common Stock as a market value calculated by Strand of $ 65 million. The trial in this matter ended in October 2025, with a judgment finalized on December 16, 2025, in the amount of approximately $ 7 million, plus interest and repayment of a fraction of Strand’s costs totaling $ 9.6 million. CDT is not a party to the CPL judgment. Prior to the issuance of the judgment, the Company completed the sale of CPL to Corvus, pursuant to the Sale and Purchase Agreement. See 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 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. 23 Separately, 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 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. Leases The 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 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. 16. Warrants Pre-Funded Warrants – Corvus and Sarborg In 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 14,743 of the Pre-Funded Warrants were exercised through a cashless exercise into 14,740 shares of the Company’s Common Stock. In 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. 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. Warrants – J.J. Astor Note 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. Astor Note. 17. Segments The 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 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. 24 The CODM uses consolidated net loss and budget-to-actual variances to assess the operating segment’s performance and determine whether the Company is progressing towards its goals. The following table presents specific financial data for the Company’s reportable segment (in thousands): Schedule of Financial Data for the Company’s Reportable Segment (Dollar amounts in thousands) 2026 2025 2026 2025 Three months ended June 30, Six months ended June 30, (Dollar amounts in thousands) 2026 2025 2026 2025 Operating expenses: Research & development expenses-clinical asset development $ 185 $ 222 $ 447 $ 411 Research & development expense – related parties 117 1,638 633 2,365 Research & development expense 117 1,638 633 2,365 General and administrative expenses – legal & professional fees 300 872 1,013 1,632 General and administrative expenses – accounting & audit fees 639 378 1,348 922 General and administrative expenses – salaries, payroll and stock based compensation 470 751 1,013 1,444 General and administrative expenses - other 1,291 1,091 2,204 1,794 General and administrative expenses 1,291 1,091 2,204 1,794 Total operating costs and expenses 3,002 4,952 6,658 8,568 Operating loss ( 3,002 ) ( 4,952 ) ( 6,658 ) ( 8,568 ) Other income (expenses): Other expense ( 1,536 ) ( 1,023 ) ( 1,826 ) ( 1,992 ) Loss on investment ( 86 ) - ( 154 ) - Interest income - 4 - 12 Interest expense, net ( 17 ) ( 57 ) ( 66 ) ( 233 ) Total other (expense) income, net ( 1,639 ) ( 1,076 ) ( 2,046 ) ( 2,213 ) Net loss $ ( 4,641 ) $ ( 6,028 ) $ ( 8,704 ) $ ( 10,781 ) Other segment items consist of the items within Note 13 to the unaudited condensed consolidated financial statements. 25 18. Subsequent Events Additional Transaction with Investors of Sarborg Limited On 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. As 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. The 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. Variation Agreement with NJS Foresight Bio-Advisory On 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. All shares are fully vested, fully paid and nonassessable upon issuance. Variation Agreement with Thesprogen On 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. Amendment to Letter Agreement with Maxim Group LLC On 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. Consulting Agreement with EX-ANIMO LTD 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 Services 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 July 2026. 26