What changed in this filing

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Item 7. Management’s Discussion and Analysis

2024-04-16 compared with 2023-03-28 · 476 added, 254 removed, 6 unchanged (99% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

are a newly organized blank check company incorporated as a Delaware corporation and formed for the purpose of effecting a merger, capital

stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses.

our efforts to identify a target business may span many industries and regions worldwide, we intend to focus our search for prospects

within the real estate industry.

We have not selected any specific business combination target and we have not, nor has anyone on our

behalf, initiated any substantive discussions, directly or indirectly, with any business combination target.

We intend to effectuate

our initial business combination using cash from the proceeds of the initial public offering and the sale of the placement units, the

proceeds of the sale of our shares in connection with our initial business combination (including 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.

issuance of additional shares in connection with an initial business combination to the owners of the target or other investors:

significantly dilute the equity interest of existing shareholders;

subordinate the rights of holders of our common stock if preferred stock is issued with rights senior to those afforded our common

cause a change in control if a substantial number of shares of our common stock is issued, which may affect, among other things,

our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers

and directors;

have the effect of delaying or preventing a change of control of us by diluting the stock ownership or voting rights of a person

seeking to obtain control of us;

adversely affect prevailing market prices for our common stock and warrants.

if we issue debt securities or otherwise incur significant debt to bank or other lenders or the owners of a target, it could result in:

and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt

of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants

that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;

immediate payment of all principal and accrued interest, if any, if the debt is payable on demand;

inability to obtain necessary additional financing if the debt contains covenants restricting our ability to obtain such financing

while the debt is outstanding;

inability to pay dividends on our common stock;

a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends

on our common stock if declared, our ability to pay expenses, make capital expenditures and acquisitions, and fund other general

corporate purposes;

on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;

vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation;

on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, and execution

of our strategy;

purposes and other disadvantages compared to our competitors who have less debt.

indicated in the accompanying financial statements, at December 31, 2022 and December 31, 2021, we had $345,777 and $48,555 in cash,

respectively and deferred offering costs of $0 and $108,962, respectively.

Additionally, the underwriters are entitled to a deferred

fee of $0.35 per Unit, or $4,628,750.

The deferred fee will become payable to the underwriters from the amounts held in the Trust Account

solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement.

expect to continue to incur significant costs in the pursuit of our initial business combination plans.

We cannot assure you that our

plans to raise capital or to complete our initial business combination will be successful.

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.

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.

Our 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, or an aggregate of approximately $77,000 per month, and 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.

of Operations and Known Trends or Future Events

entire activity since inception up to December 31, 2022 relates to our formation, our initial public offering and, since the closing

of the initial public offering, a search for a business combination candidate.

We will not be generating any operating revenues until

the closing and completion of our initial business combination, at the earliest.

the year ended December 31, 2022 and during the period from October 19, 2021 (inception) through December 31, 2021, we had net income

and a loss of $398,639 and $4,381, respectively.

For the year ended December 31, 2022 this consisted primarily of general and administrative

expenses of approximately $1.20 million and income tax expense of $374,862.

This was offset by interest income of approximately $1.98

million earned on Trust assets during the year ended December 31, 2022.

There was no interest income earned and during the period from

October 19, 2021 (inception) through December 31, 2021, and the net loss consisted of formation costs.

January 2023, 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.

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.

As a result of less fund in the Trust Account, we

do not expect the same level of interest income in 2023 as we experienced during the year ended December 31, 2022.

Capital Resources and Going Concern

indicated in the accompanying financial statements, at December 31, 2022, we had $345,777 in cash.

the year ended December 31, 2022, the net increase in cash was $297,222.

Cash used in operating activities was $1,311,310 and was mainly

the result of a net income of $398,639, interest income earned on trust assets $1,976,183, cash used in accrued expenses of $27,664, and cash used in prepaid expenses of $245,254 partially offset by change in deferred offering costs of $108,962 and

accrued income taxes payable of $374,862.

Cash used in investing activities was $134,895,000 and was the result of funds deposited into the trust

Cash provided by financing activities was $136,503,532 and was primarily related to the initial public offering.

February 7, 2022 Company consummated its initial public offering of 11,500,000 units (the “Units”).

Each Unit consists of

one share of Class A common stock of the Company, par value $0.0001 per share (“Class A Common Stock”), and one redeemable

warrant of the Company (“Warrant”), with each whole Warrant entitling the holder thereof to purchase one share of Class A

Common Stock for $11.50 per share.

The Units were sold at a price of $10.00 per Unit, generating gross proceeds to the Company of $115,000,000

the Company granted the Underwriters in the Offering a 45-day option to purchase up to 1,725,000 additional Units solely to cover over-allotments,

if any (the “Option”).

The Underwriters exercised the Option in full, resulting in the sale of 13,225,000 Units in total

and total gross proceeds of $132.25 million, which were placed in a U.S.-based trust account (the “Trust Account”), maintained

by Wilmington Trust Company, acting as trustee.

February 7, 2022, simultaneously with the consummation of the Offering, the Company consummated the private placement of 754,000 units

(the “Private Placement Units”) to the Sponsor, which amount includes 69,000 Private Placement Units purchased by the Sponsor

in connection with the Underwriters’ exercise of the Option in full, at a price of $10.00 per Private Placement Unit, generating

gross proceeds of approximately $7.54 million (the “Private Placement”) a portion of the proceeds of were placed in the Trust

Account and a portion was used to pay offering expenses including the non-deferred underwriting discount related to the Offering.

“ January 2023 Extension ” as noted above for additional information regarding proceeds currently in the Trust

connection with the Company’s assessment of going concern considerations in accordance with Accounting Standards Update (“ASU”)

2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined

that the Combination Period is less than one year from the date of the issuance of the financial statements.

There is no assurance that

the Company’s plans to consummate a Business Combination will be successful within the Combination Period.

As a result, these factors

raise substantial doubt about the Company’s ability to continue as a going concern for the next twelve months from the issuance

of these financial statements.

The financial statements do not include any adjustments that might result from the outcome of the uncertainty.

Party Transactions

November 16, 2021, Murphy Canyon Acquisition Sponsor, LLC, our sponsor, purchased 4,312,500 founder shares for an aggregate purchase

price of $25,000, or approximately $0.006 per share.

On January 26, 2022, the sponsor surrendered and forfeited 1,006,250 Founder Shares

for no consideration, following which the sponsor holds 3,306,250 founder shares at approximately $0.008 per share.

The founder shares

(including the Class A common stock issuable upon exercise thereof) may not, subject to certain limited exceptions, be transferred, assigned

or sold by the holder.

on the date of our initial public offering, we have pay Murphy Canyon Management Group, Inc., an affiliate of our sponsor, a total of

$10,000 per month for office space, utilities and secretarial and administrative support.

For the year ended December 31, 2022, total

payments to Murphy Canyon Management Group were $110,000.

Upon completion of our initial business combination or our liquidation, we

will cease paying these monthly fees.

sponsor, officers and directors, or any of their respective affiliates, will be reimbursed for any out-of-pocket expenses incurred in

connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business

combinations.

Our audit committee will review on a quarterly basis all payments that were made to our sponsor, officers or directors

or our or their affiliates and will determine which expenses and the amount of expenses that will be reimbursed.

There is no cap or ceiling

on the reimbursement of out-of-pocket expenses incurred by such persons in connection with activities on our behalf.

November 4, 2021 our sponsor loaned us $300,000 to be used for a portion of the expenses of the initial public offering.

are non-interest bearing, unsecured and were repaid upon the closing of the initial public offering in February 2022.

addition, in order to finance transaction costs in connection with an intended initial business combination, our sponsor or an affiliate

of our sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required.

If we complete

our initial business combination, we would repay such loaned amounts.

In the event that our initial business combination does not close,

we may use a portion of the working capital held outside the Trust Account to repay such loaned amounts but no proceeds from our Trust

Account would be used for such repayment.

Up to $1,500,000 of such loans may be convertible into units, at a price of $10.00 per unit

at the option of the lender, upon consummation of our initial business combination.

The units would be identical to the placement units.

The terms of such loans by our officers and directors, if any, have not been determined and no written agreements exist with respect

to such loans.

We do not expect to seek loans from parties other than our sponsor or an affiliate of our sponsor as we do not believe

third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our Trust

connection with the initial public offering, our sponsor purchased 754,000 placement units for an aggregate purchase price of $7,540,000.

Each whole warrant is exercisable to purchase one whole share of Class A common stock at $11.50 per share.

Our Sponsor has agreed to

transfer, but has not yet transferred, an aggregate of 45,000 placement units (15,000 each) to each of our three independent directors.

There will be no redemption rights or liquidating distributions from the Trust Account with respect to the founder shares, or placement

units, which will expire worthless if we do not consummate a 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).

The placement

units are identical to the units sold in the initial public offering except that the placement units and their component securities will

not be transferable, assignable or saleable until 30 days after the consummation of our initial business combination except to permitted

transferees, the purchasers of the placement units waive any and all rights and claims that they may have to any proceeds, and any interest

thereon, held in the Trust Account in respect of the common stock underlying such placement units in the event that a business combination

is not consummated.

The placement units are entitled registration rights.

Additionally, the warrants underlying the placement units contain

a cashless exercise provision and shall be non-redeemable while held by the initial purchasers thereof or their permitted assignees.

There will be no underwriting fees or commissions due with the respect to the private placement.

sponsor has agreed to waive its redemption rights with respect to its founder shares (i) in connection with the consummation of a business

combination, (ii) in connection with a stockholder vote to amend our amended and restated certificate of incorporation 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) and (iii) if we fail to consummate a 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 if we liquidate

prior to the expiration of such period.

However, our initial stockholders will be entitled to redemption rights with respect to any public

shares held by them if we fail to consummate a business combination or liquidate 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).

to a registration rights agreement we entered into with our initial stockholders, we may be required to register certain securities for

sale under the Securities Act.

These holders, and holders of units issued upon conversion of working capital loans, if any, are entitled

under the registration rights agreement to make up to three demands that we register certain of our securities held by them for sale

under the Securities Act and to have the securities covered thereby registered for resale pursuant to Rule 415 under the Securities Act.

In addition, these holders have the right to include their securities in other registration statements filed by us.

We will bear the

costs and expenses of filing any such registration statements.

March 7, 2023 our sponsor loaned us $300,000 to be used to fund the trust account and for our operating expenses, and may lend up to

$1,500,000 in total.

These loans are non-interest bearing, unsecured and will be repayable in full upon the earlier of (i) the date on

which we consummate our initial business combination and (ii) the date that our winding up is effective.

Sheet Arrangements;

Commitments and Contractual Obligations;

Quarterly Results

of December 31, 2022, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K and did not

have any commitments or contractual obligations.

April 5, 2012, the JOBS Act was signed into law.

The JOBS Act contains provisions that, among other things, relax certain reporting requirements

for qualifying public companies.

We will qualify as an “emerging growth company” and under the JOBS Act will be allowed to

comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies.

electing to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting

standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies.

As a result, our financial

statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective

Additionally,

we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act.

to certain conditions set forth in the JOBS Act, if, as an “emerging growth company”, we choose to rely on such exemptions

we may not be required to, among other things, (i) provide an independent registered public accounting firm’s attestation report

on our system of internal controls over financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure

that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii)

comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the report of

independent registered public accounting firm providing additional information about the audit and the financial statements (auditor

discussion and analysis), and (iv) disclose certain executive compensation related items such as the correlation between executive compensation

and performance and comparisons of the Chief Executive Officer’s compensation to median employee compensation.

These exemptions

will apply for a period of five years following the completion of the initial public offering or until we are no longer an “emerging

growth company,” whichever is earlier.

following discussion and analysis of our financial condition and results of operations should be read together with the other sections

of this Annual Report on Form 10-K, including our audited financial statements for the year ended

December 31, 2023, together with related notes thereto, included elsewhere in this Annual Report.

The following discussion contains forward-looking

statements based upon current expectations that involve risks, uncertainties, and assumptions.

Our actual results may differ materially

from those anticipated in these forward-looking statements as a result of various factors, including those set forth under the section

titled “Risk Factors” or in other parts of this Annual Report and our other filings with the SEC.

Our historical results

are not necessarily indicative of the results that may be expected for any period in the future.

Conduit Pharmaceuticals Limited entered

into an Agreement and Plan of Merger (the “Merger Agreement”) with Murphy Canyon Acquisition Corp.

November 8, 2022.

The transaction contemplated by the terms of the Merger Agreement was completed on September 22, 2023, in conjunction

with which MURF changed its name to Conduit Pharmaceuticals Inc.

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

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

amounts are expressed in thousands of United States dollars (“$”), unless otherwise indicated.

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 need and lengthens the intellectual

property for our existing assets through cutting-edge solid-form technology and then commercialize these products with life science

are led by highly experienced pharma executives, Dr.

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.

simultaneously leveraging 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 CROs and 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.

We will 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, 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.

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

but has decided to license them for further development.

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 is expected to 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.

this relationship, there is considerable APIs that was manufactured by AstraZeneca in conducting its clinical trials available.

result, Conduit may 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.

of COVID-19, the Russia and Ukraine Conflict, and Global Economic Conditions

a result of the spread of the COVID-19 pandemic, economic uncertainties have arisen which may negatively affect our financial position,

results of operations and cash flows.

We have assessed that the COVID-19 pandemic has not so far had a material or direct impact on our

operations or financial position.

Nevertheless, in light of the ongoing COVID-19 pandemic, we have implemented measures to protect employees

and take social responsibilities while at the same time attempting to limit any negative effects on our business.

outbreak of an illness, a communicable disease, or any other public health crisis, and any resulting impacts, such as an extended period

of global supply chain and/or economic disruption, labor shortages, or government-mandated actions in response to such public health

crisis could materially affect our business, results of operations, access to sources of liquidity, and financial condition.

continues to actively monitor our financial condition, liquidity, operations, suppliers, industry and workforce.

conflicts between Russia and Ukraine and between Israel and Hamas have caused major macroeconomic disruptions that have impacted the

global trade and economies.

As such increasing inflation around the globe has forced national banks to increase their interest rates,

consequently impacting interest yields around the globe.

We have assessed the impact of these measures and concluded that as of today,

no material impact has been identified on our business or our ability to continue as a going concern.

Component of Result of Operations

and Development Expenses

and development expenses consist primarily of costs incurred in connection with the research and development of our candidates and programs.

We expense research and development costs and intangible assets acquired that have no alternative future use as incurred.

These expenses

personnel-related

expenses, including salaries, bonuses, benefits and stock-based compensation for employees engaged in research and development functions;

incurred in connection with the clinical development and regulatory approval of our clinical assets, including under agreements with

third parties, such as consultants, contractors and CROs;

fees with no alternative use;

expenses related to research and development.

expense research and development costs as incurred.

Advance payments that we make for goods or services to be received in the future

for use in research and development activities are recorded as prepaid expenses.

The prepaid amounts are expensed as the benefits are

incurred approximately $37,000 on research and development activities during the year ended December 31, 2022, and $90,000 during the

year ended December 31, 2023.

Our research and development activities have been wholly focused on 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.

have one pending international patent application and two pending national patent applications.

The successful completion of clinical

trials increases the value of clinical assets and may lead to the commercialization and/or licensing of such assets to other pharmaceutical

There is no assurance that any clinical trials on the assets owned or licensed by us will be successful.

and Development Funding expenses

Funding expenses

consist primarily of costs incurred in connection with the Company providing funding to SGSC to carry out its research and development

SGSC holds all licenses to conduct clinical research through third party pharmaceutical companies.

We 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 project.

We have provided approximately GBP £220,000 in aggregate project funding pursuant to the Global Funding Agreement and the project

funding agreements and we have received aggregate revenues totaling GBP £0 pursuant to the Global Funding Agreement and the project

funding agreements.

date, we do not track our research and development expenses on a program-by-program basis as we only worked on one program related to

COVID-19 treatment.

Moving forward, we do not expect further research and development expense for clinical research into COVID-19 as

we explore broader applications of our research to date.

Our direct external research and development expenses consist primarily of external

costs, such as fees paid to outside consultants, CROs, CMOs and research laboratories in connection with our preclinical development,

process development, manufacturing and clinical development activities.

We do not allocate employee costs, costs associated with our

discovery efforts, laboratory supplies, and facilities, including depreciation or other indirect costs, to specific programs because

these costs are deployed across multiple programs and, as such, are not separately classified.

We use internal resources primarily to

conduct its research and discovery as well as for managing its preclinical development, process development, manufacturing and clinical

development activities.

These employees work across multiple programs and, therefore, we do not track their costs by program.

and development activities have historically been central to our business model.

We anticipate that our research and development expenses

will increase for the foreseeable future in connection with our planned clinical development activities, upon raising anticipated additional

this time, we cannot reasonably estimate or know the nature, timing and costs of the efforts that would be necessary to complete the

preclinical and clinical development of any of our clinical assets or when, if ever, material net cash inflows may commence from any

of our clinical assets.

The successful development and commercialization of any of our clinical assets is highly uncertain.

This uncertainty

is due to the numerous risks and uncertainties associated with product development and commercialization, including the uncertainty of

the following:

scope, progress, timing, outcome and costs of any continued preclinical development activities, clinical trials and other related

development activities;

suspensions, or other setbacks or interruptions encountered;

patient enrollment in and the initiation and completion of any clinical trials;

timing, receipt and terms of any marketing approvals from applicable regulatory authorities including the U.S.

Food and Drug Administration

(“FDA”) and non-U.S.

regulatory authorities;

extent of any required post-marketing approval commitments to applicable regulatory authorities;

clinical and commercial manufacturing capabilities or making arrangements with third-party manufacturers in order to ensure that

us or our third-party manufacturers are able to make and scale our products successfully;

and timely delivery of clinical-grade and commercial-grade drug formulations that can be used in Conduit’s clinical trials

and for commercial launch;

maintaining, defending and enforcing patent claims and other intellectual property rights;

and changing government regulation;

commercial sales of Conduit’s clinical assets, if and when approved, whether alone or in collaboration with others;

a continued acceptable safety profile of Conduit’s clinical assets following approval, if any, of Conduit’s clinical

change in any of these variables with respect to any of Conduit’s programs would significantly change the costs, timing and viability

associated with that program.

and Administrative Expenses

and administrative expenses consist of salaries and other related costs, legal fees relating to intellectual property and corporate matters,

professional fees for accounting, auditing, tax and consulting services, insurance costs, travel, and other operating costs.

anticipate that our general and administrative expenses will increase substantially for the foreseeable future as we increase our administrative

headcount to operate as a public company and as we advance clinical assets through clinical development.

We also will incur additional

expenses as a result of operating as a public company, including expenses related to compliance with the rules and regulations of the

SEC and the Nasdaq listing rules, additional insurance expenses, investor relations activities and other administrative and professional

Income (Expenses)

income (expenses), net

income (expense), net consists of realized and unrealized losses or gains from the sale of equity securities, unrealized foreign

currency transaction loss, loss on the change in fair value of convertible notes, warrants and option liabilities, and write-off of

long-term debt- related party, and derecognition of deferred revenue.

expense, net consists primarily of interest expense on convertible loan notes and promissory notes and interest expense on deferred commissions

payable to an advisor for fees related to the merger, as well as a small amount of interest income on cash and cash equivalents held

by the Company.

of Operations

following table set forth our results of operations for the periods indicated:

amounts in thousands)

and development expenses

and development expenses increased by approximately $53,000, or 143%, to approximately $90,000 for the year ended December 31, 2023,

as compared to approximately $37,000 for the year ended December 31, 2022.

The increase was primarily due to the development of certain

co-crystals of AZD1656 (AZD1656 Co-Crystal PCT/IB2022/00075 - Patent Expires 02/09/2042) during the year ended December 31, 2023.

will seek to develop the AZD1656 Co-Crystal in psoriasis, Crohn’s disease, lupus, sarcoidosis, diabetic wound healing, idiopathic

pulmonary fibrosis, and nonalcoholic steatohepatitis (NASH).

and administrative expenses

amounts in thousands)

and administrative expenses

and administrative expenses increased by $2.1 million, or 70%, to approximately $5.2 million for the year ended December 31, 2023,

as compared to approximately $3.0 million for the year ended December 31, 2022.

The increase was primarily driven by a $1.2 million

increase in professional fees including:

legal fees, accounting

and tax expense, listing fees and consulting fees.

General and administrative expenses were also impacted by a $0.4 million increase

in salaries, payroll expense and stock compensation, a $0.2 million increase in travel expense, $0.5 million increase in

employee insurance (including directors and officers insurance expense), offset by a $0.2 million decrease in Other G&A expenses.

amounts in thousands)

expenses decreased by $0.1 million, or 100%, to zero for the year ended December 31, 2023, as compared to $0.1 million for the year ended

December 31, 2022.

The decrease was primarily due to a decrease of $0.1 million in funding requirements from St George Street for research

and development expenses incurred and which we agreed to fund.

No funding was provided in 2023, as Conduit continues to explore preferred

indications, its preferred collaboration partners, and preferred avenues of additional research.

income (expense), net

amounts in thousands)

income (expense), net

income (expense), net changed by $6.7 million, or 385%, to other income of $4.9 million for the year ended December 31, 2023, as

compared to other expense, net of $1.7 million for the year ended December 31, 2022.

The change was primarily driven by a $1.5

million gain on the derecognition of the Cizzle option in 2023, a $1.3 million gain on the change in fair value of the Cizzle

option, a $2.8 million gain on the derecognition of the deferred revenue for the Vela option prior to the exercise of the Vela

option , and a $1.0 million gain on the change in fair value of the Vela option.

This was offset by a $1.0 million loss on issuance

related to the Vela option, $0.4 million change in the fair value of convertible notes payable and $0.3 million realized foreign

currency transaction loss.

During the year ended December 31, 2022, we recorded a loss on the fair market value adjustment for the

Cizzle option of $1.3 million and a loss on the adjustment to convertible notes of $0.3 million.

further details refer to Note 16 – Other income (expense), net in the financial statements as of December 31, 2023 and 2022

included elsewhere in this Report.

amounts in thousands)

changes denoted with an “nm” represent percent changes that are not meaningful.

expense, net changed by $0.2 million from nil for the year ended December 31, 2023 to an expense of $0.2 million for the year ended

December 31, 2022.

The change was driven by $0.2 million increase in interest expense on interest-bearing convertible promissory

notes for the year ended December 31, 2023 that was not issued until the first quarter of 2023.

and Capital Resources

assesses liquidity in terms of our ability to generate cash to fund operating, investing and financing activities.

Since our inception,

and in line with our growth strategy, we have prepared our financial statements assuming we will continue as a going concern.

inception, we have incurred net losses and experienced negative cash flows from operations.

To date, our primary sources of capital have

been through private placements of equity securities and convertible debt as well as PIPE financing as a result of the Merger.

the year ended December 31, 2023 and 2022, we had net losses of $0.5 million and $4.9 million, respectively.

The Company has also received

a $5 million commitment for working capital, subject to agreement and definitive documentation, from Corvus Capital, a major shareholder,

and expects to use that commitment to cover its operating costs for the coming year.

We expect to incur additional losses and higher

operating expenses for the foreseeable future as we continue to invest in research and development programs.

primary uses of cash are to fund our operations as we continue to grow our business.

We will require a significant amount of cash for

expenditures as we invest in ongoing research and development and business operations.

Until such time as we can generate significant

revenue from commercialization of our product, we expect to finance our cash needs for ongoing research and development and business

operations through public or private equity or debt financings or other capital sources, including strategic partnerships.

may be unable to raise additional funds or enter into such other arrangements, when needed, on favorable terms or at all.

To the extent

that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders

will be, or could be, diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the

rights of our common stockholders.

Debt financing and equity financing, if available, may involve agreements that include covenants limiting

or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.

If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, or substantially

reduce research and development efforts all of which could have a material adverse effect on the Company and its financial results.

the Company believes in the viability of its ability to raise additional funds, there can be no assurances to that effect.

We have based

our estimates on assumptions of operating costs that may prove to be wrong.

As a result, we could deplete our capital resources sooner

than we currently expect.

If, for any reason, our expenses differ materially from our assumptions or we utilize our cash more quickly

than anticipated, or if we are unable to obtain funding on a timely basis we may be required to revise our business plan and strategy,

which may result in significantly curtailing, delaying or discontinuing one or more of our research or development programs or the commercialization

of any product candidates or may result in our being unable to expand our operations or otherwise capitalize on our business opportunities.

As a result, our business, financial condition, and results of operations could be materially affected.

has concluded that there is substantial doubt regarding our ability to continue as a going concern for a period of at least 12 months

from the date of the filing of this Annual Report.

This is based on our analysis under applicable accounting principles.

These financial

statements have been prepared assuming the Company will continue as a going concern and do not include adjustments to reflect the possible

effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the

outcome of this uncertainty.

material cash requirements include the following contractual and other obligations.

Convertible Note

March 2023, we issued an aggregate principal amount of $0.8 million convertible promissory note payable to an investor.

promissory convertible note matures and is payable in full 18 months from the date of the note.

The note carries 20% interest and is

payable every six months from the date of the note until the maturity date.

The note is subject to conversion into our common stock prior

to the maturity date.

May 2022, we entered into two loan agreements, with an aggregate principal amount of $0.2 million, with two lenders.

loans are payable and mature in May 2024 and bear no interest.

additional information regarding our convertible promissory note, see Note 7 of the notes to the financial statements.

currently anticipate that cash required for working capital for the next 12 months is approximately $6.8 million, which includes accrued

expenses and other current liabilities of $1.1 million, and convertible promissory note, if not converted prior to maturity, of $0.8 million.

We do anticipate being able to fund required working capital for the next 12 months with cash and cash equivalents on hand and current

Management believes that we will be able to fund cash required for the next 12 months through borrowings.

We have historically

been able to access funds through the issuance of debt and believe we can continue to obtain funding through such debt financing agreements

as needed to meet cash requirements for the next 12 months.

following table set forth our cash flows for the period indicated (in thousands):

cash (used in) provided by:

of exchange rate changes on cash and cash equivalents

(decrease) increase in cash and cash equivalents

Flows Used in Operating Activities

cash used in operating activities for the year ended December 31, 2023 was $7.7 million, resulting primarily from a net loss of $0.5

million, adjusted for non-cash items including a $4.3 million reduction of deferred income upon exercise of the Cizzle and Vela

option, a $2.5 million change in operating assets and liabilities, a $2.3 million gain on the change in fair value of the Vela and

Cizzle options, a $0.2 million change in the reserve for uncollectible loans and a $0.1 million gain on warrant remeasurement,

partially offset by a $1.0 million loss upon the issuance of the Vela option, a $0.5 million change in amortization on directors

& officers insurance, a $0.4 million loss on change in fair value of convertible notes and a $0.2 million increase in stock

based compensation expense.

The $2.5 million cash outflow from operating assets and liabilities is primarily due to a $1.0 million

cash outflow from prepaid expenses and a $1.7 million cash outflow from accrued expenses and other current liabilities partially

offset by a $0.2 million cash inflow from accounts payable $1.8 million in decrease from accounts payable, accrued expense and other

current liabilities due to differences in the timing of disbursements.

cash used in operating activities during the year ended December 31, 2022 was $2.3 million, resulting primarily from a net loss of $4.9

million, adjusted for non-cash charges of $2.0 million and working capital adjustments of $0.6 million.

Flows (Used) Provided by Investing Activities

cash provided by or used in investing activities for the year ended December 31, 2023.

was $0.7 million, resulting from $0.5 million

in proceeds from an option fee received from Vela of $0.5 million and $0.6 million proceeds from the repayment of a loan from a

related party, partially offset by an issuance of a loan to a related party of $0.4 million.

cash used in investing activities for the year ended December 31, 2022 was $0.2 million resulting from the issuance of a loan to a related

party of $0.3 million, partially offset by an option fee received from Cizzle of $0.1 million .

Flows Provided by Financing Activities

cash provided by financing activities for the year ended December 31, 2023 was $11.0 million, resulting from the proceeds from the

Merger and related PIPE financing, net of transaction costs of $8.5 million, $2.3 million from issuance of convertible notes

payable, and $0.1 million capital contribution from a related party.

cash provided by financing activities during the year ended December 31, 2022 was $2.4 million.

resulting from the proceeds from the

sale of shares received for the sale of future revenue of $1.3 million, proceeds from notes payable of $0.2 million and the issuance

of our convertible debt of $0.9 million.

Obligations and Other Commitments

of December 31, 2023, we had no non-cancellable commitments for the purchase of clinical materials, contract manufacturing, maintenance

and committed funding which we expect to pay within one year.

Accounting Estimates

preparation of financial statements in conformity with U.S.

GAAP requires us to make estimates, judgments and assumptions that affect

the amounts reported in the Consolidated Financial Statements.

These estimates, judgments and assumptions are evaluated on an ongoing

We base our estimates on historical experience and on various other assumptions that we believe are reasonable at that time, the

results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent

from other sources.

Actual results may differ materially from those estimates.

The accounting policies that reflect our more significant

estimates, judgments and assumptions and which we believe are the most critical to aid in fully understanding and evaluating our reported

financial results include the following:

accompanying Consolidated Financial Statements have been prepared on a going concern basis of accounting, which contemplates continuity

of operations, realization of assets and liabilities and commitments in the normal course of business.

The accompanying Consolidated

Financial Statements do not reflect any adjustments that might result if we are unable to continue as a going concern.

In connection

with the preparation of the Consolidated Financial Statements for the years ended December 31, 2023 and 2022, we conducted an evaluation

as to whether there were conditions and events, considered in the aggregate, which raised substantial doubt as to our ability to continue

as a going concern within one year after the date of the issuance of such financial statements, and concluded that substantial doubt

existed as to our ability to continue as a going concern as further discussed in Note 1 in the notes to the Consolidated Financial Statements

of this Annual Report.

ASC 205-40, the receipt of potential funding from future partnerships, equity or debt issuances, potential achievement of milestones

from customer agreements and reductions in workforce cannot be considered probable at this time because these plans are not entirely

within our control and/or have not been approved by our board of directors as of the date of issuance of the Consolidated Financial Statements.

expectation to generate operating losses and negative operating cash flows in the future and the need for additional funding to support

our planned operations, raise substantial doubt regarding our ability to continue as a going concern.

Our plans to alleviate the conditions

that raise substantial doubt include reduced spending, and the pursuit of additional capital.

We have concluded the likelihood that our

plan to successfully obtain sufficient funding from one or more of these sources, or adequately reduce expenditures, while possible,

is less than probable.

We believe that the accounting estimates described below involve a significant degree of judgment and complexity.

Accordingly, we believe these are the most critical to aid in fully understanding and evaluating our financial condition and results

of operations.

Value Measurements

Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures , defines fair value, establishes

a framework for measuring fair value, and expands disclosures about fair value measurements.

Fair value is to be determined based on

the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous

market for the asset or liability in an orderly transaction between market participants.

In determining fair value, the Company used

various valuation approaches.

A fair value hierarchy has been established for inputs used in measuring fair value that maximizes the

use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available.

Observable inputs are those that market participants would use in pricing the asset or liability based on market data obtained from sources

independent of the Company.

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

based on the best information available in the circumstances.

The fair value hierarchy is categorized into three levels, based on the

inputs, as follows:

1—Valuations based on quoted prices for identical instruments in active markets.

Since valuations are based on quoted prices

that are readily and regularly available in an active market, valuation of these instruments does not entail a significant degree

2— Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for either similar

instruments in active markets, identical or similar instruments in markets that are not active, or model-derived valuations whose

inputs or significant value drivers are observable or can be corroborated by observable market data.

3—Valuations based on inputs that are unobservable.

These valuations require significant judgment.

Company’s Level 1 assets consist of cash and cash equivalents in the accompanying balance sheets and the value of accrued expenses

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

of December 31, 2023, the Company has a warrant liability for which the fair value is determined based on Level

2 inputs as such inputs are based on observable inputs other than quoted prices.

See Note 4 and Note 6 for further information on the

Company’s financial liabilities carried at fair value.

Option Agreement

account for the Vela option at fair value in order to measure the liability at an amount that more accurately reflects the current economic

environment in which we operate.

We recorded the option at fair value with changes in fair value recorded in earnings at each

reporting period through settlement.

The significant assumptions used to estimate the fair value of the option liability involved inherent

uncertainties and the application of significant judgment and included the time to maturity and the underlying asset price based on the

probability of AZD 1656 successfully moving from Phase I to Phase II.

The sensitivity of these inputs to the fair value of the option is assessed on a periodic basis.

fair value of the option liability was estimated using the Monte Carlo Simulation Model, where the value of the Vela option was estimated

based on an analysis of five inputs.

Valuation models require the input of highly subjective assumptions, including the expected volatility

of the underlying asset as well as the expected share price of the Company at the reporting date.

If any of the assumptions used in the

Monte Carlo Simulation Model changes significantly, the option liability may differ materially from that recorded in the current period.

Option Agreement

account for the Cizzle option at fair value in order to measure the liability at an amount that more accurately reflects the current

economic environment in which we operate.

We recorded the option at fair value with changes in fair value recorded in earnings

at each reporting period through settlement.

The significant assumptions used to estimate the fair value of the option liability involved

inherent uncertainties and the application of significant judgment and included the time to maturity and the underlying asset price based

on the probability of the AZD 1656 successfully moving from Phase I to Phase II.

The sensitivity of these inputs to the fair value of

the option is assessed on a periodic basis.

fair value of the option liability was estimated using the Black-Scholes-Merton Model, where the value of the Cizzle option was estimated

based on an analysis of six inputs.

Valuation models require the input of highly subjective assumptions, including the expected volatility

of the underlying asset.

If any of the assumptions used in the Black-Scholes-Merton Model changes significantly, the option liability

may differ materially from that recorded in the current period.

Value Option for Convertible Notes

elected to account for certain of our convertible notes at fair value in order to measure those liabilities at amounts that more

accurately reflect the current economic environment in which we operate.

We recorded the convertible notes at fair value with

changes in fair value recorded in earnings at each reporting period through settlement.

The fair value of the convertible notes was

determined using a probability-weighted income approach as the convertible notes contained various settlement outcomes.

significant assumptions used to estimate the fair value of the convertible notes involved inherent uncertainties and the application

of significant judgment and included the time to maturity and the probability of the various settlement outcomes.

The sensitivity

of these inputs to the fair value of the convertible notes is assessed on a periodic basis.

values of the derivative liabilities related to the convertible notes were estimated using a probability-weighted expected return method,

where the values of various instruments were estimated based on an analysis of future values of our business, assuming various future

The resulting instruments’ values were based upon the probability - weighted present value of expected future

investment returns, considering each of the possible future outcomes available to us, as well as the economic benefits attributable to

each class of instruments.

The expected future investment returns were estimated using a variety of methodologies, including both the

market approach and the income approach, where an observable quoted market does not exist, and were generally classified as Level 3.

Such methodologies included reviewing values ascribed to our most recent financing, comparing the subject instrument with similar instruments

of publicly traded companies in similar lines of business, and reviewing our underlying financial performance and subject instrument,

including estimating discounted cash flows.

If any of the assumptions used in the probability-weighted expected return method changes

significantly, the convertible notes may differ materially from that recorded in the current period.

Accounting Pronouncements

discussion of recent accounting pronouncements is included in Note 1 - Nature of the Business and Basis of Presentation and Summary

of Significant Accounting Policies to our financial statements included elsewhere in this Report.

Growth Company Status and Smaller Reporting Company Status

Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”).

the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of

the JOBS Act until such time as those standards apply to private companies.

The Company has elected to use this extended transition period

for complying with new or revised accounting standards that have different effective dates for public and private companies until the

earlier of the date that:

(i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended

transition period provided in the JOBS Act.

As a result, these financial statements may not be comparable to companies that comply with

the new or revised accounting pronouncements as of public company effective dates.

closing of the Merger, the surviving company remained an emerging growth company, as defined by the Jumpstart Our Business Startups act

of 2012, until the earliest of (i) the last day of the combined entity’s first fiscal year following the fifth anniversary of the

completion of MURF’s initial public offering, (ii) the last day of the fiscal year in which the combined entity has total annual

gross revenue of at least $1.235 billion, (iii) the last day of the fiscal year in which the combined entity is deemed to be a large

accelerated filer, which means the market value of the combined entity’s common stock that is held by non-affiliates exceeds $700.0

million as of the prior December 31st or (iv) the date on which the combined entity has issued more than $1.0 billion in non-convertible

debt securities during the prior three year period.

addition, Conduit is a smaller reporting company as defined in the Exchange Act.

The Company may continue to be a smaller reporting company

even after we are no longer an emerging growth company.

We may take advantage of certain of the scaled disclosures available to smaller

reporting companies and will be able to take advantage of these scaled disclosures for so long as (i) Conduit’s voting and non-voting

common stock held by non-affiliates is less than $250.0 million measured on the last business day of our second fiscal quarter or (ii)

Conduit’s annual revenue is less than $100.0 million during the most recently completed fiscal year and its voting and non-voting

common stock held by non-affiliates is less than $700.0 million measured on the last business day of its second fiscal quarter.

Quantitative and Qualitative Disclosures about Market Risk

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What changed 10-K

Item 7. Management’s Discussion and Analysis