What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-04-15 compared with 2025-03-28 · 267 added, 385 removed, 160 unchanged (80% of the section changed)

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

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

of this Annual Report on Form 10-K, including our audited financial statements for the year ended December 31, 2024, together with related

notes thereto, included elsewhere in this Annual Report.

The following discussion contains forward-looking statements based upon current

expectations that involve risks, uncertainties, and assumptions.

Our actual results may differ materially from those anticipated in these

forward-looking statements as a result of various factors, including those set forth under the section titled “Risk Factors”

or in other parts of this Annual Report and our other filings with the SEC.

Our historical results are not necessarily indicative of

the results that may be expected for any period in the future.

Conduit Pharmaceuticals Limited entered into an Agreement and Plan of

Merger (the “Merger Agreement”) with Murphy Canyon Acquisition Corp.

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

sections of this Annual Report on Form 10-K, including our audited financial statements for the year ended December 31, 2025,

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

The following discussion contains forward-looking

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

Our actual results may differ

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

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

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

CDT Equity Inc.

(formerly Conduit Pharmaceuticals Limited) entered into an Agreement and Plan of Merger (the “Merger Agreement”) with

Murphy Canyon Acquisition Corp.

(“MURF”) on November 8, 2022.

The transaction

contemplated by the terms of the Merger Agreement was completed on September 22, 2023, in conjunction with which MURF changed its name

to Conduit Pharmaceuticals Inc.

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

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

All dollar amounts are expressed in thousands

of United States dollars (“$”), unless otherwise indicated.

The transaction contemplated by the terms of the Merger

Agreement was completed on September 22, 2023, in conjunction with which MURF changed its name to Conduit Pharmaceuticals Inc.

(hereafter referred to, collectively with is subsidiaries as “CDT”, “CDT Equity”, the “Company”, “we”,

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

All dollar amounts are expressed in thousands of

United States dollars (“$”), unless otherwise indicated.

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

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to Conduit Pharmaceuticals Inc.

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

new treatments for patients.

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

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

We continue to

evaluate novel artificial intelligence and cybernetics approaches to drug re-purposing, intellectual property and asset selection to

give Conduit a competitive advantage.

are led by highly experienced pharmaceutical executives:

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

of our Board of Directors, and Dr.

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

LifeArc, our Chief Executive Officer.

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

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

efficacy and patient safety.

Simultaneously,

Conduit leverages the capabilities of our Cambridge laboratory facility and highly experienced team of solid-form experts to extend or

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

Our own intellectual property portfolio

comprises pending patent applications in several international jurisdictions describing a solid-form compound, including the AZD1656

Cocrystal (a HK-4 Glucokinase Activator), targeting a wide range of autoimmune disorders.

Our pipeline research includes a number of

compounds that serve as promising alternatives to existing clinical assets currently marketed and sold by large pharmaceutical companies,

which we have identified as having an opportunity to develop further intellectual property positions through solid-form technology.

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

developed and collaborate with external CROs and Key Opinion Leaders

(“KOLs”) to run clinical trials that are managed, funded, and overseen by us.

We intend to leverage our comprehensive

clinical and scientific expertise in order to facilitate development of clinical assets through Phase II trials in an efficient

manner by using CROs and third-party service providers.

We will also collaborate closely with disease specific KOLs to collectively

assess and determine the most appropriate indications for all our current and forthcoming assets.

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

There is no assurance

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

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

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

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

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

of our proprietary owned patented clinical assets, 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 the Licensed Products under the related License Agreement.

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

Effective August 5, 2025, the Company changed

its name from Conduit Pharmaceuticals Inc.

to CDT Equity Inc.

Our change to CDT Equity Inc.

reflects the evolution of our strategy as

a data-driven biotech development company focused on identifying, enhancing, and advancing high-potential therapeutic assets through

scientific innovation and strategic partnerships.

Equity is a data-driven biotech development company focused on identifying, enhancing, and advancing

high-potential therapeutic assets through scientific innovation and strategic partnerships.

The Company has evolved into a broader, more

agile platform that leverages artificial intelligence, solid-form chemistry, and efficient asset repositioning to accelerate the development

of novel therapeutic treatments.

Equity’s strategy is centered on unlocking the untapped value of clinical-stage compounds, particularly those deprioritized by

larger pharmaceutical companies with strong, supporting Phase I safety data.

Through advanced co-crystallization and solid-form technologies

developed at our Cambridge facility, we aim to improve drug properties and have successfully extended the patent life of certain drugs

by up to 20 years.

current pipeline includes candidates targeting inflammatory and autoimmune disorders, as well as idiopathic male infertility,

dermatology, and animal health.

The intellectual property portfolio comprises pending patent applications in several international

jurisdictions describing a solid-form compound, including the AZD1656 Cocrystal (a HK-4 Glucokinase Activator).

research includes a number of additional compounds that serve as promising alternatives to existing clinical assets currently

marketed and sold by large pharmaceutical companies, which we have identified as potential opportunities to develop further

intellectual property positions through solid-form technology.

collaboration with Sarborg enables us to apply proprietary algorithms utilizing AI-powered disease mapping to identify novel re-purposing

opportunities across a database of more than 3,000 disease signatures.

Sarborg’s insights have directly informed two new combination

patent filings, strengthening our intellectual property portfolio.

In addition, CDT Equity has initiated pre-clinical in-vitro models

to explore new indications, guided by AI-insights without human intervention.

We will seek an exit through third-party license deals

following successful in vitro and in vivo pre-clinical trials, entering into agreements with third parties to pursue further development,

FDA approval, commercialization, and marketing of our assets.

Sarborg Agreement entered into between the Company and Sarborg on December 12, 2024 is designed to address longstanding challenges in

the pharmaceutical sector, in particular by reducing human error in critical decision-making processes in both clinical development and

asset identification.

By integrating Sarborg’s algorithmic AI/cybernetics technology, CDT Equity aims to enhance efficiency, lower

costs, and accelerate timelines by minimizing human intervention, ultimately optimizing the drug development cycle and giving CDT Equity

a competitive advantage in the sector.

this relationship, CDT Equity will gain access to cutting-edge predictive models and dashboards, enabling the Company to evaluate drug

candidates, streamline clinical trials, and optimize asset management with real-time data.

These tools will drive faster, more accurate

decisions, improving efficiency and reducing costs.

By leveraging these insights, CDT Equity can differentiate itself in a competitive

sector and gain unique data-driven insights that position the Company for success across both its current and future asset portfolio.

further partnership with Manoira enables CDT Equity to expand the scope of its drug portfolio into the animal health market in a cost-efficient

This collaboration allows us to accelerate the understanding of the mechanism of action, safety, and potential efficacy of its

portfolio across multiple species, while retaining 100% ownership of all data and intellectual property generated relating to human applications.

This is expected to enhance the core human therapeutic pipeline but also opens potential new revenue streams in the high-growth veterinary

Repositioning

CDT Equity enables the Company to explore multiple opportunities in the healthcare, biotech, artificial intelligence and broader technology

The Board continues to evaluate an artificial intelligence led strategy, collaborating with consultants to best advise a

growing market which has seen significant recent activity and success for respective stakeholders.

Long-term exposure to artificial intelligence

can present both strategic and financial benefits as part of a diversified capital management approach.

with a lean disease-agnostic model, CDT Equity prioritizes speed, adaptability, and capital efficiency.

We avoid the cost burden of late-stage

clinical trials, focusing instead on high-leverage development strategies.

Led by highly experienced executives:

Freda Lewis-Hall,

former Chief Medical Officer of Pfizer Inc., the Chair of the Company’s Board;

Andrew Regan, CEO and James Bligh, CFO.

management team includes active senior scientists who have an extensive understanding of the pharmaceuticals market, supporting our strategy

of developing clinical assets in a cost-efficient manner focused on therapeutic efficacy.

2024, AstraZeneca granted 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 development and commercialization of the Licensed Products

under the related License Agreement.

The Company is required to use commercially reasonable efforts to develop and commercialize the

Licensed Products.

has conducted initial pre-clinical and, in some instances, clinical trials on these assets, but has decided to license them for further

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

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

this relationship, there are considerable APIs that were manufactured by AstraZeneca

(prior to conducting its clinical trials) available to Conduit.

As a result, Conduit may not have to develop the APIs, which is often

a time consuming and expensive process, and the APIs already produced were subject to rigorous quality control measures.

collaboration with SARBORG Limited (“Sarborg”), a related party, Conduit intends to leverage an advanced AI and cybernetics platform to evaluate key deliverables across multiple areas of the Company’s operations,

including drug repurposing, drug discovery, solid-form identification, and clinical trial monitoring.

Sarborg Agreement is designed to address longstanding challenges in the pharmaceutical sector, in particular by reducing human error

in critical decision-making processes in both clinical development and asset identification.

By integrating Sarborg’s

algorithmic AI/cybernetics technology, Conduit aims to enhance efficiency, lower costs, and accelerate timelines by minimizing human

intervention, ultimately optimizing the drug development cycle and giving Conduit a competitive advantage in the sector.

this relationship, Conduit will gain access to cutting-edge predictive models and dashboards, enabling the Company to evaluate drug candidates,

streamline clinical trials, and optimize asset management with real-time data.

These tools will drive faster, more accurate decisions,

improving efficiency and reducing costs.

By leveraging these insights, Conduit can differentiate itself in a competitive sector and gain

unique data-driven insights that position the Company for success across both its current and future asset portfolio.

addition, Conduit will retain a perpetual, non-exclusive, royalty-free, and assignable right to use any platform or technology developed

by Sarborg in association with the deliverables.

Ongoing support from Sarborg will ensure these systems evolve with Conduit’s needs,

driving long-term innovation in areas like IP creation, regulatory strategy, and clinical trial monitoring.

This partnership reinforces

Conduit’s commitment to leveraging AI-driven solutions to accelerate growth, deliver value to shareholders, and maintain a competitive

edge in the pharmaceutical sector.

strategic move reaffirms Conduit’s commitment to adopting forward-thinking solutions to stay at the forefront of innovation in

the pharmaceutical industry.

By reducing reliance on traditional, labor-intensive methods and harnessing the power of AI-driven technology,

Conduit is well-positioned to lead in areas such as drug repurposing, clinical trial monitoring, and IP creation, ensuring the Company’s

long-term growth and market leadership.

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

licensing of further assets which are currently deprioritized.

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

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

January 22, 2025, we filed a certificate of amendment to the Company’s Second Amended and Restated Certificate of Incorporation

(the “Amendment”) with the Secretary of State of the State of Delaware to effectuate a 1-for-100 reverse stock split (the

“Reverse Stock Split”) of the outstanding shares of our common stock.

Our stockholders previously approved the Reverse Stock

Split and granted the board of directors the authority to determine the exact split ratio and when to proceed with the Reverse Stock

Split at our annual meeting of stockholders held on December 18, 2024.

The Reverse Stock Split became effective on January 24, 2025,

and the common stock begin trading on The Nasdaq Global Market on a Reverse Stock Split-adjusted basis on January 27, 2025.

The par value

and other terms of the common stock were not affected by the Reverse Stock Split.

a result of the reverse stock split, every 100 shares of our common stock issued or outstanding were automatically reclassified into

and became one new share of common stock, and the number of our issued and outstanding shares of common stock was reduced to 1,384,801

and 738,295 as of December 31, 2024 and December 31, 2023, respectively.

All references to numbers of shares of common stock and per-share

information in this Annual Report on Form 10-K have been adjusted retroactively, as appropriate, to reflect the reverse stock split.

Nasdaq Stock Market Correspondence and Subsequent

Nasdaq Capital Market Listing

We are compliant with the MVPHS

continued listing standard of Nasdaq Capital Market being greater than $1.0 million.

The current MVPHS is $5,166,785 based on

the closing price of the common stock on March 27, 2025.

On a pro-forma basis at March 31, 2025, we expect to satisfy compliance

with the Nasdaq Capital Market Equity Standard of Stockholder’s Equity greater than $2.5 million, after anticipating all Q1

2025 expected losses.

Through the date of the consolidated financial statements, Stockholder’s Equity has increased significantly,

through (i) fundraising of an additional $8.332 million from the Sales Agreement with AGP, (ii) conversion of $1.785 million from the

Nirland Notes into 924,200 shares of common stock, and (iii) capitalization of certain invoices and fees.

We expect to maintain

continued compliance with the Equity Standard through additional issuance under its Sales Agreement, additional conversions of outstanding

debt and capitalization of fees and a tight control of expenditure, although no such assurance can be given.

use the safety data generated in these clinical trials to assess which clinical assets to further develop and re-purpose.

CDT Equity is well positioned to pursue, and intends to pursue additional relationships and/or partnerships with third parties to license

assets which are currently deprioritized.

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

large populations where there is no present treatment or the existing treatments carry significant unwanted side effects.

the year ended December 31, 2025, the Company effected three reverse stock splits of its common stock pursuant to amendments to the Company’s

Second Amended and Restated Certificate of Incorporation that were previously approved by the Company’s stockholders and authorized

by the Board of Directors.

The reverse stock splits were implemented as follows:

a 1-for-100 reverse stock split effective January 24,

2025, a 1-for-15 reverse stock split effective May 19, 2025, and a 1-for-8 reverse stock split effective October 10, 2025.

March 26, 2026, the company effected a 1-for-25 reverse stock split.

No fractional shares were issued in connection with the reverse

stock splits.

Stockholders who otherwise would have been entitled to receive fractional shares received cash in lieu of fractional shares

based on the applicable post-split trading price of the Company’s common stock.

All references to numbers of shares of common stock

and per-share information in this Annual Report on Form 10-K have been adjusted retroactively, as appropriate, to reflect the reverse

stock splits were applied sequentially at their respective effective dates (resulting in a cumulative effect equivalent to an approximate

1-for-300,000 reverse stock split).

reverse stock splits automatically combined the Company’s issued and outstanding shares of common stock at the applicable ratios

without affecting the number of authorized shares of common stock or the par value of $0.0001 per share.

No fractional shares were issued

in connection with the reverse stock splits.

Stockholders who otherwise would have been entitled to receive fractional shares received

cash in lieu of fractional shares based on the applicable post-split trading price of the Company’s common stock.

a result of the aggregate of the reverse stock splits, every 300,000 shares

of our common stock issued or outstanding were automatically reclassified into and became one new share of common stock.

The number of

our issued and outstanding shares of common stock, when accounting for the reverse stock splits, was 92,140 and 461 shares as of December

31, 2025 and December 31, 2024, respectively.

accordance with ASC 260, Earnings Per Share, all historical share and per-share amounts presented in the accompanying consolidated financial

statements and related notes have been retroactively adjusted to reflect the effect of the reverse stock splits for all periods presented.

Accordingly, all references to common stock share amounts and per-share information in this Annual Report on Form 10-K have been retroactively

adjusted, as applicable, to reflect the reverse stock splits.

Component of Result of Operations

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The prepaid amounts are expensed as the benefits are

Our research and development

activities have been wholly focused on developing co-crystals of AZD1656 to increase patent life.

Some of this work was completed by

third-party CROs but all intellectual property is retained by us.

We currently have one pending international patent application and

two pending national patent applications.

The successful completion of clinical trials increases the value of clinical assets and may

lead to the commercialization and/or licensing of such assets to other pharmaceutical companies.

There is no assurance that any clinical

trials on the assets owned or licensed by us will be successful.

research and development activities have been wholly focused on developing co-crystals of AZD1656 to increase patent life.

work was completed by third-party CROs but all intellectual property is retained by us.

We currently have one pending international patent

application and two pending national patent applications.

The successful completion of clinical trials increases the value of clinical

assets and may lead to the commercialization and/or licensing of such assets to other pharmaceutical companies.

There is no assurance

that any clinical trials on the assets owned or licensed by us will be successful.

and Administrative Expenses

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and development expenses increased by approximately $1.7 million, or 50%, to approximately $5.1 million for the year ended December 31,

31, 2024, as compared to approximately $90 thousand for the year ended December 31, 2023.

The increase was primarily driven by a $3.1

million upfront payment to AstraZeneca in connection with the license agreement, comprised of $1.5 million cash and $1.6 million of our

common shares issued to AstraZeneca with no comparable activity in 2023.

2025, as compared to approximately $3.4 million for the year ended December 31, 2024.

The increase was primarily driven by an increase

of $4.2 million related to work performed under the Sarborg agreements, a $0.3 million increase related to Thesprogen, a $0.2 million

increase related to Charles River and a $0.1 million increase related to Manoira, partially offset by a $3.1 million decrease related

to an upfront payment to AstraZeneca with no comparable activity in 2025.

and administrative expenses

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General and administrative expenses

and administrative expenses increased by $6.9 million, or 133%, to approximately $12.0 million for the year ended December 31, 2024,

as compared to approximately $5.2 million for the year ended December 31, 2023.

The increase was primarily driven by a $3.4 million increase

in salaries, stock-based compensation and payroll, a $1.3 million increase in other G&A expenses, a $1.1 million increase in D&O

insurance, a $0.5 million increase in professional fees including:

legal fees, accounting and tax expense, listing fees and consulting

fees and a $0.5 million increase in travel expenses.

income (expense), net

General and administrative

expenses increased by $19.7 million, or 163%, to approximately $31.7 million for the year ended December 31, 2025, as compared to approximately

$12.0 million for the year ended December 31, 2024.

The $19.7 million increase was primarily driven by a $9.6 million increase in litigation

liability expense in relation to the Strand litigation, a $7.0 million increase in compensation expense associated with the issuance of

common stock and pre-funded warrants as consideration for the sale of CPL, a $2.4 million increase in legal fees, and a $0.9 million increase

in salaries and stock-based compensation, partially offset by a $0.2 million decrease in directors’ and officers’ (D&O)

insurance costs.

Other expense, net

(Dollar amounts in thousands)

Other income (expense), net

income (expense), net changed by $5.8 million, or 118%, to other expense of approximately $0.9 million for the year ended December

31, 2024, as compared to other income of $4.9 million for the year ended December 31, 2023.

In 2024, other expense was driven by a

$2.7 million loss on the issuance of warrants, and a $0.7 million expense related to a net loss on extinguishments, offset by a $2.0

million gain on the change in fair value of convertible notes payable, a $0.3 million increase from an income tax refund and a $0.2

million increase in the gain on change in fair value of warrants.

In 2023, other income was driven by a $1.5 million gain on the

derecognition of the Cizzle option in 2023, a $1.3 million gain on the change in fair value of the Cizzle option, a $2.8 million

gain on the derecognition of the deferred revenue for the Vela option prior to the exercise of the Vela option, and a $1.0 million

gain on the change in fair value of the Vela option.

This was offset by a $1.0 million loss on issuance related to the Vela option,

$0.4 million change in the fair value of convertible notes payable and $0.3 million realized foreign currency transaction

further details refer to Note 17 in the consolidated financial statements as of December 31, 2024 and 2023 included elsewhere in this

Annual Report.

Other expense, net

for the year ended December 31, 2025 consisted of a loss on the change in fair value of convertible notes of $2.7 million, a loss on

the disposition of digital assets of $0.4 million, partially offset by a gain on the waiver of accrued interest of $0.4 million ,

a gain on debt extinguishment of $0.3 million, and a gain on the change in the fair value of warrant liability of $0.2 million.

Activity for the

year ended December 31, 2024 consisted of a loss of debt extinguishment of $3.2 million and a loss on the issuance of warrants for lock-up of $2.7 million, partially offset by a gain on debt extinguishment of $2.5 million,

a gain on the change in fair value of

convertible notes of $2.0 million, a $0.3 million income tax refund and a gain on the change in the fair value of warrant liability of $0.2 million.

further details refer to Note 17, “Other income (expense), net,” in the consolidated financial statements as of December

31, 2025 and 2024 included elsewhere in this Annual Report.

(Dollar amounts in thousands)

Interest expense, net

expense, net changed by $1.3 million or 614%, to $1.5 million for the year ended December 31, 2024, from $0.2 million for the year

ended December 31, 2023.

The change was driven by a $0.9 million increase in the amortization of debt issuance costs and debt

discounts and a $0.4 million increase in interest expense incurred on interest-bearing convertible promissory notes.

expense, net changed by $1.2 million or 79%, to $0.3 million for the year ended December 31, 2025, from $1.5 million for the year ended

December 31, 2024.

The decrease was primarily attributable to a $0.9 million decrease in the amortization of debt issuance costs, debt

discounts, and conversion costs, and a $0.4 million decrease in interest expense and conversion costs related to interest-bearing convertible

promissory notes, partially offset by a $0.1 million increase in loan settlement fees.

and Capital Resources

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been through private placements of equity securities and convertible debt and the Sales Agreement with A.G.P.

During the years ended December

31, 2024 and 2023, we incurred operating losses of $15.4 million and $5.3 million, respectively.

During the years ended

December 31, 2025 and 2024, we incurred operating losses of $36.8 million and $15.4 million, respectively.

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

We will require a significant amount of cash

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

Until such time we can generate

significant revenue from the successful approval and commercialization of a product candidate, we expect to finance our cash needs for

ongoing research and development and business operations through public or private equity or debt financings or other capital

sources, including strategic partnerships.

However, we may be unable to raise additional funds or enter into such other

arrangements, when needed, on favorable terms or at all.

To the extent that we raise additional capital through the sale of equity

or convertible debt securities, the ownership interest of our stockholders will be, or could be, diluted, and the terms of these

securities may include liquidation or other preferences that adversely affect the rights of our common stockholders.

Debt financing

and equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take

specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.

If we are unable to raise

additional funds through equity or debt financings when needed, we may be required to delay, limit, or substantially reduce research

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

We will require a significant amount of cash for

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

Until such time we can generate significant revenue

from the successful approval and commercialization of a product candidate, we expect to finance our cash needs for ongoing research and

development and business operations through public or private equity or debt financings or other capital sources, including strategic

partnerships.

However, we may be unable to raise additional funds or enter into such other arrangements, when needed, on favorable terms

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

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

adversely affect the rights of our common stockholders.

Debt financing and equity financing, if available, may involve agreements that

include limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures

or declaring dividends.

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

to delay, limit, or substantially reduce research and development efforts all of which could have a material adverse effect on the Company

and its financial results.

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

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material cash requirements include the following contractual and other obligations.

May 2022, we entered into two loan agreements (the “Loans”), with an aggregate principal amount of $0.2 million, with

The Loans were to mature and become payable in full two years from the date of the loan agreement and they bear no

On October 9, 2024, the Company executed agreements to extend the loan maturity date for each loan to December 19, 2024.

As of December 31, 2024, the Loans are still outstanding and considered to be in default.

The Company repaid the lenders in full during February 2025.

Refer to Note 8 to our financial statements included elsewhere in this

Annual Report.

Convertible Note

March 2023, we issued an aggregate principal amount of $0.8 million convertible promissory note (the “March 2023 Convertible Note”)

payable to an investor.

March 2023 Convertible Note originally was to mature and become payable in full, 18 months from the date of the March 2023 Convertible

The March 2023 Convertible Note carries 20% interest per annum and interest is payable every six months from the date of the March

2023 Convertible Note until the maturity date.

The March 2023 Convertible Note became convertible into Common Stock following the consummation

of the Merger.

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 both options to extend the maturity date to December 19, 2024.

As of December 31,

2024, the March 2023 Convertible Note is still outstanding and considered to be in default.

On March 6, 2025, the Company reached an agreement with the loan holder

to pay $0.7 million in order to settle the March 2023 Convertible Note in full.

The Company repaid the loan holder the settlement amount

$0.7 million on March 13, 2025.

Refer to Note 7 to our financial statements included elsewhere in this

Annual Report.

Convertible Note

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

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Convertible Note, provided that the A.G.P.

has given at least three business days

written notice to the Company, A.G.P., in its sole discretion, may elect to have all or any portion of the outstanding principal amount

and all interest accrued converted into shares of the Company’s common stock, at the lower of the Reverse Split price and the market

price per share at the time of the conversion date, but in no event less than $1.00, subject to adjustment as provided therein and to

take into account any future share splits or reverse splits.

has given at least three business days written

notice to the Company, A.G.P., in its sole discretion, may elect to have all or any portion of the outstanding principal amount and all

interest accrued converted into shares of the Company’s common stock, at the lower of the Reverse Split price and the market price

per share at the time of the conversion date, but in no event less than $1.00, subject to adjustment as provided therein and to take

into account any future share splits or reverse splits.

However, the conversion of the A.G.P.

Convertible Note may not occur

prior to the Company having sufficiently authorized shares of common stock to permit the entire conversion of the convertible promissory

Convertible Note may not occur prior to

the Company having sufficiently authorized shares of common stock to permit the entire conversion of the convertible promissory note.

Refer to Note 8 to our financial statements included elsewhere in this Annual Report.

Per the terms outlined in the agreement, we are required to undertake capital raises to paydown the A.G.P.

2024 Nirland Note

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.

Refer to Note 8 to our financial statements included elsewhere

in this Annual Report.

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.

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, $10, subject to adjustment as provided within the amended agreement.

Note 7 to our financial statements

included elsewhere in this Annual Report.

November 22, 2024, the Company and Nirland entered into a Second Amendment to the August 2024 Nirland Note (the “Second

Pursuant to the Second Amendment, the Nirland Note may not be converted (other than partial conversions that may

be permitted pursuant to the rules and regulations of NASDAQ (or any successor entity)) prior to receipt of stockholder approval to

provide for such conversion of the Nirland Note, and subsequent issuance of the Company’s Common Stock, pursuant to the

stockholder approval rules under the rules and regulations of The Nasdaq Stock Market.

If the Company has not held a special meeting

of the stockholders to approve the full conversion of the August 2024 Nirland Note on or before January 9, 2025, then the Company

shall be obligated to pay Nirland a penalty of $100,000 per day until the special meeting is held.

The special meeting was held on

January 9, 2025, in which stockholder approval was obtained.

In addition, the existing conversion rate was amended to be two and one

half times the sum of (x) the 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 (including default interest) with respect to such portion of the

principal amount, if any divided by $0.10, pre-split in January 2025 (or following any reverse splits that may occur in a ratio greater than 10 to 1, the lower

of such reverse split price and the market price per share at the time of the conversion date, but in no event less than $1.00),

subject to adjustment as provided therein and to take into account any future share splits or reverse splits.

On January 24, 2025, the Reverse Stock Split became effective, resulting in every 100 shares of our common stock

issued or outstanding becoming one new share of our common stock, resulting in the conversion price increasing to $6.86 as of December

On December 9, 2024, Nirland

exercised their conversion option and converted $0.1 million of principal for 23,000 shares of common stock pursuant to the rules and

regulations of the NASDAQ.

As of December 31, 2024, $2.6 million of principal and accrued interest remains outstanding.

2024 Nirland Note

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

principal amount of $0.6 million 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.

If an event of default under and as defined

in the Nirland Note occurs, the interest rate will be increased to 18% per annum or to the maximum rate permitted by law.

connection with the 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 Nirland Note.

The Company paid down $0.2 million of the October 2024 Nirland Note on December

11, 2024 and as of the date of filing this Annual Report, such note has been repaid in full.

Refer to Note 8 and Note 20 to our

financial statements included elsewhere in this Annual Report.

currently anticipate that cash required for working capital for the next 12 months is approximately $22.9 million, which includes forecasted

research and development costs of $6.0 million, forecasted operating expenses of $6.2 million, accrued expenses and other current liabilities

of $3.4 million, a convertible promissory note payable, if not converted prior to maturity of $6.0 million, a convertible promissory

note, if not converted prior to maturity, of $0.8 million and loans payable due within the next 12 months of $0.5 million.

We do anticipate

being able to fund required working capital for the next 12 months with cash and cash equivalents on hand and current borrowings.

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

We have historically

been able to access funds through the issuance of debt, and more recently the at the market offering program agreement, and believe we

can continue to obtain funding through such debt financing agreements and Sales agreement as needed to meet cash requirements

for the next 12 months.

of December 31, 2024, we have raised $3.3 million (net of fees) out of the $23.9 million available to us

through the Sales agreement and expect to raise the additional $20.4 million over the next 12 months.

Through the date of the issuance of the consolidated financial statements,

we have raised an additional $8.1 million, net of fees due to A.G.P., through the Sales Agreement.

After considering the issuances subsequent

to December 31, 2024, we have $12.0 million available to us through the Sales Agreement.

the year ended December 31, 2025, the holder of the A.G.P.

Convertible Note converted $3.5 million of principal and interest into

18,711 shares of the Company’s Common Stock, respectively.

As of December 31, 2025 and the date of filing the consolidated

financial statements, approximately $2.5 million and $1.2 million, respectively, of principal and interest remained outstanding

under the A.G.P.

Convertible Note.

currently anticipate that cash required for working capital for the next 12 months is approximately $10.0 million, which includes forecasted operating expenses of $6.3 million,

accrued expenses and other current liabilities of $2.5 million, the A.G.P.

Convertible Promissory Note payable, if not converted prior to maturity

of $1.2 million and forecasted research and development costs of $60 thousand.

We do anticipate being able to fund required working capital

for the next 12 months with cash and cash equivalents on hand and current borrowings.

Management believes that we will be able to fund

cash required for the next 12 months through borrowings and equity raises.

We have historically been able to access funds through the

issuance of debt, and more recently the at the market offering program agreement and believe we can continue to obtain funding through

such debt financing agreements and Sales agreement as needed to meet cash requirements for the next 12 months.

of December 31, 2025, we have raised the full $23.9 million (net of fees) out of the $23.9 million available to us through the Sales

We expect to raise additional funds from an updated at the market offering program agreement and ELOC over the next 12 months but can’t guarantee the

additional funding from the at the market offering program agreement, ELOC and other potential debt and equity raises will cover the required

cash required for working capital for the next 12 months.

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

Years ended December 31,

Net cash (used in) provided by:

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Effect of exchange rate changes on cash and cash equivalents

Net (decrease) increase in cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

Flows Used in Operating Activities

cash used in operating activities for the year ended December 31, 2024 was $9.7 million, resulting primarily from a net loss of $17.8

million, a gain on the change in fair value of convertible notes payable of $2.0 million, a gain on change in fair value of warrant liabilities

of $0.2 million and a $0.1 million cash outflow from operating assets and liabilities.

This was partially offset by a $2.7 million loss

on the issuance of warrants, $1.7 million of amortization of directors and officers insurance, a $1.6 million outflow attributable to

the purchase of licensing rights, $1.6 million of stock-based compensation, $0.9 million of debt discount amortization, a $0.7 million

loss on debt extinguishment, $0.5 million of non-cash interest expense, $0.4 million of amortization expense, a $0.2 million share issuance

for services and a $0.1 million of non-cash lease expense.

The $0.1 million cash outflow from operating assets and liabilities is primarily

due to a $2.3 million cash outflow from prepaid expenses and other current assets and a $0.1 million cash outflow from lease liabilities,

partially offset by a cash inflow of $1.2 million from accounts payable and a cash inflow of $1.2 million from accrued expenses and other

current liabilities.

Net cash used in

operating activities for the year ended December 31, 2025 was $15.6 million, resulting primarily from a net loss of $39.2 million, a

gain on the waiver of accrued interest of $0.4 million, a gain on debt extinguishment of $0.3 million and a gain on the change in

fair value of warrant liabilities of $0.1 million.

This was partially offset by a $7.0 million compensation expense from the

issuance of shares and warrants upon the sale of a previously controlled subsidiary, $4.7 million cash inflow from operating assets

and liabilities, a $3.2 million cash inflow from the issuance of common stock for services, a $2.7 million loss on the change in

fair value of convertible notes payable, $2.4 million of amortization expense, $2.2 million cash outflow of stock-based

compensation, $1.4 million of amortization of directors and officers insurance, a $0.4 million loss on the change in fair value of

digital assets, $0.3 million of non-cash interest expense and $0.1 million of non-cash lease expense.

The $4.7 million cash inflow

from operating assets and liabilities was primarily driven by a $9.6 million increase in accrued litigation liability, a $0.4

million cash inflow from accounts payable, partially offset by a $4.1 million cash outflow from prepaid expenses, $0.9 million cash

outflow from accrued expenses and other liabilities, and other current assets and a $0.1 million cash outflow from lease

cash used in operating activities for the year ended December 31, 2024 was $9.7 million, resulting primarily from a net loss of

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

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

a $0.2 million change in the reserve for uncollectible loans and a $0.1 million gain on warrant remeasurement, partially offset by a

$1.0 million loss upon the issuance of the Vela option, a $0.5 million change in amortization on directors & officers insurance,

a $0.4 million loss on change in fair value of convertible notes and a $0.2 million increase in stock based compensation expense.

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

and a $1.7 million cash outflow from accrued expenses and other current liabilities partially offset by a $0.2 million cash inflow from

accounts payable.

Flows (Used) Provided by Investing Activities

cash used in investing activities for the year ended December 31, 2024 was $43 thousand, resulting from purchases

of short-term investments of $0.5 million and purchases of property, plant and equipment of $0.1 million, partially offset by sales of

short-term investments of $0.5 million.

cash provided by investing activities for the year ended December 31, 2023 was $0.7 million, resulting from $0.5 million in proceeds from

an option fee received from Vela and $0.6 million proceeds from the repayment of a loan from a related party, partially

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

$17.8 million, a gain on the change in fair value of convertible notes payable of $2.0 million, a gain on change in fair value of

warrant liabilities of $0.2 million and a $0.1 million cash outflow from operating assets and liabilities.

This was partially offset

by a $2.7 million loss on the issuance of warrants, $1.7 million of amortization of directors and officers insurance, a $1.6 million

outflow attributable to the issuance of common stock for licensing rights, $1.6 million of stock-based compensation, $0.9 million of

debt discount amortization, a $0.7 million loss on debt extinguishment, $0.5 million of non-cash interest expense, $0.4 million of

amortization expense, a $0.2 million share issuance for services and a $0.1 million of non-cash lease expense.

The $0.1 million cash

outflow from operating assets and liabilities is primarily due to a $2.3 million cash outflow from prepaid expenses and other

current assets and a $0.1 million cash outflow from lease liabilities, partially offset by a cash inflow of $1.2 million from

accounts payable and a cash inflow of $1.0 million from accrued expenses and other current liabilities.

Flows Used in Investing Activities

cash used in investing activities for the year ended December 31, 2025 was $0.8 million, consisting of $2.0 million of digital asset

purchases and $0.4 million of equipment and clinical assets, partially offset by proceeds of $1.6 million from digital asset disposals.

cash used in investing activities for the year ended December 31, 2024 was $43 thousand, resulting from purchases of short-term investments

of $0.5 million and purchases of property, plant and equipment of $0.1 million, partially offset by sales of short-term investments of

$0.5 million.

Flows Provided by Financing Activities

cash provided by financing activities for the year ended December 31, 2024 was $6.1 million, resulting from proceeds from the Sales Agreement

of $3.3 million, proceeds from the issuance of notes payable of $3.2 million, proceeds from the exercise of warrants of $0.2 million

and proceeds from the exercise of warrants of $0.1 million, partially offset by repayments of notes payable of $0.8 million.

cash provided by financing activities during the year ended December 31, 2023 was $11.0 million.

resulting from the proceeds from the

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

and $0.2 million capital contribution from a related party.

cash provided by financing activities for the year ended December 31, 2025 was $17.4 million, resulting from $19.7 million of proceeds

from the issuance of common shares under the ATM program, partially offset by $2.2 million of debt repayments and $0.1 million of treasury

stock purchases.

cash provided by financing activities for the year ended December 31, 2024 was $6.1 million, resulting from proceeds from the

issuance of common shares under the ATM program of $3.3 million, proceeds from the issuance of notes payable of $3.2 million,

proceeds from the exercise of warrants of $0.2 million and proceeds from the issuance of warrants of $0.1 million, partially offset

by repayments of notes payable of $0.8 million.

Obligations and Other Commitments

Laboratory Lease

of December 31, 2025, we are the lessee under one laboratory space lease for a term of two years.

The annual rent payments

are $0.1 million for the years ending December 31, 2025 and December 31, 2026.

The laboratory space lease has a remaining lease term

of approximately 1.2 years.

The annual rent payments are $0.1 million

for the years ending December 31, 2025 and December 31, 2026.

The laboratory space lease has a remaining lease term of approximately

Accounting Estimates

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

To value the convertible debt, the Company utilizes Binomial Lattice Pricing Models.

The Binomial Lattice Pricing Models involve the

construction of various intermediate lattices:

stock price tree, conversion value tree, conversion probability tree, and discount rate

In doing so, we assume the holders act rationally to maximize return and minimize cost at each decision point.

We computed the

notes payoff at maturity and at intermediate decision nodes based upon the better of (i) conversion or (ii) repayment of principal and

the convertible debt, the Company utilizes Binomial Lattice Pricing Models.

The Binomial Lattice Pricing Models involve the construction

of various intermediate lattices:

stock price tree, conversion value tree, conversion probability tree, and discount rate tree.

so, we assume the holders act rationally to maximize return and minimize cost at each decision point.

We computed the notes payoff at

maturity and at intermediate decision nodes based upon the better of (i) conversion or (ii) repayment of principal and interest.

significant inputs and assumptions used to estimate the fair value include:

5 unchanged sentences

convertible debt will subsequently be remeasured at fair value each reporting date until settled or converted.

Value of Warrants

Company has issued warrants to investors in our debt and equity offerings.

The Company has also issued warrants to service providers

in relation to our financing offerings.

We evaluate all warrants issued to determine the appropriate classification under ASC 480 and ASC

warrants that are determined to be equity-classified, we estimate the fair value at issuance and record the amounts to additional paid

For warrants that are determined to be liability-classified, we estimate the fair value at issuance and each subsequent reporting date.

the Company’s liability classified warrants, we estimate fair value using the Black-Scholes model.

The significant inputs and assumptions

used to estimate the fair value include:

(i) the Company’s stock price, (ii) the risk-free rate, (iii) the expected volatility,

and (iv) the dividend yield.

The use of these valuation models requires the input of highly subjective assumptions.

Any change to these

inputs could produce significantly higher or lower fair value measurements and result in a material change within the financial statements.

Contingencies

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been accrued previously or modifications to contingency disclosures that are considered material.

record stock compensation expense related to our 2023 Plan in accordance with ASC 718, Compensation - Stock Compensation

which requires our stock-based awards, including restricted stock units (“RSUs”) and stock options to be measured at

fair value of stock options is estimated on the grant date using the Black-Scholes option-valuation model.

The calculation of stock-based

compensation expense requires that we make assumptions and judgments about the variables used in the Black- Scholes option-valuation

model, including the fair value of our common stock, expected term, expected volatility of the underlying common stock, and risk-free

interest rate.

assumption inputs subject to significant estimation include:

The expected term represents the period that the Company’s stock options are expected to be outstanding.

limitations on the sale or transfer of the Company’s common stock under the lock-up agreements and market standoff components of

the stock option agreements, the Company does not believe its historical exercise pattern is indicative of the pattern it will experience

after restricted periods expire.

The Company uses the simplified method to calculate the expected term, which is the average of the contractual

term and vesting period.

determine the price volatility based on the historical volatilities of industry peers as we have limited trading history for our common

We intend to continue to consistently apply this process using the same or a similar peer group of public companies, until

a sufficient amount of historical information regarding the volatility of our own common stock price becomes available, or unless circumstances

change such that the identified peer companies are no longer similar, in which case other suitable peer companies whose common stock

prices are publicly available would be utilized in the calculation.

Accounting Pronouncements

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

discussion of recent accounting pronouncements is included in Note 3 - Basis of Presentation and Summary

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

17 unchanged sentences

debt securities during the prior three year period.

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

The Company may continue to be a smaller reporting company

even after we are no longer an emerging growth company.

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

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

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

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

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

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

The Company may continue to be a smaller reporting

company even after we are no longer an emerging growth company.

We may take advantage of certain of the scaled disclosures available

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

and non-voting common stock held by non-affiliates is less than $250.0 million measured on the last business day of our second fiscal

quarter or (ii) CDT’s annual revenue is less than $100.0 million during the most recently completed fiscal year and its voting

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

Quantitative and Qualitative Disclosures about Market Risk

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

What changed 10-K

Item 7. Management’s Discussion and Analysis