What changed in this filing

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Item 1. Financial Statements

2024-11-14 compared with 2024-08-12 · 728 added, 525 removed, 651 unchanged (66% of the section changed)

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thousands, except share and per share amounts)

June 30, 2024

September 30, 2024

December 31, 2023

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Accrued expenses and other current liabilities

Bank overdraft

Convertible promissory note payable

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Loans payable

Deferred commission payable

Total current liabilities

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Total liabilities

Commitments and contingencies (see note 16)

Stockholders’ deficit

Common stock, par value $ 0.0001 ;

250,000,000 shares authorized at June 30, 2024 and December 31, 2023, respectively, 74,000,234 and 73,829,536 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively

250,000,000 shares authorized at September 30, 2024 and December 31, 2023, respectively, 96,004,699 and 73,829,536 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively

Preferred stock, par value $ 0.0001 ;

1,000,000 shares authorized at June 30, 2024 and December 31, 2023;

no shares issued and outstanding at June 30, 2024 and December 31, 2023

1,000,000 shares authorized at September 30, 2024 and December 31, 2023;

no shares issued and outstanding at September 30, 2024 and December 31, 2023

Additional paid-in capital

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PHARMACEUTICALS INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

thousands, except share and per share amounts)

Three Months ended June 30,

Months ended June 30,

Three Months ended September 30,

Nine Months ended September 30,

Operating expenses:

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Total other (expense) income, net

Net (loss) income

Basic earnings/(net loss) per share

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Diluted weighted-average common shares outstanding

Comprehensive loss:

Comprehensive Income (loss):

Foreign currency translation adjustment

Total comprehensive loss

Total comprehensive Income (loss)

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

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stockholders’

Balance at April 1, 2024

Issuance of Common Stock for services

Issuance of Common Stock upon vesting of restricted stock units

Issuance of Warrants

Balance at July 1, 2024

Issuance of Common Stock for note payable

Issuance of Common Stock for licensing right

Stock-based compensation

Foreign currency translation adjustment

Balance at June 30, 2024

Balance at September 30, 2024

comprehensive

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Issuance of Common Stock upon vesting of restricted stock units

Issuance of Common Stock for note payable

Issuance of Common Stock for licensing right

Issuance of Warrants

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Foreign currency translation adjustment

Balance at June 30, 2024

other comprehensive

Balance at September 30, 2024

comprehensive

stockholders’

Balance at April 1, 2023

Balance at July 1, 2023

Retroactive application of Merger

Reclassification of additional paid-in-capital

Adjusted Balances, beginning of period

Reclassification of additional paid-in-capital

Issuance of Conduit Pharmaceuticals Inc.

common stock to holders of Conduit Pharmaceuticals Limited convertible notes on the Closing Date (Note 3)

Merger, net of redemptions (Note 3)

Issuance of Conduit Pharmaceuticals Inc.

common stock in connection with PIPE Financing (Note 3)

Issuance of Conduit Pharmaceuticals Inc.

common stock to Cizzle Biotechnology Holding PLC

Issuance of Conduit Pharmaceuticals Inc.

common stock to an advisor for services directly related to the Merger (Note 3)

Reduction of excise tax liability associated with the Merger (Note 3)

Capital contribution - related party

Stock-based compensation

Foreign currency translation adjustment

Balance at June 30, 2023

Accumulated other comprehensive

Balance at September 30, 2023

comprehensive

stockholders’

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Adjusted Balances, beginning of period

Reclassification of additional paid-in-capital

Issuance of Conduit Pharmaceuticals Inc.

common stock to holders of Conduit Pharmaceuticals Limited convertible notes on the Closing Date (Note 3)

Merger, net of redemptions (Note 3)

Issuance of Conduit Pharmaceuticals Inc.

common stock in connection with PIPE Financing (Note 3)

Issuance of Conduit Pharmaceuticals Inc.

common stock to Cizzle Biotechnology Holding PLC

Issuance of Conduit Pharmaceuticals Inc.

common stock to an advisor for services directly related to the Merger (Note 3)

Reduction of excise tax liability associated with the Merger (Note 3)

Capital contribution - related party

Stock-based compensation

Foreign currency translation adjustment

Balance at June 30, 2023

Balance at September 30, 2023

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

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CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months ended June 30,

Nine Months ended September 30,

Cash flows used in operating activities:

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Loss on change in fair value of convertible notes payable

Loss on related party loan forgiveness

Unrealized foreign exchange gain

Unrealized foreign exchange loss

Issuance of warrants for lock-up

Interest expense on convertible promissory note

Non-cash reduction of deferred income upon exercise of option liability

Gain on change in fair value of derivative warrant liability

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Amortization of financed Directors and Officers insurance

Issuance of common stock for services

Amortization of debt issuance costs

Depreciation Expense

Issuance of common stock for services and licensing right

Changes in operating assets and liabilities:

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Proceeds from the sale of short-term investments

Proceeds from the issuance of the Vela option

Proceeds from the issuance of options

Net cash flows used in investing activities

Cash flows provided by financing activities:

Proceeds from Merger and related PIPE Financing, net of transaction costs

Net proceeds from the issuance of notes payable

Capital contribution - related party

Proceeds from issuance of convertible notes payable, carried at fair value

Interest paid on convertible promissory note, carried at cost

Proceeds from issuance of warrants from lock-up

Bank Overdraft

Proceeds from issuance of convertible promissory note payable, carried at cost

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Right-of-use assets obtained in exchange for operating lease liabilities

Purchases of PP&E in accounts payable

Receivables from issuance of warrants for lock-up

Receivable from issuance of note payable

Issuance of Conduit Pharmaceuticals Inc.

common stock to Cizzle Biotechnology Holding PLC upon exercise of option

Exchange of Conduit Pharmaceuticals Limited convertible notes for shares of Conduit Pharmaceuticals Inc.

common stock in connection with the Merger

Accrued transaction costs

Non-cash directors and officers insurance

Reclassification of deferred offering costs to reduction of additional paid-in capital

Net Liabilities assumed in the Merger

Initial value of warrant liabilities issued in connection with PIPE Financing and Closing of the Merger

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

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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 companies.

The Company’s current

development pipeline, following the recently completed License Agreement with AstraZeneca AB (PUBL) (“AstraZeneca”)

dated August 7, 2024, includes two HK-4 Glucokinase Activators, which have been determined to be Phase 2 ready for application in

autoimmune disorders, as well as the Company’s proprietary, patent pending in some jurisdictions, solid-form compound targeting autoimmune disorders.

The Company’s development pipeline

also includes a potent, irreversible inhibitor of human Myeloperoxidase (MPO) that has been licensed in, and has the potential to

treat, idiopathic male infertility.

See Note 16, Subsequent Events .

Through June 30, 2024, the

Company’s development pipeline, through a relationship with St.

George Street Capital included a single HK-4 Glucokinase

Activator licensed to St George Street Capital for use in uveitis, Hashimoto’s Thyroiditis, preterm labor, and renal

transplant rejection.

The Company’s development pipeline also included a potent, irreversible inhibitor of human

Myeloperoxidase (MPO) licensed in idiopathic male infertility.

See Note 13, Related Party transactions .

solid-form technology with the expectation of commercializing these products with life science companies.

September 22, 2023 (the “Closing Date”), a merger transaction between Conduit Pharmaceuticals Limited (“Old Conduit”),

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subsidiary of MURF (“Merger Sub”), was completed (the “Merger”, see Note 3) pursuant to the initial merger agreement

dated November 8, 2022 and subsequent amendments to the merger agreement dated January 27, 2023 and May 11, 2023 (the “Merger Agreement”).

Pursuant to the terms of the Merger Agreement, on the Closing Date, (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.

Pharmaceuticals Inc.

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.

dated November 8, 2022 and subsequent amendments to the merger agreement dated January 27, 2023 and May 11, 2023 (together, the “Merger

Pursuant to the terms of the Merger Agreement, on the Closing Date, (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

to Conduit Pharmaceuticals Inc.

The common stock of the Company (the “Common Stock”) 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.

Merger was accounted for as a reverse recapitalization in accordance with accounting principles generally accepted in the United States

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GAAP and, in the opinion of the Company, contain all adjustments, consisting of only normal recurring adjustments, necessary

for a fair statement of its financial position as of June 30, 2024, and its results of operations for the three and six months ended

June 30, 2024 and 2023, and cash flows for the six months ended June 30, 2024 and June 30, 2023.

The condensed consolidated balance sheet

at December 31, 2023, was derived from the audited annual financial statements but does not contain all of the footnote disclosures from

the annual financial statements.

for a fair statement of its financial position as of September 30, 2024, and its results of operations for the three and nine months

ended September 30, 2024 and 2023, and cash flows for the nine months ended September 30, 2024 and September 30, 2023.

The condensed

consolidated balance sheet at December 31, 2023, was derived from the audited annual financial statements but does not contain all of

the footnote disclosures from the annual financial statements.

of Consolidation

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date the financial statements are issued.

Since its inception, the Company has generated significant losses and as of June 30, 2024,

Since its inception, the Company has generated significant losses and as of September 30,

2024, the Company had an accumulated deficit of $ 26.7

As of June 30, 2024 and December 31, 2023, the Company had cash and cash equivalents of $ 0.2 million and $ 4.2 million,

As of September 30, 2024 and December 31, 2023, the Company had cash and cash equivalents (net of bank overdrafts) and

short term investments of $ 34,000 and

$ 4.2 million,

respectively.

For the six months ended June 30, 2024 and 2023, the Company had net losses of $ 8.9

For the nine months ended September 30, 2024 and 2023, the Company had net operating losses of $ 11.9

million and $ 2.8

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million, respectively.

Management has determined that it does not have sufficient cash and other sources of liquidity to fund its current

business plan.

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

the next 12 months from the financial statement filing date.

March 4, 2024, the Company received a Commitment Letter in the amount of $ 5 million,

subject to agreement and definition documentation, from Corvus Capital Limited (“Corvus”), a major stockholder and

related party.

The facility allows for single draws of up to $ 500,000 ,

and limits draw requests to $ 1,000,000 in

any 30-day period.

As of June 30, 2024, the Company had not received any proceeds from the $ 5.0 million

On August 5, 2024, the

Company entered into a Senior Secured Promissory Note (the “Note”) with Nirland Limited (“Nirland”),

pursuant to which the Company issued and sold to the Nirland the Note in the original principal amount of $ 2,650,000

(the “Note”), inclusive of a $ 500,000

original issuance discount.

Of the total amount of the Note, $ 1,675,000

was issued upon execution of the Note .

In connection with the Note, the Company issued the Purchaser 12,500,000 shares of the

Company’s common stock on August 6, 2024.

The balance of $ 475,000

will be paid after the shares have been registered for resale.

The Note bears interest at a rate of 12 %

per annum, accruing daily on a 365-day basis, payable monthly in arrears as cash, or accrued at the Nirland’s discretion.

matures on August

Management has determined that it does not have sufficient cash and other sources of liquidity to fund its

current business plan.

These factors raise substantial doubt regarding the Company’s ability to continue as a going concern

for at least the next 12 months from the financial statement filing date.

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

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the pursuit of additional cash resources through public or private equity or debt financings.

There is no assurance that such funding

will be available when needed or on acceptable terms.

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

delay or curtail its operations and its research and development activities until such funding is received, all of which could have a

material adverse effect on the Company and its financial condition.

However, there is no assurance that such

funding will be available when needed or on acceptable terms.

If additional funding is not available when required, the Company would

need to delay or curtail its operations and its research and development activities until such funding is received, all of which could

have a material adverse effect on the Company and its financial condition.

To date, management has executed

on the following plans (see Note 17).

However, the plans executed to date do not alleviate

the substantial doubt about the Company’s ability to continue as a going concern:

On October 23, 2024, we entered into a sales agreement, with A.G.P./Alliance Global Partners (“A.G.P,”) relating to shares of our Common Stock..

In accordance with the terms of the sales agreement, we may offer and sell shares of our Common Stock having an aggregate

offering price of up to $ 3,556,586 from

time to time through A.G.P., acting as our sales agent or principal.

On October 28, 2024, the Company issued a promissory note (the “October 2024 Nirland Note”)

to Nirland Limited (“Nirland”) in the original principal amount of $ 600,000

in exchange for funds in such amount.

The October 2024 Nirland Note bears interest at a rate of 12 %

per annum, is due and payable semi-annually in arrears, and matures on October 31, 2025.

On October 29, 2024, the Company entered into a Bridge Loan Agreement (the “A.G.P.

Bridge Agreement”),

with A.G.P., pursuant to which A.G.P.

made an advance (the “Advance”) to the Company in an amount not to exceed $ 600,000

(the “Commitment”).

As partial consideration for the Advance, the Company issued A.G.P.

warrants to purchase up to

shares of the Company’s Common Stock, which is equal to 50 %

of the sum of the Commitment divided by the closing price of the Company’s Common Stock on October 29, 2024, at an exercise price

In connection with the Advance, the Company issued a promissory note (the “A.G.P.

Bridge Note”) to A.G.P.

in the original principal amount of $ 600,000 .

Bridge Note bears interest at a rate of 4.21 %

per annum and is due and payable on December 31, 2024.

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

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Company licenses clinical assets from AstraZeneca.

See Note 13 and Note 17.

If there is a breach or other termination

of such agreements, there could be a material adverse effect on the Company’s business, financial condition, operating results,

and prospects.

While the Company holds its own intellectual

property outside of the scope of these agreements, termination of such agreements could adversely affect the business and ability to

commercialize our clinical assets.

If there is a breach or other termination of such agreements,

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

Listing Deficiencies

Notice of Delisting or Failure

to Satisfy a Continued Listing Rule or Standard

On May 28, 2024, the Company received a notice (the “Notice”)

it was expecting from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company

that, due to the previously disclosed resignation of Ms.

Jennifer McNealey from the Company’s Board of Directors (the “Board”)

and from all committees on which she served, the Company, effective as of such date of resignation, was not in compliance with Nasdaq’s

independent audit committee requirements as set forth in Listing Rule 5605 as a result of the audit committee being comprised of only

two independent directors.

The Company has until the earlier of its next annual meeting of stockholders or May 13, 2025 or, if the

next annual meeting of stockholders is held before November 12, 2024, then the Company must evidence compliance no later than November

The Notice has no immediate effect on the listing of the Company’s securities on Nasdaq.

The Company intends to regain

compliance with the requirement that the audit committee be comprised of at least three independent directors prior to the expiration

of the cure period provided pursuant to Nasdaq Listing Rule 5605(c)(4).

of Delisting or Failure to Satisfy a Continued Listing Rule or Standard

May 28, 2024, the Company received a notice it was expecting from the Listing Qualifications Department (the

“Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that, due to the previously disclosed

resignation of Ms.

Jennifer McNealey from the Company’s Board of Directors (the “Board”) and from all committees on

which she served, the Company, effective as of such date of resignation, was not in compliance with Nasdaq’s independent audit

committee requirements as set forth in Listing Rule 5605 as a result of the audit committee being comprised of only two independent directors.

The Company has until the earlier of its next annual meeting of stockholders or May 13, 2025 to evidence compliance.

The notice has no immediate

effect on the listing of the Company’s securities on Nasdaq.

The Company intends to regain compliance with the requirement that

the audit committee be comprised of at least three independent directors prior to the expiration of the cure period provided pursuant

to Nasdaq Listing Rule 5605(c)(4).

of Failure to Satisfy a Continued Listing Rule

August 12, 2024, the Company received a deficiency letter from the Listing Qualifications Department (the “Staff”) of the

Nasdaq notifying the Company that for the last 30 consecutive business days the closing bid price for the Company’s common stock

had closed below the minimum $ 1.00 per share requirement for continued inclusion on the Nasdaq Global Market pursuant to Nasdaq Listing

Rule 5450(a)(1) (the “Bid Price Rule”).

The deficiency letter does not result in the immediate delisting of the Company’s

common stock from the Nasdaq Global Market.

August 12, 2024, the Company received a deficiency letter from the Staff of Nasdaq notifying the Company that for the last 30

consecutive business days the closing bid price for the Company’s Common Stock had closed below the minimum $ 1.00

per share requirement for continued inclusion on The Nasdaq Global Market pursuant to Nasdaq Listing Rule 5450(a)(1) (the “Bid

Price Rule”).

The deficiency letter does not result in the immediate delisting of the Company’s Common Stock from The

Nasdaq Global Market.

accordance with Nasdaq Listing Rule 5810(c)(3)(A) (the “Compliance Period Rule”), the Company has been provided an initial

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to Nasdaq Listing Rule 5810(c)(3)(H).

the Company does not regain compliance by February 10, 2025, the Company may be eligible for an additional 180 calendar day grace period

if it applies to transfer the listing of its common stock to the Nasdaq Capital Market.

To qualify, the Company would be required to

meet the continued listing requirement for the market value of its publicly held shares and all other initial listing standards for the

Nasdaq Capital Market, with the exception of the minimum bid price requirement, and provide written notice of its intention to cure the

minimum bid price deficiency during the second compliance period.

If the Nasdaq staff determines that the Company will not be able to

cure the deficiency, or if the Company is otherwise not eligible for such additional compliance period, Nasdaq will provide notice that

the Company’s common stock will be subject to delisting.

The Company would have the right to appeal a determination to delist its

common stock, and the common stock would remain listed on the Nasdaq Global Market until the appeal process is complete.

no assurance that, if the Company does appeal the delisting determination by the Staff to the NASDAQ Listing Qualifications Panel, that

such appeal would be successful.

the Company does not regain compliance by February 10, 2025, the Company may be eligible for an additional 180 calendar day grace

period if it applies to transfer the listing of its Common Stock to The Nasdaq Capital Market.

To qualify, the Company would be

required to meet the continued listing requirement for the market value of its publicly held shares and all other initial listing

standards for The Nasdaq Capital Market, with the exception of the minimum bid price requirement, and provide written notice of its

intention to cure the minimum bid price deficiency during the second compliance period.

If the Nasdaq staff determines that the

Company will not be able to cure the deficiency, or if the Company is otherwise not eligible for such additional compliance period,

Nasdaq will provide notice that the Company’s Common Stock will be subject to delisting.

The Company would have the right to

appeal a determination to delist its Common Stock, and the Common Stock would remain listed on The Nasdaq Global Market until the

appeal process is complete.

There can be no assurance that, if the Company does appeal the delisting determination by the Staff to

The NASDAQ Listing Qualifications Panel, that such appeal would be successful.

Company intends to monitor the closing bid price of its Common Stock and may, if appropriate, consider available options to regain compliance

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be able to regain compliance with the Bid Price Rule.

Value of Publicly Held Shares Requirement

August 15, 2024, the Company received a notice from the Staff notifying the Company that, based on the market value of publicly held

shares for the previous 30 consecutive business days, the listing of the Company’s common stock was not in compliance with Nasdaq

Listing Rule 5450(b)(2)(C) to maintain a minimum market value of publicly held shares of at least $ 15 million (the “MVPHS Requirement”).

accordance with Nasdaq rules, the Company has a period of 180 calendar days (or until February 11, 2025) to regain compliance with the

MVPHS Requirement.

To regain compliance during this 180-day compliance period, the minimum market value of publicly held shares must

close at $ 15 million or more for a minimum of 10 consecutive business days.

The notice has no immediate effect on the

listing of the Company’s securities on Nasdaq.

the event that the Company does not regain compliance with the MVPHS Requirement prior to the expiration of the 180-day compliance period,

the Company will receive written notification from Nasdaq that the Company’s securities are subject to delisting.

Alternatively,

the Company may apply to transfer the listing of its securities to The Nasdaq Capital Market, provided the Company will only be able

to transfer the listing to The Nasdaq Capital Market if the Company then meets the continued listing requirements on The Nasdaq Capital

Value of Listed Securities Requirement

August 15, 2024, the Company received an additional deficiency letter from the Staff notifying the Company that,

based on the market value of listed securities for the previous 30 consecutive business days, the listing of the Company’s

Common Stock was not in compliance with Nasdaq Listing Rule 5450(b)(2)(A) to maintain a minimum market value of listed securities of

at least $ 50

million (the “MVLS Requirement”).

accordance with Nasdaq rules, the Company has a period of 180 calendar days (or until February 11, 2025) to regain compliance with

the MVLS Requirement.

To regain compliance during this 180-day compliance period, the minimum market value of listed securities must

close at $ 50

million or more for a minimum of 10 consecutive business days.

The notice has no immediate effect on the listing of the

Company’s securities on Nasdaq.

the event that the Company does not regain compliance with the MVLS Requirement prior to the expiration of the 180-day compliance period,

the Company will receive written notification from Nasdaq that the Company’s securities are subject to delisting.

Alternatively,

the Company may transfer the listing of its securities to The Nasdaq Capital Market, provided the Company will only be able to transfer

the listing to The Nasdaq Capital Market if the Company then meets the continued listing requirements on The Nasdaq Capital Market.

of Significant Accounting Policies

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bank account, with a balance

at June 30, 2024 of £ 93,014 (or approximately $ 117,623 ), which exceeds the country’s deposit limit of £ 85,000

(approximately $ 108,000 ).

at September 30, 2024 of £ 0 (or approximately $ 0 ), which does not exceed the country’s deposit limit of £ 85,000 (approximately

The Company’s U.S.

depository bank participates in the Demand Deposit Marketplace program, insuring deposits

up to $ 10 million by sweeping amounts in excess of the $ 250,000 deposit insurance limit among participating banks.

The Company has not

experienced any losses on any accounts through the six months ended June 30, 2024.

Short-term may investments

include marketable debt and equity securities with maturities of less than one year or where management’s intent is to use the

investments to fund current operations or to make them available for current operations.

All investments in marketable securities

are classified as available-for-sale and are reported at fair value on the consolidated balance sheets.

depository bank participates in the Demand Deposit Marketplace program, insuring deposits up to $ 10

million by sweeping amounts in excess of the $ 250,000 deposit insurance limit among participating banks.

The Company has not experienced

any losses on any accounts through the nine months ended September 30, 2024.

Short-term investments include marketable debt and equity securities with maturities of less than one year or where management’s intent

is to use the investments to fund current operations or to make them available for current operations.

All investments in marketable

securities are classified as available-for-sale and are reported at fair value on the consolidated balance sheets.

Investments with remaining

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estimated useful lives of the assets or, for leasehold improvements, the life of the lease, if shorter.

When assets are retired

or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss

is reflected in other income or expense for the period.

As of June 30, 2024, property, plant and equipment primarily consisted of leasehold

improvements.

When assets are retired or otherwise

disposed of, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected

in other income or expense for the period.

As of September 30, 2024, property, plant and equipment primarily consisted of leasehold improvements.

preparation of financial statements in conformity with U.S.

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

The Company determines the accounting classification of warrants as either liability or equity by first assessing

whether the Warrants meet liability classification in accordance with ASC 480, Distinguishing Liabilities from Equity (“ASC 480”).

Under ASC 480, a financial instrument that embodies an unconditional obligation, or a financial instrument other than an outstanding share

that embodies a conditional obligation, that the issuer must or may settle by issuing a variable number of its equity shares must be classified

as a liability (or an asset in some circumstances) if, at inception, the monetary value of the obligation is based solely or predominantly

Company determines the accounting classification of warrants as either liability or equity by first assessing whether the Warrants meet

liability classification in accordance with ASC 480, Distinguishing Liabilities from Equity (“ASC 480”).

Under ASC 480, a

financial instrument that embodies an unconditional obligation, or a financial instrument other than an outstanding share that embodies

a conditional obligation, that the issuer must or may settle by issuing a variable number of its equity shares must be classified as

a liability (or an asset in some circumstances) if, at inception, the monetary value of the obligation is based solely or predominantly

on any one of the following:

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or (c) variations inversely related to changes in the fair value of the issuer’s equity shares.

If financial instruments, such as the warrants, are not required to be classified as liabilities under ASC 480, the Company assesses whether

such instruments are indexed to the Company’s own stock under ASC 815-40.

In order for an instrument to be considered indexed to

an entity’s own stock, its settlement amount must always equal the difference between the following:

(a) the fair value of a fixed

number of the Company’s equity shares, and (b) a fixed monetary amount or a fixed amount of a debt instrument issued by the Company.

Equity classified warrants are recorded in stockholders’ deficit and liability classified warrants are recorded

as liabilities within the Consolidated Balance Sheets.

The liability classified warrants are remeasured each period with changes recorded

in the Consolidated Statements of Operations and Comprehensive Loss.

As of June 30, 2024, the Company

had outstanding warrants that are classified as a liability within the condensed consolidated balance sheets.

The fair value of the warrant

liability is determined each balance sheet date based on Level 2 inputs as such inputs are based on observable inputs other than quoted

The warrant liability is valued using a Black-Scholes model, with the most judgmental non-observable input being the volatility

Changes in the assumptions around the volatility can cause significant changes in the estimated fair value of the warrant liability.

See Note 4 for further information on the Company’s financial liabilities carried at fair value.

the sixth months ended June 30, 2024, the Company issued warrants that met the criteria to be classified within stockholders’ deficit

within the condensed consolidated balance sheets.

The fair value of the warrants was determined by using a Black-Scholes model, with

the most judgmental non-observable input being the volatility measure.

Changes in the assumptions around the volatility could have caused

significant changes in the estimated fair value of the warrants.

See Note 14 for further information on the warrants classified within

stockholders’ deficit.

If financial instruments, such as the warrants, are not required to be classified as liabilities under ASC 480, the Company assesses

whether such instruments are indexed to the Company’s own stock under ASC 815-40.

In order for an instrument to be considered indexed

to an entity’s own stock, its settlement amount must always equal the difference between the following:

(a) the fair value of a

fixed number of the Company’s equity shares, and (b) a fixed monetary amount or a fixed amount of a debt instrument issued by the

classified warrants are recorded in stockholders’ deficit and liability classified warrants are recorded as liabilities within

the Consolidated Balance Sheets.

The liability classified warrants are remeasured each period with changes recorded in the Consolidated

Statements of Operations and Comprehensive Loss.

of September 30, 2024, the Company had outstanding warrants that are classified as a liability within the condensed consolidated balance

The fair value of the warrant liability is determined each balance sheet date based on Level 2 inputs as such inputs are based

on observable inputs other than quoted prices.

The warrant liability is valued using an observable market quote for the Company’s publicly traded warrants, which are considered to be a similar

asset in an active market.

See Note 5 for further information on the Company’s financial liabilities carried

at fair value.

the nine months ended September 30, 2024, the Company issued warrants that met the criteria to be classified within stockholders’

deficit within the condensed consolidated balance sheets.

The fair value of the warrants was determined by using a Black-Scholes model,

with the most judgmental non-observable input being the volatility measure.

Changes in the assumptions around the volatility could have

caused significant changes in the estimated fair value of the warrants.

See Note 15 for further information on the warrants classified

within stockholders’ deficit.

Based Compensation

Company accounts for share based compensation arrangements granted to employees in accordance with ASC 718, Compensation:

Compensation, by measuring the grant date fair value of the award and recognizing the resulting expense over the period

during which the employee is required to perform service in exchange for the award.

The grant date fair value of stock options is determined

using a Black-Scholes model, with the most judgmental non-observable input being the volatility measure.

Changes in the assumptions around

the volatility can cause significant changes in the grant date fair value of stock options.

The Company accounts for forfeitures when

Stock Compensation,

by measuring the grant date fair value of the award and recognizing the resulting expense over the period during which the employee is

required to perform service in exchange for the award.

The grant date fair value of stock options is determined using a Black-Scholes

model, with the most judgmental non-observable input being the volatility measure.

Changes in the assumptions around the volatility can

cause significant changes in the grant date fair value of stock options.

The Company accounts for forfeitures when they occur.

and Development and Funding

and development expenses consist primarily of costs incurred in connection with the research and development of our clinical assets and

The Company expenses research and development costs and intangible assets acquired that have no alternative

future use as incurred.

The Company expenses research and development costs and intangible assets acquired that have no alternative future use as incurred.

These expenses include:

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of the transaction).

Revision of Previously Issued Financials

connection with the preparation of the Company’s financial statements as of and for the year ended December 31, 2023, the Company’s

management identified errors in its previously issued unaudited financial statements as of and for the three months and six months ended

June 30, 2023 with respect to how certain expenses relating to the Merger were previously expensed and that as part of the Company’s

annual audit it was determined that such expenses should have been capitalized and subsequently recorded against equity.

The accounting

for legal costs was deemed to be specific incremental costs directly attributable to the Merger and concurrent PIPE financing (See Note

Management has evaluated this change in accounting, which overstated net loss, additional paid in capital, and accumulated deficit

and understated prepaid expense, and concluded it was material to the prior periods, individually and in the aggregate.

Therefore, the

Company is restating the previously issued unaudited financial statements, and related notes thereto, as of and for the three and six

months ended June 30, 2023.

Additionally, certain items included in the comparative financial statements for the prior period have been

reclassified to conform to the current period presentation.

impact of the errors described above on the balance sheets as of June 30, 2023, is as follows (in thousands):

of Impact of the Errors on Financial Statement

As of June 30, 2023 (Unaudited)

As Previously

Balance Sheets

Current assets

Prepaid expenses and other current assets

Total current assets

Revision of Previously Issued Financial Statements

In connection

with the preparation of the Company’s financial statements as of and for the year ended December 31, 2023, the Company’s

management identified errors in its previously issued unaudited financial statements as of and for the three months and nine months

ended September 30, 2023 with respect to how certain expenses relating to the Merger were previously expensed and that as part of

the Company’s annual audit it was determined that such expenses should have been capitalized and subsequently recorded against

equity and restated such quarterly period in the December 31, 2023 Form 10-K.

The accounting for legal costs was deemed to be

specific incremental costs directly attributable to the Merger and concurrent PIPE financing (See Note 3).

Management has evaluated

this correction to the accounting treatment of such costs, which overstated net loss, additional paid in capital, and accumulated

deficit and understated prepaid expense, and concluded it was material to the prior quarterly periods, individually and in the

impact of the errors described above on the condensed consolidated balance sheets as of September 30, 2023, is as follows:

Schedule of Impact of the Errors on Financial Statement

As of September 30, 2023 (Unaudited)

(Dollar amounts in thousands)

Condensed Consolidated Balance Sheets

Stockholders’ deficit

Additional paid-in capital

Accumulated deficit

Total shareholders’ deficit

Total liabilities and shareholders’ deficit

impact of the errors described above on the statements of operations and comprehensive loss for the three and six months ended June 30,

2023, is as follows (in thousands):

Previously Reported

For the three months ended June 30, 2023 (Unaudited)

As Previously Reported

impact of the errors described above on the condensed consolidated statements of operations and comprehensive income (loss) for the three

months ended September 30, 2023, is as follows:

For the Three Months ended September 30, 2023 (Unaudited)

(Dollar amounts in thousands, except per share amounts)

Statements of Operations and Comprehensive Loss

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Net income (loss)

Net loss per share attributable to ordinary shareholders – basic and diluted*

Basic earnings/(net loss) per share

Diluted earnings/(net loss) per share

Total comprehensive income (loss)

not reflect the impact of the Merger on the Company’s capital structure

Previously Reported

For the six months ended June 30, 2023 (Unaudited)

As Previously Reported

Statements of Operations and Comprehensive Loss

impact of the errors described above on the condensed consolidated statements of operations and comprehensive income (loss) for the nine

months ended September 30, 2023, is as follows:

For the Nine Months ended September 30, 2023 (Unaudited)

(Dollar amounts in thousands, except per share price amounts)

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

Operating expenses:

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Net income (loss)

Net loss per share attributable to ordinary shareholders – basic and diluted*

Basic earnings/(net loss) per share

Diluted earnings/(net loss) per share

Total comprehensive income (loss)

not reflect the impact of the Merger on the Company’s capital structure

impact of the errors described above on the statements of changes in shareholders’ deficit as of June 30, 2023, is as follows (in

As of June 30, 2023 (Unaudited)

As Previously

impact of the errors described above on the condensed consolidated statements of changes in stockholders’ deficit as of September

30, 2023, is as follows:

(Dollar amounts in thousands)

As of September 30, 2023 (Unaudited)

(Dollar amounts in thousands)

Statements of Changes in Shareholders’ Deficit

Stockholders’ deficit

Additional paid-in capital

Accumulated deficit

Total shareholders’ deficit

Does not reflect the impact of the Merger on the Company’s capital structure

impact of the errors described above on the statements of cash flows for the six months ended June 30, 2023, is as follows (in thousands):

For the six months ended June 30, 2023 (Unaudited)

As Previously

Statements of Cash Flows

impact of the errors described above on the condensed consolidated statement of cash flows for the nine months ended September 30, 2023,

is as follows:

For the Nine Months ended September 30, 2023 (Unaudited)

(Dollar amounts in thousands)

Condensed Consolidated Statements of Cash Flows

Cash flows from operating activities:

1 unchanged sentence

Prepaid expenses and other current assets

discussed in Note 1, “Summary of Significant Accounting Policies,” on September 22, 2023, the Company and MURF completed

Non-cash investing and financing activities

Reclassification of deferred offering costs to reduction of additional paid-in capital

discussed in Note 1, on September 22, 2023, the Company and MURF completed

Upon the closing of the Merger, the following occurred:

share of Old Conduit common stock issued and outstanding immediately prior to the closing of the Merger, which totaled 2,000 shares,

was exchanged for the right to receive 32,313.215 shares of the Company’s Common Stock (“Common Stock”) resulting

in the issuance of 64,626,430 shares of the Company’s Common Stock.

was exchanged for the right to receive 32,313.215 shares of the Company’s Common Stock resulting in the issuance of 64,626,430

shares of the Company’s Common Stock.

addition to the shares issued to legacy Conduit shareholders noted above, an additional 373,570 shares of Common Stock were issued

1 unchanged sentence

and holders of Conduit convertible notes payable.

connection with the Merger, 45,000 share of MURF Class A common stock held by the MURF Sponsor was transferred to MURF Directors.

connection with the Merger, 45,000 share of MURF Class A common stock held by Murphy Canyon Acquisition Sponsor, LLC (the “MURF Sponsor”) was transferred to MURF Directors.

Each share was exchanged on a one-for-one basis for shares of Common Stock.

3 unchanged sentences

58,066 shares, was exchanged for, on a one-for-one basis, for shares of Common Stock.

connection with the Merger, 3,306,250 shares of MURF Class B common stock held by the Sponsor was automatically converted into shares

of MURF Class A common stock and then subsequently converted into shares of Common Stock on a one-for-one basis.

connection with the Merger, 3,306,250

shares of MURF Class B common stock held by the MURF Sponsor was automatically converted into shares of MURF Class A common stock

and then subsequently converted into shares of Common Stock on a one-for-one basis.

connection with the Merger, A.G.P./Alliance Global Partners (“A.G.P.”), whom acted as a financial advisor to both MURF

35 unchanged sentences

Marketable Investments

The following table summarizes

the Company’s investments accounted for as available-for-sale securities as of June 30, 2024 (in thousands):

following table summarizes the Company’s investments accounted for as available-for-sale securities as of September 30, 2024 (in

Schedule of Available for Sale Securities

As of June 30, 2024

As of September 30, 2024

Amortized Cost

4 unchanged sentences

Total available-for-sale, short-term investments

The Company had no short-term investments as of December

Unrealized losses on available-for-sale

securities as of June 30, 2024, were not significant.

There were no significant realized gains or losses recognized on the sale or maturity

of available-for-sale investments for the six months ended June 30, 2024.

following table presents as of June 30, 2024 the Company’s liabilities subject to measurement at fair value on a recurring basis

Company had no short-term investments as of December 31, 2023.

losses on available-for-sale securities as of September 30, 2024, were not significant.

There were no significant realized gains or losses

recognized on the sale or maturity of available-for-sale investments for the nine months ended September 30, 2024.

following table presents as of September 30, 2024 the Company’s assets subject to measurement at fair value on a recurring basis

(in thousands):

of Liabilities Subject to Measurement at Fair Value on Recurring Basis

Fair Value Measurements as of June 30, 2024

of Assets Subject to Measurement at Fair Value on Recurring Basis

Fair Value Measurements as of September 30, 2024

Investment in trading securities

following table presents as of September 30, 2024 the Company’s liabilities subject to measurement at fair value on a recurring

basis (in thousands):

of Liabilities Subject to Measurement at Fair Value on Recurring Basis

Fair Value Measurements as of September 30, 2024

Derivative warrant Liability

5 unchanged sentences

Total Liabilities

The fair value of the investment

in trading securities was valued based on the purchase price of the investments and has therefore been classified as a Level

3 fair value measurement.

fair value of the investment in trading securities is the purchase price of the investments plus the unrealized gains and has

therefore been classified as a Level 3 fair value measurement.

The Company had no investment in trading securities as of December

There were no significant gains or losses recognized on the sale of investments in trading securities for the six months ended June

warrants issued to the PIPE Investors and an advisor in connection with the Merger are accounted for as liabilities in accordance with

ASC 815-40 and are presented within warrant liabilities in the consolidated balance sheets.

The measurements of the liability classified

warrants are classified as Level 2 fair value measurements due to the use of an observable market quote for the Company’s publicly

traded warrants, which are considered to be a similar asset in an active market.

There were no significant gains or losses recognized on the sale of investments in trading securities for the nine months

ended September 30, 2024.

warrants issued to the PIPE Investors and an advisor in connection with the Merger are accounted for as liabilities in accordance

with ASC 815-40 and are presented within warrant liabilities in the consolidated balance sheets.

The measurements of the liability classified warrants are classified as Level 2 fair value measurements due to the

use of an observable market quote for the Company’s publicly traded warrants, which are considered to be a similar asset in an

active market.

warrant liabilities are calculated by multiplying the quoted market price of the Company’s publicly traded warrants by the number

of liability classified warrants.

the period ended June 30, 2024, there were no transfers between Level 1 and Level 2, nor into or out of Level 3.

the period ended September 30, 2024, there were no transfers between Level 1 and Level 2, nor into or out of Level 3.

Balance Sheet Details

assets consisted of the following as of June 30, 2024 and December 31, 2023 (in thousands):

assets consisted of the following as of September 30, 2024 and December 31, 2023 (in thousands):

of Balance Sheet Details

June 30, 2024

September 30, 2024

December 31, 2023

1 unchanged sentence

Prepaid Expenses

Loan Receivable *

Other Receivables

Other Current Assets

Total prepaid expenses and other current assets

Expenses and other current liabilities consisted of the following as of June 30, 2024 and December 31, 2023 (in thousands):

* Refer to Note

Expenses and other current liabilities consisted of the following as of September 30, 2024 and December 31, 2023 (in thousands):

of Accrued Expenses and Other Current Liabilities

June 30, 2024

December 31, 2023

1 unchanged sentence

Accrued Payroll

Accrued Contingency **

Accrued Interest

1 unchanged sentence

Total accrued expenses and other current liabilities

** Refer to Note 16.

Convertible Notes Payable

May 27, 2021, the Company approved a Master Convertible Loan Note Instrument (the “2021 Convertible Loan Note Instrument”),

permitting the Company to issue convertible notes in a maximum aggregate principal amount of up to $ 1.4 million (£ 1.0 million).

The convertible notes issuable under the 2021 Convertible Loan Note Instrument mature three years after issuance to the respective noteholders

and bear 5 % interest, only to be paid to the noteholders in the event of a material breach by the Company of the terms of the 2021 Convertible

Loan Note Instrument.

In the event of a Change of Control (as defined in the 2021 Convertible Loan Note Instrument), the convertible

notes issued under the 2021 Convertible Loan Note Instrument automatically convert into common shares of the Company at a conversion

price equal to a 20 % discount to the price per share paid for the most senior class of shares in respect of such Change of Control.

Company, with consent from the noteholders, may prepay the convertible notes payable issued under the 2021 Convertible Loan Note Instrument

without penalty.

The convertible notes payable issued under the 2021 Convertible Loan Note Instrument are general, unsecured obligations

of the Company.

November 1, 2022, the Company approved a master Convertible Loan Note Instrument (the “2022 Convertible Loan Note Instrument”),

15 unchanged sentences

million) to non-related third parties.

As discussed in Note 13, “Related Party Transactions,”

during January and February 2023, under the terms of the 2022 Convertible Loan Note Instrument, the Company issued convertible notes payable

with an aggregate principal amount of $ 0.4 million (£ 0.3 million) to the CEO of Corvus.

On September 22, 2023, as discussed in Note 3, “Merger,” the

Company and MURF completed the Merger, at which point all outstanding convertible notes issued under the 2021 and 2022 Convertible Loan

Instruments converted into 373,570 shares of Common Stock.

Company elected to fair value the convertible notes payable issued under the 2021 and 2022 Convertible Loan Note Instruments.

end of each reporting period, the Company calculated the fair value of the convertible notes payable, and any changes in fair value are

reported in other income (expense), net, in the current period’s unaudited condensed consolidated

statements of operations and Comprehensive Loss.

There has been no change in fair value from a change in credit quality.

the three and six months ended June 30, 2023, the Company recorded a $ 0.3 million loss from the change in fair value of convertible notes

payable in other income (expense), net, in its unaudited condensed consolidated statements of operations and Comprehensive Loss.

As discussed in Note 13, “Related Party Transactions,” during January and

February 2023, under the terms of the 2022 Convertible Loan Note Instrument, the Company issued convertible notes payable with an

aggregate principal amount of $ 0.4

million (£ 0.3

million) to the CEO of Corvus.

The Company elected to fair value the convertible notes payable issued under the Convertible Loan Note Instruments.

On September 22, 2023, as discussed in Note 3, the Company and MURF completed the Merger, at which point all outstanding convertible notes

issued converted into 373,570 shares of Common Stock.

the three and nine months ended September 30, 2023, the Company recorded a $ 0.1 million and $ 0.4 million loss, respectively, from the change in fair

value of convertible notes payable in other income (expense), net, in its unaudited condensed consolidated statements of operations and

comprehensive loss.

Promissory Notes Payable

March 2023, the Company issued a convertible promissory note payable with an aggregate principal amount of $ 0.8

million to a non-related third party.

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

The note contains a conversion option which allows

March 2023, the Company issued a convertible promissory note payable (the “March 2023 Convertible Note”) with an

aggregate principal amount of $ 0.8

million to an unrelated third party.

March 2023 Convertible Note matures and is payable in full 18 months from the date of issuance .

The March 2023 Convertible Note contains a conversion option which allows

the holder of the note to convert the principal, plus any accrued interest at the date of conversion, into shares of Common Stock at

a conversion price of $ 10

The note carries 20 %

interest, which is payable every six months from the date of the note until the maturity date.

The March 2023 Convertible Note carries 20 %

interest per annum, which is payable every six months from the date of the note until the maturity date.

The promissory convertible note

payable was not converted at the closing of the Merger and was also not converted as of June 30, 2024.

For the six months ended June

30, 2024 and June 30, 2023, the Company incurred interest expense on the convertible promissory of $ 80,000 and $ 40,000 , respectively.

payable was not converted at the closing of the Merger and was also not converted as of September 30, 2024.

For the three months ended September 30, 2024 and September 30, 2023, the

Company incurred interest expense on the convertible promissory of $ 40,000 for each period.

For the nine months

ended September 30, 2024 and September 30, 2023, the Company incurred interest expense on the convertible promissory of $ 120,000

and $ 40,000 ,

respectively.

As of September 30, 2024, the balance of the loan was still outstanding and $ 80,000 of

the interest expense was included in accrued expenses.

October 9, 2024, the Company and the loan holder signed an extension for the March 2023 Convertible Note to extend the maturity date

from September 20, 2024 to October 20, 2024 with the option for the Company to further extend the maturity date two times, each by

an additional 30-day period.

The Company exercised the first option to extend the maturity date and the maturity date is currently

November 19, 2024.

In consideration for extending the maturity date, the Company amended the form of the repayment of the remaining

interest due on the loan.

As payment for the interest, the Company issued the loan holder, (i) $ 80,000

worth of Common Stock to be issued at the closing market price on the date prior to issuance and (ii) 2,000,000

shares of Common Stock.

On October 11,

2024, the Company issued the loan holder 2,781,250

shares of Common Stock in satisfaction of the obligations in (i) and (ii) in the preceding sentence.

In connection with the extension of the loan, the Company entered into a consulting agreement with an unrelated third

party to negotiate the extension of the of the convertible note with the loan holder on behalf of the Company.

The Company issued

the third party 850,000

shares on October 11, 2024 in exchange for services provided.

Loans Payable

May 1, 2022, the Company entered into Loan Agreements (the “Loans”) with two lenders, totaling $ 0.2

Loans matured two years from the date of the agreement and bore no interest.

loan was made available to the Company by the lenders in three tranches of (i) $ 33,000

Loans were originally set to mature two years from the date of the agreement and bore no interest.

Each loan was made

available to the Company by the lenders in three tranches of (i) $ 33,000

(ii) $ 33,000

and (iii) $ 28,000 (£ 25,000 ),

thousand), totaling $ 0.2

The Loans provided for events of default,

including, among others, failure to make payment, bankruptcy and non-compliance with the terms of the Loans.

As of June 30, 2024, the

Company utilized all three tranches of the first loan and two out of three tranches of the second loan, with total loans payable at June

30, 2024 and December 31, 2023 of $ 0.2 million

respectively.

totaling $ 0.2 million.

The Loans provided for

events of default, including, among others, failure to make payment, bankruptcy and non-compliance with the terms of the Loans.

of September 30, 2024, the Company utilized all three tranches of the first loan and two out of three tranches of the second loan,

with total loans payable at September 30, 2024 and December 31, 2023 of $ 0.2

million and $ 0.2 million, respectively.

On October 9, 2024, the Company and the Loan holders signed agreements to extend the maturity date for each Loan to December

The agreements also modified the payment terms for each Loan from a cash payment of £ 85,000

per loan to (1) a cash payment of £ 60,000 ,

worth of shares of Common Stock converted into USD at the prevailing exchange rate, to be issued at the closing market price on the

date prior to issuance, and in consideration for the extension, and (3) 250,000 additional

shares of Common stock.

On October 11, 2024, the Company issued each of the Loan holders 569,043

shares ( 1,138,086

August 6, 2024, the Company entered into a Senior Secured Promissory Note (the “August 2024 Nirland Note”) with Nirland,

a related party of the Company, pursuant to which the Company issued and sold to Nirland the August 2024 Note in the original

principal amount of $ 2,650,000 ,

inclusive of a $ 500,000

original issuance discount.

Of the total amount of the August 2024 Nirland Note, $ 1,675,000

was issued upon execution of the August 2024 Nirland Note.

In connection with the August 2024 Nirland Note, the Company issued to

Nirland 12,500,000

shares of the Company’s Common Stock on August 6, 2024.

The balance of $ 475,000

became payable when the shares were registered for resale in September 2024.

In the event the Company completes any public or

private equity or debt financing, the Company shall be required to mandatorily prepay (“Mandatory Prepayment Right”),

any amounts that may be then outstanding under the August 2024 Nirland Note, within two business days following the closing of such

financing, in an amount of no less than 75 %

of the net proceeds received.

Per the terms of the August 2024 Nirland Note, the Company is prohibited from entering into a variable

rate transaction without prior written consent from Nirland.

The August 2024 Nirland Note bears interest at a rate of 12 %

per annum, accruing daily on a 365-day basis, payable monthly in arrears as cash, or accrued at the Nirland’s discretion.

August 2024 Nirland Note matures in 12 months from August 5, 2024.

noted above, the Company issued to Nirland 12,500,000 shares

of the Company’s Common Stock on August 6, 2024.

The Company determined that loan agreement and share issuance should were

part of a basket transaction and allocated the net proceeds on a relative fair value basis.

Of the total $ 2.2 net proceeds, $ 1.2 million was allocated to the August

2024 Nirland Note including $ 1.5 million gross proceeds, less $ 0.3 million Original Issue Discount (“OID”).

The remaining

$ 1.0 million was allocated to the common stock, including $ 1.2 gross proceeds less $ 0.2 OID.

The $ 1.2 million allocated to the common

stock was considered to be a discount on the August 2024 Nirland Note making the balance of the note to be $ 2.7 million note payable,

less a total debt discount of $ 1.5 million.

The debt discount will be amortized to interest expense using the effective interest method

over the life of the note.

of September 30, the Company has $ 2.7 million

outstanding on the August 2024 Nirland Note, net of the unamortized debt discount of $ 1.4

million receivable related to the loan.

As of September 30, 2024 the Company recorded $ 0.2

million in interest expense of which $ 0.1

million was due to the amortization of debt discount and $ 50,000 of

accrued interest.

October 31, 2024, the Company and Nirland amended the August 2024 Nirland Note, whereby the August 2024 Nirland Note was amended to

(i) provide for the conversion of the August 2024 Nirland Note into shares of Common Stock, at Nirland’s discretion, in a

multiple of any unpaid amounts, if not otherwise previously paid, pursuant to the conversion rate contained therein, (ii) remove

Nirland’s mandatory prepayment right, and (iii) remove Nirland’s right of first refusal to participate in any future

equity or debt offerings of the Company.

Deferred Commission Payable

8 unchanged sentences

million of fees plus annual interest of 5.5 %

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

The $ 5.7 million

deferred commissions payable was recorded as a non-current liability on the Company’s unaudited condensed consolidated balance

sheet as of June 30, 2024.

The Company will pay the deferred commission payable using 25 % of the net proceeds received in connection

with any underwritten public offering, equity line, at the market offering, private placement, and any other public or private

fundraising activities that result in proceeds to the Company until the full amount has been paid.

Accrued interest was recorded as

a liability on the Company’s condensed consolidated balance sheet and totaled $ 0.2

as a result of its engagement for MURF’s initial public offering.

million deferred commissions payable was recorded as a current liability on the Company’s unaudited condensed consolidated

balance sheet as of September 30, 2024.

Pursuant to the agreement, if the Company raises any proceeds with any underwritten public

offering, equity line, at the market offering, private placement, and any other public or private fundraising activities, the

Company will pay to A.G.P.

25 % of the net proceeds of each capital raise until the deferred amount has been paid in full.

interest was recorded as a liability on the Company’s condensed consolidated balance sheet and totaled $ 0.2

million and $ 0.1

million as of June 30, 2024 and December 31, 2023, respectively.

Share Based Compensation

million as of September 30, 2024 and December 31, 2023, respectively.

to the Bridge Agreement with A.G.P entered into on October 29, 2024, the Company and A.G.P.

also agreed to amend a fee letter agreement

entered into between the Company and A.G.P., effective September 22, 2023, suspending the provision that the Company was required to

of all net proceeds received from certain transactions described therein, for the repayment of an outstanding amount owed to A.G.P.,

until such time as the Bridge Note is repaid in full.

Refer to Note 16 for more information.

Research and Development License Agreement

August 7, 2024, the Company and AstraZeneca AB (PUBL) (“AstraZeneca”) entered into a License Agreement, dated August 7, 2024

(the “August 2024 License Agreement”).

Pursuant to the August 2024 License Agreement, AstraZeneca agreed to grant a license

to the Company under certain intellectual property rights controlled by AstraZeneca related to HK-4 Glucokinase activators AZD1656 and

AZD5658 in all indications and myeloperoxidase inhibitor AZD5904 for the treatment, prevention, and prophylaxis of idiopathic male infertility.

The Company will be responsible for the development and commercialization of relevant products licensed under the August 2024 License

Agreement (the “Licensed Products”).

consideration for the grant of the license, the Company (i) granted AstraZeneca Common Stock pursuant to a stock issuance agreement (the

“Issuance Agreement”), (ii) paid AstraZeneca an up-front payment of $ 1.5

million, and (iii) is obligated to pay AstraZeneca

a percentage (on a tiered basis) of any amounts it may receive in connection with a grant of a sublicense (subject to various customary

The Issuance Agreement called for the Company to issue AstraZeneca 9,504,465 shares of the Company’s Common Stock.

The Issuance Agreement provides AstraZeneca

with resale registration rights for such shares.

As of September 30, 2024, the Company recorded $ 1.6 million and $ 1.5 million in research

and development expenses related to the share issuance and upfront payment to AstraZeneca, respectively.

has been granted a right of first negotiation to develop, manufacture, and commercialize a Licensed Product if the Company receives an

offer for, or solicits, a transaction where a third party would obtain the right to develop, manufacture, or commercialize a Licensed

If AstraZeneca exercises such right, the parties would negotiate in good faith for an agreed period of time on an exclusive

party may terminate the August 2024 License Agreement for material breach (subject to a cure period) or insolvency of the other party.

The Company may terminate the August 2024 License Agreement for convenience (in its entirety or on a Licensed Product-by-Licensed Product

In addition, AstraZeneca may terminate the August 2024 License Agreement in certain circumstances, including (but not limited

to) the Company ceasing development of all Licensed Products (subject to certain exceptions for normal pauses or gaps between clinical

a result of the above, the Company will no longer fund the development of AZD1656 or AZD5904 under the terms of the Exclusive Funding

Agreement, dated March 26, 2021 with St George Street Capital (the “Funding Agreement”).

In this regard, the Company previously

entered into a deed of amendment amending such Funding Agreement.

The parties agreed that the project funding provisions of such Funding

Agreement whereby the Company had the right to fund a project or refer other funders to St George Street Capital, were amended to provide that St George Street Capital must still include the Company in any project funding opportunities

and requests but may now seek other third party project funders in addition to the Company.

See Note 13, Related Party Transactions .

Based Compensation

September 22, 2023, in connection with the Merger, the Company adopted the Conduit Pharmaceuticals Inc.

2023 Stock Incentive Plan

(the “2023 Plan”).

2023 Stock Incentive Plan (the

“2023 Plan”).

The 2023 Plan became effective upon the closing of the Merger.

The 2023 Plan initially provides for

the issuance of up to 11,497,622

shares of Common Stock.

Pursuant to the 2023 Plan’s “evergreen” provision, the number of shares of Common Stock

available for issuance under the 2023 Plan was increased by 3,691,476

shares of common stock effective January 1, 2024.

The number of authorized shares will automatically increase on January 1, 2025 and

continuing annually on each anniversary thereof through (and including) January 1, 2033, equal to the lesser of (i) 5 %

of the shares of common stock outstanding on the last day of the immediately preceding fiscal year and (ii) such smaller number of

shares of common stock as determined by the Board or the applicable committee of the Board.

The 2023 Plan allows for awards to be issued to

employees and non-employee directors in the form of options, stock appreciation rights, restricted stock, restricted stock units (“RSUs”),

performance stock units, dividend equivalents, other stock-based, or other cash-based awards.

As of June 30, 2024, there were 14,107,834

shares of Common Stock available for issuance under the 2023 Plan.

For the three months ended June 30, 2024 and 2023, there was a total of $ 0.5 million and $ 0 , respectively in stock-based compensation

The 2023 Plan initially provides for the issuance

of up to 11,497,622 shares of Common Stock.

Pursuant to the 2023 Plan’s “evergreen” provision, the number of shares

of Common Stock available for issuance under the 2023 Plan was increased by 3,691,476 shares of common stock effective January 1, 2024.

The number of authorized shares will automatically increase on January 1, 2025 and continuing annually on each anniversary thereof through

(and including) January 1, 2033, equal to the lesser of (i) 5 % of the shares of Common Stock outstanding on the last day of the immediately

preceding fiscal year and (ii) such smaller number of shares of Common Stock as determined by the Board or the applicable committee of

The 2023 Plan allows for awards to be issued to employees and non-employee directors in the form of options, stock appreciation

rights, restricted stock, restricted stock units (“RSUs”), performance stock units, dividend equivalents, other stock-based,

or other cash-based awards.

As of September 30, 2024, there were 14,107,834 shares of Common Stock available for issuance under the 2023

the three months ended September 30, 2024 and 2023, there was a total of $ 0.4 million and $ 0 , respectively in stock-based compensation

expense recognized within General and Administrative expenses on the consolidated statements of operations and Comprehensive Loss, respectively,

related to the RSUs and stock options granted since the Merger.

the six months ended June 30, 2024 and 2023, there was a total of $ 0.9 million

and $ 0 , respectively

in stock-based compensation expense recognized within General and Administrative expenses on the consolidated statements of

operations and Comprehensive Loss, respectively, related to the RSUs and stock options granted since the Merger.

On June 24, 2024, in connection with a

services agreement with an unrelated third party to provide marketing services, the Company issued 96,154 shares of its Common Stock (the

“Service Shares”).

The Company valued the Service Shares at $ 1.56 per share, the closing price of the Company’s

Common Stock on June 21, 2024.

The total compensation for these shares is $ 0.2 million which will recognized within General and Administrative expenses

over the service period of the agreement.

connection with the Merger, as discussed in Notes 1 and 3, and by Unanimous Written Consent of the Board of Directors, the then

Chief Financial Officer of the Company was granted 74,545

RSUs on December 1, 2023 at a weighted average grant date fair value of $ 5.51 .

The RSUs were to vest in equal annual instalments on the first three anniversaries of the closing of the Merger.

Upon the then

Chief Financial Officer’s resignation, effective May 15, 2024, all such RSUs were forfeited.

On June 7, 2024 by Unanimous

Written Consent of the Board of Directors, the Interim Chief Financial Officer of the Company and a Board member

were each granted 37,272

shares of immediately vested restricted stock at a weighted average grant date fair value of $ 2.84 .

The shares of restricted stock were fully vested as of the grant date.

additional RSU’s or shares of restricted common stock were granted during the three and six months ended June 30, 2024.There

shares of restricted common stock vested as of June 30, 2024 and no

RSUs vested as of December 31, 2023.

the nine months ended September 30, 2024 and 2023, there was a total of $ 1.3 million and $ 0 , respectively in stock-based compensation

expense recognized within General and Administrative expenses on the consolidated statements of operations and Comprehensive Loss, respectively,

related to the RSUs and stock options granted since the Merger.

June 24, 2024, in connection with a services agreement with an unrelated third party to provide marketing services from July to December 2024, the Company

issued 96,154

shares of its Common Stock (the “Service Shares”).

The Company valued the Service Shares at $ 1.56

per share, the closing price of the Company’s Common Stock on June 21, 2024.

The total compensation for these shares is $ 0.2

million which will recognized within General and Administrative expenses over the service period of the agreement.

or around August 14, 2024, the Company was first made aware that one of its directors, through a wholly owned subsidiary, had previously

entered into certain collateral pledge agreements that resulted in the disposition of a substantial amount of shares in the Company pursuant

to those agreements without the Company’s knowledge.

In addition, the Company also became aware that approximately 30 million shares

(or 31 % of outstanding Common Stock as of August 14, 2024) are currently subject to a further third-party pledge arrangement with a significant stockholder

of the Company.

Upon learning of these transactions, the Board has appointed an independent committee of the Board (the “Special

Committee”) and delegated to the Special Committee the authority to review these matters and determine action(s), if any, to be

taken by the Company in response thereto.

Additionally, the Company formed another committee of the Board (the “Trading Review

Committee”) and delegated to the Trading Review Committee the authority to investigate and review the trading patterns of certain

of the Company’s stockholders and determine action(s), if any, to be taken by the Company in response thereto.

connection with the Merger, as discussed in Notes 1 and 3, and by Unanimous Written Consent of the Board, the then Chief

Financial Officer of the Company was granted 74,545 RSUs on December 1, 2023 at a weighted average grant date fair value of $ 5.51 .

RSUs were to vest in equal annual instalments on the first three anniversaries of the closing of the Merger.

Upon the then Chief Financial

Officer’s resignation, effective May 15, 2024, all such RSUs were forfeited.

On June 7, 2024 by Unanimous Written Consent of the

Board, the Interim Chief Financial Officer of the Company and a Board member were each granted 37,272 shares of immediately

vested restricted stock at a weighted average grant date fair value of $ 2.84 .

The shares of restricted stock were fully vested as of

the grant date.

No additional RSU’s or shares of restricted Common Stock were granted during the three and nine months ended September

30, 2024.There were 74,544 shares of restricted Common Stock vested as of September 30, 2024 and no RSUs vested as of December 31, 2023.

following table summarizes restricted stock activity for the 2023 Plan:

of Restricted Stock Activity

Number of Awards

Weighted Average

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Cancelled/forfeited

Outstanding at June 30, 2024

Outstanding at September 30, 2024

Company estimates the fair value of each option award on the date of grant using the Black-Scholes option-pricing model.

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there any plans to declare a dividend.

Company did not grant stock options during the three and six months ended June 30, 2024 or June 30, 2023.

Company did not grant stock options during the three and nine months ended September 30, 2024 or September 30, 2023.

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

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Cancelled/forfeited

Outstanding at June 30, 2024

Outstanding at September 30, 2024

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

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Common Stock.

As of June 30, 2024, the total compensation cost related to non-vested option awards not yet recognized was $ 3.1 million

As of September 30, 2024, the total compensation cost related to non-vested option awards not yet recognized was $ 2.7 million

with a weighted average remaining vesting period of 2.8 years.

the six months ended June 30, 2024, and 2023, the Company’s effective tax rate was 0.0 % and 0.0 %, respectively, due to the current

year tax loss and valuation allowance established against the Company’s net deferred tax assets, and due to operating in a no tax

jurisdiction, respectively.

Earnings/(Net Loss) Per Share Attributable to Common Stockholders

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For the three months ended

For the six months ended

September 30,

For the nine months ended

September 30,

Net loss - basic

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of Potentially Dilutive Securities

June 30, 2024

June 30, 2023

September 30, 2024

September 30, 2023

Equity classified warrants

Liability classified warrants

Convertible notes payable

Restricted Stock Options

Stock options

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Capital Limited

is a significant investor in the Company and the Chief Executive Officer of Corvus is a member of Conduit’s Board.

conjunction with the execution of the Subscription Agreements, Corvus and its affiliates entered into a participation and inducement

agreement with the PIPE Investors whereby Corvus agreed to provide certain payments and economic benefits to such investor in the

event Corvus sold or pledged in a debt transaction any of the shares it was receiving in the Merger.

circumstances, such investor may have a right to cause Corvus to transfer certain of its shares to such investor.

the six months ended June 30, 2024, the Company incurred travel expenses on behalf of the CEO of Corvus of approximately $ 0.3 million.

For the three and six months ended June 30, 2023, the Company incurred director’s fees and travel expenses payable to the CEO

of Corvus of $ 0.3 million.

The $ 0.3 million

paid during the six months ended June 30, 2024 was inclusive of an advance of $ 0.2 million

for travel expenses.

As of June 30, 2024, approximately $ 50,000

was outstanding on the advance.

of June 30, 2024 and December 31, 2023, the Company did not owe the CEO of Corvus any director’s fees as the CEO of Corvus and

the Company agreed to cease director’s fees to the CEO of Corvus effective at the closing of the Merger.

January and February 2023, under the terms of the 2022 Convertible Loan Note Instrument, the Company issued convertible notes payable

with an aggregate principal amount of $ 0.4 million (£ 0.3 million) to the CEO of Corvus.

The convertible notes payable mature three

years after issuance and bear 5 % interest, only to be paid in the event of a material breach by the Company of the terms of the 2022

Convertible Loan Note Instrument.

All of the convertible notes payable were converted into Common Stock upon the closing of the Merger

at a 20 % discount as specified under the terms of the 2021 Convertible Note Loan Instrument and the 2022 Convertible Note Loan Instrument.

is a significant investor in the Company and the Chief Executive Officer of Corvus is the chairman of Conduit’s Board.

addition, the Company’s interim Chief Financial Officer is a partner at Corvus.

In conjunction with the execution of the

Subscription Agreements, Corvus and its affiliates entered into a participation and inducement agreement with the PIPE Investors

whereby Corvus agreed to provide certain payments and economic benefits to such investor in the event Corvus sold or pledged in a

debt transaction any of the shares it was receiving in the Merger.

In certain circumstances, such investor may have a right to cause

Corvus to transfer certain of its shares to such investor.

No share transfers have been made to date.

On July 31, 2024, Corvus pledged 30,048,454 shares of common stock to

Nirland Limited, a related party of the Company discussed below.

Refer to Note 11 for additional information.

the nine months ended September 30, 2024, the Company incurred travel expenses on behalf of the CEO of Corvus of approximately $ 0.3 million.

For the three and nine months ended September 30, 2023, the Company incurred director’s fees and travel expenses payable to the

CEO of Corvus of $ 0.3 million.

As of September 30, 2024 and December 31, 2023, the Company did not owe the CEO of Corvus any director’s

fees as the CEO of Corvus and the Company agreed to cease director’s fees to the CEO of Corvus effective at the closing of the

George Street Capital

George Street Capital (“SGSC”) is a stockholder and the Company has a Funding Agreement (as defined below) with SGSC.

Following the execution of the License Agreement with AstraZeneca (See Note 16, Subsequent Events ), the Company

will no longer fund the development of AZD1656 or AZD5904 under the terms of the Funding Agreement, dated March 26, 2021 (the “Funding

In this regard, the Company

previously entered into a deed of amendment in May 2024 amending the Funding Agreement.

The parties agreed that the

project funding provisions of the Funding Agreement whereby the Company had the right to fund a project or refer other funders to SGSC, but not the obligation to fund any project, would be amended to provide that SGSC must still include the

Company in any project funding opportunities and requests but may now seek other third party p roject

funders in addition to the Company.

For the three and six months ended June 30, 2024 and 2023, the Company did not incur expenses to SGSC and as of June

the execution of the License Agreement with AstraZeneca (See Note 1), the Company will no longer fund the development of AZD1656 or AZD5904

under the terms of the Funding Agreement, dated March 26, 2021 (the “Funding Agreement”).

this regard, the Company previously entered into a deed of amendment in May 2024 amending the Funding Agreement.

The parties agreed that

the project funding provisions of the Funding Agreement whereby the Company had the right to fund a project or refer other funders to

SGSC, but not the obligation to fund any project, would be amended to provide that SGSC must still include the Company in any project

funding opportunities and requests but may now seek other third party project funders in addition to the Company.

the three and nine months ended September 30, 2024 and 2023, the Company did not incur expenses to SGSC and, as of September 30, 2024

and December 31, 2023, the Company did not owe any amounts to SGSC.

August 20, 2022, the Company entered into a loan agreement with SGSC, with a total principal amount of $ 0.6 million.

loan to SGSC carried no interest, and as such, no interest receivable was recorded.

The Company previously recorded a full

reserve against the loan as SGSC did not previously have the ability to repay the loan.

On September 22, 2023, the related

party paid back a significant portion of its outstanding loan and the Company forgave the remaining portion of the loan and the Company

recorded the $ 0.6 million payoff as a gain within general and administrative expense on the consolidated statement of operations and

Comprehensive Loss, as it had previously been fully reserved.

Nirland Limited

On August 6, 2024, the

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

Refer to Note 8 above for additional

Additionally, on October 28, 2024, the Company issued the October 2024 Nirland Note to Nirland, and on October 31, 2024, the

Company and Nirland amended the August 2024 Nirland Note.

Refer to Note 17 below for additional information.

Other Income (Expense), Net

following table presents other income (expense), net, for the three and six months ended June 30, 2024 and 2023 (in thousands):

following table presents other income (expense), net, for the three and nine months ended September 30, 2024 and 2023 (in thousands):

of Other Expense, Net

For the Three Months ended

For the six months ended

September 30,

For the Nine Months ended

September 30,

Other income:

Change in fair value of Cizzle option

Change in fair value of Vela option liability

Unrealized foreign Currency gain

Gain on change in fair value of derivative warrant liability

Realized foreign Currency gain

Interest Income

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Other expense:

Loss on Vela Option

Loss on issuance of Cizzle option

Change in fair value of convertible notes payable

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Interest expense on convertible promissory note payable

Unrealized foreign currency transaction loss

Amortization of Debt Issuance costs

Interest Expense on Note payable

Loss on contingent liability

Realized foreign currency transaction loss

Unrealized Foreign currency Loss

Issuance of Warrants for lock up

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Total other expense, net

the closing of the Merger, the Company assumed (i) the warrants initially included in the MURF units issued in MURF’s initial public

offering (the “Publicly Traded Warrants”), and (ii) the warrants that were included in the private placement units issued

to the Sponsor simultaneously with the closing of MURF’s initial public offering (the “Private Placement Warrants”).

In connection with the Merger, the Company also issued warrants to the PIPE Investors (the “PIPE Warrants”) pursuant to the

Subscription Agreements and to an advisor (the “A.G.P.

Warrants,” and together with the PIPE Warrants, the “Liability

Classified Warrants”) pursuant to the Company’s engagement agreement with the advisor.

the closing of the Merger, the Company assumed (i) the warrants initially included in the MURF units issued in MURF’s initial

public offering (the “Publicly Traded Warrants”), and (ii) the warrants that were included in the private placement

units issued to the MURF Sponsor simultaneously with the closing of MURF’s initial public offering (the “Private

Placement Warrants”).

In connection with the Merger, the Company also issued warrants to the PIPE Investors (the “PIPE

Warrants”) pursuant to the Subscription Agreements and to an advisor (the “A.G.P.

Warrants,” and together with the

PIPE Warrants, the “Liability Classified Warrants”) pursuant to the Company’s engagement agreement with the

Company determined that the settlement amount of the Publicly Traded Warrants and the Private Placement Warrants would equal the difference

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a fixed number of shares and a fixed monetary amount (or a fixed amount of a debt instrument) and must be classified as a liability.

Equity Classified Warrants

March 20, 2024, the Company issued in a private placement equity classified common stock purchase warrants to an unrelated third

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The Company recognized at $ 0.5

million loss on the issuance of the warrants in the period ending June 30, 2024.

estimated the fair value of the warrants issued as of March 20, 2024, using a Black-Scholes option-pricing model utilizing the

following assumptions:

million loss on the issuance of the warrants in the period ending September 30, 2024.

Company estimated the fair value of the warrants issued as of March 20, 2024, using a Black-Scholes option-pricing model utilizing

the following assumptions:

of Black-Scholes Option Pricing Model

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Time period to expiration

April 20, 2024, the Company issued in a private placement equity classified common stock purchase warrants to shareholders’ of

the Company to purchase up to an aggregate 1,447,725 shares

of the Company’s Common Stock, in exchange for (1) $ 0.125

April 20, 2024, the Company issued in a private placement equity classified common stock purchase warrants to stockholders of the

Company to purchase up to an aggregate 1,447,725

shares of the Company’s Common Stock, in exchange for (1) $ 0.125

per warrant and (2) entering into a lock-up with respect to the shares of Common Stock held by such holders (the “April 2024

Lock-Up Agreement”).

the total April 2024 Warrants issued were issued to directors, related parties and management of the Company.

The Company received

cash of $ 0.2 million

and recognized a $ 2.2 million

loss on the issuance of the warrants in the three months ended June 30, 2024.

estimated the fair value of the warrants issued as of April 20, 2024, using a Black-Scholes option-pricing model utilizing the

following assumptions:

Of the total April 2024 Warrants issued, 907,725

were issued to directors, related parties and management of the Company.

The Company received cash of $ 0.2

million and recognized a $ 2.2

million loss on the issuance of the warrants in the nine months ended September 30, 2024.

Company estimated the fair value of the warrants issued as of April 20, 2024, using a Black-Scholes option-pricing model utilizing

the following assumptions:

April 20, 2024

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Time period to expiration

Classified Warrants

to MURF’s initial public offering, the Company sold 13,225,000 units at a price of $ 10.00 per unit.

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Simultaneously

with the closing of its initial public offering, MURF consummated the private sale to the Sponsor of 754,000 private placement units

at a price of $ 10.00 per private placement unit.

Each private placement unit was comprised of one share of MURF Class A common stock

and one Private Placement Warrant.

Each Private Placement Warrant was exercisable to purchase one share of MURF Class A common stock

at a price of $ 11.50 per share, subject to adjustment.

The private placement units (including the Class A common stock issuable upon

exercise of the warrants included in the private placement units) were not transferable, assignable, or saleable until 30 days after

the completion of a Merger, subject to certain exceptions.

with the closing of its initial public offering, MURF consummated the private sale to the MURF Sponsor of 754,000

private placement units at a price of $ 10.00

per private placement unit.

Each private placement unit was comprised of one share of MURF Class A common stock and one Private

Placement Warrant.

Each Private Placement Warrant was exercisable to purchase one share of MURF Class A common stock at a price of

per share, subject to adjustment.

The private placement units (including the Class A common stock issuable upon exercise of the

warrants included in the private placement units) were not transferable, assignable, or saleable until 30 days after the completion

of a Merger, subject to certain exceptions.

connection with the closing of the Merger on September 22, 2023, the Equity Classified Warrants were amended to entitle each holder to

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a cashless basis, at the holder’s option, and will not be redeemable by Conduit, in each case so long as they are still held by

the Sponsor or its permitted transferees.

warrants issued in March 2024 (the “March 2024 Warrants”) are not exercisable until one year after their date of

the MURF Sponsor or its permitted transferees.

The March 2024 Warrants are not exercisable until one year after their date of

Each March 2024 Warrant is exercisable into one share of the Company’s Common Stock at a price per share of $ 3.18

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the March 2024 Lock-Up Agreement and 25% on each subsequent 90-day anniversary, in each case vesting only if the holder agrees to

continue to have its shares of common stock remain locked up pursuant to the March Lock-Up Agreement on such date .

warrants issued April 2024 (the “April 2024 Warrants”) are not exercisable until one year after their date of issuance.

continue to have its shares of common stock remain locked up pursuant to the March 2024 Lock-Up Agreement on such

The April 2024 Warrants are not exercisable until one year after their date of issuance.

Each April 2024 Warrant is exercisable into one share of the Company’s Common Stock at a price per share of $ 3.12

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the April 2024 Lock-Up Agreement and 25% on each subsequent 90-day anniversary, in each case vesting only if the holder agrees to

continue to have its shares of common stock remain locked up pursuant to the April Lock-Up Agreement on such date.

continue to have its shares of common stock remain locked up pursuant to the April 2024 Lock-Up Agreement on such

Classified Warrants

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each day in the 30 trading day period and continuing each thereafter until the redemption date.

These warrants are classified as derivative liabilities because they do not meet the criteria in ASC 815-40 to be considered

indexed to the entity’s own stock as the warrants could be settled for an amount that is not equal to the difference between the

fair value of a fixed number of the entity’s shares and a fixed monetary amount.

The Liability Classified Warrants are initially

measured at fair value based on the price of the Publicly Traded Warrants and are remeasured at fair value at subsequent financial reporting

period end dates and upon exercise (see Note 6 for additional information regarding fair value).

June 30, 2024 and December 31, 2023, the consolidated balance sheets contained derivative warrant liabilities of $ 32,000 and $ 0.1

warrants are classified as derivative liabilities because they do not meet the criteria in ASC 815-40 to be considered indexed to the

entity’s own stock as the warrants could be settled for an amount that is not equal to the difference between the fair value of

a fixed number of the entity’s shares and a fixed monetary amount.

The Liability Classified Warrants are initially measured at

fair value based on the price of the Publicly Traded Warrants and are remeasured at fair value at subsequent financial reporting period

end dates and upon exercise (see Note 6 for additional information regarding fair value).

September 30, 2024 and December 31, 2023, the consolidated balance sheets contained derivative warrant liabilities of $ 24,000 and $ 0.1

million, respectively.

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which we currently believe to be immaterial, does not become material in the future.

August 2023, prior to the Business Combination, our now wholly-owned subsidiary, Conduit Pharmaceuticals Limited, received a letter from

Strand Hanson Limited (“Strand”) claiming it was owed advisory fees pursuant to a previously executed letter.

Conduit rejected

and disputed the substance of the letter in full.

Following such rejection, on September 7, 2023, Strand filed a claim in the Business

and Property Courts of England and Wales claiming it is entitled to be paid the sum of $ 2 million and, as a result of the completion

of the Business Combination, to be issued 6.5 million shares of common stock.

The potential contingency is not considered probable or

reasonable estimable as of the financial statement issuance date and no loss contingency accruals have been incurred in the accompanying

August 2023, prior to the Business Combination, our now wholly-owned subsidiary, Conduit Pharmaceuticals Limited, received a letter

from Strand Hanson Limited (“Strand”) claiming it was owed advisory fees pursuant to a previously executed letter.

Conduit rejected and disputed the substance of the letter in full.

Following such rejection, on September 7, 2023, Strand filed a

claim in the Business and Property Courts of England and Wales claiming it is entitled to be paid the sum of $ 2

million and, as a result of the completion of the Business Combination, to be issued 6.5

million shares of Common Stock.

As of September 30, 2024, the potential contingency is considered probable and reasonably estimable and as such, the Company accrued an estimated

liability of $ 0.4 million in the accompanying

financial statements.

We intend to vigorously defend against these claims.

Regardless of its outcome, the litigation may impact our business

due to, among other things, defense legal cost and the diversion of the attention of our management.

Regardless of its outcome, the litigation may impact our

business due to, among other things, defense legal cost and the diversion of the attention of our management.

March 7, 2024, the Company entered into a lease agreement with respect to approximately 2,100 square feet of space in Cambridge, England,

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The Company classified $ 0.1 million of the lease liability

as short-term and $ 0.1 million of the lease liability as long-term as of June 30, 2024.

as short-term and $ 0.1 million of the lease liability as long-term as of September 30, 2024.

Subsequent Events

August 7, 2024, the Company and AstraZeneca, a related party of the Company,

entered into a License Agreement, dated August 7, 2024 (the “License Agreement”).

Pursuant to such License Agreement,

AstraZeneca agreed to grant an exclusive license to the Company for certain intellectual property rights controlled by AstraZeneca related to

HK-4 Glucokinase activators AZD1656 and AZD5658 in all indications and myeloperoxidase inhibitor AZD5904 for the treatment,

prevention, and prophylaxis of idiopathic male infertility.

The Company will be responsible for the development and

commercialization of the relevant products licensed under the License Agreement (the “Licensed Products”) at its sole cost and expense in accordance with the Development

plan, as defined.

is required to use commercially reasonable efforts to develop and commercialize the Licensed Products.

consideration for the grant of the license, the Company (i) granted AstraZeneca Common Stock pursuant to a Stock Issuance Agreement

(as further set out below), (ii) paid AstraZeneca an up-front payment of $ 1.5

million, and (iii) will pay AstraZeneca a percentage (on a tiered basis) of any amounts it may receive in connection with a grant of

a sublicense (subject to various customary exceptions).

has been granted a right of first negotiation to develop, manufacture, and commercialize a Licensed Product if Conduit receives an

offer for, or solicits, a transaction where a third party would obtain the right to develop, manufacture, or commercialize a

Licensed Product.

If AstraZeneca exercises such right, the parties will negotiate in good faith for an agreed period of time on an

exclusive basis.

If Conduit intends to commercialize any Licensed Product itself, it shall discuss in good faith the appropriate royalty

to be paid to AstraZeneca, subject to a low double digit royalty floor.

AstraZeneca agreed to transfer to Conduit has the right to purchase all quantities of existing inventory of Licensed

Products including up to 450kg of AZD1656 at pre-agreed prices, which the Company believes would be sufficient to commercial launch,

assuming all clinical trials were successfully completed and regulatory approvals granted.

party may terminate the License Agreement for material breach (subject to a cure period) or insolvency of the other party.

may terminate the License Agreement for convenience (in its entirety or on a Licensed Product-by-Licensed Product basis).

AstraZeneca may terminate the License Agreement in certain circumstances, including (but not limited to) the Company ceasing development

of all Licensed Products (subject to certain exceptions for normal pauses or gaps between clinical studies).

connection with the execution of the License Agreement, the Company and AstraZeneca entered into a Stock Issuance Agreement, dated

August 7, 2024 (the “Issuance Agreement”), whereby the Company has issued AstraZeneca 9,504,465

shares of the Company’s Common Stock.

The Issuance Agreement provides AstraZeneca with resale registration rights for such shares.

2024, the Company entered into a Senior Secured Promissory Note (the “Note”) with Nirland Limited (the

“Nirland”), a related party of the Company, pursuant to which the Company issued and sold to the Nirland the Note in

the original principal amount of $ 2,650,000

(the “Note”), inclusive of a $ 500,000

original issuance discount.

Of the total amount of the Note, $ 1,675,000

was issued upon execution of the Note and the balance of $ 475,000

will be paid after the Closing Common Stock, defined below, has been registered for resale.

The Note bears interest at a rate of 12 %

per annum, accruing daily on a 365-day basis, payable monthly in arrears as cash, or accrued at the Nirland’s discretion.

Note matures in 12 months from August 5, 2024 .

The Company has certain

obligations to mandatorily prepay the Note, and any accrued interest, with portions of any proceeds received in connection with future

The Company may prepay the outstanding principal and accrued interest on the Note with no fee.

Until the Note is no longer

outstanding, Nirland has a right of first refusal to participate, in an amount up to 100%, with certain exceptions, in any future

equity or debt offering of the Company.

The Note is secured

by all assets of the Company and its subsidiary.

The Note is guaranteed by the subsidiary of the Company.

The Note contains customary

default provisions for a transaction of this nature.

Upon an event of default, the interest rate of the Note will increase to 18 % , until

such time as the default is remedied.

In connection with the Note, the Company issued the Nirland 12,500,000 shares of the Company’s

Common Stock on August 6, 2024.

October 9, 2024, the

Company entered into an agreement with the loan holder of the convertible promissory note payable (see Note 7) to extend the

maturity date from September 20, 2024 to October 20, 2024 with the option for the Company to further extend the maturity date two

times, each by an additional 30-day period.

The Company exercised the first option to extend the maturity date and the maturity date

is currently November 19, 2024.

In consideration for extending the maturity date, the Company amended the form of the

repayment of the remaining interest due on the loan.

As payment for the interest, the Company issued the loan holder, (i) $ 80,000

worth of Common Stock to be issued at the closing market price on the date prior to issuance and (ii) 2,000,000

shares of Common Stock.

On October 11, 2024, the Company issued the loan holder 2,781,250

shares of Common Stock in satisfaction of the obligations in (i) and (ii) in preceding sentence.

In connection with the extension of

the loan, the Company entered into a consulting agreement with an unrelated third party to negotiate the extension of the of the

convertible note with the loan holder on behalf of the Company.

The Company issued the third party 850,000

shares of Common Stock on October 11, 2024 in exchange for services provided.

October 9, 2024, the Company entered into two separate agreements with each of the Loan holders of the notes payable (see Note 8) to

extend the maturity date for each Loan to December

The agreements also modified the payment terms for each Loan from a cash payment of £ 85,000

per loan to (1) a cash payment of £ 60,000 ,

worth of shares of Common Stock converted into USD at the prevailing exchange rate, to be issued at the closing market price on the

date prior to issuance, and in consideration for the extension, and (3) 250,000

additional shares of Common stock.

On October 11, 2024, the Company issued the each of the Loan holders 569,043

shares ( 1,138,086

shares in total).

On October 23, 2024, we entered into a sales agreement,

relating to shares of our common stock.

In accordance with the terms of the sales agreement, we may offer and sell shares

of our common stock having an aggregate offering price of up to $ 3,556,586 from time to time through A.G.P., acting as our sales agent

or principal.

On October 29, 2024, the

Company entered into a Bridge Loan Agreement (the “A.G.P.

Bridge Agreement”), with A.G.P., pursuant to which A.G.P.

an advance (the “Advance”) to the Company in an amount not to exceed $ 600,000 (the

“Commitment”).

As partial consideration for the Advance, the Company issued A.G.P.

warrants to purchase up to 2,862,596 shares

of the Company’s Common Stock, which is equal to 50 %

of the sum of the Commitment divided by the closing price of the Company’s Common Stock on October 29, 2024, at an exercise

price of $ 0.1048 per

In connection with the Advance, the Company issued a promissory note (the “A.G.P.

Bridge Note”) to A.G.P.

original principal amount of $ 600,000 .

The A.G.P Bridge Note bears interest at a rate of 4.21 %

per annum and is due and payable on December 31, 2024.

Pursuant to the A.G.P.

Bridge Agreement, the Company and A.G.P.

also agreed to

amend a fee letter agreement entered into between the Company and A.G.P., effective September 22, 2023 (See Note 9), suspending the provision

that the Company was required to pay A.G.P.

of all net proceeds received from certain transactions described therein, for the repayment of an outstanding amount owed to A.G.P.,

until such time as the A.G.P Bridge Note is repaid in full.

On October 28, 2024, the

Company issued a promissory note (the “October 2024 Nirland Note”) to Nirland in the original principal amount of $ 600,000

in exchange for funds in such amount.

The October 2024 Nirland Note bears interest at a rate of 12 %

per annum, is due and payable semi-annually in arrears, and matures on October 28, 2025.

If an event of default under and as defined

in the October 2024 Nirland Note occurs, the interest rate will be increased to 18 %

per annum or to the maximum rate permitted by law.

In connection with the October 2024 Nirland Note, the Company has

agreed to pay Nirland a 1 %

arrangement fee, which will be included with the principal and interest owed under the October 2024 Nirland Note.

On October 31, 2024, the Company

and Nirland amended the August 2024 Nirland Note (See Note 8), whereby the August 2024 Nirland Note was amended to (i) provide for the

conversion of the August 2024 Nirland Note into shares of Common Stock, at Nirland’s discretion, in a multiple of any unpaid amounts,

if not otherwise previously paid, pursuant to the conversion rate contained therein, (ii) remove Nirland’s Mandatory Prepayment

Right, and (iii) remove Nirland’s right of first refusal to participate in any future equity or debt offerings of the Company.

The number of shares of Common Stock issuable upon conversion of any Conversion Amount pursuant to shall be determined by dividing

(x) such conversion amount by (y) the conversion price.

Conversion amount means two and one quarter times the sum of (x) portion of the

principal to be converted, redeemed or otherwise with respect to which this determination is being made and (y) all accrued and unpaid

interest with respect to such portion of the principal amount, if any.

Conversion price means, as of any conversion date or other date

of determination, $ 0.10 , subject to adjustment as provided within the amended agreement.

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

What changed 10-Q

Item 1. Financial Statements