What changed in this filing

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Item 1. Business

2024-04-16 compared with 2023-03-28 · 1744 added, 1052 removed, 1 unchanged (100% of the section changed)

are a recently organized blank check company incorporated on October 19, 2021 as a Delaware corporation formed for the purpose of effecting

a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or

more businesses, which we refer to throughout this report as our initial business combination.

Public Offering

February 7, 2022, we consummated our initial public offering of an aggregate of 13,225,000 units, including full exercise of the underwriters’

over-allotment option, at $10.00 per unit.

The gross proceeds of the offering were $132.25 million.

Simultaneously with the consummation

of the initial public offering, we consummated the private placement of 754,000 units to the sponsor, which amount included 69,000 private

placement units purchased by the sponsor in connection with the underwriters’ exercise of their overallotment option in full, at

a price of $10.00 per private placement unit, generating gross proceeds of approximately $7.54 million.

the closing of the Initial Public Offering on February 7, 2022, an amount of $139,790,000 from the net proceeds of the sale of the Units

in the Initial Public Offering and the Private Placement was placed in the Trust Account.

This resulted in an overfunding of the Trust

Account of $4,895,000.

As such, subsequent to the initial funding of the Trust Account, $2,000,000 was transferred to the Company’s

operating cash account and $2,895,000 was used to pay offering costs.

Except with respect to interest earned on the funds held in the

Trust Account that may be released to us to pay our taxes (less up to $100,000 interest to pay dissolution expenses), the funds held

in the Trust Account will not be released from the Trust Account until the earliest of (a) the completion of our initial business combination,

(b) the redemption of any public shares properly submitted in connection with a stockholder vote to amend our certificate of incorporation

(A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or certain

amendments to our charter prior thereto or to redeem 100% of our public shares if we do not complete our initial business combination

within 12 months from the consummation of our initial public offering or up to February 7, 2024 if we extend the period of time to consummate

a business combination, at our election by separate one month extensions, subject to satisfaction of certain conditions, including the

deposit of approximately $77,000 for each one month extension, into the Trust Account or (ii) with respect to any other provision relating

to stockholders’ rights or pre-initial business combination activity, and (c) the redemption of our public shares if we are unable

to complete our initial business combination within 12 months from the consummation of our initial public offering or up to February

7, 2024 if we extend the period of time to consummate a business combination, at our election by separate one month extensions, subject

to satisfaction of certain conditions, including the deposit of approximately $77,000 for each one month extension, into the Trust Account,

subject to applicable law.

Agreement with Conduit Pharmaceuticals Limited

following description of the Merger Agreement and related agreements does not purport to describe all of the terms thereof and is qualified

in its entirety by reference to the complete text of the Merger Agreement and related agreements.

Our stockholders and other interested

parties are urged to read such agreements in their entirety.

November 8, 2022, we entered into an agreement and plan of merger (together with an amendment entered into on January 27, 2023, the “Merger

Agreement”) with Conduit Pharmaceuticals Limited, a Cayman Islands exempted company (“Conduit”) and Conduit Merger

Sub, Inc., a Cayman Islands exempted company and our wholly owned subsidiary.

If the Merger Agreement is approved by our stockholders

and the transactions under the Merger Agreement are consummated, Merger Sub will merge with and into Conduit, with Conduit surviving

the merger as our wholly owned subsidiary (the “Merger”).

Upon the closing of the Merger, it is anticipated that we will

change our name to “Conduit Pharmaceuticals Inc.” Our board of directors has (i) approved and declared advisable the Merger

Agreement, the related ancillary agreements thereto and the transactions contemplated thereby and (ii) resolved to recommend approval

of the Merger Agreement and related transactions by our stockholders.

to the Merger Agreement, the outstanding ordinary shares (including the shares issued upon conversion of all outstanding convertible

debt, which conversion shall have occurred prior to the consummation of the Merger Agreement) of Conduit will be converted into an aggregate

of 65,000,000 shares of our newly issued common stock, with each such outstanding Conduit ordinary share (including the ordinary shares

issued upon conversion of all outstanding convertible debt, which conversion shall have occurred prior to the consummation of the Merger

Agreement) converted into newly issued shares of our common stock on a pro rata basis.

connection with the transactions contemplated by the Merger Agreement, we entered into a subscription agreement (the “Subscription

Agreement”) with an investor.

Pursuant to the Subscription Agreement, the investor has agreed to purchase $27 million (the “Private

Placement”) units of our securities, with each unit consisting of (i) one share of common stock and (ii) one warrant to purchase

one share of common stock, for a purchase price of $10.00 per unit.

The Subscription Agreement contains registration rights, pursuant

to which within 15 business days after the closing, we will use reasonable best efforts to file with the U.S.

Securities and Exchange

Commission (the “SEC”) a registration statement registering the resale of the shares of common stock included in the units

and issued and issuable upon exercise of the warrants.

The closing of the Private Placement is conditioned on, among other things, the

closing of the Conduit Business Combination.

2023 Extension

we were required to complete our initial business combination transaction by 12 months from the consummation of our initial public

offering or up to 18 months if we extended the period of time to consummate a business combination in accordance with our

Certificate of Incorporation (“Business Combination Period”).

On January 26, 2023, at a special meeting of our stockholders, our stockholders approved a proposal

to amend our certificate of incorporation to allow us to extend, at our election, the date by which we have to consummate a business

combination up to 12 times, each such extension for an additional one month period, from February 7, 2023, to February 7, 2024.

stockholders also approved a related proposal to amend the trust agreement allowing us to deposit into the Trust Account, for each

one-month extension, one-third of 1% of the funds remaining in the Trust Account following the redemptions made in connection with

the approval of the extension proposal at the special meeting.

At the special meeting our stockholders also approved a proposal to

amend our certificate of incorporation to expand the methods that we may employ to not become subject to the “penny

stock” rules of the SEC.

connection with such proposals, our public stockholders had the right to redeem their shares for cash equal to their pro rata share of

the aggregate amount on deposit in the Trust Account as of two days prior to such stockholder vote.

Our public stockholders holding 11,037,272

shares of Class A common stock (out of a total of 13,979,000 shares of Class A common stock) exercised their right to redeem such shares

at a redemption price of approximately $10.33 per share.

Approximately $114 million in cash was removed from the Trust Account to pay

such stockholders and, accordingly, after giving effect to such redemptions, the balance in the Trust Account was approximately $23 million.

a result of the approval of such proposals, we agreed to deposit into the trust account one-third of 1% of the funds then on deposit

in the trust account for each month of the extension period, resulting in a monthly contribution of approximately $0.035 per share that

was not redeemed in connection with the Special Meeting (approximately $77,000 in the aggregate per month), or an aggregate of $924,000

(the “Maximum Contribution”) if the date we have to consummate a business combination is extended 12 times, each assuming

no interest is earned on the funds in the trust account.

Thesis and Strategy

date, our efforts have been limited to organizational activities, as well as activities related to our initial public offering and investigating

potential business combinations.

As of the date of this report, we anticipate that we will consummate the Merger Agreement.

have entered into the Merger Agreement with Conduit, in the event we are unable to consummate the Conduit Business Combination, we will

continue to pursue another business combination.

While we may pursue an initial business combination target in any stage of our corporate

evolution or in any industry or sector, we intend to focus our search on identifying businesses in the real estate industry, including

construction, homebuilding, real estate owners and operators, arrangers of financing, insurance, and other services for real estate,

and adjacent businesses and technologies targeting the real estate space, which we may refer to as “Proptech” businesses.

We define Proptech businesses broadly as those applying innovative digital technologies and technology-enhanced services and solutions

to the identification, design, development, construction, operation, underwriting, acquisition, leasing, financing, management and disposition

of real estate properties.

Leveraging our sponsor’s management team and directors’ deep and global real estate expertise

and extensive network of relationships, we intend to identify innovative companies that have the potential to disrupt different aspects

of the real estate industry or related industries and to transform how stakeholders relate to real estate in the future.

These stakeholders

include brokers, investors, lenders, operators, municipalities, service providers, owners, residents and tenants.

Our sponsor and management

team have a proven track record in identifying opportunities in the real estate industry that have generated attractive risk-adjusted

business strategy is to identify and complete our initial business combination with a company that complements the experience of our

management team and that can benefit from their and our sponsor’s operational expertise.

Our selection process will leverage our

management teams’ broad and deep relationship network, unique industry experiences and proven deal sourcing capabilities to access

a broad spectrum of differentiated opportunities.

The businesses we seek to acquire offer innovative software, hardware, products, operations

or services that are technologically equipped to improve property ownership;

property financing;

property transactions;

property valuation;

property operations;

property management;

property insurance;

real estate asset management and investment management;

construction and development.

Our management team will seek to leverage their access to proprietary deal flow, sourcing capabilities

and network of industry contacts to generate business combination opportunities.

with this strategy, we have identified the following general criteria and guidelines that we believe are important in evaluating prospective

We will use these criteria and guidelines in evaluating acquisition opportunities, but we may decide to enter into our initial

business combination with a target business that does not meet these criteria and guidelines.

We will seek to focus our search on identifying transformative, technology-driven businesses targeting the real estate

sector that can benefit from the leading brand, operational expertise and global network of our sponsor and management team in the

real estate industry.

Our management team has developed significant experience at Presidio Property Trust, Inc.

in evaluating transaction

candidates across many stages of the real estate investment and business life cycles, and we will seek to capitalize on that multifaceted

expertise in sourcing and assessing potential business combination targets.

We intend to focus our efforts on identifying one or more later-stage businesses that we believe have significant potential

for attractive risk-adjusted returns for shareholders, weighing potential growth opportunities and operational improvements in the

target business against any identified downside risks.

We will seek to acquire one or more businesses that have the potential for significant revenue and earnings growth

through a combination of organic growth, potential to leverage competitive advantages and innovation through our expertise and scale

as a vertically integrated real estate platform.

From Presidio Property, Inc.’s Proven Platform.

We intend to acquire one or more businesses that we believe will benefit

from Presidio Property, Inc.’s differentiated industry network, brand and proprietary value-creation capabilities in order

to improve financial performance and business planning.

We will seek to acquire one or more businesses that demonstrate advantages when compared to their competitors, including

the potential to disrupt the market through technology driven transformation, defensible proprietary technology, strong adoption

rates, and low or manageable risks of technological obsolescence.

We will seek to invest in one or more businesses that have proven management teams with a compelling strategy of selling

their product and recruiting talent.

from Being a Public Company.

We intend to invest in one or more businesses that will benefit from being publicly listed and can

effectively utilize the broader access to capital and the public profile to grow and accelerate shareholder value creation.

criteria are not intended to be exhaustive.

Any evaluation relating to the merits of a particular initial business combination may be

based, to the extent relevant, on these general guidelines as well as other considerations, factors and criteria that our management

may deem relevant.

In the event that we decide to enter into our initial business combination with a target business that does not meet

the above criteria and guidelines, we will disclose that the target business does not meet the above criteria in our shareholder communications

related to our initial business combination, which would be in the form of tender offer documents or proxy solicitation materials that

we would file with the SEC.

the event the Conduit Business Combination is not consummated, we intend to capitalize on the following competitive advantages in our

pursuit of a target company or companies:

of an Experienced Management Team .

believe our management team will provide us with a significant pipeline of opportunities from which to evaluate potential business

combinations.

Our management team provides a combination of a proprietary sourcing network and deep industry, mergers and acquisition,

and capital markets expertise.

management team is led by our Chief Executive Officer (“CEO”) Jack K.

Heilbron, who has over 40 years of experience in real

estate due diligence, mergers and acquisitions, and real estate management.

He has previously served as a director of an investment company

registered under the Investment Company Act of 1940.

We believe that his business acumen and experience, which demonstrate his ability

to identify opportunities and enhance value, will help facilitate our business acquisition strategy.

Chief Financial Officer (“CFO”), Adam Sragovicz, has over 25 years of experience in treasury and investment analysis, equity

and debt management, strategic risk and reward analysis as well as portfolio management.

We believe that Mr.

Sragovicz brings a unique

background to oversee the Company’s accounting and financial reporting matters through a wealth of experience in SEC reporting,

finance, accounting, and building and integrating internal control structures in high growth environments which will provide accurate

and reliable financial and operations reporting and internal control structures for successfully acquired domestic and international

acquisition targets.

Bentzen, our Chief Accounting Officer (“CAO”), brings over 18 years of professional experience in accounting and finance

for both public and private companies, including seven years of experience in SEC reporting, control processing experience at publicly

traded companies].

We believe that Mr.

Bentzen’s expertise in financial reporting will prove invaluable in evaluating acquisition

targets and ensuring a smooth business combination process.

to established and proven solution .

We believe the business relationships with our sponsor’s corporate parent, Presidio

Property Trust, Inc., will provide significant value enhancement to acquisition targets from both daily human capital management

and cost efficiency perspectives.

Deal Sourcing Network .

We believe the strong track record of our management team will provide access to quality initial business

combination partners.

In addition, through our management team, we believe we have contacts and sources from which to generate acquisition

opportunities and possibly seek complementary follow-on business arrangements.

These contacts and sources include those in private

and public companies, private equity and venture capital funds, investment bankers, attorneys and accountants.

as a Publicly Listed Acquisition Company .

We believe our structure will make us an attractive business combination partner

to prospective target businesses.

As a publicly listed company, we will offer a target business an alternative to the traditional

initial public offering process.

We believe that some target businesses will favor this alternative, which we believe is less expensive,

while offering greater certainty of execution, than the traditional initial public offering process.

During an initial public offering,

there are typically underwriting fees and marketing expenses, which would be costlier than a business combination with us.

once a proposed business combination is approved by our stockholders (if applicable) and the transaction is consummated, the target

business will have effectively become public, whereas an initial public offering is always subject to the underwriter’s ability

to complete the offering, as well as general market conditions that could prevent the offering from occurring.

Once public, we believe

our target business would have greater access to capital and additional means of creating management incentives that are better aligned

with stockholders’ interests than it would as a private company.

Brings Deal Flow and Extensive Understanding of Capital Markets and Public Market Investors.

We will be supported by A.G.P.

and its team of investment banking professionals, each of whom have meaningful transaction experience, including corporate finance,

mergers and acquisitions, equity and debt capital markets, strategic consulting, and operations.

has developed an extensive

network of contacts and corporate relationships which we believe will provide us with an important source of initial business combination

opportunities as well as assistance with potential future financing needs.

is a leading advisor to public company boards of

directors and executives, including technology companies, on matters of public markets capital raising, corporate strategy, and M&A.

We believe that the significant knowhow of A.G.P.

will allow us to effectively gauge target companies that possess a readiness for

being public, as well as to support their executives in the process of going public.

we may acquire a business or businesses in any industry, in the event the Conduit Business Combination is not consummated, our focus

will be on companies in the real estate industry, including construction, homebuilding, real estate owners and operators, arrangers of

financing, insurance, and other services for real estate, and adjacent businesses and technologies targeting the real estate space, which

we may refer to as “Proptech” businesses.

We believe that our target industry is attractive for a number of reasons, including

the following:

Addressable Market .

Real estate investment represents a significant segment of the global economy.

Global real estate was worth over

$280 trillion (by asset value), larger than equity, debt, or gold (combined), and more than 3.5 times the total global gross domestic

product in 2017, according to Savills Inc.

According to Forbes, real estate contributed $3.5 trillion to the U.S.

gross domestic product

Within the real estate industry, Proptech businesses have a large addressable market targeting landlords, tenants, developers,

operators, managers, brokers, investors, lenders, architects, engineers, and general contractors.

We believe the acquisition of one or

more Proptech businesses can serve as a platform for expansion, both organically and through further acquisitions.

Technology Trends .

Real estate has traditionally been a human capital and resource-intensive sector, but technology has become a

strategic imperative as owners seek ways to increase the efficiency of their assets.

We believe new technologies that create efficiencies

in the value chain will reduce transaction costs and improve information flow.

Innovation is being driven by increased rates of technology

adoption, provided by both incumbent firms and disruptive new entrants that are building vertical solutions and new consumer-facing technologies

for the real estate industry.

Examples of innovative technology trends driving technological transformation in the real estate sector

artificial intelligence and machine learning, data and analytics, cloud technologies, the Internet of Things, virtual and augmented

reality, financial and mortgage technologies, 5G, automation and robotics, 3D printing, and modular construction.

Digital transformation

has also enabled new business models including iBuying, co-working, flexible warehousing, and crowdfunding.

Market Growth .

Over the last two decades, Proptech has evolved from tools and platforms that facilitated enhanced information transparency

to more robust and innovative technologies that can drive meaningful operational efficiencies and safety enhancements.

The total global

investment in Proptech businesses has grown at a pace substantially above the rate of inflation in the recent past, with approximately

$66 billion invested in Proptech since 2010, of which approximately $63 billion has been invested since 2015 and approximately $43 billion

We expect this growth to continue over the years to come, given the increased rates of technology adoption we are seeing

in the real estate industry.

Universe of Potential Targets .

We currently intend to focus our investment effort broadly across Proptech businesses, although we

may pursue an acquisition opportunity in any industry or geographic region.

We believe that our investment and operating expertise in

the real estate industry and across multiple asset classes and geographies will offer us a large, addressable universe of potential targets.

The diversity of the target universe and the number of largely uncorrelated sub-sectors maximizes the likelihood that our management

team will identify and execute an attractive transaction.

with our strategy, we have identified the following general criteria and guidelines that we believe are important in evaluating prospective

target businesses.

In the event that the Conduit Business Combination is not consummated, we will use these criteria and guidelines in

evaluating acquisition opportunities, but we may decide to enter into our initial business combination with a target business that does

not meet these criteria and guidelines.

We intend to focus on companies that provide value-added services that we believe:

market leadership positions in their respective products and services;

an attractive risk profile, including revenues under long-term contracts and/or a strong backlog of business;

attractive organic and inorganic growth opportunities which may be accelerated with our expertise and/or access to a public listing;

benefit from an improved capital structure or streamlined ownership structure;

benefit from a relationship with a public company;

an attractive risk-adjusted return for our stockholders.

intend to seek targets with an aggregate combined enterprise value of approximately $300 million to $1.2 billion, based upon widely accepted

valuation standards and methodologies.

We believe targeting companies in this “middle market” will provide the greatest number

of opportunities for investment.

criteria are not intended to be exhaustive.

Any evaluation relating to the merits of a particular initial business combination may be

based, to the extent relevant, on these general guidelines as well as other considerations, factors and criteria that from time to time

our management may deem relevant.

In evaluating a prospective target business, we expect to conduct a thorough due diligence review that

will encompass, among other things, meetings with incumbent management and employees, document reviews and inspection of facilities,

as applicable, as well as a review of financial and other information that will be made available to us.

Business Combination

rules require that we must complete one or more business combinations having an aggregate fair market value of at least 80% of the value

of the assets held in the Trust Account at the time of our signing a definitive agreement in connection with our initial business combination.

Our board of directors will make the determination as to the fair market value of our initial business combination.

If our board of directors

is not able to independently determine the fair market value of our initial business combination, or if we are considering an initial

business combination with an entity that is affiliated with A.G.P., our sponsor, directors or officers, we will obtain an opinion from

an independent investment banking firm or another independent entity that commonly renders valuation opinions with respect to the satisfaction

of such criteria.

While we consider it unlikely that our board of directors will not be able to make an independent determination of

the fair market value of our initial business combination, it may be unable to do so if it is less familiar or experienced with the business

of a particular target or if there is a significant amount of uncertainty as to the value of a target’s assets or prospects.

Additionally,

pursuant to Nasdaq rules, any initial business combination must be approved by a majority of our independent directors.

are not prohibited from consummating an initial business combination with an entity that is affiliated with A.G.P., our sponsor, officers

or directors, provided, however, that, pursuant to our certificate of incorporation, if we do, we, or a committee of our independent

directors, must obtain an opinion from an independent investment banking firm or another independent entity that commonly renders valuation

opinions that our initial business combination is fair to our company from a financial point of view.

anticipate structuring our initial business combination so that the post-transaction company in which our public stockholders own shares

will own or acquire 100% of the equity interests or assets of the target business or businesses.

We may, however, structure our initial

business combination such that the post-transaction company owns or acquires less than 100% of such interests or assets of the target

business in order to meet certain objectives of the prior owners of the target business, the target management team or stockholders or

for other reasons, but we will only complete such business combination if the post-transaction company owns or acquires 50% or more of

the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be

required to register as an investment company under the Investment Company Act of 1940, as amended (the “Investment Company Act”).

Even if the post-transaction company owns or acquires 50% or more of the voting securities of the target, our stockholders prior to the

business combination may collectively own a minority interest in the post-transaction company, depending on valuations ascribed to the

target and us in the business combination transaction.

For example, we could pursue a transaction in which we issue a substantial number

of new shares in exchange for all of the outstanding capital stock, shares or other equity interests of a target.

In this case, we would

acquire a 100% controlling interest in the target.

However, as a result of the issuance of a substantial number of new shares, our stockholders

immediately prior to our initial business combination could own less than a majority of our issued and outstanding shares subsequent

to our initial business combination.

If less than 100% of the equity interests or assets of a target business or businesses are owned

or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what will be valued

for purposes of the 80% fair market value test.

If the business combination involves more than one target business, the 80% fair market

value test will be based on the aggregate value of all of the target businesses and we will treat the target businesses together as our

initial business combination for purposes of a tender offer or for seeking stockholder approval, as applicable.

the extent we effect our initial business combination with a company or business that may be financially unstable or in its early stages

of development or growth, we may be affected by numerous risks inherent in such company or business.

Although our management will endeavor

to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all significant

risk factors.

evaluating a prospective target business, we expect to conduct a thorough due diligence review which will encompass, among other things,

meetings with incumbent management and employees, document reviews, inspection of facilities, as well as a review of financial, operational,

legal and other information which will be made available to us.

time required to select and evaluate a target business and to structure and complete our initial business combination, and the costs

associated with this process, are not currently ascertainable with any degree of certainty.

Any costs incurred with respect to the identification

and evaluation of a prospective target business with which our initial business combination is not ultimately completed will result in

our incurring losses and will reduce the funds we can use to complete another business combination.

Further, our sponsor’s corporate

parent, Presidio Property Trust, Inc., is not formally constrained in any way from pursuing acquisitions or business combinations that

could be suitable transactions for us.

While we do not believe it is likely that Presidio Property Trust, Inc., will compete against

us for suitable acquisition targets based upon our management’s understanding of Presidio Property Trust, Inc.’s current

business model, it is possible that a potential business combination could arise that would be suitable for us and Presidio Property

Trust, Inc., giving rise to a conflict of interest.

If such a circumstance were to occur, we anticipate that our board of directors would

recuse any conflicted members of our management from taking any role in the consideration of such a transaction and, to the extent necessary,

retain appropriate qualified, non-conflicted personnel to advise us in accordance with the provisions of our certificate of incorporation

relating to transactions with affiliates.

Such an eventuality could increase the costs associated with evaluating a target business.

Our board of directors has established a code of ethics that includes a conflict of interest policy intended to ensure timely disclosure

and avoidance of activities and relationships that conflict with the interests of the Company.

Business Combination Process

evaluating prospective business combinations, we expect to conduct a thorough due diligence review process that will encompass, among

other things, meetings with incumbent management and employees, document reviews and inspection of facilities, as applicable, as well

as a review of financial and other information that will be made available to us.

are not prohibited from pursuing an initial business combination with a company that is affiliated with our sponsor, Murphy Canyon Acquisition

Sponsor, LLC, its corporate parent, Presidio Property Trust, Inc., or any of our officers or directors.

In the event we seek to complete

our initial business combination with a company that is affiliated with our sponsor, its corporate parent, or any of our officers or

directors, we, or a committee of independent directors, will obtain an opinion from an independent investment banking firm which is a

member of FINRA or an independent accounting firm that our initial business combination is fair to our company from a financial point

of our management team will directly or indirectly own founder shares and/or private placement units and, accordingly, may have a conflict

of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business

Further, each of our officers and directors may have a conflict of interest with respect to evaluating a particular business

combination if the retention or resignation of any such officers and directors were to be included by a target business as a condition

to any agreement with respect to our initial business combination.

However, subject to any pre-existing contractual or fiduciary obligations,

our sponsor and officers and directors will offer all suitable business combination opportunities within the real estate industry (and

other related sectors, as discussed elsewhere in this annual report) to us before any other person or company until we have entered into

a definitive agreement regarding our initial business combination or we have failed to complete our initial business combination by February

of our officers are employed by our sponsor’s corporate parent, Presidio Property Trust, Inc.

Our sponsor is continuously made

aware of potential business opportunities, one or more of which we may desire to pursue for an initial business combination.

Canyon Acquisition Sponsor, LLC, Presidio Property Trust, Inc., and each of our officers and directors presently have, and any of them

in the future may have additional, fiduciary or contractual obligations to other entities pursuant to which such officer or director

is or will be required to present a business combination opportunity.

Accordingly, if any of our officers or directors becomes aware

of a business combination opportunity which is suitable for an entity to which he or she has then-current fiduciary or contractual obligations,

he or she will honor his or her fiduciary or contractual obligations to present such business combination opportunity to such other entity.

We do not believe, however, that any fiduciary duties or contractual obligations of our sponsor, its corporate parent, and our officers

or directors will materially affect our ability to complete our initial business combination.

Our certificate of incorporation provides

that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered

to such person solely in his or her capacity as a director or officer of our company and such opportunity is one we are legally and contractually

permitted to undertake and would otherwise be reasonable for us to pursue, and to the extent the director or officer is permitted to

refer that opportunity to us without violating another legal obligation.

of Potential Initial Business Combination Targets

believe the industry experience and business relationships of our sponsor’s corporate parent, Presidio Property Trust, Inc., will

allow for a wide range of evaluation of targets for our business combination.

Our sponsor’s corporate parent, with many decades

of experience in the real estate industry and related industries, should be able to assist with accessing, and the vetting of, quality

While we are an entirely separate company from Presidio Property Trust, Inc., with a fully independent Board except for Jack

Heilbron and Adam Sragovicz, (and no overlapping officers aside from our CEO, Jack K.

Heilbron, our CFO, Adam Sragovicz, and our CAO,

Ed Bentzen), we expect to benefit from our sponsor’s corporate parent’s position in the industry.

network has provided our management team with a flow of referrals that have resulted in numerous transactions.

In the event that the

Conduit Business Combination is not consummated, we believe that the network of contacts and relationships of our management team will

provide us with an important source of acquisition opportunities.

In addition, we anticipate that target business candidates will be

brought to our attention from various unaffiliated sources, including investment market participants, private equity groups, investment

banks, consultants, accounting firms and large business enterprises.

of our management team and our independent directors directly or indirectly own founder shares and/or placement units following our initial

public offering and, accordingly, may have a conflict of interest in determining whether a particular target business is an appropriate

business with which to effectuate our initial business combination.

Further, each of our officers and directors may have a conflict of

interest with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors

was included by a target business as a condition to any agreement with respect to our initial business combination.

addition, each of our officers and directors presently has, and any of them in the future may have additional, fiduciary or contractual

obligations to other entities pursuant to which such officer or director is or will be required to present a business combination opportunity

to such entity.

As discussed above, however, we do not believe that the fiduciary duties or contractual obligations of our officers or

directors will materially affect our ability to complete our initial business combination.

certificate of incorporation provides that we renounce our interest in any corporate opportunity offered to any director or officer unless

such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of our company and such opportunity

is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue, and to the extent

the director or officer is permitted to refer that opportunity to us without violating another legal obligation.

as a Public Company

believe our structure will make us an attractive business combination partner to target businesses.

As a public company, we offer a target

business an alternative to the traditional initial public offering through a merger or other business combination with us.

an initial business combination, we believe the target business would have greater access to capital and additional means of creating

management incentives that are better aligned with stockholders’ interests than it would as a private company.

A target business

can further benefit by augmenting its profile among potential new customers and vendors and aid in attracting talented employees.

a business combination transaction with us, the owners of the target business may, for example, exchange their shares of stock in the

target business for our shares of Class A common stock (or shares of a new holding company) or for a combination of our shares of Class

A common stock and cash, allowing us to tailor the consideration to the specific needs of the sellers.

there are various costs and obligations associated with being a public company, we believe target businesses will find this method a

more expeditious and cost effective method to becoming a public company than the typical initial public offering.

The typical initial

public offering process takes a significantly longer period of time than the typical business combination transaction process, and there

are significant expenses in the initial public offering process, including underwriting discounts and commissions, marketing and road

show efforts that may not be present to the same extent in connection with an initial business combination with us.

once a proposed initial business combination is completed, the target business will have effectively become public, whereas an initial

public offering is always subject to the underwriters’ ability to complete the offering, as well as general market conditions,

which could delay or prevent the offering from occurring or could have negative valuation consequences.

Following an initial business

combination, we believe the target business would then have greater access to capital and an additional means of providing management

incentives consistent with stockholders’ interests and the ability to use its shares as currency for acquisitions.

Being a public

company can offer further benefits by augmenting a company’s profile among potential new customers and vendors and aid in attracting

talented employees.

we believe that our structure and our management team’s backgrounds make us an attractive business partner, some potential target

businesses may view our status as a blank check company, such as our lack of an operating history and our ability to seek stockholder

approval of any proposed initial business combination, negatively.

are an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, or the “Securities

Act”, as modified by the JOBS Act.

As such, we are eligible to take advantage of certain exemptions from various reporting requirements

that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not

being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley

Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from

the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments

not previously approved.

If some investors find our securities less attractive as a result, there may be a less active trading market

for our securities and the prices of our securities may be more volatile.

addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended

transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards.

words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise

apply to private companies.

We intend to take advantage of the benefits of this extended transition period.

will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of

the completion of our initial public offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which

we are deemed to be a large accelerated filer, which means the market value of our common stock that is held by non-affiliates exceeds

$700 million as of the prior June 30 th , and (2) the date on which we have issued more than $1.0 billion in non-convertible

debt securities during the prior three-year period.

Additionally,

we are a “smaller reporting company” as defined in Rule 10(f)(1) of Regulation S-K.

Smaller reporting companies may take

advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements.

We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our common stock held

by non-affiliates exceeds $250 million as of the end of the prior June 30 th , or (2) our annual revenues exceeded $100 million

during such completed fiscal year and the market value of our common stock held by non-affiliates exceeds $700 million as of the prior

funds available for an initial business combination in the amount of approximately $23 million after payment of $4,628,750 of deferred

underwriting fees, we offer a target business a variety of options such as creating a liquidity event for its owners, providing capital

for the potential growth and expansion of its operations or strengthening its balance sheet by reducing its debt or leverage ratio.

we are able to complete our initial business combination using our cash, debt or equity securities, or a combination of the foregoing,

we have the flexibility to use the most efficient combination that will allow us to tailor the consideration to be paid to the target

business to fit its needs and desires.

However, we have not taken any steps to secure third party financing and there can be no assurance

it will be available to us.

Our Initial Business Combination

are not presently engaged in, and we will not engage in, any operations for an indefinite period of time following our initial public

We intend to effectuate our initial business combination using cash from the proceeds of the offering and the sale of the placement

units, the proceeds of the sale of our shares in connection with our initial business combination (pursuant to backstop agreements we

may enter into), shares issued to the owners of the target, debt issued to bank or other lenders or the owners of the target, or a combination

of the foregoing.

We may seek to complete our initial business combination with a company or business that may be financially unstable

or in its early stages of development or growth, which would subject us to the numerous risks inherent in such companies and businesses.

our initial business combination is paid for using equity or debt securities, or not all of the funds released from the Trust Account

are used for payment of the consideration in connection with our initial business combination or used for redemptions of our Class A

common stock, we may apply the balance of the cash released to us from the Trust Account for general corporate purposes, including for

maintenance or expansion of operations of the post-transaction company, the payment of principal or interest due on indebtedness incurred

in completing our initial business combination, to fund the purchase of other companies or for working capital.

in the case of the Conduit Business Combination, we may seek to raise additional funds through a private offering of debt or equity securities

in connection with the completion of our initial business combination, and we may effectuate our initial business combination using the

proceeds of such offering rather than using the amounts held in the Trust Account.

In addition, we intend to target businesses larger

than we could acquire with the net proceeds of our initial public offering and the sale of the placement units, and may as a result be

required to seek additional financing to complete such proposed initial business combination.

Subject to compliance with applicable securities

laws, we would expect to complete such financing only simultaneously with the completion of our initial business combination.

case of an initial business combination funded with assets other than the Trust Account assets, our proxy materials or tender offer documents

disclosing the initial business combination would disclose the terms of the financing and, only if required by applicable law or stock

exchange requirements, we would seek stockholder approval of such financing.

There are no prohibitions on our ability to raise funds

privately, or through loans in connection with our initial business combination.

At this time, we are not a party to any arrangement

or understanding with any third party with respect to raising any additional funds through the sale of securities or otherwise.

of a Target Business and Structuring of our Initial Business Combination

rules require that we must complete one or more business combinations having an aggregate fair market value of at least 80% of the value

of the assets held in the Trust Account at the time of our signing a definitive agreement in connection with our initial business combination.

The fair market value of our initial business combination will be determined by our board of directors based upon one or more standards

generally accepted by the financial community, such as discounted cash flow valuation, a valuation based on trading multiples of comparable

public businesses or a valuation based on the financial metrics of M&A transactions of comparable businesses.

If our board of directors

is not able to independently determine the fair market value of our initial business combination, or if we are considering an initial

business combination with an entity that is affiliated with A.G.P., our sponsor, directors or officers, we will obtain an opinion from

an independent investment banking firm or another independent entity that commonly renders valuation opinions with respect to the satisfaction

of such criteria.

While we consider it unlikely that our board of directors will not be able to make an independent determination of

the fair market value of our initial business combination, it may be unable to do so if it is less familiar or experienced with the business

of a particular target or if there is a significant amount of uncertainty as to the value of a target’s assets or prospects.

do not intend to purchase multiple businesses in unrelated industries in conjunction with our initial business combination.

this requirement, our management will virtually have unrestricted flexibility in identifying and selecting one or more prospective target

businesses, although we will not be permitted to effectuate our initial business combination with another blank check company or a similar

company with nominal operations.

any case, we will only complete an initial business combination in which we own or acquire 50% or more of the outstanding voting securities

of the target or otherwise acquire a controlling interest in the target sufficient for it not to be required to register as an investment

company under the Investment Company Act.

If we own or acquire less than 100% of the equity interests or assets of a target business

or businesses, the portion of such business or businesses that are owned or acquired by the post-transaction company is what will be

taken into account for purposes of Nasdaq’s 80% fair market value test.

There is no basis for investors to evaluate the possible

merits or risks of any target business with which we may ultimately complete our initial business combination.

the extent we effect our initial business combination with a company or business that may be financially unstable or in its early stages

of development or growth we may be affected by numerous risks inherent in such company or business.

Although our management will endeavor

to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all significant

risk factors.

evaluating a prospective business target, we expect to conduct a thorough due diligence review, which may encompass, among other things,

meetings with incumbent management and employees, document reviews, interviews of customers and suppliers, inspection of facilities,

as well as a review of financial and other information that will be made available to us.

time required to select and evaluate a target business and to structure and complete our initial business combination, and the costs

associated with this process, are not currently ascertainable with any degree of certainty.

Any costs incurred with respect to the identification

and evaluation of a prospective target business with which our initial business combination is not ultimately completed will result in

our incurring losses and will reduce the funds we can use to complete another business combination.

of Business Diversification

an indefinite period of time after the completion of our initial business combination, the prospects for our success may depend entirely

on the future performance of a single business.

Unlike other entities that have the resources to complete business combinations with

multiple entities in one or several industries, it is probable that we will not have the resources to diversify our operations and mitigate

the risks of being in a single line of business.

In addition, we intend to focus our search for an initial business combination in a

single industry.

By completing our initial business combination with only a single entity, our lack of diversification may:

us to negative economic, competitive and regulatory developments, any or all of which may

have a substantial adverse impact on the particular industry in which we operate after our

initial business combination, and

us to depend on the marketing and sale of a single product or limited number of products or services.

Ability to Evaluate the Target’s Management Team

we intend to closely scrutinize the management of a prospective target business when evaluating the desirability of effecting our initial

business combination with that business, our assessment of the target business’ management may not prove to be correct.

the future management may not have the necessary skills, qualifications or abilities to manage a public company.

Furthermore, the future

role of members of our management team, if any, in the target business cannot presently be stated with any certainty.

The determination

as to whether any of the members of our management team will remain with the combined company will be made at the time of our initial

business combination.

While it is possible that one or more of our directors will remain associated in some capacity with us following

our initial business combination, it is unlikely that any of them will devote their full efforts to our affairs subsequent to our initial

business combination.

Moreover, we cannot assure you that members of our management team will have significant experience or knowledge

relating to the operations of the particular target business.

cannot assure you that any of our key personnel will remain in senior management or advisory positions with the combined company.

determination as to whether any of our key personnel will remain with the combined company will be made at the time of our initial business

an initial business combination, we may seek to recruit additional managers to supplement the incumbent management of the target business.

We cannot assure you that we will have the ability to recruit additional managers, or that additional managers will have the requisite

skills, knowledge or experience necessary to enhance the incumbent management.

May Not Have the Ability to Approve Our Initial Business Combination

may conduct redemptions without a stockholder vote pursuant to the tender offer rules of the SEC.

However, we will seek stockholder approval

of the Conduit Business Combination and, if the Conduit Business Combination is not consummated, of any future proposed initial business

combination if it is required by applicable law or applicable stock exchange listing requirements, or we may decide to seek stockholder

approval for business or other legal reasons.

Presented in the table below is a graphic explanation of the types of initial business

combinations we may consider and whether stockholder approval is currently required under Delaware law for each such transaction.

of Transaction

of stock of target not involving a merger with the company

of target into a subsidiary of the company

of the company with a target

Nasdaq’s listing rules, stockholder approval would be required for our initial business combination if, for example:

issue shares of Class A common stock that will be equal to or in excess of 20% of the number of shares of our Class A common stock

then outstanding (other than in a public offering);

of our directors, officers or substantial stockholders (as defined by Nasdaq rules) has a 5% or greater interest (or such persons

collectively have a 10% or greater interest), directly or indirectly, in the target business or assets to be acquired or otherwise

and the present or potential issuance of common stock could result in an increase in outstanding common stock or voting power of

issuance or potential issuance of common stock will result in our undergoing a change of control.

Purchases of our Securities

we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business

combination pursuant to the tender offer rules, our sponsor, initial stockholders, directors, officers, advisors or their affiliates

may purchase public shares or public warrants in privately negotiated transactions or in the open market either prior to or following

the completion of our initial business combination.

There is no limit on the number of shares our initial stockholders, directors, officers

or their affiliates may purchase in such transactions, subject to compliance with applicable law and Nasdaq rules.

However, they have

no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such

transactions.

If they engage in such transactions, they will not make any such purchases when they are in possession of any material

nonpublic information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange Act.

currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the Exchange

Act or a going-private transaction subject to the going-private rules under the Exchange Act;

however, if the purchasers determine at

the time of any such purchases that the purchases are subject to such rules, the purchasers will comply with such rules.

Any such purchases

will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers are subject to such reporting

September 22, 2023, a merger transaction between Conduit Pharmaceuticals Limited (“Old Conduit”), Murphy Canyon Acquisition

Corp (“MURF”) and Conduit Merger Sub, Inc., a Cayman Islands exempted company and a wholly owned subsidiary of MURF (“Merger

Sub”), was completed pursuant to the Agreement and Plan of Merger, dated November 8, 2022, as amended, (the “Merger Agreement”).

Pursuant to the terms of the Merger Agreement, at the closing, (i) Merger Sub merged with and into Old Conduit, with Old Conduit surviving

the merger as a wholly-owned subsidiary of MURF, and (ii) MURF changed its name from Murphy Canyon Acquisition Corp.

to Conduit Pharmaceuticals

(hereafter referred to, collectively with is subsidiaries as “Conduit”, the “Company”,

“we”, “us” or “our”, unless the context otherwise requires).

The common stock of the Company

commenced trading on The Nasdaq Global Market under the symbol “CDT” on September 25, 2023, and the Company’s warrants

commenced trading on The Nasdaq Capital Market under the symbol “CDTTW” on September 25, 2023 .

has developed a unique business model that allows it to act as a conduit to bring clinical assets from pharmaceutical companies and

develop new treatments for patients.

Our novel approach addresses unmet medical needs and lengthens the intellectual property for our

existing assets through cutting-edge solid-form technology and then commercializing these products with life science

are led by highly experienced pharmaceutical executives:

Freda Lewis-Hall, former Chief Medical Officer of Pfizer Inc., the Chair

of our Board of Directors, and Dr.

David Tapolczay, former Chief Executive Officer of the United Kingdom-based medical research charity

LifeArc, our Chief Executive Officer.

Our management team includes active senior clinicians who have an extensive understanding of the

pharmaceuticals market, which supports our strategy of developing clinical assets in a cost-efficient manner while focusing on therapeutic

efficacy and patient safety.

We believe that we can leverage the capabilities of our Cambridge laboratory facility and highly experienced team of solid-form experts to

extend or develop proprietary solid-form intellectual property for our existing and future clinical assets.

Our own intellectual property

portfolio comprises a 20-year patent pending solid-form compound, the AZD1656 Cocrystal (a HK-4 Glucokinase Activator), targeting a wide

range of autoimmune diseases.

Our pipeline research includes a number of compounds that serve as promising alternatives to existing clinical

assets currently marketed and sold by large pharmaceutical companies, which we have identified as having an opportunity to develop further intellectual property positions through solid-form technology.

connection with the funding and development of clinical assets, we evaluate and select the specific molecules to be developed and collaborate

with external contract research organizations (“CROs”) and Key Opinion Leaders (“KOLs”) to run clinical trials

that are managed, funded, and overseen by us.

We intend to leverage our comprehensive clinical and scientific expertise in order to facilitate

development of clinical assets through Phase II trials in an efficient manner by using CROs and third-party service providers.

also collaborate closely with disease specific KOLs to collectively assess and determine the most appropriate indications for all our

current and forthcoming assets.

believe that successful Phase II trials of the clinical assets in our pipeline will increase the value of our assets.

There is no assurance

that any clinical trials on the assets owned or licensed by us will be successful, however, following a successful Phase II clinical

trial, we would look to licensing opportunities with large biotech or pharmaceutical companies, typically for up-front milestone payments

and royalty income streams for the life of the asset patent.

We anticipate using any future royalty income stream to develop our asset

portfolio in combination with other potential sources of financing, including debt or equity financing.

of our proprietary owned patented clinical assets, we have an exclusive relationship and partnership with St George Street Capital

(“St George Street”), a biomedical charity based in the United Kingdom.

We have the option to fund 100% of the

development of clinical assets that were initially licensed to St George Street by AstraZeneca PLC (AZN.L)

(“AstraZeneca”).

AstraZeneca has conducted initial pre-clinical and, in some instances, clinical trials on these assets,

but has decided to license them for further development.

At present, the Company has not definitely determined whether to fund any of projects through St George Street,

although its ability to choose to remains at the present time.

Subject to the terms of the Global Funding Agreement and the project funding

agreements (described in further detail below), either we or St George Street may seek funding for projects from third parties.

addition to our patent pending solid-form compound targeting a wide range of autoimmune diseases, two assets which were licensed from

AstraZeneca to St George Street that may be developed by us include AZD5904 (a Myeloperoxidase Inhibitor) targeting idiopathic male

infertility and AZD1656 (a Glucokinase Activator) targeting autoimmune diseases or immunodeficient conditions including uveitis, premature

labor, renal transplant rejection, and Hashimoto’s thyroiditis.

the clinical assets have undergone initial pre-clinical and clinical testing conducted by AstraZeneca, we are able to use the safety

data generated in these clinical trials to assess which clinical assets to further develop and for which indications.

Through this relationship,

there are considerable active pharmaceutical ingredients (“APIs”) that were manufactured by AstraZeneca in conducting its clinical

trials available.

As a result, Conduit does not have to develop the API, which is often a time consuming and expensive process, and the

API already produced was subject to rigorous quality control measures.

Conduit is well positioned, and intends, to pursue additional relationships and/or partnerships with third parties for the licensing

of further assets which are currently deprioritized.

We plan to focus our efforts on developing clinical assets to address diseases that

impact a large population where there is no present treatment or the present treatment, carries significant unwanted side effects.

Initial Pipeline:

HK-4 Glucokinase Activator Cocrystal, AZD1656 and AZD5904

wholly own the intellectual property and the rights to further develop the solid-form patent pending Cocrystals of AZD1656 (AZD1656 Cocrystal

WO2023084313 - Patent Expires 02/09/2042) which we intend to target a wide range of autoimmune diseases.

our agreements, we have the exclusive rights to fund the development of clinical assets, AZD1656 and AZD5904, which are licensed to St

George Street by AstraZeneca, in five indications.

has undergone testing in a total of 20 Phase I clinical trials and five Phase II clinical trials conducted by AstraZeneca since 2008

and 19 of which were conducted in the U.S.

Additional information about those clinical trials is available at the U.S.

National Library

of Medicine’s website at www.clinicaltrials.gov (however, the information contained on or otherwise accessible through such website

is not part of this Annual Report).

has undergone testing in five Phase I clinical trials conducted by AstraZeneca, one of which was conducted in the U.S.

While a significant

amount of clinical trial data has already been generated for both AZD1656 and AZD5904, some of this data was generated outside of the

and accordingly may not be accepted by the FDA.

In the event that such data is not accepted by the FDA, additional clinical trials

may be required, which would result in additional costs and time to develop these clinical assets.

initial development plan is to conduct a Phase II clinical trial on the selected AZD1656 Cocrystal (which we wholly own the intellectual

property rights to), that we believe has the potential to treat a wide range of autoimmune diseases.

Should we choose to develop AZD1656

or AZD5904, that development would be subject to the terms of the Global Funding Agreement, described in more detail below.

We anticipate

developing our Initial Pipeline (which has already undergone pre-clinical and clinical trials) through the Phase II stage and then monetizing

such clinical assets through a license, royalty, or other transaction at this stage.

At this time, we do not expect that we will commercialize

any clinical assets or seek marketing approval from the FDA (or similar organizations) as we intend to enter into agreements with third

parties following Phase II clinical trials for each such clinical asset that would provide that such third party would pursue the further

development, commercialization, and marketing of such assets.

enable us to monetize our clinical assets, we, in partnership with CROs and KOLs, intend to conduct additional clinical trials on our

clinical assets in order to generate clinical data to support the further development of our clinical assets beyond the Phase II stage.

In the event successful clinical trial data is generated for a clinical asset with a particular indication, at that point, we will seek

to enter into a license, royalty, or other transaction with a third party whereby the third party would continue to pursue the development

of the clinical asset in Phase III clinical trials.

There is no assurance that any clinical trials on the assets owned or licensed by

us will be successful.

intend to use the income received from licensing clinical assets in our pipeline to fund the development of additional clinical assets,

which will allow us to use the existing income stream from clinical assets that have been licensed to fund our on-going operations, including

the development and commercialization of additional clinical assets, without having to rely solely on debt and/or equity financing.

Development Strategy

strategy is to generate value through the development of new medicines, or clinical assets, for patients where our research indicates

that there are not effective pharmaceutical treatments available or such existing pharmaceutical treatments are not adequate due to,

among other things, cost of such pharmaceuticals and side effects.

We are working to develop new medicines in diseases where competitive

treatments carry a high incidence of unacceptable side effects resulting in tolerability and compliance issues.

We aim to extend and

develop solid-form intellectual property on assets which are licensed from pharmaceutical companies or generated within our facility

in Cambridge, UK.

We believe that our Cambridge facility positions us at the nexus of scientific advancement, providing an environment

to drive cutting-edge research and development initiatives.

is evidence that promising solid-form candidates can supersede original pharmaceutical products.

We are currently in the process of developing

new solid-form intellectual property on clinical assets which we believe will serve as promising alternatives for existing products on

We believe that our expertise and utilization of solid-form technology can potentially enhance the efficacy, bioavailability,

solubility and delivery of existing products on the market.

Once a candidate has been identified and patented, we will fund and conduct

clinical trials through CROs.

previously indicated, our strategy also involves establishing strategic collaborations with globally recognized KOLs.

collaborate closely with disease specific KOLs to collectively assess and determine the most appropriate indications for all our

current and forthcoming assets.

This approach ensures that the selection of indications aligns with the KOLs’ insights, in

addition to our internal expertise, optimizing the development and success of Conduit’s diverse portfolio.

unique relationships allow us to bypass certain traditional hurdles for the development of clinical assets.

Through relationships with

St George Street, and we anticipate, subsequently with AstraZeneca, our Initial Pipeline has already undergone initial pre-clinical,

and, in some instances, clinical testing conducted by AstraZeneca, this enables us to use the safety data generated in the prior trials

in order to assess which assets to continue to develop.

We regularly assess our asset portfolio to identify potential risks and take

steps to mitigate those risks, such as the repurposing of assets, which reduces development costs and timelines, as the clinical asset

has already undergone safety and toxicity testing in humans, as well as extending the remaining patent life by up to 20 years on all

assets which are licensed.

prior preclinical and clinical studies conducted by AstraZeneca allow us to reduce the costs, expenses, and time in the development of

these assets by allowing us to continue the Phase Ib or Phase II stage, rather than the preclinical or Phase I stage, even if we are

investigating the assets for a new indication.

For example, if a clinical asset was subject to a Phase I trial, such clinical asset may

be advanced to a Phase II trial even if the clinical asset is being investigated for a different indication.

In addition, we have access

to API manufactured by AstraZeneca and as a result, should we use their formulation, we do not have to develop a route of manufacture

for the API, which is time consuming and expensive.

Funding Agreement – St George Street

and St George Street entered into an Exclusive Funding Agreement on March 26, 2021 (the “Global Funding Agreement”), pursuant

to which St George Street granted us the exclusive first right to provide to St George Street, or procure the provision of, all funding

for the performance of a drug discovery and/or development project in consideration for a share of the net revenue in respect of such

and St George Street currently have entered into five project funding agreements, which are subject to the terms of the Global Funding

Agreement, to develop certain clinical assets that have been licensed to St George Street by AstraZeneca.

The project funding agreements

for use in renal transplant,

for use in pre-term labor,

for use in Hashimoto’s thyroiditis,

for use in uveitis, and

for use in idiopathic male infertility.

present, the Company has not determined whether to fund any of these projects, although its ability to choose to remains at the present

Subject to the terms of the Global Funding Agreement and the project funding agreements, either we or St George Street may seek

funding for projects from third parties.

may be additional opportunities for us to partner with St George Street to fund the development of additional clinical assets in the

future, licensed from Astra Zeneca.

we choose to fund these projects through St.

George Street (“SGSC”), we are entitled to receive 100% of the Net Receipts (as defined in the

relevant project funding agreement) under each of the project funding agreements.

to its terms, the Global Funding Agreement remains effective in respect of each project until the expiration of the right of a party

to receive a share of the Net Revenue (as defined in the Global Funding Agreement) pursuant to the Global Funding Agreement.

Under certain

circumstances, St George Street may terminate a project (i) in the event of a material or persistent breach of the Global Funding Agreement

by us, subject to a cure period if the breach is capable of remedy, or (ii) in the event St George Street decides to cease development

of a project.

If an event of force majeure occurs and continues for a designated period of time, the innocent party may terminate the

Global Funding Agreement after a notice period.

party may terminate a project if a voluntary arrangement is proposed or approved or an administration order is made, or a receiver or

administrative receiver is appointed of any of the other party’s assets or undertakings or a winding-up resolution or petition

is passed (otherwise than for the purpose of solvent reconstruction or amalgamation, in particular with respect to any reorganization

of the structure of that party) or if any circumstances arise which entitle a court or a creditor to appoint a receiver, administrative

receiver or administrator or make a winding-up order or similar or equivalent action is taken against or by that other party by reason

of its insolvency or in consequence of debt.

Generally, each project funding agreement may be terminated by us if at any time St George

Street ceases the conduct of development or commercialization of the relevant products in accordance with the relevant development plan

for a designated period of time, provided that the termination is only effective with respect to the specified project and the Global

Funding Agreement continues in effect for all other projects.

They may also be terminated by either party upon written notice to other

party if the other party materially breaches the project funding agreement and does not fully cure the breach to the non-breaching party’s

satisfaction within 90 days.

Global Funding Agreement also contains customary representations and warranties.

Each party also agreed to keep secret and confidential

certain confidential information of the other party.

foregoing summary does not purport to be a complete description of all of the provisions of the Global Funding Agreement and related

project funding agreements and is qualified by reference to the full text of the Global Funding Agreement and the project funding agreements,

which are filed as exhibits to this Annual Report, and which are incorporated by reference in their entirety.

Agreement – St George Street and AstraZeneca

August 2019, St George Street entered into a license agreement with AstraZeneca (the “AZ License Agreement”), pursuant to

which AstraZeneca granted an exclusive worldwide license to St George Street, under certain AstraZeneca patents and know-how, to exploit

the pharmaceutical compounds known individually and together as AZD5904 (Myeloperoxidase Inhibitor) and AZD1656 (Glucokinase Activator).

The AZ License Agreement also included any additional compounds to be developed by St George Street and any product that is comprised

of or contains any such licensed compound pertaining to the field of idiopathic male infertility for the licensed compound AZD5904 and

in the field of renal transplant for the licensed compound for AZD1656.

the AZ License Agreement, for a period of 60 days following AstraZeneca’s receipt of a proof of concept study for any licensed

compound, AstraZeneca retains an exclusive right of first negotiation to transfer all development, commercialization, or other ongoing

planned activities related to such licensed compound, to AstraZeneca or any of its affiliates, and to undertake future exploitation of

such licensed compound.

Subject to the foregoing negotiation right, St George Street has the right and obligation to develop each licensed

compound at its sole cost and expense in accordance with the development plan set forth in the AZ License Agreement, and the right to

grant sublicenses to its affiliates and other persons with respect to each licensed compound.

Any sublicense shall be consistent with,

and expressly made subject and subordinate to, the terms and conditions of the AZ License Agreement, and St George Street shall cause

each sublicensee to comply with the applicable terms and conditions of the AZ License Agreement.

The development plan for each licensed

compound shall be managed by a joint coordination committee consisting of representatives from each party to the agreement.

George Street is required to pay AstraZeneca a share of any revenue payable to St George Street by any sublicensee according to the relevant

sublicense (the “Sublicense Revenue”), which shall be calculated based on the amounts payable to St George Street by the

sublicensee gross of tax, and shall include any upfront, milestone, or royalty payments payable.

The percentage of Sublicense Revenue

payable to AstraZeneca is 60% for Sublicense Revenue that is less than $10 million;

50% for Sublicense Revenue that is equal to or greater

than $10 million but less than $15 million;

and 40% for Sublicense Revenue that is equal to or greater than $15 million.

term of the AstraZeneca License Agreement commences on the effective date of that agreement and, unless earlier terminated in accordance

therewith, continues until the date of expiration of the last royalty term for the last licensed product.

Following the expiration (but

not earlier termination) of the royalty term for a licensed product in a country, the license grant set forth in this agreement shall

become non-exclusive, fully-paid, and irrevocable for such licensed product.

AZ Agreement is terminable by either party if the other party is in material breach of the agreement, and such breach has not cured the

breach 90 days of notice (or 10 days of notice with respect to a payment breach).

may immediately terminate the agreement, including the rights of any sublicensees, upon written notice if St George Street or any of

its affiliates or sublicensees, anywhere in the territory, institutes, prosecutes or otherwise participates in any claim, demand, action

or cause of action for declaratory relief, damages or any other remedy or for an enjoinment, injunction or any other equitable remedy

alleging that any claim in an AstraZeneca patent is invalid, unenforceable or otherwise not patentable or would not be infringed by St

George Street’s activities absent the rights and licenses granted under the agreement.

AstraZeneca may also terminate the agreement

upon 30 days’ prior written notice if St George Street ceases development of all licensed compounds and all licensed products and

a licensed product is not being commercialized in the territory by or on behalf of St George Street.

George Street may terminate its activities under the agreement for convenience, on a project-by-project basis, upon reasonable notice

to AstraZeneca.

St George Street may also cease its activities under any development plan of a licensed compound if the joint commercialization

committee determines that it is inappropriate to continue such plan for scientific, safety, or for ethical reasons, or that a licensed

product no longer meets an unmet medical need.

2020, St George Street and AstraZeneca entered into an amendment to the AZ License Agreement to add Covid-19 to the field for

licensed compound AZD1656.

St George Street and AstraZeneca entered into a second amendment and a third amendment to the AZ License

The second amendment, dated April 9, 2020, to the AZ

License Agreement added Schedule 1.36(a) to the AZ License Agreement, which describes additional terms and conditions that apply

only to the parties with respect to Covid-19 for the licensed compound AZD1656.

The third amendment, dated April 27, 2021, added

Hashimoto’s thyroiditis, uveitis, preterm labor, and Covid-19 to the field for AZD1656 and added Schedule 1.42(a) to the AZ

License Agreement, which describes additional terms and conditions that apply to the parties (i) only with respect to

Hashimoto’s thyroiditis, uveitis, and preterm labor for the licensed compound AZD1656, and (ii) with respect to all other

indications and Licensed Compounds (as defined in the AZ License Agreement) as set forth in the AZ License Agreement, except with

respect to Covid-19 for AZD1656, for which Schedule 1.36(a) of the AZ License Agreement applies.

The terms and conditions contained

in the second and third amendments to the AZ License Agreement also set forth the obligations and responsibilities of the parties

regarding supply of study drugs, conducting studies, and other matters.

Biotechnology Industry

global biotechnology industry comprises a large range of companies engaged in diverse activities, such as biopharmaceutical development.

The industry companies also span across a wide spectrum of operational models.

Some small, dedicated biotechnology companies are research

and development (“R&D”) intensive and operate primarily with venture capital, grants, initial public offerings and collaborative

Conversely, large, diversified companies hold significant in-house R&D resources and well-established production, commercialization,

and distribution processes.

believes that the global biotechnology market was valued at $1.55 trillion in 2023 and is projected to grow at a compound annual growth

rate (“CAGR”) of 13.96% from 2024 to 2030.

The market is driven by strong government support through initiatives aimed at

the modernization of regulatory framework, improvements in approval processes and reimbursement policies, as well as standardization

of clinical studies.

investor confidence has fallen during the period, which served to somewhat subdue revenue growth.

However, global investment in R&D

has grown strongly and consistently in recent years, with much of this funding funneled into medical biotechnology development, aimed

at providing better care for the aging global population, thus bolstering industry revenue.

Pharmaceutical Industry

the previous five years, pharmaceutical companies have benefited from an aging population in developed economies and a growing middle

class in emerging economies.

Many companies have also tapped into regional demand for pharmaceuticals that may differ from developed

markets and have expanded their global presence to tap into regional market needs.

cliffs have continued to hamper industry revenue during the current period.

When drugs lose patent exclusivity, the market is inundated

with low-cost generic drugs.

As manufacturers contend with more price-based competition from generics, many operators respond by lowering

their R&D expenditures, which limits the industry’s drug pipelines.

Additionally, many governments and health insurance organizations

have reduced their drug reimbursements to control healthcare costs, such as implementing incentives for patients to use generic drugs.

forward, revenue is forecast to grow an annualized 3.2% to $1.3 trillion over the next five years amid an anticipated persistence of

global demand for industry products.

Initial Pipeline:

AZD1656 and AZD5904

wholly own the intellectual property and the rights to further develop the solid-form patent pending Cocrystals of AZD1656 (AZD1656 Cocrystal

WO2023084313 - Patent Expires 02/09/2042) which we intend to target a wide range of autoimmune diseases.

we currently have the exclusive rights to develop clinical assets, AZD1656 and AZD5904, which are licensed

to St George Street by AstraZeneca, in five indications.

to our relationship with St George Street, we intend to leverage the data generated from these historical trials in order to investigate

the efficacy and safety to AZD1656 to potentially treat HT, uveitis, preterm labor, and renal transplant patients, and the efficacy and

safety of AZD5904 to treat IMI.

AZD1656 has undergone testing in a total of 20 Phase I clinical trials and five Phase II clinical trials

conducted by AstraZeneca since 2008 and 19 of which were conducted in the U.S.

Additional information about those clinical trials is

available at the U.S.

National Library of Medicine’s website at www.clinicaltrials.gov (however, the information contained on or

otherwise accessible through such website is not part of this Annual Report).

AZD5904 has undergone testing in five Phase I clinical

trials conducted by AstraZeneca, one of which was conducted in the U.S.

While a significant amount of clinical trial data has already

been generated for both AZD1656 and AZD5904, some of this data was generated outside of the U.S.

and accordingly may not be accepted

In the event that such data is not accepted by the FDA, additional clinical trials may be required, which would result in

additional costs and time to develop these clinical assets.

table below sets forth the pre-clinical or clinical trials that have been conducted by or at the direction of AstraZeneca to date on

the particular clinical asset.

All of these pre-clinical or clinical trials were conducted by AstraZeneca prior to AstraZeneca entering

into its license agreement with St George Street.

None of the pre-clinical or clinical trials that have taken place to date were conducted

by or at the direction of the Company.

of Development

Phase I and Phase II

United States

Transplant Patients with Type II Diabetes

Phase I and Phase II

Male Infertility

United States

following table sets forth the current asset development stage for each of AZD1656 and AZD5904 for the indications noted below.

at Their Present Stage of Readiness (1)

Stage of Development to be Conducted by Conduit

Exit Stage for Monetization (3)

Thyroiditis & Grave’s Disease

completion of Phase II

Male Infertility

completion of Phase II

that the asset is considered ready for this Phase.

For example, if an asset is listed under Phase II, this means that the asset has

already completed Phase I trials and is therefore considered Phase II ready.

do not intend to provide additional funding to develop AZD1656 for Covid-19.

However, we are entitled to a portion of the revenues

in the event that AZD1656 is further developed by St George Street (or another third party) and is monetized, whether through a

sale, license agreement, or otherwise.

the stage at which we currently anticipate that we will seek to monetize such assets through a license, royalty, or other transaction

with a third party, who would then seek to continue the development of such clinical asset until its potential commercialization

after Phase III clinical trials were completed.

There is no assurance that we will be able to monetize such assets by entering into

a license, royalty, or other transaction with a third party.

In addition, there is no assurance that any of the clinical assets licensed

or owned by us will successfully complete Phase II or Phase III clinical trials or obtain regulatory approvals, or that such assets

will be monetized or commercialized.

was subject to Phase I and Phase IIa clinical trials consisting of 23 studies in 526 subjects, 446 of whom were dosed with AZD1656.

than for the intended effect of lowering glucose, there were no difference identified between the AZD1656-treated and placebo-treated

subjects relating to adverse events.

All of cases where low glucose levels were identified were managed by the patients and resolved.

Based on these clinical trials, no safety signals were identified regarding vital signs, safety laboratory values or electrocardiogram

No deaths occurred in any studies with healthy volunteers or patients.

AZD1656 was also subject to Phase II clinical trials consisting

of two studies where AZD1656 was given to patients with Type 2 Diabetes Mellitus for four months or longer.

In total, there were 754

randomized patients, 516 of whom were exposed to AZD1656 (316 men and 200 women).

There were no clinically important differences in the

adverse effects profile between the AZD1656 treatment group and the AZD1656 placebo group and there were no deaths in either of the Phase

The efficacy of AZD1656 as a potential treatment for diabetes was also assessed during the Phase II clinical trials, including

whether the efficacy was statistically significant.

Clinically relevant and statistically significant reductions in HbA1c were seen after

however, the initial improvement in glucose control deteriorated over time and the change in HbA1c levels after four months

were not statistically different than the placebo.

This decreasing efficacy over time was seen in both Phase II studies.

was subject to five Phase I clinical studies, with a total of 1181 subjects being exposed to AZD5904.

Single doses of up to 1200 mg and

multiple doses of up to 325 mg for up to three times per day for 21 days have been administered as an oral solution in the completed

clinical studies.

In addition, single doses of up to 1400 mg and multiple doses of up to 600 mg for 10 days have been administered as

an “extended release” formulation.

The data from these studies did not identify any expected adverse drug reactions for AZD5904

and no adverse effects were reported as related to AZD5904.

In addition, the data revealed no clinically significant changes in blood

pressure or pulse rate related to AZD5904 and electrocardiogram data was within the physiological range for the population studied.

effect of AZD5904 on human myeloperoxidase, which we refer to as MPO, activity was evaluated by determination in an ex vivo assay of

MPO activity in plasma.

The correlation between MPO activity and plasma concentrations was assessed for single and multiple doses of

A relationship between plasma concentrations of AZD5904 and MPO activity was demonstrated, which indicates that AZD5904 may

be an effective inhibitor of MPO activity in humans.

However, Phase I trials do not assess statistical significance so additional Phase

II trials are necessary to determine if the inhibition of MPO activity as a result of AZD5904 is statistically significant.

in Autoimmune Diseases

diseases refers to a broad group of diseases and conditions that arise from an abnormal immune response to a functioning body part.

example, autoimmune diseases may arise from an abnormal immune response of major organs (i.e., the heart, kidneys, bladder, liver, lungs,

and skin), glands (i.e., the adrenal gland, pancreas, thyroid, or reproductive organs), digestive system, and tissue (i.e., blood, connective

tissue, muscle, eyes, ears, or vascular system).

Management believes that there are over 80 types of autoimmune diseases that have been

identified, including lupus, celiac disease, multiple sclerosis, rheumatoid arthritis, psoriasis, and inflammatory bowel disease.

diseases are often difficult to diagnose and often the cause of the disease is not known.

is estimated by the American Autoimmune Related Diseases Association (“AARDA”) that as many as 50 million Americans are living

with an autoimmune disease – at a cost of $86 billion a year and there is presently no totally effective treatment known to management.

The currently available treatments for autoimmune diseases include non-steroidal anti-inflammatory drugs (“NSAIDS”) or immune

suppressants.

These treatments often improve the symptoms but ultimately do not cure the disease and often involve side effects.

is a highly specific glucokinase activator;

originally developed by AstraZeneca for use in diabetes mellitus.

It has now been tested

in over 1,000 patients with both type I and II diabetes and no significant safety concerns have been raised.

It was most recently

tested in the ARCADIA Phase II trial in diabetic patients hospitalized with Covid-19 on the basis of new research into

immunometabolic modulation.

We believe that AZD1656 may be used to activate a patient’s own immune system in order to limit

harmful inflation.

We have identified several autoimmune diseases, which reflects good market potential, with a high level of need

that may be treatable using AZD1656.

We believe that our clinical assets have the potential to treat numerous autoimmune diseases.

We intend to initially focus on the indications below in order to maximize the commercial potential of our clinical

Hashimoto’s Thyroiditis Disease

Thyroiditis (“HT”) is an autoimmune disease involving the improper functioning of the thyroid.

HT is an autoimmune disease

driven by T cells, which are one of the types of white blood cells, where the immune system attacks the thyroid gland.

believes that HT is the most prevalent autoimmune thyroid disease worldwide and anticipates that the prevalence of HT will continue to

increase due to rising obesity and the rising prevalence of other autoimmune disorders that made patients more susceptible to HT.

current treatment for HT involves hormone replacement therapy with levothyroxine.

However, determining the appropriate dose for each

individual is complex with the individual needing to continue hormone replacement therapy for the rest of his or her life while still

suffering with some symptoms of HT.

Under the current treatment, the patient is monitored by measuring Thyroid-Stimulating Hormone levels

In addition, this difficulty in titrating the appropriate dose of levothyroxine leads to a high burden of medical

appointments and the risk of development of comorbidities, including cardiovascular disease.

believes that the global thyroid gland disorders treatment market was valued at $2.23 billion in 2021 and is set to grow from $2.37 billion

in 2023 to $2.95 billion by 2030, at a CAGR of 3.17% during the forecast period (2023-2030).

was previously subject to preclinical and clinical trials, including Phase I and Phase II trials, conducted by AstraZeneca relating to

its potential to treat type 2 diabetes.

As of the date hereof, no preclinical or clinical trials have been conducted on the use of AZD1656

intend to conduct further trials on AZD1656 relating to HT.

We plan to conduct further research on AZD1656 to investigate if AZD1656

is a treatment option for HT, including investigating any negative side effects in the use of AZD1656 as compared to the currently available

treatment options for HT.

We, in connection with a CRO, have prepared clinical trial protocols for the use of AZD1656 in HT in a Phase

II clinical trial:

a Phase II, randomized, double-blind, placebo-controlled study to evaluate the efficacy and safety of AZD1656 in patients

with HT with an anticipated enrollment of 200 patients.

Pharmaceutical

companies typically find market entry for HT clinical assets challenging due to the manufacturing complexities and careful consideration

of manufacturing product, which are usually patented or trade secrets of companies.

Due to its relationship with St George Street, we

have sufficient API to conduct Phase II clinical trials on AZD1656 for the treatment of HT.

There can be no assurances that the clinical

trials that we intend to conduct on AZD1656 to treat HT will be successful.

is an autoimmune disease of the eye that refers to a number of intraocular inflammatory conditions and involves the swelling of the uvea,

the colored portion of the eyes.

Management believes that in the U.S.

uveitis causes an estimated approximately 30,000 new cases of blindness

per year and may be the third leading cause of blindness worldwide.

3 Unlike other leading causes of blindness, uveitis is

particularly prevalent in younger working-age people.

Uveitis has a prevalence of around 40-100 per 100,000 persons, and can be subdivided

into specific conditions, so it qualifies as a rare disease.

4 We believe that a treatment for non-infectious uveitis would

be eligible for orphan drug designation, which provides for market exclusivity of 10 years in the European Union and seven years in the

United States.

The global uveitis market size was valued at $456 million in 2022 and is estimated to reach $837 million by 2030, growing

at a CAGR of 4.8% during the forecast period (2023-2030).

“Epidemiology

of uveitis in a US population-based study,” by Marta Mora Gonzalez, Marisee Masis Solano, Travis C.

Porco, Catherine E.

Acharya, Shan C.

Lin, and Matilda F.

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5904090/)

“Epidemiology

and risk factors in non-infectious uveitis:

a systemic review,” by Katherine A.

and Anne-Marie Lobo-Chan (Link:

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8461013/ ).

which can cause elevated intraocular pressures and cataracts, are often used to manage uveitis.

Most patients develop elevated intraocular

pressures and/or cataracts after long-term treatment with steroids and may have to switch therapies or the disease may become resistant

to steroid treatment.

Biological drugs have been developed but these are expensive and not always effective as many patients still go

blind every year.

was previously subject to preclinical and clinical trials, including Phase I and Phase II trials, conducted by AstraZeneca relating to

its potential to treat type 2 diabetes.

As of December 31, 2023, no preclinical or clinical trials have been conducted on the use of

AZD1656 to treat uveitis.

We, in connection with a CRO, have prepared clinical trial protocols relating to the use of AZD1656 in uveitis

in a Phase II clinical trial:

a Phase II, double-blind, placebo-controlled study to evaluate the efficacy and safety of ADZ1656 in patients

with non-infectious uveitis with an anticipated enrollment of 120 patients.

We intend to conduct further trials on AZD1656 in order to

investigate if AZD1656 is an option to treat uveitis without the side effects involved in the current treatment using steroids.

can be no assurances that the clinical trials that we intend to conduct on AZD1656 to treat uveitis will be successful.

Transplant Failure

transplant failure occurs when a patient’s body rejects a kidney transplant and involves the gradual decrease in kidney function

that starts following a kidney transplant surgery and often results in organ failure.

According to the United Network for Organ Sharing,

there are around 93,000 patients waiting for a kidney transplant in the U.S.

The United Network for Organ Sharing reports that the prevalence

of chronic kidney disease is rising due to other conditions, such as diabetes, and as a result of an aging population.

The Organ Procurement

& Transplantation Network reported that during 2023, over 46,000 individuals received an organ transplant and all-time volume records

were set for kidney transplants of 27,329.

6 Management believe that the global kidney transplant market is estimated to be

valued at $5.8 billion in 2021 and is expected to register a CAGR of 4.2% through to 2033.

current treatment for renal transplant failure involves using immunosuppressives to suppress the patient’s immune system, which

has numerous side effects including high blood pressure, weight gain, diabetes, dyslipidemia and some cancers.

Malignancy, which refers

to uncontrolled growth and division of abnormal cells, is one of the most common causes of death in kidney transplant recipients.

Immunosuppressives

are a major contributing factor to malignancy.

was previously subject to preclinical and clinical trials, including Phase I and Phase II trials, conducted by AstraZeneca relating to

its potential to impact on renal transplant patients with type 2 diabetes.

We believe that AZD1656 may facilitate the immune system in

tolerating or accepting the transplanted kidney.

We intend to conduct Phase II studies on AZD1656 to investigate if AZD1656 decreases

the rejection in kidney transplant patients.

We are currently working with a CRO to prepare protocols for clinical trials to investigate

the use of AZD1656 to reduce the rejection in kidney transplant patients.

There can be no assurances that the clinical trials that we

intend to conduct on AZD1656 to treat renal transplant patients will be successful.

labor refers to labor that begins before 37 weeks of pregnancy.

Preterm labor may result in premature birth and the earlier the

premature birth happens, the greater the of health risks for the baby.

According to an article published in PubMed, globally, 14.84

million babies were preterm births.

8 Preterm labor is a condition that may result in the death of the baby and/or the

There is no effective treatment for preterm labor that is known to us.

Management believes that approximately 60,000 babies

per year in the U.K.

according to the Mums and Midwives Awareness Academy and approximately 380,000 per year in the U.S.

preterm according to the Preeclampsia Foundation.

Globally, prematurity is the leading cause of death in children under the age of

five years, and preterm labor rates are increasing.

For example, according to the Centers for Disease Control and Prevention, in the

U.S., the preterm labor rate rose for the fifth straight year in 2019.

For 2021, the preterm labor rate in the U.S.

approximately 10.5%.

According to the World Health Organization, the rates of preterm labor by country range from approximately 5%

to approximately 18%.

Management believe that the global preterm birth prevention and management market size is estimated to stand

at $1.70 billion in 2024.

As both developed and developing countries embrace therapeutics for preventing and managing preterm birth,

the market is expected to exceed a valuation of $4.49 billion by 2034, registering a CAGR of 10.2%.

Preterm labor results in

increases costs, both higher costs of labor and neonatal care, and often results in additional medical care during the child’s

lifetime for those that are born prematurely.

Accordingly, the reduction in preterm labor would have a significant health and

economic impact.

https://optn.transplant.hrsa.gov/news/continued-increase-in-organ-donation-drives-new-records-in-2023-

new-milestones-exceeded/

https://pubmed.ncbi.nlm.nih.gov/36964535/

was previously subject to preclinical and clinical trials, including Phase I and Phase II trials, conducted by AstraZeneca relating to

its potential to treat type 2 diabetes.

As of the date hereof, no preclinical or clinical trials have been conducted on the use of AZD1656

to treat preterm labor.

Specially, we intend to conduct a Phase II study on the use of AZD1656 to assist in maintaining pregnancy beyond

in connection with a CRO, have prepared clinical trial protocols relating to the use of AZD1656 in preterm labor in a Phase II clinical

a multicenter, randomized, double-bind, placebo-controlled Phase II clinical trial evaluating the efficacy and safety of AZD1656

in the prevent of preterm labor with an anticipated enrollment of 200 patients.

In the event that AZD1656 is shown to be able to effectively

treat preterm labor (of which there can be no assurance), AZD1656 could potentially maintain a pregnancy for longer, reduce the number

of babies that are born prematurely and reduce the costs associated with preterm labor.

There can be no assurances that the clinical

trials that we intend to conduct on AZD1656 to treat preterm labor will be successful.

drugs for preterm labor are only used for about 24-48 hours once a woman is already in labor, so that the patients can be treated with

corticosteroids to promote the functioning of the baby’s lungs.

These drugs are unable to sustain a pregnancy beyond this and are

not safe to be used for prolonged periods.

We believe that, in the event that AZD1656 is shown to be able to effectively treat preterm

labor (of which there can be no assurance), AZD1656 could potentially maintain a pregnancy for longer, reduce the number of babies that

are born prematurely and reduce the costs associated with preterm labor.

in Infectious Diseases – Covid-19 and Long Covid

is a disease caused by a virus named SARS-CoV-2, which refers to severe acute respiratory syndrome coronavirus 2, and is a strain of

the coronavirus, which is a respiratory illness.

We continue to have an economic interest in AZD1656 for treatment of Covid-19 and have

included AZD1656 for the treatment of Covid-19 in our pipeline.

However, at this time, we do not intend to provide additional funding

to develop AZD1656 for Covid-19.

However, we are entitled to a portion of the revenues in the event that AZD1656 is further developed

by St George Street or other third parties and is monetized, whether through a sale, license agreement, or otherwise.

While we do not

intend to further fund the research and development of the use of AZD1656 in Covid, we retain an economic interest in the clinical asset

and if such asset is further developed through funding provided by other third parties, then we may be entitled to receive compensation

from those development activities conducted by third parties.

There can be no assurances that AZD1656 will be further developed or commercialized

for the treatment of Covid-19 or Long Covid.

in Idiopathic Male Infertility

Male Infertility (“IMI”) is defined as failure of a couple to conceive after one year of regular sexual intercourse where

the physical examination and endocrine laboratory testing of the male are normal, but semen analysis reveals sperm abnormalities.

Approximately

15% of couples globally, or 48.5 million couples globally, are infertile and that 30% of infertility cases can be attributed solely to

the female, 30% can be attributed solely to the male, 30% can be attributed to a combination of both partners, and 10% of cases have

an unknown cause.

8 According to the National Library of Medicine, male infertility accounts for 30% of infertility cases and

its prevalence in the general population approximately ranges between 9 and 15%.

9 Our management believes that male sperm

counts have declined in Western men and will continue to decline due, in part, to increasing rates of diseases such as obesity and diabetes

that can reduce fertility.

affects families worldwide and is inherent in problems of reproduction.

Currently, there are no specific treatments for male infertility,

and we are not aware of any other company that is developing a treatment for male infertility.

There are no approved pharmacotherapies

for idiopathic male infertility.

Lifestyle medicine and unproven supplements are often used.

Intracytoplasmic sperm injection, a form

of in vitro fertilization, is the only treatment currently available for male infertility.

This process is not a treatment of male infertility

but rather is an alternative means of fertilizing the egg.

In vitro fertilization places a significant burden on the woman as it requires

the induction of egg production and harvesting of eggs.

In vitro fertilization is costly and time consuming and has modest success rates.

Management believes that the male infertility market size is expected to grow from $3.72 billion in 2023 to $4.42 billion by 2028, at

a CAGR of 3.54% during the period 2023-2028.

unique view on male infertility around the globe,” by Ashok Agarwal, Aditi Mulgund, Alaa Hamada, and Michelle Renee Chyatte

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4424520/).

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC10057583/#B1-jcm-12-02366

sperm are unable to successfully fertilize eggs due to factors including impaired motility, impaired ability to penetrate and/or DNA

damaged sperm that is unable to form a viable fetus.

Our development pipeline for AZD5904 includes a potent, irreversible inhibitor of

human myeloperoxidase, which we refer to as MPO, that has the potential to treat idiopathic male infertility.

was investigated by AstraZeneca for the treatment of idiopathic male infertility in Phase I trials, which confirmed the suitability to

progress to Phase II trials.

While AZD5904 is Phase II ready, our management intends to conduct a Phase Ib “proof of mechanism”

trial to verify AZD5904 has the intended biological effect in semen (as well as in blood) prior to commencing a Phase II trial for the

use of AZD5904 to treat idiopathic male infertility.

Specifically, our management intends to conduct the Phase Ib study in order to see

if the trial will provide evidence that AZD5904 has its intended effect of inhibiting myeloperoxidase and reduce oxidative stress in

We believe that AZD5904 has the potential to be used to create a tablet that could treat IMI and would be the first drug developed

to directly treat IMI.

We, in connection with a CRO, have prepared clinical trial protocols relating to the use of AZD5904 to treat IMI

in a Phase Ib clinical trial:

a Phase Ib, randomized, double-blind, placebo-controlled, dose escalation study to evaluate the safety,

tolerability and preliminary efficacy of AZD5904 in adult men with IMI with an anticipated enrollment of 60 patients, and a Phase II

clinical trial:

a Phase II, randomized, double-blind, placebo-controlled clinical trial to evaluate the efficacy and safety of AZD5904

in the treatment of IMI with an anticipated enrollment of 200 patients.

There can be no assurances that the clinical trials that we intend

to conduct on AZD5904 to treat idiopathic male infertility will be successful.

Clinical Assets

part of our strategic planning process, we intend to explore the efficacy of using AZD1656 to treat other diseases.

Specifically, we

intend to conduct research on whether AZD1656 may be effective treating other autoimmune diseases, include systemic lupus erythematosus,

ANCA vasculitis, rheumatoid arthritis, multiple sclerosis, motor neuron disease, and amyotrophic lateral sclerosis.

As part of our strategic

planning process, we intend to explore the efficacy of using AZD1656 to treat other diseases.

We also plan to further develop the co-crystals

that we own from our prior development work on AZD1656, including to research the ability of the co-crystals developed from AZD1656 to

treat psoriasis, Crohn’s disease, lupus, sarcoidosis, diabetic wound healing, idiopathic pulmonary fibrosis, and nonalcoholic steatohepatitis.

In addition, we currently intend to explore the use of AZD5904 for the treatment of glioma.

Due to our on-going relationship with St

George Street, from time to time, there may be additional clinical assets that we are able to partner with St George Street to develop.

We expect to seek to develop other clinical assets and determine based on pre-clinical and clinical data which clinical assets in order

to determine which assets in our pipeline to continue to develop.

Accordingly, we believe that our management team will be able to effectively

allocate resources to the development of clinical assets that we believe show the most promise.

However, there can be no guarantee that

the clinical trials conducted by us of our clinical assets will be successful.

If we are unable to commercialize our clinical assets

or experience significant delays in doing so, our business will be materially harmed.

Manufacturing

do not currently own or operate any facilities to formulate, manufacture, test, store, package, or distribute any of the clinical assets

that we are developing or may seek to develop and do not currently have the capabilities to conduct such activities.

We currently plan

to rely on third parties to manufacture, store, and test the clinical assets that we seek to develop, including material manufactured

originally by AstraZeneca.

We will depend on third-party suppliers and manufacturing organizations for all our required raw materials

and drug substance and to formulate, manufacture, test, store, package, and distribute clinical trial quantities of clinical assets that

we may seek to develop.

We plan to continue to use third-party suppliers and manufacturing organizations and we anticipate expanding

our network of third-party suppliers and manufacturing organizations as our operations expand.

have internal personnel and utilize consultants with extensive technical, manufacturing, analytical, and quality experience to oversee

our contract manufacturing and testing activities.

Manufacturing is subject to extensive regulations that impose procedural and documentation

requirements, including, but not limited to, record-keeping, manufacturing processes and controls, personnel, quality control, and quality

Our systems, procedures, and contractors are required to be in compliance with these regulations and are assessed through

regular monitoring and formal audits.

and Development

research and development activities have included developing co-crystals of AZD1656 to increase patent life.

Some of this work was completed

by third-party CROs but all intellectual property is retained by us.

The successful completion of clinical trials increases the value

of clinical assets and may lead to the commercialization and/or licensing of such assets to other pharmaceutical companies.

no assurance that any clinical trials on the assets owned or licensed by us will be successful or any assurance our co-crystal development

will be successful.

do not intend to further fund the research and development of the use of AZD1656 in Covid;

however, we retain an economic interest in

the clinical asset and if such asset is further developed through funding provided by other third parties, then we may be entitled to

receive compensation from those development activities conducted by third parties due to its economic interest in AZD1656 in Covid.

and Marketing

do not currently have marketing, sales, or distribution capabilities.

In order to commercialize any clinical asset that is approved for

commercial sale, we must either develop our own sales, marketing, and distribution infrastructure or collaborate with third parties that

have such commercial infrastructure and relevant marketing and sales experience.

We anticipate relying on licensing, co-sale, co-promotion,

and distribution agreements with strategic partners for the commercialization of our products.

We do not currently anticipate that we

would develop our own internal sales force organization.

operate in the highly competitive pharmaceutical and biotechnology industry.

Our competitors may include public and private companies,

universities, governmental agencies, and other research organizations actively engaged in the research and development of clinical assets

and biopharmaceutical products.

Our competitors may have greater financial, technical, and human resources than we currently have and/or

may be better equipped to develop, manufacture, and market their products.

Our competitors may be developing clinical assets for products

for similar indications.

However, we believe that we have an unprecedented advantage in novelty.

As discussed above, AZD1656 is an activator

(not an inhibitor) of a metabolic process.

We anticipate that the number of companies seeking to develop clinical assets, biopharmaceutical

products, and therapies will continue to increase.

As a result, the competition we face may also increase.

However, both in the treatment

of autoimmune disease and idiopathic male infertility the competition is currently expected to come in years, even if biopharmaceutical

products that we develop and/or commercialize were not to compete with products of our competitors based on the product efficacy, safety,

ease of use, price, demonstrated cost-effectiveness, marketing effectiveness, service, reputation, and access to technical information.

However, we believe that our ability to focus on clinical assets that have been deprioritized by larger pharmaceutical companies is a

competitive advantage.

hold exclusive rights to develop AZD1656 and AZD5904 through our Global Funding Agreement with St George Street and we also own the intellectual

property and the rights to further develop co-crystals resulting from our prior research and development work on AZD1656.

currently have one pending international patent application and two pending national patent applications.

Even though we have filed patent

applications, there is no guarantee that the validity of the patents will be upheld if challenged by a third party, that patents will

be granted on the applications filed in the respective jurisdictions, or that once granted, the patents will contain claims that encompass

our commercial products.

There can be no assurance that any of our intellectual property rights will afford us any protection from competition.

following patent applications are relevant to the operation of our business:

Clinical Asset

Information and Number

Ownership/Licensing

Patent Status

Jurisdictions

of Matter Patent;

101901 (family number)

to St George Street Capital from AstraZeneca for use in thyroiditis, uveitis, pre-term labor, renal transplant failure.

Brazil, Canada, Switzerland, China, Germany, European Procedure, Spain, France, United Kingdom, Hong Kong, India, Japan, South Korea,

Mexico, Netherlands, Russian Federation, Sweden, Turkey, United States

July 3, 2026.

103631 (family number)

to St George Street Capital from AstraZeneca for use in thyroiditis, uveitis, pre-term labor, renal transplant failure.

and United States

February 2030.

PCT/IB2022/00075

by Conduit Pharmaceuticals.

September 2, 2022.

date September 2, 2022.

If granted, will expire September 2, 2042.

Male Infertility;

AZD5904 use patent;

200644 (family number)

[WO/2019/016074]

to St George Street Capital from AstraZeneca.

International

July 12, 2038.

have not filed any applications for trademark protection of any names or logos for products or technologies in development.

seek trademark protection inside and outside of the United States where and when appropriate and if available.

We intend to use these

registered marks in connection with our pharmaceutical research and development, including proprietary technologies, as well as our clinical

expect to protect our products and technologies through a combination of patents, regulatory exclusivity, and potentially confidential

and proprietary know-how.

We intend to actively seek to obtain, where appropriate, the broadest commercially reasonable intellectual

property protection possible for our clinical assets and technologies, including any future clinical assets and technologies under development,

our proprietary information, and our proprietary technology through a combination of contractual arrangements and patents, in the United

States and abroad.

However, we cannot guarantee that patent protection will provide complete protection against competitors who seek

to circumvent our patents.

Regulation and Product Approval

authorities in the United States, at the federal, state, and local level, and in other countries, extensively regulate, among other things,

the research, development, clinical trials, testing, manufacture, including any manufacturing changes, authorization, pharmacovigilance,

adverse event reporting, recalls, packaging, storage, recordkeeping, labeling, advertising, promotion, distribution, marketing, import

and export of pharmaceutical products and clinical assets, including clinical assets such as those we are developing.

The processes for

obtaining regulatory approvals in the United States and in foreign countries, along with subsequent compliance with applicable statutes

and regulations have no guaranteed outcomes and require the expenditure of substantial time and financial resources.

development plan for each of AZD1656 and AZD5904 is to conduct clinical trials and if those trials are successful, we will then seek

to enter into a transaction with a third party with respect to AZD1656 orAZD5904, as applicable, for the particular indication.

not intend to continue development of such clinical assets beyond Phase II clinical trials.

Accordingly, we anticipate developing clinical

assets, which we own or license from third parties, that have undergone pre-clinical and clinical trials through the Phase II stage and

then monetizing such clinical assets through a license, royalty, or other transaction.

We do not expect that we will commercialize any

clinical assets or seek marketing approval from the FDA (or similar organizations) as we intend to enter into agreements with third parties

following Phase II clinical trials for each such clinical asset that would provide that such third party would pursue the further development,

commercialization, and marketing of such assets.

following description of the process relating to obtaining regulatory approvals in the United States and in foreign countries is intended

for informational purposes only as we do not expect to continue the development of any of the clinical assets beyond the Phase II stage.

There is no assurance that any clinical trials on the assets owned or licensed by us will be successful.

States Government Regulation

the United States, the U.S.

Food and Drug Administration (“FDA”) regulates drugs under the Federal Food, Drug, and Cosmetic

Act (“FDCA”) and implementing regulations.

Failure to comply with the applicable United States requirements at any time during

the product development process, approval process or after approval, may subject an applicant to a variety of administrative or judicial

sanctions, such as the FDA’s refusal to approve pending New Drug Applications (“NDAs”), withdrawal of an approval,

imposition of a clinical hold, issuance of warning letters, product recalls, product seizures, total or partial suspension of production

or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement or civil and/or criminal penalties.

process required by the FDA before a drug may be marketed in the United States generally involves the following steps, each of which

requires the expenditure of substantial time and financial resources:

of preclinical laboratory tests, animal studies and formulation studies in compliance with good laboratory practices (“GLPs”)

and other applicable regulations;

to the FDA of an Investigational New Drug Application (“IND”), which must become effective before human clinical trials

by an independent institutional review board (“IRB”) at each clinical site before each trial may be initiated;

of well-controlled human clinical trials in accordance with good clinical practices (“GCPs”), which may include placebo

controls, to establish the safety and efficacy of the proposed drug product for each indication;

to the FDA of an NDA and payment of fees;

completion of an FDA advisory committee review, if applicable;

completion of an FDA pre-approval inspection of the manufacturing facility or facilities at which the product is produced to assess

compliance with current good manufacturing practices (“cGMPs”) and to assure that the facilities, methods and controls

are adequate to preserve the drug’s identity, strength, quality and purity;

completion of audits of clinical trial sites conducted by FDA to assure compliance with GCPs and the integrity of clinical data;

review and approval of the NDA.

studies include laboratory evaluation of product chemistry, toxicity, and formulation, as well as animal studies to assess potential

safety and efficacy.

Preclinical tests intended for submission to the FDA to support the safety of a clinical asset must be conducted

in compliance with GLP regulations and the U.S.

Department of Agriculture’s Animal Welfare Act.

A drug sponsor must submit the

results of the preclinical tests, together with manufacturing information, analytical data and any available ex-U.S.

clinical data or

relevant literature, among other things, to the FDA as part of an IND.

Some nonclinical testing may continue even after the IND is submitted.

An IND automatically becomes effective 30 days after receipt by the FDA, unless before that time the FDA raises concerns or questions

related to one or more proposed clinical trials and places the clinical trial on a clinical hold.

In such a case, the IND sponsor and

the FDA must resolve any outstanding concerns before the clinical trial can begin.

As a result, submission of an IND may not result in

the FDA allowing clinical trials to commence.

A clinical hold may occur at any time during the life of an IND and may affect one or more

specific studies or all studies conducted under the IND.

the FDA or the sponsor may suspend or terminate a clinical trial at any time on various grounds, including a finding that the research

subjects are being exposed to an unacceptable health risk.

Similarly, an Institutional Review Board (“IRB”) can suspend or

terminate approval of a clinical trial at its institution if the clinical trial is not being conducted in accordance with the IRB’s

requirements or if the drug candidate has been associated with unexpected serious harm to patients.

trials involve the administration of the investigational new drug to human subjects under the supervision of qualified investigators

in accordance with GCP requirements, which include the requirement that all research subjects provide their informed consent in writing

for their participation in any clinical trial along with the requirement to ensure that the data and results reported from the clinical

trials are credible and accurate.

Clinical trials are conducted under protocols detailing, among other things, the objectives of the

trial, the criteria for determining subject eligibility, the dosing plan, the parameters to be used in monitoring safety, the procedure

for timely reporting of adverse events, and the effectiveness criteria to be evaluated.

A protocol for each clinical trial and any subsequent

protocol amendments must be submitted to the FDA as part of the IND.

In addition, an IRB at each institution participating in the clinical

trial must review and approve the plan for any clinical trial before it commences at that institution.

about certain clinical trials and clinical trial results must be submitted within specific timeframes to the National Institutes of Health

for public dissemination on the Clinicaltrials.gov registry.

Failure to timely register a covered clinical study or to submit study results

as provided for in the law can give rise to civil monetary penalties and also prevent the non-compliant party from receiving future grant

funds from the federal government.

The government has recently begun enforcing these registration and results reporting requirements

against non-compliant clinical trial sponsors.

clinical trials are typically conducted in at least three sequential phases and occasionally four or more, which may require repetition,

or overlap or be combined:

The drug candidate is initially introduced into healthy human subjects or patients with the target disease or condition and

tested for safety, dosage tolerance, absorption, metabolism, distribution, excretion and, if possible, to gain an early indication of

its effectiveness.

During Phase I clinical trials, sufficient information about the investigational drug’s pharmacokinetics and

pharmacological effects may be obtained to permit the design of well-controlled and scientifically valid Phase II clinical trials.

The drug candidate is administered to a larger, but still limited patient population to identify possible adverse effects

and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted indications and to determine dosage tolerance

and optimal dosage.

Phase II clinical trials are typically well-controlled and closely monitored.

The drug candidate is administered to an expanded patient population, generally at geographically dispersed clinical trial

sites, in well-controlled clinical trials to generate enough data to statistically evaluate the efficacy and safety of the product for

approval, to establish the overall risk-benefit profile of the product, and to provide adequate information for the labeling of the product.

Phase III clinical trials usually involve a larger number of participants than a Phase II clinical trial.

is no guarantee that a clinical asset will successfully complete any such clinical trials.

There is no assurance that any clinical trials

on the assets owned or licensed by Conduit will be successful.

with FDA During the Clinical Development Program

the clearance of an IND and the commencement of clinical trials, the sponsor of such trial will continue to have interactions with the

Progress reports detailing the results of clinical trials must be submitted at least annually to the FDA and more frequently if

serious adverse events occur.

In addition, IND safety reports must be submitted to the FDA for any of the following:

serious and unexpected

suspected adverse reactions;

findings from other studies or animal or in vitro testing that suggest a significant risk in humans exposed

to the product;

and any clinically important increase in the occurrence of a serious suspected adverse reaction over that listed in the

protocol or investigator brochure.

addition, sponsors are given opportunities to meet with the FDA at certain points in the clinical development program.

Specifically,

sponsors may meet with the FDA prior to the submission of an IND (“pre-IND meeting”), at the end of Phase II clinical trial

(“EOP2” meeting) and before an NDA is submitted (“pre-NDA meeting”).

Meetings at other times may also be requested.

These meetings provide an opportunity for the sponsor to share information about the data gathered to date with the FDA and for the FDA

to provide advice on the next phase of development.

For example, at an EOP2, a sponsor may discuss its Phase II clinical results and

present its plans for the pivotal Phase III clinical trial(s) that it believes will support the approval of the new product.

Such meetings

may be conducted in person, via teleconference/videoconference or written response only with minutes reflecting the questions that the

sponsor posed to the FDA and the agency’s responses.

The FDA has indicated that its responses, as conveyed in meeting minutes and

advice letters, only constitute recommendations and/or advice made to a sponsor and, as such, sponsors are not bound by such recommendations

and/or advice.

Nonetheless, from a practical perspective, a sponsor’s failure to follow the FDA’s recommendations for design

of a clinical program may put the program at significant risk of failure.

successful completion of the required clinical testing, the results of the preclinical studies and clinical trials, along with information

relating to the product’s chemistry, manufacturing, controls, safety updates, patent information, abuse information and proposed

labeling, are submitted to the FDA as part of an application requesting approval to market the clinical asset for one or more indications.

Data may come from company-sponsored clinical trials intended to test the safety and efficacy of a product’s use or from a number

of alternative sources, including studies initiated by investigators.

To support marketing approval, the data submitted must be sufficient

in quality and quantity to establish the safety and efficacy of a drug product.

The fee required for the submission and review of an

application under the Prescription Drug User Fee Act (“PDUFA”) is substantial, and the sponsor of an approved application

is also subject to an annual program fee assessed based on eligible prescription drug products.

These fees are typically adjusted annually,

and exemptions and waivers may be available under certain circumstances, such as where a waiver is necessary to protect the public health,

where the fee would present a significant barrier to innovation, or where the applicant is a small business submitting its first human

therapeutic application for review.

FDA conducts a preliminary review of all applications within 60 days of receipt and must inform the sponsor at that time or before whether

an application is sufficiently complete to permit substantive review.

In pertinent part, the FDA’s regulations provide that the

agency may refuse to file an application if the application does not include all pertinent information and data necessary for review

In the event that the FDA determines that an application does not satisfy this standard, it will issue a Refuse to File (“RTF”)

determination to the applicant.

Typically, an RTF will be based on administrative incompleteness, such as clear omission of information

or sections of required information;

scientific incompleteness, such as omission of critical data, information or analyses needed to

evaluate safety and efficacy or provide adequate directions for use;

or inadequate content, presentation, or organization of information

such that substantive and meaningful review is precluded.

The FDA may request additional information rather than accept an application

In this event, the application must be resubmitted with the additional information.

The resubmitted application is also subject

to review before the FDA accepts it for filing.

the submission is accepted for filing, the FDA begins an in-depth substantive review of the application.

The FDA reviews the application

to determine, among other things, whether the proposed product is safe and effective for its intended use, whether it has an acceptable

purity profile and whether the product is being manufactured in accordance with cGMP.

the goals and policies agreed to by the FDA under PDUFA, the FDA has 10 months from the filing date in which to complete its initial

review of a standard application that is a new molecular entity, and six months from the filing date for an application with “priority

review.” The review process may be extended by the FDA for three additional months to consider new information or in the case of

a clarification provided by the applicant to address an outstanding deficiency identified by the FDA following the original submission.

Despite these review goals, the NDA review process can be very lengthy, and it is not uncommon for FDA review of an application to extend

beyond the PDUFA target action date.

Most innovative drug products (other than biological products) obtain FDA marketing approval pursuant

to an NDA submitted under Section 505(b)(1) of the FDCA, commonly referred to as a traditional or “full NDA.” In 1984, with

passage of the Drug Price Competition and Patent Term Restoration Act, informally known as the Hatch-Waxman Act, that established an

abbreviated regulatory scheme authorizing the FDA to approve generic drugs based on an innovator or “reference” product,

Congress also enacted Section 505(b)(2) of the FDCA, which provides a hybrid pathway combining features of a traditional NDA and a generic

drug application.

Section 505(b)(2) enables the applicant to rely, in part, on the FDA’s prior findings of safety and efficacy

data for an existing product, or published literature, in support of its application.

Section 505(b)(2) NDAs may provide an alternate

path to FDA approval for new or improved formulations or new uses of previously approved products that would require new clinical data

to demonstrate safety or effectiveness.

Section 505(b)(2) permits the filing of an NDA in which the applicant relies, at least in part,

on information from studies made to show whether a drug is safe or effective that were not conducted by or for the applicant and for

which the applicant has not obtained a right of reference or use.

A Section 505(b)(2) applicant may eliminate or reduce the need to conduct

certain preclinical or clinical studies, if it can establish that reliance on studies conducted for a previously approved product is

scientifically appropriate.

The FDA may also require companies to perform additional studies or measurements, including nonclinical and

clinical studies, to support the change from the approved product.

The FDA may then approve the new clinical asset for all or some of

the labeled indications for which the referenced product has been approved, as well as for any new indication for which the Section 505(b)(2)

NDA applicant has submitted data.

connection with its review of an application, the FDA will typically submit information requests to the applicant and set deadlines for

responses thereto.

The FDA will also conduct a pre-approval inspection of the manufacturing facilities for the new product to determine

whether the manufacturing processes and facilities comply with cGMPs.

The FDA will not approve the product unless it determines that

the manufacturing processes and facilities are in compliance with cGMP requirements and are adequate to assure consistent production

of the product within required specifications.

FDA also may inspect the sponsor and one or more clinical trial sites to assure compliance with IND and GCP requirements and the integrity

of the clinical data submitted to the FDA.

To ensure cGMP and GCP compliance by its employees and third-party contractors, an applicant

may incur significant expenditure of time, money and effort in the areas of training, record keeping, production and quality control.

The FDA generally accepts data from foreign clinical trials in support of an NDA if the trials were conducted under an IND.

clinical trial is not conducted under an IND, the FDA nevertheless may accept the data in support of an NDA if the study was conducted

in accordance with GCPs and the FDA is able to validate the data through an on-site inspection, if deemed necessary.

Although the FDA

generally requests that marketing applications be supported by some data from domestic clinical trials, the FDA may accept foreign data

as the sole basis for marketing approval if (1) the foreign data are applicable to the United States population and United States medical

practice, (2) the studies were performed by clinical investigators with recognized competence, and (3) the data may be considered valid

without the need for an on-site inspection or, if the FDA considers the inspection to be necessary, the FDA is able to validate the data

through an on-site inspection or other appropriate means.

FDA may also refer an application, including applications for novel clinical asset which present difficult questions of safety or efficacy,

to an advisory committee for review, evaluation and recommendation as to whether the application should be approved and under what conditions.

Typically, an advisory committee is a panel of independent experts, including clinicians and other scientific experts, that reviews,

evaluates and provides a recommendation as to whether the application should be approved and under what conditions.

The FDA is not bound

by the recommendation of an advisory committee, but it considers such recommendations when making final decisions on approval.

from clinical trials are not always conclusive, and the FDA or its advisory committee may interpret data differently than the sponsor

interprets the same data.

The FDA may also re-analyze the clinical trial data, which could result in extensive discussions between the

FDA and the applicant during the review process or delay, limit or prevent regulatory approval.

The FDA may not grant approval on a timely

basis or at all.

FDA also may require submission of a risk evaluation and mitigation strategy (“REMS”) if it determines that a REMS is necessary

to ensure that the benefits of the drug product outweigh its risks and to assure the safe use of the product.

The REMS could include

medication guides, physician communication plans, assessment plans and/or elements to assure safe use, such as restricted distribution

methods, patient registries or other risk minimization tools.

The FDA determines the requirement for a REMS, as well as the specific

REMS provisions, on a case-by-case basis.

If the FDA concludes a REMS is needed, the sponsor of the application must submit a proposed

REMS and the FDA will not approve the application without a REMS.

FDA reviews an application to determine, among other things, whether the product is safe and whether it is effective for its intended

use(s), with the latter determination being made on the basis of substantial evidence.

The term “substantial evidence” is

defined under the FDCA as “evidence consisting of adequate and well-controlled investigations, including clinical investigations,

by experts qualified by scientific training and experience to evaluate the effectiveness of the drug involved, on the basis of which

it could fairly and responsibly be concluded by such experts that the drug will have the effect it purports or is represented to have

under the conditions of use prescribed, recommended, or suggested in the labeling or proposed labeling thereof.”

FDA has interpreted this evidentiary standard to require at least two adequate and well-controlled clinical investigations to establish

effectiveness of a new product.

Under certain circumstances, however, the FDA has indicated that a single trial with certain characteristics

and additional information may satisfy this standard.

This approach was subsequently endorsed by Congress in 1998 with legislation providing,

in pertinent part, that “If [the FDA] determines, based on relevant science, that data from one adequate and well-controlled clinical

investigation and confirmatory evidence (obtained prior to or after such investigation) are sufficient to establish effectiveness, the

FDA may consider such data and evidence to constitute substantial evidence.” This modification to the law recognized the potential

for the FDA to find that one adequate and well controlled clinical investigation with confirmatory evidence, including supportive data

outside of a controlled trial, is sufficient to establish effectiveness.

In December 2019, the FDA issued draft guidance further explaining

the studies that are needed to establish substantial evidence of effectiveness, and in September 2023 it issued a draft guidance that

complements the 2019 draft guidance.

The FDA has not yet finalized either guidance.

evaluating the application and all related information, including the advisory committee recommendations, if any, and inspection reports

of manufacturing facilities and clinical trial sites, the FDA will issue either a Complete Response Letter (“CRL”) or an

approval letter.

To approve the application, the FDA must determine that the drug is effective and that its expected benefits outweigh

its potential risks to patients.

This “benefit-risk” assessment is informed by the extensive body of evidence about the product’s

safety and efficacy in the NDA.

This assessment is also informed by other factors, including:

the severity of the underlying condition

and how well patients’ medical needs are addressed by currently available therapies;

uncertainty about how the premarket clinical

trial evidence will extrapolate to real-world use of the product in the post-market setting;

and whether risk management tools are necessary

to manage specific risks.

In connection with this assessment, the FDA review team will assemble all individual reviews and other documents

into an “action package,” which becomes the record for FDA review.

The review team then issues a recommendation, and a senior

FDA official makes a decision.

CRL indicates that the review cycle of the application is complete, and the application will not be approved in its present form.

generally outlines the deficiencies in the submission and may require substantial additional testing or information in order for the

FDA to reconsider the application.

The CRL may require additional clinical or other data, additional pivotal Phase III clinical trial(s)

and/or other significant and time-consuming requirements related to clinical trials, preclinical studies or manufacturing.

issued, the applicant will have one year to respond to the deficiencies identified by the FDA, at which time the FDA can deem the application

withdrawn or, in its discretion, grant the applicant an additional six-month extension to respond.

The FDA has committed to reviewing

resubmissions in response to an issued CRL in either two or six months depending on the type of information included.

Even with the submission

of this additional information, however, the FDA ultimately may decide that the application does not satisfy the regulatory criteria

for approval.

approval letter, on the other hand, authorizes commercial marketing of the product with specific prescribing information for specific

That is, the approval will be limited to the conditions of use ( e.g.

, patient population, indication) described in

the FDA-approved labeling.

Further, depending on the specific risk(s) to be addressed, the FDA may require that contraindications, warnings

or precautions be included in the product labeling, require that post-approval trials, including Phase 4 clinical trials, be conducted

to further assess a product’s safety after approval, require testing and surveillance programs to monitor the product after commercialization

or impose other conditions, including distribution and use restrictions or other risk management mechanisms under a REMS which can materially

affect the potential market and profitability of the product.

The FDA may prevent or limit further marketing of a product based on the

results of post-marketing trials or surveillance programs.

After approval, some types of changes to the approved product, such as adding

new indications, manufacturing changes and additional labeling claims, are subject to further testing requirements and FDA review and

FDA Expedited Review Programs

FDA is authorized to designate certain products for expedited development or review if they are intended to address an unmet medical

need in the treatment of a serious or life-threatening disease or condition.

These programs include fast track designation, breakthrough

therapy designation, and priority review designation.

The purpose of these programs is to provide important new drugs to patients earlier

than under standard FDA review procedures.

be eligible for a fast-track designation, the FDA must determine, based on the request of a sponsor, that a product is intended to treat

a serious or life-threatening disease or condition and demonstrates the potential to address an unmet medical need.

The FDA will determine

that a product will fill an unmet medical need if it will provide a therapy where none exists or provide a therapy that may be potentially

superior to existing therapy based on efficacy or safety factors.

Fast track designation provides additional opportunities for interaction

with the FDA’s review team and may allow for a rolling review of NDA components before the completed application is submitted,

if the sponsor provides a schedule for the submission of the sections of the NDA, the FDA agrees to accept sections of the NDA and determines

that the schedule is acceptable, and the sponsor pays any required user fees upon submission of the first section of the NDA.

fast track designation may be withdrawn by the sponsor or rescinded by the FDA if the designation is no longer supported by data emerging

in the clinical trial process.

addition, with the enactment of the FDA Safety and Innovation Act (“FDASIA”) in 2012, Congress created a new regulatory program

for therapeutic candidates designated by FDA as “breakthrough therapies” upon a request made by the IND sponsors.

A breakthrough

therapy is defined as a drug that is intended, alone or in combination with one or more other drugs, to treat a serious or life-threatening

disease or condition, and preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over existing

therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development.

The FDA must take certain actions with respect to breakthrough therapies, such as holding timely meetings with and providing advice to

the product sponsor, intended to expedite the development and review of an application for approval of a breakthrough therapy.

the FDA may designate a product for priority review if it is a drug that treats a serious condition and, if approved, would provide a

significant improvement in safety or effectiveness.

The FDA determines at the time that the marketing application is submitted, on a

case-by-case basis, whether the proposed drug represents a significant improvement in treatment, prevention or diagnosis of disease when

compared with other available therapies.

Significant improvement may be illustrated by evidence of increased effectiveness in the treatment

of a condition, elimination or substantial reduction of a treatment-limiting drug reaction, documented enhancement of patient compliance

that may lead to improvement in serious outcomes, or evidence of safety and effectiveness in a new subpopulation.

A priority review designation

is intended to direct overall attention and resources to the evaluation of such applications, and to shorten the FDA’s goal for

taking action on a marketing application from ten months to six months for an NDA for a new molecular entity from the date of filing.

if a product qualifies for one or more of these programs, the FDA may later decide that the product no longer meets the conditions for

qualification or decide that the time period for FDA review or approval will not be shortened.

Furthermore, fast track designation, breakthrough

therapy designation and priority review do not change the standards for approval and may not ultimately expedite the development or approval

Approval Pathway

addition, a product studied for its safety and effectiveness in treating serious or life-threatening illnesses and that provide meaningful

therapeutic benefit over existing treatments may receive accelerated approval, meaning that it may be approved on (i) the basis of adequate

and well-controlled clinical trials establishing that the drug product has an effect on a surrogate endpoint that is reasonably likely

to predict clinical benefit, or (ii) on an intermediate clinical endpoint that can be measured earlier than irreversible morbidity or

mortality (“IMM”) and that is reasonably likely to predict an effect on IMM or other clinical benefits, taking into account

the severity, rarity or prevalence of the condition and the availability or lack of alternative treatments.

As a condition of approval,

the FDA may require a sponsor of a drug receiving accelerated approval to perform post-marketing studies to verify and describe the predicted

effect on IMM or other clinical endpoints, and the drug may be subject to expedited withdrawal procedures.

Drugs granted accelerated

approval must meet the same statutory standards for safety and effectiveness as those granted traditional approval.

accelerated approval pathway is usually contingent on a sponsor’s agreement to conduct, in a diligent manner, additional post-approval

confirmatory studies to verify and describe the drug’s clinical benefit.

As a result, a therapeutic candidate approved on this

basis is subject to rigorous post-marketing compliance requirements, including the completion of Phase 4 or post-approval clinical trials

to confirm the effect on the clinical endpoint.

Failure to conduct required post-approval studies, or to confirm the predicted clinical

benefit of the product during post-marketing studies, would allow the FDA to withdraw approval of the drug.

All promotional materials

for drug products being considered and approved under the accelerated approval program are subject to prior review by the FDA.

FDA officials, and other stakeholders have recently been evaluating the accelerated approval program and have proposed potential reforms

to improve certain aspects.

Scrutiny of the accelerated approval pathway is likely to continue and may lead to legislative and/or administrative

changes in the future.

Post-Approval

manufactured or distributed pursuant to FDA approvals are subject to pervasive and continuing regulation by the FDA, including, among

other things, requirements relating to recordkeeping, periodic reporting, product sampling and distribution, advertising and promotion

and reporting of adverse experiences with the product.

After approval, most changes to the approved product, such as adding new indications

or other labeling claims, are subject to prior FDA review and approval.

Certain modifications to the product, including changes in indications

or manufacturing processes or facilities, may require the applicant to develop additional data or conduct additional preclinical studies

and clinical trials to support the submission to FDA.

As previously noted, there also are continuing, annual user fee requirements for

any marketed products, as well as new application fees for supplemental applications with clinical data.

FDA may impose a number of post-approval requirements as a condition of approval of an NDA.

For example, the FDA may require post-marketing

testing, including Phase 4 clinical trials, and surveillance to further assess and monitor the product’s safety and effectiveness

after commercialization.

addition, FDA regulations require that products be manufactured in specific approved facilities and in accordance with cGMPs.

regulations include requirements relating to the organization of personnel, buildings and facilities, equipment, control of components

and drug product containers and closures, production and process controls, packaging and labeling controls, holding and distribution,

laboratory controls, records and reports and returned or salvaged products.

Drug manufacturers and other entities involved in the manufacture

and distribution of approved drugs are required to register their establishments with the FDA and some state agencies and are subject

to periodic unannounced inspections by the FDA for compliance with cGMP requirements and other laws.

Changes to the manufacturing process

are strictly regulated and, depending on the significance of the change, may require prior FDA approval before being implemented.

regulations also require investigation and correction of any deviations from cGMP and impose reporting and documentation requirements

upon the sponsor and any third-party manufacturers.

Accordingly, manufacturers must continue to expend time, money, and effort in production

and quality control to maintain compliance with cGMP and other aspects of quality control and quality assurance.

FDA strictly regulates the marketing, labeling, advertising and promotion of drug products that are placed on the market.

A product cannot

be commercially promoted before it is approved, and approved drugs may generally be promoted only for their approved indications and

for use in patient populations described in the product’s approved labeling.

Promotional claims must also be consistent with the

product’s FDA-approved label, including claims related to safety and effectiveness.

The government closely scrutinizes the promotion

of prescription drugs in specific contexts such as direct-to-consumer advertising, industry-sponsored scientific and educational activities,

and promotional activities involving the Internet and social media.

Although physicians may prescribe legally available products for

off-label uses, manufacturers may not market or promote such uses.

discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing

processes, or failure to comply with regulatory requirements, may result in mandatory revisions to the approved labeling to add new safety

imposition of post-market studies or clinical trials to assess new safety risks;

or imposition of distribution or other

restrictions under a REMS program.

Other potential consequences of regulatory non-compliance include, among other things:

on, or suspensions of, the marketing or manufacturing of the product, complete withdrawal of the product from the market or product

of production processes, including the shutdown of manufacturing facilities or production lines or the imposition of new manufacturing

requirements;

None of the funds held in the Trust Account will be used to purchase shares or public warrants in such transactions prior

to completion of our initial business combination.

purpose of any such purchases of shares could be to vote such shares in favor of the initial business combination and thereby increase

the likelihood of obtaining stockholder approval of the initial business combination or to satisfy a closing condition in an agreement

with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination,

where it appears that such requirement would otherwise not be met.

The purpose of any such purchases of public warrants could be to reduce

the number of public warrants outstanding or to vote such warrants on any matters submitted to the warrant holders for approval in connection

with our initial business combination.

Any such purchases of our securities may result in the completion of our initial business combination

that may not otherwise have been possible.

In addition, if such purchases are made, the public “float” of our shares of Class

A common stock or warrants may be reduced and the number of beneficial holders of our securities may be reduced, which may make it difficult

to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.

sponsor, officers, directors and/or their affiliates anticipate that they may identify the stockholders with whom our sponsor, officers,

directors or their affiliates may pursue privately negotiated purchases by either the stockholders contacting us directly or by our receipt

of redemption requests submitted by stockholders following our mailing of proxy materials in connection with our initial business combination.

To the extent that our sponsor, officers, directors or their affiliates enter into a private purchase, they would identify and contact

only potential selling stockholders who have expressed their election to redeem their shares for a pro rata share of the Trust Account

or vote against our initial business combination, whether or not such stockholder has already submitted a proxy with respect to our initial

business combination.

Our sponsor, officers, directors or their affiliates will only purchase public shares if such purchases comply

with Regulation M under the Exchange Act and the other federal securities laws.

purchases by our sponsor, officers, directors and/or their affiliates who are affiliated purchasers under Rule 10b-18 under the Exchange

Act will only be made to the extent such purchases are able to be made in compliance with Rule 10b-18, which is a safe harbor from liability

for manipulation under Section 9(a)(2) and Rule 10b-5 of the Exchange Act.

Rule 10b-18 has certain technical requirements that must be

complied with in order for the safe harbor to be available to the purchaser.

Our sponsor, officers, directors and/or their affiliates

will not make purchases of common stock if the purchases would violate Section 9(a)(2) or Rule 10b-5 of the Exchange Act.

We expect that

any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchases are subject

to such reporting requirements.

Rights for Public Stockholders upon Completion of our Initial Business Combination

will provide our public stockholders with the opportunity to redeem all or a portion of their shares of Class A common stock upon the

completion of our initial business combination, including the Conduit Business Combination, at a per-share price, payable in cash, equal

to the aggregate amount then on deposit in the Trust Account as of two business days prior to the consummation of the initial business

combination including interest earned on the funds held in the Trust Account and not previously released to us to pay our taxes, divided

by the number of then outstanding public shares, subject to the limitations described herein.

The amount in the Trust Account is anticipated

to be approximately $11.05 per public share, assuming our sponsor makes the Maximum Contribution, less any tax obligations.

otherwise set forth herein, all references to the approximately $11.05 per share redemption amount assume that our sponsor will have

made the Maximum Contribution and do not include any interest generated on the amounts in the trust account.

Our sponsor, officers and

directors have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect

to any founder shares and any public shares held by them in connection with the completion of our initial business combination.

of Conducting Redemptions

will provide our public stockholders with the opportunity to redeem all or a portion of their public shares of Class A common stock upon

the completion of our initial business combination either (i) in connection with a stockholder meeting called to approve the initial

business combination, as in the case of the Conduit Business Combination, or (ii) by means of a tender offer.

The decision as to whether

we will seek stockholder approval of a proposed initial business combination or conduct a tender offer will be made by us, solely in

our discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction

would require us to seek stockholder approval under the law or stock exchange listing requirement.

Under Nasdaq rules, asset acquisitions

and stock purchases would not typically require stockholder approval while direct mergers with our company where we do not survive and

any transactions where we issue more than 20% of our outstanding common stock or seek to amend our certificate of incorporation would

require stockholder approval.

If we structure an initial business combination with a target company in a manner that requires stockholder

approval, we will not have discretion as to whether to seek a stockholder vote to approve the proposed initial business combination.

We may conduct redemptions without a stockholder vote pursuant to the tender offer rules of the SEC unless stockholder approval is required

by law or stock exchange listing requirements or we choose to seek stockholder approval for business or other legal reasons.

as we obtain and maintain a listing for our securities on the Nasdaq we will be required to comply with such rules.

stockholder approval of the transaction is required by law or stock exchange listing requirement, or we decide to obtain stockholder

approval for business or other legal reasons, we will, pursuant to our certificate of incorporation:

the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation

of proxies, and not pursuant to the tender offer rules, and

proxy materials with the SEC.

the event that we seek stockholder approval of our initial business combination, we will distribute proxy materials and, in connection

therewith, provide our public stockholders with the redemption rights described above upon completion of the initial business combination.

we seek stockholder approval, we will complete our initial business combination only if a majority of the outstanding shares of common

stock present and entitled to vote at the meeting to approve the initial business combination when a quorum is present are voted in favor

of the initial business combination.

A quorum for such meeting will consist of the holders present in person or by proxy of shares of

outstanding capital stock of the Company representing a majority of the voting power of all outstanding shares of capital stock of the

Company entitled to vote at such meeting.

Our initial stockholders will count toward this quorum and pursuant to the letter agreement,

our sponsor, officers and directors have agreed to vote any founder shares held by them and any public shares acquired during or after

our initial public offering (including in open market and privately negotiated transactions) in favor of our initial business combination.

For purposes of seeking approval of the majority of our outstanding shares of common stock voted, non-votes will have no effect on the

approval of our initial business combination once a quorum is obtained.

In order to have our initial business combination approved (assuming

only the minimum number of shares representing a quorum are voted), we would need 716,864, or approximately 33% of the 2,187,728 Class

A common Stock public shares, to be voted in favor of an initial business combination, in addition to our initial stockholders’

founder shares.

We intend to give approximately 30 days (but not less than 10 days nor more than 60 days) prior written notice of any

such meeting, if required, at which a vote shall be taken to approve our initial business combination.

These quorums and voting thresholds,

and the voting agreements of our initial stockholders, may make it more likely that we will consummate our initial business combination.

Each public stockholder may elect to redeem its public shares irrespective of whether they vote for or against the proposed transaction.

a stockholder vote is not required and we do not decide to hold a stockholder vote for business or other legal reasons, we will, pursuant

to our certificate of incorporation:

the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers, and

tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial

and other information about the initial business combination and the redemption rights as is required under Regulation 14A of the

Exchange Act, which regulates the solicitation of proxies.

the public announcement of our initial business combination, we or our sponsor will terminate any plan established in accordance with

Rule 10b5-1 to purchase shares of our Class A common stock in the open market if we elect to redeem our public shares through a tender

offer, to comply with Rule 14e-5 under the Exchange Act.

the event we conduct redemptions pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business days,

in accordance with Rule 14e-1(a) under the Exchange Act, and we will not be permitted to complete our initial business combination until

the expiration of the tender offer period.

In addition, so that we are not subject to the SEC’s “penny stock” rules,

we will not redeem any public shares unless (i) our net tangible assets will be at least $5,000,001 either immediately prior to or upon

consummation of our initial business combination and after payment of underwriters’ fees and commissions or (ii) we are otherwise

exempt from the provisions of Rule 419 promulgated under the Securities Act .

If public stockholders tender more shares than we have

offered to purchase, we will withdraw the tender offer and not complete the initial business combination.

certificate of incorporation provides that we may not redeem our public shares unless (i) we are exempt from the provisions of Rule 419

promulgated under the Securities Act other than through our net tangible assets or (ii) our net tangible assets are at least $5,000,001

either immediately prior to or upon consummation of our initial business combination and after payment of underwriters’ fees and

commissions (so that we are not subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash

requirement which may be contained in the agreement relating to our initial business combination.

For example, the proposed initial business

combination may require:

(i) cash consideration to be paid to the target or its owners, (ii) cash to be transferred to the target for

working capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions in accordance with the

terms of the proposed initial business combination.

In the event the aggregate cash consideration we would be required to pay for all

shares of Class A common stock that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant

to the terms of the proposed initial business combination exceed the aggregate amount of cash available to us, we will not complete the

initial business combination or redeem any shares, and all shares of Class A common stock submitted for redemption will be returned to

the holders thereof.

on Redemption upon Completion of our Initial Business Combination if we Seek Stockholder Approval

Notwithstanding

the foregoing, if we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with

our initial business combination pursuant to the tender offer rules, our certificate of incorporation provides that a public stockholder,

together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group”

(as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate

of 15% of the shares sold in our initial public offering, which we refer to as the “Excess Shares.” Such restriction shall

also be applicable to our affiliates.

We believe this restriction will discourage stockholders from accumulating large blocks of shares,

and subsequent attempts by such holders to use their ability to exercise their redemption rights against a proposed initial business

combination as a means to force us or our management to purchase their shares at a significant premium to the then-current market price

or on other undesirable terms.

By limiting our stockholders’ ability to redeem no more than 15% of the shares sold in our initial

public offering without our prior consent, we believe we will limit the ability of a small group of stockholders to unreasonably attempt

to block our ability to complete our initial business combination, particularly in connection with an initial business combination with

a target that requires as a closing condition that we have a minimum net worth or a certain amount of cash.

However, we would not be

restricting our stockholders’ ability to vote all of their shares (including Excess Shares) for or against our initial business

Stock Certificates in Connection with Redemption Rights

may require our public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares

in “street name,” to either tender their certificates to our transfer agent up to two business days prior to the vote on

the proposal to approve the initial business combination, or to deliver their shares to the transfer agent electronically using the Depository

Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System, at the holder’s option.

The proxy materials that we will furnish

to holders of our public shares in connection with our initial business combination will indicate whether we are requiring public stockholders

to satisfy such delivery requirements.

Accordingly, a public stockholder would have up to two days prior to the vote on the initial business

combination to tender its shares if it wishes to seek to exercise its redemption rights.

Given the relatively short exercise period,

it is advisable for stockholders to use electronic delivery of their public shares.

is a nominal cost associated with the above-referenced tendering process and the act of certificating the shares or delivering them through

the DWAC System.

The transfer agent will typically charge the tendering broker $80.00 and it would be up to the broker whether or not

to pass this cost on to the redeeming holder.

However, this fee would be incurred regardless of whether or not we require holders seeking

to exercise redemption rights to tender their shares.

The need to deliver shares is a requirement of exercising redemption rights regardless

of the timing of when such delivery must be effectuated.

foregoing is different from the procedures used by many special purpose acquisition companies.

In order to perfect redemption rights

in connection with their business combinations, many blank check companies would distribute proxy materials for the stockholders’

vote on an initial business combination, and a holder could simply vote against a proposed initial business combination and check a box

on the proxy card indicating such holder was seeking to exercise his or her redemption rights.

After the initial business combination

was approved, the company would contact such stockholder to arrange for him or her to deliver his or her certificate to verify ownership.

As a result, the stockholder then had an “option window” after the completion of the initial business combination during

which he or she could monitor the price of the company’s stock in the market.

If the price rose above the redemption price, he

or she could sell his or her shares in the open market before actually delivering his or her shares to the company for cancellation.

As a result, the redemption rights, to which stockholders were aware they needed to commit before the stockholder meeting, would become

“option” rights surviving past the completion of the initial business combination until the redeeming holder delivered its

The requirement for physical or electronic delivery prior to the meeting ensures that a redeeming holder’s election

to redeem is irrevocable once the initial business combination is approved.

request to redeem such shares, once made, may be withdrawn at any time up to the date of the stockholder meeting.

Furthermore, if a holder

of a public share delivered its certificate in connection with an election of redemption rights and subsequently decides prior to the

applicable date not to elect to exercise such rights, such holder may simply request that the transfer agent return the certificate (physically

or electronically).

It is anticipated that the funds to be distributed to holders of our public shares electing to redeem their shares

will be distributed promptly after the completion of our initial business combination.

our initial business combination is not approved or completed for any reason, then our public stockholders who elected to exercise their

redemption rights would not be entitled to redeem their shares for the applicable pro rata share of the Trust Account.

In such case,

we will promptly return any certificates delivered by public holders who elected to redeem their shares.

our initial proposed initial business combination is not completed, we may continue to try to complete an initial business combination

with a different target at the election of the Company until February 7, 2024.

of Public Shares and Liquidation if no Initial Business Combination

certificate of incorporation provides that we will have up to February 7, 2024 if we extend the period of time to consummate a business

combination, at our election by separate one month extensions, subject to satisfaction of certain conditions, including the deposit of

up to $77,000 for each one month extension, into the Trust Account, to complete our initial business combination.

If we are unable to

complete our initial business combination within such period, we will:

(i) cease all operations except for the purpose of winding up,

(ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price,

payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the

Trust Account and not previously released to us to pay our taxes (less up to $100,000 of interest to pay dissolution expenses), divided

by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders

(including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably

possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate,

subject in the case of clauses (ii) and (iii) above to our obligations under Delaware law to provide for claims of creditors and the

requirements of other applicable law.

There will be no redemption rights or liquidating distributions with respect to our warrants, which

will expire worthless if we fail to complete our initial business combination within such period.

sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have waived their rights to liquidating

distributions from the Trust Account with respect to any founder shares held by them if we fail to complete our initial business combination

within 12 months from the consummation of our initial public offering (or up to February 7,

2024 at the election of the Company subject to satisfaction of certain conditions) .

if our sponsor, officers or directors acquire public shares after our initial public offering, they will be entitled to liquidating distributions

from the Trust Account with respect to such public shares if we fail to complete our initial business combination within

12 months from the consummation of our initial public offering (or up to February 7, 2024 at the election of the Company subject

to satisfaction of certain conditions).

sponsor, officers and directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our

certificate of incorporation (i) to modify the substance or timing of our obligation to allow redemption in connection with our initial

business combination or certain amendments to our charter prior thereto or to redeem 100% of our public shares if we do not complete

our initial business combination within 12 months from the consummation of our initial public offering

(or up to February 7, 2024 at the election of the Company subject to satisfaction of certain conditions) or (ii) with respect

to any other provision relating to stockholders’ rights or pre-initial business combination activity, unless we provide our public

stockholders with the opportunity to redeem their shares of Class A common stock upon approval of any such amendment at a per-share price,

payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the

Trust Account and not previously released to us to pay our taxes divided by the number of then outstanding public shares.

If this optional

redemption right is exercised with respect to an excessive number of public shares such that we cannot satisfy the net tangible asset

requirement (described above), we would not proceed with the amendment or the related redemption of our public shares at such time.

expect that all costs and expenses associated with implementing our plan of dissolution, as well as payments to any creditors, will be

funded from amounts remaining out of the funds held outside the Trust Account, although we cannot assure you that there will be sufficient

funds for such purpose.

As of December 31, 2022, we had approximately $346,000 in cash remaining.

We will depend on sufficient interest

being earned on the proceeds held in the Trust Account to pay any tax obligations we may owe.

However, if those funds are not sufficient

to cover the costs and expenses associated with implementing our plan of dissolution, to the extent that there is any interest accrued

in the Trust Account not required to pay taxes, we may request the trustee to release to us an additional amount of up to $100,000 of

such accrued interest to pay those costs and expenses.

we were to expend all of the net proceeds of our initial public offering and the sale of the placement units, other than the proceeds

deposited in the Trust Account, and without taking into account interest, if any, earned on the Trust Account, the per-share redemption

amount received by stockholders upon our dissolution would be approximately $11.05, assuming our sponsor makes the Maximum Contribution

and net of any taxes paid or payable.

The proceeds deposited in the Trust Account could, however, become subject to the claims of our

creditors which would have higher priority than the claims of our public stockholders.

We cannot assure you that the actual per-share

redemption amount received by stockholders will not be substantially less than approximately $11.05.

Under Section 281(b) of the DGCL,

our plan of dissolution must provide for all claims against us to be paid in full or make provision for payments to be made in full,

as applicable, if there are sufficient assets.

These claims must be paid or provided for before we make any distribution of our remaining

assets to our stockholders.

While we intend to pay such amounts, if any, we cannot assure you that we will have funds sufficient to pay

or provide for all creditors’ claims.

we will seek to have all vendors, service providers, prospective target businesses or other entities with which we do business execute

agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the Trust Account for the benefit

of our public stockholders, there is no guarantee that they will execute such agreements or even if they execute such agreements that

they would be prevented from bringing claims against the Trust Account including but not limited to fraudulent inducement, breach of

fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order

to gain an advantage with respect to a claim against our assets, including the funds held in the Trust Account.

If any third party refuses

to execute an agreement waiving such claims to the monies held in the Trust Account, our management will perform an analysis of the alternatives

available to it and will only enter into an agreement with a third party that has not executed a waiver if management believes that such

third party’s engagement would be significantly more beneficial to us than any alternative.

Examples of possible instances where

we may engage a third party that refuses to execute a waiver include the engagement of a third party consultant whose particular expertise

or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver

or in cases where management is unable to find a service provider willing to execute a waiver.

Marcum LLP, our independent registered

public accounting firm, and the underwriters of the offering, will not execute agreements with us waiving such claims to the monies held

in the Trust Account.

addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising

out of, any negotiations, contracts or agreements with us and will not seek recourse against the Trust Account for any reason.

has agreed that it will be liable to us if and to the extent any claims by a third party for services rendered or products sold to us,

or a prospective target business with which we have entered into a written letter of intent, confidentiality or similar agreement or

business combination agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $10.20 per public share and

(ii) the actual amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than

$10.20 per share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply

to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the Trust

Account (whether or not such waiver is enforceable) nor will it apply to any claims under our indemnity of the underwriters of our initial

public offering against certain liabilities, including liabilities under the Securities Act.

However, we have not asked our sponsor to

reserve for such indemnification obligations, nor have we independently verified whether our sponsor has sufficient funds to satisfy

its indemnity obligations and believe that our sponsor’s only assets are securities of our company.

Therefore, we cannot assure

you that our sponsor would be able to satisfy those obligations.

None of our officers or directors will indemnify us for claims by third

parties including, without limitation, claims by vendors and prospective target businesses.

the event that the proceeds in the Trust Account are reduced below (i) $10.20 per public share or (ii) such lesser amount per public

share held in the Trust Account as of the date of the liquidation of the Trust Account, due to reductions in value of the trust assets,

in each case net of the amount of interest which may be withdrawn to pay taxes, and our sponsor asserts that it is unable to satisfy

its indemnification obligations or that it has no indemnification obligations related to a particular claim, our independent directors

would determine whether to take legal action against our sponsor to enforce its indemnification obligations.

While we currently expect

that our independent directors would take legal action on our behalf against our sponsor to enforce its indemnification obligations to

us, it is possible that our independent directors in exercising their business judgment may choose not to do so if, for example, the

cost of such legal action is deemed by the independent directors to be too high relative to the amount recoverable or if the independent

directors determine that a favorable outcome is not likely.

We have not asked our sponsor to reserve for such indemnification obligations

and we cannot assure you that our sponsor would be able to satisfy those obligations.

Accordingly, we cannot assure you that due to claims

of creditors the actual value of the per-share redemption price will not be less than $10.20 per public share.

will seek to reduce the possibility that our sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring

to have all vendors, service providers, prospective target businesses or other entities with which we do business execute agreements

with us waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.

Our sponsor will also not

be liable as to any claims under our indemnity of the underwriters of our initial public offering against certain liabilities, including

liabilities under the Securities Act.

We will have access to up to approximately $1,500,000 from loans from our sponsor with which to

pay any such potential claims (including costs and expenses incurred in connection with our liquidation, currently estimated to be no

more than approximately $100,000).

In the event that we liquidate and it is subsequently determined that the reserve for claims and liabilities

is insufficient, stockholders who received funds from our Trust Account could be liable for claims made by creditors.

the DGCL, stockholders may be held liable for claims by third parties against a corporation to the extent of distributions received by

them in a dissolution.

The pro rata portion of our Trust Account distributed to our public stockholders upon the redemption of our public

shares in the event we do not complete our initial business combination within 12 months from the

consummation of our initial public offering (or up to February 7, 2024 at the election of the Company subject to satisfaction

of certain conditions) , may be considered a liquidating distribution under Delaware law.

the corporation complies with certain procedures set forth in Section 280 of the DGCL intended to ensure that it makes reasonable provision

for all claims against it, including a 60-day notice period during which any third-party claims can be brought against the corporation,

a 90-day period during which the corporation may reject any claims brought, and an additional 150-day waiting period before any liquidating

distributions are made to stockholders, any liability of stockholders with respect to a liquidating distribution is limited to the lesser

of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder

would be barred after the third anniversary of the dissolution.

if the pro rata portion of our Trust Account distributed to our public stockholders upon the redemption of our public shares in the event

we do not complete our initial business combination within 12 months from the consummation of our

initial public offering (or up to February 7, 2024 at the election of the Company subject to satisfaction of certain conditions),

is not considered a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful (potentially

due to the imposition of legal proceedings that a party may bring or due to other circumstances that are currently unknown), then pursuant

to Section 174 of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful redemption

distribution, instead of three years, as in the case of a liquidating distribution.

If we are unable to complete our initial business

combination within 12 months from the consummation of our initial public offering (or up to

February 7, 2024 at the election of the Company subject to satisfaction of certain conditions), we will:

(i) cease all operations except

for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public

shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest

earned on the funds held in the Trust Account and not previously released to us to pay our taxes (less up to $100,000 of interest to

pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public

stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable

law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and

our board of directors, dissolve and liquidate, subject in the case of clauses (ii) and (iii) above to our obligations under Delaware

law to provide for claims of creditors and the requirements of other applicable law.

Accordingly, it is our intention to redeem our public

shares as soon as reasonably possible up to the 24th month from the closing of our initial public offering at the election of the Company

subject to satisfaction of certain conditions or as extended by the Company’s stockholders in accordance with our certificate of

incorporation) and, therefore, we do not intend to comply with those procedures.

As such, our stockholders could potentially be liable

for any claims to the extent of distributions received by them (but no more) and any liability of our stockholders may extend well beyond

the third anniversary of such date.

we will not be complying with Section 280, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at such

time that will provide for our payment of all existing and pending claims or claims that may be potentially brought against us within

the subsequent 10 years.

However, because we are a blank check company, rather than an operating company, and our operations will be

limited to searching for prospective target businesses to acquire, the only likely claims to arise would be from our vendors (such as

lawyers, investment bankers, etc.) or prospective target businesses.

As described above, pursuant to the obligation contained in our

underwriting agreement, we will seek to have all vendors, service providers, prospective target businesses or other entities with which

we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the Trust

As a result of this obligation, the claims that could be made against us are significantly limited and the likelihood that any

claim that would result in any liability extending to the Trust Account is remote.

Further, our sponsor may be liable only to the extent

necessary to ensure that the amounts in the Trust Account are not reduced below (i) $10.20 per public share or (ii) such lesser amount

per public share held in the Trust Account as of the date of the liquidation of the Trust Account, due to reductions in value of the

trust assets, in each case net of the amount of interest withdrawn to pay taxes and will not be liable as to any claims under our indemnity

of the underwriters of our initial public offering against certain liabilities, including liabilities under the Securities Act.

event that an executed waiver is deemed to be unenforceable against a third party, our sponsor will not be responsible to the extent

of any liability for such third-party claims.

we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the proceeds held in the

Trust Account could be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of

third parties with priority over the claims of our stockholders.

To the extent any bankruptcy claims deplete the Trust Account, we cannot

assure you we will be able to return $10.20 per share to our public stockholders.

Additionally, if we file a bankruptcy petition or an

involuntary bankruptcy petition is filed against us that is not dismissed, any distributions received by stockholders could be viewed

under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.”

As a result, a bankruptcy court could seek to recover some or all amounts received by our stockholders.

Furthermore, our board of directors

may be viewed as having breached its fiduciary duty to our creditors and/or may have acted in bad faith, thereby exposing itself and

our company to claims of punitive damages, by paying public stockholders from the Trust Account prior to addressing the claims of creditors.

We cannot assure you that claims will not be brought against us for these reasons.

public stockholders will be entitled to receive funds from the Trust Account only upon the earlier to occur of:

(i) the completion of

our initial business combination, (ii) the redemption of any public shares properly tendered in connection with a stockholder vote to

amend any provisions of our certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemption

in connection with our initial business combination or certain amendments to our charter prior thereto or to redeem 100% of our public

shares if we do not complete our initial business combination within 12 months from the consummation

of our initial public offering (or up to February 7, 2024 at the election of the Company subject to satisfaction of certain conditions)

or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity, and (iii)

the redemption of all of our public shares if we are unable to complete our business combination within 12 months from the consummation

of our initial public offering (or up to February 7, 2024 at the election of the Company subject to satisfaction of certain conditions)

, subject to applicable law.

In no other circumstances will a stockholder have any right or interest of any kind to or in the Trust Account.

In the event we seek stockholder approval in connection with our initial business combination, a stockholder’s voting in connection

with the initial business combination alone will not result in a stockholder’s redeeming its shares to us for an applicable pro

rata share of the Trust Account.

Such stockholder must have also exercised its redemption rights as described above.

These provisions

of our certificate of incorporation, like all provisions of our certificate of incorporation, may be amended with a stockholder vote.

identifying, evaluating and selecting a target business for our initial business combination, we may encounter intense competition from

other entities having a business objective similar to ours, including other blank check companies, private equity groups and leveraged

buyout funds, and operating businesses seeking strategic business combinations.

Many of these entities are well established and have

extensive experience identifying and effecting business combinations directly or through affiliates.

Moreover, many of these competitors

possess greater financial, technical, human and other resources than we do.

Our ability to acquire larger target businesses will be limited

by our available financial resources.

This inherent limitation gives others an advantage in pursuing the initial business combination

of a target business.

Furthermore, our obligation to pay cash in connection with our public stockholders who exercise their redemption

rights may reduce the resources available to us for our initial business combination and our outstanding warrants, and the future dilution

they potentially represent, may not be viewed favorably by certain target businesses.

Either of these factors may place us at a competitive

disadvantage in successfully negotiating an initial business combination.

currently have three officers.

These individuals are not obligated to devote any specific number of hours to our matters but they intend

to devote as much of their time as they deem necessary, in the exercise of their respective business judgement, to our affairs until

we have completed our initial business combination.

The amount of time they will devote in any time period will vary based on whether

a target business has been selected for our initial business combination and the stage of the initial business combination process we

We do not intend to have any full-time employees prior to the completion of our initial business combination.

We do not have

an employment agreement with any member of our management team.

warning letters or other enforcement letters or clinical holds on post-approval clinical trials;

modification of promotional materials and labeling and the issuance of corrective information;

of the FDA to approve pending NDAs or supplements to approved NDAs, or suspension or revocation of product approvals;

seizure or detention, or refusal to permit the import or export of products;

or the imposition of civil or criminal penalties;

decrees, corporate integrity agreements, debarment, or exclusion from federal healthcare programs.

addition, the distribution of prescription pharmaceutical products is subject to the Prescription Drug Marketing Act (“PDMA”)

which regulates the distribution of drugs and drug samples at the federal level and sets minimum standards for the registration and regulation

of drug distributors by the states.

Both the PDMA and state laws limit the distribution of prescription pharmaceutical product samples

and impose requirements to ensure accountability in distribution.

More recently, the Drug Supply Chain Security Act (the “DSCSA”),

was enacted with the aim of building an electronic system to identify and trace certain prescription drugs distributed in the United

The DSCSA mandates phased-in and resource-intensive obligations for pharmaceutical manufacturers, wholesale distributors, and

dispensers over a 10-year period that were expected to culminate in November 2023.

From time to time, new legislation and regulations

may be implemented that could significantly change the statutory provisions governing the approval, manufacturing and marketing of products

regulated by the FDA.

For example, the FDA released proposed regulations in February 2022 to amend the national standards for licensing

of wholesale drug distributors by the states;

establish new minimum standards for state licensing third-party logistics providers;

create a federal system for licensure for use in the absence of a state program, each of which is mandated by the DSCSA.

It is impossible

to predict whether further legislative or regulatory changes will be enacted, or FDA regulations, guidance or interpretations will be

changed or what the impact of such potential changes, if any, may be.

Exclusivity and Approval of Follow-on Products

addition to enacting Section 505(b)(2) of the FDCA as part of the Hatch-Waxman Amendments to the FDCA, Congress also established an abbreviated

regulatory scheme authorizing the FDA to approve generic drugs that are shown to contain the same active ingredients as, and to be bioequivalent

to, drugs previously approved by the FDA pursuant to NDAs.

To obtain approval of a generic drug, an applicant must submit an abbreviated

new drug application (“ANDA”) to the agency.

An ANDA is a comprehensive submission that contains, among other things, data

and information pertaining to the active pharmaceutical ingredient, bioequivalence, drug product formulation, specifications and stability

of the generic drug, as well as analytical methods, manufacturing process validation data and quality control procedures.

ANDAs are “abbreviated”

because they cannot include preclinical and clinical data to demonstrate safety and effectiveness.

Instead, in support of such applications,

a generic manufacturer must rely on the preclinical and clinical testing previously conducted for a drug product previously approved

under an NDA, known as the reference listed drug (“RLD”).

order for an ANDA to be approved, the FDA must find that the generic version is identical to the RLD with respect to the active ingredients,

the route of administration, the dosage form, the strength of the drug and the conditions of use of the drug.

At the same time, the FDA

must also determine that the generic drug is “bioequivalent” to the innovator drug.

Under the statute, a generic drug is

bioequivalent to an RLD if “the rate and extent of absorption of the drug do not show a significant difference from the rate and

extent of absorption of the listed drug.” Unlike the 505(b)(2) NDA pathway that permits a follow-on applicant to conduct and submit

data from additional clinical trials or nonclinical studies in order to support the proposed change(s) to the reference product, the

ANDA regulatory pathway does not allow applicants to submit new clinical data other than bioavailability or bioequivalence data.

approval of an ANDA, the FDA indicates whether the generic product is “therapeutically equivalent” to the RLD in its publication

“Approved Drug Products with Therapeutic Equivalence Evaluations,” also referred to as the “Orange Book.” Physicians

and pharmacists consider a therapeutic equivalent generic drug to be fully substitutable for the RLD.

In addition, by operation of certain

state laws and numerous health insurance programs, the FDA’s designation of therapeutic equivalence often results in substitution

of the generic drug without the knowledge or consent of either the prescribing physician or patient.

part of the NDA review and approval process, applicants are required to list with the FDA each patent that has claims that cover the

applicant’s product or method of therapeutic use.

Upon approval of a new drug, each of the patents listed in the application for

the drug is then published in the Orange Book.

Drugs listed in the Orange Book can, in turn, be cited by potential follow-on competitors

in support of approval of an ANDA or 505(b)(2) NDA.

an ANDA applicant submits its application to the FDA, it is required to certify to the FDA concerning any patents listed for the reference

product in the FDA’s Orange Book.

Specifically, the applicant must certify that:

(i) the required patent information has not been

(ii) the listed patent has expired;

(iii) the listed patent has not expired but will expire on a particular date and approval

is sought after patent expiration;

or (iv) the listed patent is invalid or will not be infringed by the new product.

Moreover, to the

extent that the Section 505(b)(2) NDA applicant is relying on studies conducted for an already approved product, the applicant also is

required to certify to the FDA concerning any patents listed for the NDA-approved product in the Orange Book to the same extent that

an ANDA applicant would.

the follow-on applicant does not challenge the innovator’s listed patents, the FDA will not approve the ANDA or 505(b)(2) application

until all the listed patents claiming the referenced product have expired.

A certification that the new product will not infringe the

already approved product’s listed patents, or that such patents are invalid, is called a Paragraph IV certification.

If the follow-on

applicant has provided a Paragraph IV certification to the FDA, the applicant must also send notice of the Paragraph IV certification

to the NDA and patent holders once the ANDA has been accepted for filing by the FDA.

The NDA and patent holders may then initiate a patent

infringement lawsuit in response to the notice of the Paragraph IV certification.

The filing of a patent infringement lawsuit within

45 days of the receipt of a Paragraph IV certification automatically prevents the FDA from approving the ANDA or 505(b)(2) NDA until

the earlier of 30 months, expiration of the patent, settlement of the lawsuit, or a decision in the infringement case that is favorable

to the ANDA or 505(b)(2) applicant.

ANDA or 505(b)(2) application also will not be approved until any applicable non-patent exclusivities listed in the Orange Book for the

referenced product have expired.

The Hatch-Waxman Amendments to the FDCA provided a five-year period of non-patent data exclusivity within

the United States to the first applicant to gain approval of an NDA for a new chemical entity (“NCE”).

For the purposes of

this provision, an NCE is a drug that contains no active moiety that has previously been approved by the FDA in any other NDA.

moiety is the molecule or ion responsible for the physiological or pharmacological action of the drug substance.

In cases where such

NCE exclusivity has been granted, an ANDA or 505(b)(2) NDA may not be filed with the FDA until the expiration of five years unless the

submission is accompanied by a Paragraph IV certification, in which case the applicant may submit its application four years following

the original product approval.

FDCA also provides for a period of three years of data exclusivity if an NDA or NDA supplement includes reports of one or more new clinical

investigations, other than bioavailability or bioequivalence studies, that were conducted or sponsored by the applicant are deemed by

the FDA to be essential to the approval of the application.

This three-year exclusivity period often protects changes to a previously

approved drug product, such as new indications, dosage forms, route of administration or combination of ingredients.

Three-year exclusivity

would be available for a drug product that contains a previously approved active moiety, provided the statutory requirement for a new

clinical investigation is satisfied.

Unlike five-year NCE exclusivity, an award of three-year exclusivity does not block the FDA from

accepting ANDAs or 505(b)(2) NDAs seeking approval for generic versions of the drug as of the date of approval of the original drug product;

rather, this three-year exclusivity covers only the conditions of use associated with the new clinical investigations and, as a general

matter, does not prohibit the FDA from approving follow-on applications for drugs containing the original active ingredient.

and three-year exclusivity also will not delay the submission or approval of a traditional NDA filed under Section 505(b)(1) of the FDCA;

however, an applicant submitting a traditional NDA would be required to conduct or obtain a right of reference to all of the preclinical

studies and adequate and well-controlled clinical trials necessary to demonstrate safety and effectiveness.

Drug Designation and Exclusivity

the Orphan Drug Act, the FDA may grant orphan drug designation to a drug intended to treat a rare disease or condition, which is generally

a disease or condition that affects either (i) fewer than 200,000 individuals in the United States, or (ii) more than 200,000 individuals

in the United States and for which there is no reasonable expectation that the cost of developing and making available in the United

States a drug for this type of disease or condition will be recovered from sales in the United States for that drug.

Legislative proposals

are currently being considered that would revise or revoke the second option available for a drug candidate to receive an orphan designation,

the so-called “cost recovery” pathway.

Orphan drug designation must be requested before submitting an NDA.

After the FDA

grants orphan drug designation, the identity of the therapeutic agent and its potential orphan use will be disclosed publicly by the

the posting will also indicate whether a drug is no longer designated as an orphan drug.

than one clinical asset may receive an orphan drug designation for the same indication, and the same clinical asset can be designated

for more than one qualified orphan indication.

The benefits of orphan drug designation include research and development tax credits and

exemption from FDA prescription drug user fees.

Orphan drug designation does not convey any advantage in or shorten the duration of the

regulatory review and approval process if or when an NDA for the drug candidate is filed.

a product that has orphan drug designation subsequently receives the first FDA approval for the indication for which it has such designation,

the product is entitled to orphan product exclusivity, which means that for seven years, the FDA may not approve any other marketing

applications for the same drug for the same indication, except under limited circumstances described further below.

Orphan exclusivity

does not block the approval of a different drug for the same rare disease or condition, nor does it block the approval of the same drug

for different conditions.

As a result, the FDA can still approve different drugs for use in treating the same indication or disease.

Additionally, if a drug designated as an orphan product receives marketing approval for an indication broader than what was designated,

it may not be entitled to orphan drug exclusivity.

exclusivity will not bar approval of another product with the same drug for the same condition under certain circumstances, including

if a subsequent product with the same drug for the same condition is shown to be clinically superior to the approved product on the basis

of greater efficacy or safety or a major contribution to patient care, or if the company with orphan drug exclusivity cannot assure the

availability of sufficient quantities of the drug to meet the needs of persons with the disease or condition for which the drug was designated.

The FDA is now required to publish a summary of the clinical superiority findings when a drug is eligible for orphan product exclusivity

on the basis of a demonstration of clinical superiority.

Term Extension

patent claiming a prescription drug for which FDA approval is granted may be eligible for a limited patent term extension under the FDCA,

which permits a patent restoration of up to five years for patent term lost during product development and the FDA regulatory review

provided that certain statutory and regulatory requirements are met.

The length of the patent term extension is related to the length

of time the drug is under regulatory review while the patent is in force.

The restoration period granted on a patent covering a new FDA-regulated

medical product is typically one-half the time between the date a clinical investigation on human beings is begun and the submission

date of an application for premarket approval of the product, plus the time between the submission date of an application for approval

of the product and the ultimate approval date.

Patent term restoration cannot be used to extend the remaining term of a patent past a

total of 14 years from the product’s approval date.

Only one patent applicable to an approved drug product is eligible for the

extension, and the application for the extension must be submitted prior to the expiration of the patent in question.

A patent that covers

multiple products for which approval is sought can only be extended in connection with one of the marketing approvals.

The USPTO reviews

and approves the application for any patent term extension or restoration in consultation with the FDA.

Healthcare Laws and Regulations

Manufacturing,

sales, promotion, and other activities following product approval may also be subject to regulation by other regulatory authorities in

the United States in addition to the FDA.

Depending on the nature of the product, those authorities may include the Centers for Medicare

and Medicaid Services (“CMS”), other divisions of the Department of Health and Human Services (“HHS”), the Department

of Justice, the Drug Enforcement Administration, the Federal Trade Commission, the Occupational Safety and Health Administration, and

state and local governments.

example, in the United States, sales and marketing for prescription biopharmaceutical products must comply with state and federal fraud

and abuse laws.

These laws include the federal Anti-Kickback Statute, which makes it illegal for any person, including a prescription

drug manufacturer (or a party acting on its behalf), to knowingly and willfully solicit, receive, offer or pay any remuneration that

is intended to induce or reward referrals, including the purchase, recommendation, order or prescription of a particular drug, for which

payment may be made under a federal healthcare program, such as Medicare or Medicaid.

Violations of this law are punishable by up to

ten years in prison, criminal fines, administrative civil money penalties and exclusion from participation in federal healthcare programs.

In addition, the Patient Protection and Affordable Care Act, or ACA, among other things, amended the intent requirement of the federal

Anti-Kickback Statute and two of the five criminal healthcare fraud statutes created by the Health Insurance Portability and Accountability

Act of 1996, or HIPAA.

A person or entity no longer needs to have actual knowledge of these two provisions in the statute or specific

intent to violate them;

specifically with respect to the prohibition on executing or attempting to execute a scheme or artifice to defraud

or to fraudulently obtain money or property of any healthcare benefit program and the prohibition on disposing of assets to enable a

person to become eligible for Medicaid.

Moreover, the government may now assert that a claim including items or services resulting from

a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act.

and rebate programs must comply with the Medicaid rebate requirements of the U.S.

Omnibus Budget Reconciliation Act of 1990 and more

recent requirements in the ACA.

If products are made available to authorized users of the Federal Supply Schedule of the General Services

Administration, additional laws and requirements apply.

There also are federal transparency requirements under the Physician Payments

Sunshine Act that require manufacturers of FDA-approved drugs, devices, biologics and medical supplies covered by Medicare or Medicaid

to report, on an annual basis, to CMS information related to payments and other transfers of value to physicians, teaching hospitals,

and certain advanced non-physician healthcare practitioners and physician ownership and investment interests.

Prescription drug products

also must meet applicable child-resistant packaging requirements under the U.S.

Poison Prevention Packaging Act.

Manufacturing,

sales, promotion, and other activities also are potentially subject to federal and state consumer protection and unfair competition laws.

Some state laws require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines,

or the relevant compliance guidance promulgated by the federal government, in addition to requiring drug manufacturers to report information

related to payments to physicians and other healthcare providers or marketing expenditures to the extent that those laws impose requirements

that are more stringent than the Physician Payments Sunshine Act.

State and foreign laws also govern the privacy and security of health

information in some circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus

complicating compliance efforts.

failure to comply with any of these laws or regulatory requirements subjects firms to possible legal or regulatory action.

on the circumstances, failure to meet applicable regulatory requirements can result in criminal prosecution, fines or other penalties,

injunctions, requests for recall, seizure of products, total or partial suspension of production, denial or withdrawal of product approvals

or refusal to allow a firm to enter into supply contracts, including government contracts.

Regulation Outside the U.S.

addition to regulations in the United States, we will be subject to a variety of foreign regulations that govern, among other things,

clinical trials and any commercial sales and distribution of our products, if approved, either directly or through distribution partners.

Whether or not we obtain FDA approval for a product candidate, we must obtain the requisite approvals from regulatory authorities in

foreign countries or economic areas, such as the European Union and the United Kingdom, among other foreign countries, before we may

commence clinical trials or market products in those countries or areas.

The foreign regulatory approval process includes all of the

risks associated with the FDA approval described above, and the time required to obtain approval in other countries and jurisdictions

might differ from and be longer than that required to obtain FDA approval.

Some foreign jurisdictions have a drug product approval process

similar to that in the U.S., which requires the submission of a clinical trial application much like the IND prior to the commencement

of clinical studies.

In Europe, for example, a clinical trial application, or CTA, must be submitted to each country’s national

health authority and an independent ethics committee, much like the FDA and IRB, respectively.

Once the CTA is approved in accordance

with a country’s requirements, clinical trial development may proceed.

To obtain regulatory approval of a medicinal product candidate

under European Union regulatory systems, we would be required to submit a Marketing Authorisation Application, or MAA, which is similar

to the NDA, except that, among other things, there are country-specific document requirements.

For countries outside of the European

Union, such as countries in Eastern Europe, Latin America or Asia, and recently the United Kingdom, the requirements governing the conduct

of clinical trials, product approval, pricing and reimbursement vary from country to country.

Regulatory approval in one country or jurisdiction

does not ensure regulatory approval in another, but a failure or delay in obtaining regulatory approval in one country or jurisdiction

may negatively impact the regulatory process in others.

Moreover, some nations may not accept clinical studies performed for U.S.

to support approval in their countries or require that additional studies be performed on natives of their countries.

In addition, in

certain foreign markets, the pricing of drug products is subject to government control and reimbursement may in some cases be unavailable

or insufficient.

If we fail to comply with applicable foreign regulatory requirements, we may be subject to, among other things, fines,

suspension or withdrawal of regulatory approvals, product recalls, seizure of products, operating restrictions, and criminal prosecution.

of January 31, 2020, the United Kingdom is no longer a member state of the European Union, and therefore a separate marketing authorization

application and approval will be required to market a medicinal product in the U.K.

The Medicines and Healthcare products Regulatory

Agency, or the MHRA, is the U.K.’s standalone pharmaceutical regulator.

Trials and Regulation of Medicinal Products in Europe

in the United States, medicinal products can be marketed in the European Union only if a marketing authorization from the competent regulatory

agencies has been obtained.

Similar to the United States, the various phases of preclinical and clinical research in the European Union

are subject to significant regulatory controls.

to the European Clinical Trials Directive, a system for the approval of clinical trials in the European Union has been implemented through

national legislation of the member states.

Under this system, an applicant must obtain approval from the competent national authority

of a European Union member state in which the clinical trial is to be conducted.

Furthermore, the applicant may only start a clinical

trial after a competent ethics committee has issued a favorable opinion.

Clinical trial applications must be accompanied by an investigational

medicinal product dossier with supporting information prescribed by the European Clinical Trials Directive and corresponding national

laws of the member states and further detailed in applicable guidance documents.

In April 2014, the new Clinical Trials Regulation, (EU)

No 536/2014 (Clinical Trials Regulation) was adopted and became effective on January 31, 2022.

The Clinical Trials Regulation is directly

applicable in all the European Union Member States, repealing the prior Clinical Trials Directive 2001/20/EC.

The extent to which ongoing

clinical trials will be governed by the Clinical Trials Regulation will depend on the duration of the individual clinical trial;

clinical trial continues for more than three years from the day on which the Clinical Trials Regulation becomes applicable the Clinical

Trials Regulation will at that time begin to apply to the clinical trial.

new Clinical Trials Regulation aims to simplify and streamline the approval of clinical trials in the European Union.

The main characteristics

of the regulation include:

a streamlined application procedure via a single entry point;

a single set of documents to be prepared and

submitted for the application as well as simplified reporting procedures for clinical trial sponsors;

and a harmonized procedure for

the assessment of applications for clinical trials.

obtain marketing approval of a drug in the European Union, an applicant must submit a MAA either under a centralized or decentralized

The centralized procedure provides for the grant of a single marketing authorization by the European Commission that is valid

for all European Union member states, Iceland, Lichtenstein and Norway.

The centralized procedure is compulsory for specific products,

including for medicines produced by certain biotechnological processes, products designated as orphan medicinal products, advanced therapy

products (such as gene-therapy, somatic cell-therapy or tissue-engineered medicines) and products with a new active substance indicated

for the treatment of certain diseases.

For products with a new active substance indicated for the treatment of certain diseases and products

that are highly innovative or for which a centralized process is in the interest of patients, the centralized procedure may be optional.

Under the centralized procedure the maximum timeframe for the evaluation of an MAA by the European Medicines Agency (“EMA”)

is 210 days, excluding clock stops, when additional written or oral information is to be provided by the applicant in response to questions

asked by the Committee for Medicinal Products for Human Use (“CHMP”).

Accelerated assessment might be granted by the CHMP

in exceptional cases, when a medicinal product is expected to be of a major public health interest, particularly from the point of view

of therapeutic innovation.

The timeframe for the evaluation of an MAA under the accelerated assessment procedure is of 150 days, excluding

decentralized procedure is available to applicants who wish to market a product in specific European Union member states where such product

has not received marketing approval in any European Union member states before.

The decentralized procedure provides for an applicant

to apply to one-member state to assess the application (the reference member state) and specifically list other member states in which

it wishes to obtain approval (concerned member states).

the European Union, only products for which marketing authorizations have been granted may be promoted.

A marketing authorization is

valid for five years in principle and the marketing authorization may be renewed after five years on the basis of a re-evaluation of

the risk-benefit balance by the EMA or by the competent authority of the authorizing member state.

To this end, the marketing authorization

holder must provide the EMA or the competent authority with a consolidated version of the file in respect of quality, safety and efficacy,

including all variations introduced since the marketing authorization was granted, at least six months before the marketing authorization

ceases to be valid.

Once renewed, the marketing authorization is valid for an unlimited period, unless the European Commission or the

competent authority decides, on justified grounds relating to pharmacovigilance, to proceed with one additional five-year renewal.

authorization which is not followed by the actual placing of the drug on the European Union market (in case of centralized procedure)

or on the market of the authorizing member state within three years after authorization ceases to be valid (the so-called sunset clause).

even if authorized to be marketed in the European Union, prescription medicines may only be promoted to healthcare professionals, not

the general public.

All promotion should be in accordance with the particulars listed in the summary of product characteristics.

materials must also comply with various laws, and codes of conduct developed by pharmaceutical industry bodies in the European Union

which govern (among other things) the training of sales staff, promotional claims and their justification, comparative advertising, misleading

advertising, endorsements, and (where permitted) advertising to the general public.

Failure to comply with these requirements could lead

to the imposition of penalties by the competent authorities of the European Union member states.

The penalties could include warnings,

orders to discontinue the promotion of the drug product, seizure of promotional materials, fines and possible imprisonment.

of New Drugs in the United Kingdom

United Kingdom left the European Union on January 31, 2020 (commonly referred to as “Brexit”), with a transitional period

that expired on December 31, 2020.

The United Kingdom and the European Union entered into a trade agreement known as the Trade and Cooperation

Agreement, which went into effect on January 1, 2021.

It remains to be seen how, if at all, Brexit and the Trade and Cooperation Agreement

will impact regulatory requirements for product candidates and products in the United Kingdom.

We are currently evaluating the potential

impacts on our business of the Trade and Cooperation Agreement and guidance issued to date by the United Kingdom’s MHRA regarding

the requirements for licensing and marketing medicinal products in the United Kingdom.

the regulatory framework for pharmaceutical products in the United Kingdom covering the quality, safety and efficacy of pharmaceutical

products, clinical trials, marketing authorization, commercial sales and distribution of medicinal products is derived from EU Directives

and Regulations, Brexit could materially impact the future regulatory regime which applies to such products and the approval of product

candidates in the United Kingdom.

Such outcomes could make it more difficult and expensive for us to do business in Europe, complicate

our clinical, manufacturing and regulatory strategies and impair our ability to obtain and maintain regulatory approval for, and, if

approved, commercialize, our products and product candidates in Europe.

Pharmaceutical

Coverage, Pricing and Reimbursement, and Healthcare Reform

of our products, if approved for marketing, will depend, in part, on the availability and extent of coverage and reimbursement by third-party

payors, such as government health programs, including Medicare and Medicaid, commercial insurance and managed healthcare organizations.

These third-party payors are increasingly challenging the price and limiting the coverage and reimbursement amounts for medical products

and services.

There may be significant delays in obtaining coverage and reimbursement for approved products, and coverage may be more

limited than the purposes for which the product is approved by the FDA or regulatory authorities in other countries.

It is time-consuming

and expensive to seek reimbursement from third-party payors.

Moreover, eligibility for reimbursement does not imply that any product

will be paid for in all cases or at a rate that covers our costs, including research, development, manufacture, sale and distribution.

Interim payments for new products, if applicable, may also not be sufficient to cover our costs and may not be made permanent.

rates may vary according to the use of the product and the clinical setting in which it is used, may be based on payments allowed for

lower-cost products that are already reimbursed and may be incorporated into existing payments for other services.

Net prices for products

may be reduced by mandatory discounts or rebates required by third-party payors and by any future relaxation of laws that presently restrict

imports of products from countries where they may be sold at lower prices than in the United States.

In the United States, third-party

payors often rely upon Medicare coverage policy and payment limitations in setting their own reimbursement policies, but they also have

their own methods and approval process apart from Medicare coverage and reimbursement determinations.

Accordingly, one third-party payor’s

determination to provide coverage for a product does not assure that other payors will also provide coverage for the product.

addition, the containment of healthcare costs has become a priority for federal and state governments, and the prices of drugs have been

a focus in this effort.

government, state legislatures and foreign governments have shown significant interest in implementing

cost-containment programs, including price controls, restrictions on coverage and reimbursement, and requirements for substitution of

generic products.

Adoption of price controls and cost-containment measures, and adoption of more restrictive policies in jurisdictions

with existing controls and measures, could further limit our net revenue and results.

Decreases in third-party reimbursement for our

clinical assets or a decision by a third-party payor to not cover our clinical assets could reduce physician usage of the clinical asset

and have a material adverse effect on our sales, results of operations and financial condition.

Moreover, there has been heightened governmental

scrutiny over the manner in which manufacturers set prices for their marketed products, which has resulted in several Congressional inquiries

and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review

the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drug

Individual states in the United States have also increasingly passed legislation and implemented regulations designed to control

pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access

and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and

bulk purchasing.

In December 2020, the U.S.

Supreme Court held unanimously that federal law does not preempt the states’ ability

to regulate pharmaceutical benefit managers (“PBMs”) and other members of the healthcare and pharmaceutical supply chain,

an important decision that has led to further and more aggressive efforts by states in this area.

recently, on August 16, 2022, President Biden signed into the law the Inflation Reduction Act of 2022, or the IRA.

Among other things,

the IRA has multiple provisions that may impact the prices of drug products that are both sold into the Medicare program and throughout

the United States.

Starting in 2023, a manufacturer of drugs covered by Medicare Parts B or D must pay a rebate to the federal government

if their drug product’s price increases faster than the rate of inflation.

This calculation is made on a drug product by drug product

basis and the amount of the rebate owed to the federal government is directly dependent on the volume of a drug product that is paid

for by Medicare Parts B or D.

Additionally, starting for payment year 2026, CMS will negotiate drug prices annually for a select number

of single source Part D drugs without generic or biosimilar competition.

CMS will also negotiate drug prices for a select number of Part

B drugs starting for payment year 2028.

If a drug product is selected by CMS for negotiation, it is expected that the revenue generated

from such drug will decrease.

addition, in some foreign countries, the proposed pricing for a drug must be approved before it may be lawfully marketed.

The requirements

governing drug pricing vary widely from country to country.

For example, in the European Union, the sole legal instrument at the European

Union level governing the pricing and reimbursement of medicinal products is Council Directive 89/105/EEC (the “Price Transparency

The aim of the Price Transparency Directive is to ensure that pricing and reimbursement mechanisms established in

the European Union Member States are transparent and objective, do not hinder the free movement of and trade in medicinal products in

the European Union, and do not hinder, prevent or distort competition on the market.

The Price Transparency Directive does not provide

any guidance concerning the specific criteria on the basis of which pricing and reimbursement decisions are to be made in the individual

European Union Member States, nor does it have any direct consequence for pricing or reimbursement levels in the individual European

Union Member States.

The European Union Member States are free to restrict the range of medicinal products for which their national health

insurance systems provide reimbursement, and to control the prices and/or reimbursement levels of medicinal products for human use.

European Union Member State may approve a specific price or level of reimbursement for the medicinal product, or alternatively adopt

a system of direct or indirect controls on the profitability of the company responsible for placing the medicinal product on the market,

including volume-based arrangements, caps and reference pricing mechanisms.

Technology Assessment (“HTA”) of medicinal products is becoming an increasingly common part of the pricing and reimbursement

procedures in some European Union Member States, including France, Germany, Ireland, Italy and Sweden.

The HTA process in the European

Union Member States is governed by the national laws of these countries.

HTA is the procedure according to which the assessment of the

public health impact, therapeutic impact, and the economic and societal impact of the use of a given medicinal product in the national

healthcare systems of the individual country is conducted.

HTA generally focuses on the clinical efficacy and effectiveness, safety,

cost, and cost-effectiveness of individual medicinal products as well as their potential implications for the healthcare system.

elements of medicinal products are compared with other treatment options available on the market.

The outcome of HTA regarding specific

medicinal products will often influence the pricing and reimbursement status granted to these medicinal products by the competent authorities

of individual European Union Member States.

The extent to which pricing and reimbursement decisions are influenced by the HTA of the

specific medicinal product vary between the European Union Member States.

For example, European Union Member States that have not yet

developed HTA mechanisms could rely to some extent on the HTA performed in countries with a developed HTA framework when adopting decisions

concerning the pricing and reimbursement of a specific medicinal product.

from cost containment efforts, in the United States and some foreign jurisdictions, there also have been, and continue to be, several

legislative and regulatory changes and proposed changes regarding the healthcare system that could prevent or delay marketing approval

of product candidates or restrict or regulate post-approval activities.

The FDA’s and other regulatory authorities’ policies

may change, and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of our current

or future product candidates.

Privacy and the Protection of Personal Information

are subject to laws and regulations governing data privacy and the protection of personal information including health information.

legislative and regulatory landscape for privacy and data protection continues to evolve, and there has been an increasing focus on privacy

and data protection issues which will continue to affect our business.

In the United States, we may be subject to state security breach

notification laws, state laws protecting the privacy of health and personal information and federal and state consumer protections laws

that regulate the collection, use, disclosure and transmission of personal information.

These laws overlap and often conflict and each

of these laws is subject to varying interpretations by courts and government agencies, creating complex compliance issues.

to comply with applicable laws and regulations we could be subject to penalties or sanctions, including criminal penalties.

Our customers

and research partners must comply with laws governing the privacy and security of health information, including HIPAA and state health

information privacy laws.

If we knowingly obtain health information that is protected under HIPAA, called “protected health information,”

our customers or research collaborators may be subject to enforcement, and we may have direct liability for the unlawful receipt of protected

health information or for aiding and abetting a HIPAA violation.

laws protecting health and personal information are becoming increasingly stringent.

For example, California has implemented the California

Confidentiality of Medical Information Act that imposes restrictive requirements regulating the use and disclosure of health information

and other personally identifiable information, and California has recently adopted the California Consumer Privacy Act of 2018 (“CCPA”).

The CCPA mirrors a number of the key provisions of the EU General Data Protection Regulation (“GDPR”) described below.

CCPA establishes a new privacy framework for covered businesses by creating an expanded definition of personal information, establishing

new data privacy rights for consumers in the State of California, imposing special rules on the collection of consumer data from minors,

and creating a new and potentially severe statutory damages framework for violations of the CCPA and for businesses that fail to implement

reasonable security procedures and practices to prevent data breaches.

Since passage of the CCPA, several other states (Connecticut,

Colorado, Virginia, and Utah) have also enacted comprehensive consumer privacy laws that include key differences from California’s

law, further complicating compliance by industry and other stakeholders.

Other states in the U.S.

are considering privacy laws similar

Europe, the GDPR went into effect in May 2018, implementing a broad data protection framework that expanded the scope of European Union

data protection law, including to non- European Union entities that process, or control the processing of, personal data relating to

individuals located in the European Union, including clinical trial data.

The GDPR sets out a number of requirements that must be complied

with when handling the personal data of European Union-based data subjects including:

providing expanded disclosures about how their

personal data will be used;

higher standards for organizations to demonstrate that they have obtained valid consent or have another legal

basis in place to justify their data processing activities;

the obligation to appoint data protection officers in certain circumstances;

new rights for individuals to be “forgotten” and rights to data portability, as well as enhanced current rights (e.g.

the principal of accountability and demonstrating compliance through policies, procedures, training and audit;

and a new mandatory

data breach regime.

In particular, medical or health data, genetic data and biometric data where the latter is used to uniquely identify

an individual are all classified as “special category” data under the GDPR and afforded greater protection and require additional

compliance obligations.

Further, European Union member states have a broad right to impose additional conditions – including restrictions

– on these data categories.

This is because the GDPR allows European Union member states to derogate from the requirements of the

GDPR mainly in regard to specific processing situations (including special category data and processing for scientific or statistical

As the European Union states continue to reframe their national legislation to harmonize with the GDPR, we will need to monitor

compliance with all relevant European Union member states’ laws and regulations, including where permitted derogations from the

GDPR are introduced.

We will also be subject to evolving European Union laws on data export, if we transfer data outside the European

Union to ourselves or third parties outside of the European Union.

Cayman Islands Government enacted the Data Protection Act on May 18, 2017 (as amended, the “DPA”).

The DPA regulates the

processing of personal data in the Cayman Islands.

Under the DPA, the Company is a “data controller” and the Company’s

affiliates and/or its delegates may be “data processors” (or, in some circumstances, data controllers in their own right),

in respect of such personal data.

Foreign Corrupt Practices Act and Anti-bribery Regulations

general, the Foreign Corrupt Practices Act of 1977, as amended, or the FCPA, prohibits offering to pay, paying, promising to pay, or

authorizing the payment of money or anything of value to a foreign official in order to influence any act or decision of the foreign

official in his or her official capacity or to secure any other improper advantage in order to obtain or retain business for or

with, or in order to direct business to, any person.

The prohibitions apply not only to payments made to “any foreign

official,” but also to those made to “any foreign political party or official thereof,” to “any candidate

for foreign political office” or to any person, while knowing that all or a portion of the payment will be offered, given, or

promised to anyone in any of the foregoing categories.

“Foreign officials” under the FCPA include officers or employees

of a department, agency, or instrumentality of a foreign government.

The term “instrumentality” is broad and can include

state-owned or state-controlled entities.

Importantly, United States authorities deem most healthcare professionals and other

employees of foreign hospitals, clinics, research facilities and medical schools in countries with public healthcare and/or public

education systems to be “foreign officials” under the FCPA.

When we interact with foreign healthcare professionals and

researchers in testing and marketing our products abroad, should any of our product candidates receive foreign regulatory approval

in the future, we must have policies and procedures in place sufficient to prevent us and agents acting on our behalf from providing

any bribe, gift or gratuity, including excessive or lavish meals, travel or entertainment in connection with marketing our products

and services or securing required permits and approvals.

The FCPA also obligates companies whose securities are listed in the United

States to comply with accounting provisions requiring us to maintain books and records that accurately and fairly reflect all

transactions of the corporation, including international subsidiaries, and to devise and maintain an adequate system of internal

accounting controls for international operations.

are also subject to U.K.

Bribery Act of 2010, which prohibits both domestic and international bribery, as well as bribery across both

private and public sectors.

In addition, an organization that “fails to prevent bribery” committed by anyone associated with

the organization can be charged under the U.K.

Bribery Act unless the organization can establish the defense of having implemented “adequate

procedures” to prevent bribery.

As we expand our operations, we are likely to be subject to additional laws and restrictions relating

to anti-bribery.

Environmental,

Health, and Safety Regulation

are subject to numerous federal, state, and local environmental, health, and safety (“EHS”) laws and regulations relating

to, among other matters, safe working conditions, product stewardship, environmental protection, and handling or disposition of products,

including those governing the generation, storage, handling, use, transportation, release, and disposal of hazardous or potentially hazardous

materials, medical waste, and infectious materials that may be handled by our partner research laboratories.

Some of these laws and regulations

also require us to obtain licenses or permits to conduct our operations.

If we fail to comply with such laws or obtain and comply with

the applicable permits, we could face substantial fines or possible revocation of our permits or limitations on our ability to conduct

our operations.

Certain of our development and manufacturing activities may involve, from time to time, use of hazardous materials, and

we believe we are in compliance with the applicable environmental laws, regulations, permits, and licenses.

However, we cannot ensure

that EHS liabilities will not develop in the future.

EHS laws and regulations are complex, change frequently and have tended to become

more stringent over time.

Although the costs to comply with applicable laws and regulations, have not been material, we cannot predict

the impact on our business of new or amended laws or regulations or any changes in the way existing and future laws and regulations are

interpreted or enforced, nor can we ensure we will be able to obtain or maintain any required licenses or permits.

of December 31, 2023, we had a total of seven full-time employees and two consultants.

currently rely on several consultants who provide services to our Company.

None of our employees are represented by a labor union or

covered by collective bargaining agreements.

We consider our relationship with our employees to be good.

We anticipate that the number

of employees will increase as we continue to develop the assets in our pipeline and other clinical assets that we seek to develop.

Additionally,

we utilize and expect to continue to utilize clinical research organizations and third parties to perform our pre-clinical studies, clinical

studies, and manufacturing.

were incorporated under the name “Murphy Canyon Acquisition Corp.” in October 2021 under the laws of the State of Delaware

for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business

combination with one or more businesses.

We changed our name to “Conduit Pharmaceuticals Inc.” in connection with the completion

of the Business Combination in September 2023.

principal executive offices are located at 4995 Murphy Canyon Road, Suite 300, San Diego, CA 92123.

Our telephone number is +1 (760)

471-8536, and our website can be found at https://www.conduitpharma.com .

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

What changed 10-K

Item 1. Business