What changed in this filing

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Item 1. Financial Statements

2026-07-15 compared with 2025-11-13 · 726 added, 1081 removed, 354 unchanged (84% of the section changed)

Financial Statements.

CONSOLIDATED BALANCE SHEETS

CONDENSED CONSOLIDATED BALANCE SHEETS

thousands, except share and per share amounts)

September 30,

March 31, 2026

December 31, 2025

Current assets

Cash and cash equivalents

Digital assets

Prepaid R&D services- related party (see Note 8 and Note 13)

Prepaid R&D services

Prepaid expenses and other current assets

Total current assets

Equity method investments

Operating lease right-of-use assets, net

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Accounts payable

Investment payable

Accrued expenses and other current liabilities

Accrued litigation liability

Operating lease liability, current portion

Convertible promissory note payable

Convertible promissory notes payable at fair value

Convertible promissory notes payable at fair value – related parties

Convertible promissory notes payable at fair value

Notes payable

Notes payable – related parties

Notes payable

Total current liabilities

Operating lease liability, non-current portion

Derivative warrant liability

Total liabilities

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Common stock, par value $ 0.0001 ;

250,000,000 shares authorized at September 30, 2025 and December 31, 2024, respectively, 1,276,574 shares and 11,540 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively

250,000,000 shares authorized at March 31, 2026 and December 31, 2025, respectively, 4,722,457 shares and 92,140 shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively

Preferred stock, par value $ 0.0001 ;

1,000,000 shares authorized at September 30, 2025 and December 31, 2024, respectively;

nil shares issued and outstanding at September 30, 2025 and December 31, 2024

1,000,000 shares authorized at March 31, 2026 and December 31, 2025, respectively;

nil shares issued and outstanding at March 31, 2026 and December 31, 2025

Additional paid-in capital

Accumulated deficit

Accumulated other comprehensive income

Accumulated other comprehensive income (loss)

Total stockholders’ equity (deficit)

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thousands, except share and per share amounts)

Three Months ended September 30,

Nine Months ended September 30,

Three Months ended March 31,

Operating expenses:

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Other expense, net

Loss on equity method investment

Interest income

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

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

thousands, except share amounts)

comprehensive

stockholders’ equity

Balance at July 1, 2025

Issuance of Common Stock under the ATM Program

Issuance of Common Stock upon exercise of conversion option

Issuance of Common Stock upon vesting of restricted stock units

Stock-based compensation

Share c ancellation

Foreign currency translation adjustment

Balance at September 30, 2025

Additional paid-in

Accumulated other comprehensive

Total stockholders’

stockholders’

Balance at January

Issuance of Common Stock for services

Issuance of Common Stock under the ATM Program

Issuance of Common Stock upon exercise of conversion option

Issuance of Common Stock upon vesting of restricted stock units

Stock-based compensation

Share repurchases

Share cancellation

Foreign currency translation adjustment

Balance at September 30, 2025

Accumulated other comprehensive

stockholders’ equity

Balance at July 1, 2024

Issuance of Common Stock for note payable

Issuance of Common Stock for licensing right

Issuance of Common Stock for

Issuance of Common Stock upon

exercise of conversion option

Stock-based compensation

Foreign currency translation adjustment

Balance at September 30, 2024

Shares issued for equity line

Issuance of common stock upon

Issuance of warrants upon investment

Exercise of warrants attributable

to investment

Exercise of warrants attributable

to the sale of previously controlled subsidiary

Foreign currency translation

at March 31, 2026

comprehensive

stockholders’ equity

stockholders’

Balance at January

Issuance of Common Stock for services

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

Issuance of Common Stock for

Issuance of Common Stock under

the ATM Program

Issuance of Common Stock upon

exercise of conversion option

Stock-based compensation

Foreign currency translation adjustment

Balance at September 30, 2024

Foreign currency translation

at March 31, 2025

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

CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months ended September 30,

Cash flows used in operating activities:

Three Months ended March 31,

Cash flows from operating activities:

Adjustments to reconcile net loss to net cash used in operating activities:

Gain on debt extinguishment, net

Unrealized foreign exchange loss

Loss on change in fair value of convertible notes payable

Loss on debt extinguishment, net

Unrealized foreign exchange gain

Change in fair value of convertible notes payable

Gain on change in fair value of derivative warrant liability

Loss on change in fair value of crypto holdings

Loss on equity method investment

Gain on waiver of accrued interest

Non-cash lease expense

Issuance of warrants for lock-up

Interest expense on convertible promissory note

Stock-based compensation expense

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Net cash flows used in operating activities

Cash flows used in investing activities:

Cash flows from investing activities:

Purchases of equipment and clinical assets

Purchase of digital assets

Purchases of short-term investments

Proceeds from the sale of short-term investments

Net cash flows used in investing activities

Cash flows provided by financing activities:

from the issuance of notes payable

Proceeds from issuance of warrants from lock-up

Bank overdraft

Cash flows from financing activities:

Net proceeds from the issuance of notes payable

Proceeds from issuance of common shares related to the ATM program

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Repayment of convertible notes payable

Purchases of treasury stock

Net cash flows provided by financing activities

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Cash paid for interest

Cash paid for taxes

Non-cash investing and financing activities

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

Issuance of common stock upon exercise of conversion option

Issuance of common stock for services

Cancellation of shares

Receivables from issuance of warrants for lock-up

Receivable from issuance of note payable

Issuance of common stock for investment in related party

Deferred cash payable for investment in related party

Issuance of pre-funded warrants for investment in related

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

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Nature of the Business, Basis of Presentation and Summary of Significant Accounting Policies

Equity Inc., formerly Conduit Pharmaceuticals Inc., a Delaware corporation (“CDT”, “CDT Equity” or the “Company”), is a data-driven

pharmaceutical development and digital asset treasury management company focused on identifying, enhancing, and advancing high-potential

therapeutic assets through scientific innovation and strategic partnerships.

The Company has evolved into a broader, more agile platform

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

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

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

Through advanced co-crystallization and solid-form

technologies developed at our Cambridge facilities, the Company improves drug properties and extends patent life by up to 20 years.

In partnership with Sarborg Limited, the Company also applies AI-powered disease mapping to rapidly identify new therapeutic applications

for existing compounds.

Company’s pipeline includes candidates that target autoimmune disorders, as well as idiopathic male infertility, oncology,

dermatology, and animal health.

Ongoing in vitro and in vivo studies, guided by AI insights, are designed to support licensing and

commercialization partnerships.

The Company will seek an exit through third-party license deals following successful in vitro and in

vivo pre-clinical trials, by entering into agreements with third-parties to pursue further development, FDA approval,

commercialization and marketing of the Company’s assets.

Nature of the Business

Equity Inc., formerly Conduit Pharmaceuticals Inc., a Delaware corporation (“CDT”, “CDT Equity” or the “Company”),

is a data-driven pharmaceutical development and digital asset treasury management company focused on identifying, enhancing, and advancing

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

The Company has evolved into a broader, more

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

of novel treatments.

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

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

Through advanced co-crystallization and solid-form technologies

developed at our Cambridge facilities, the Company improves drug properties and extends patent life by up to 20 years.

In partnership

with Sarborg Limited, the Company also applies AI-powered disease mapping to rapidly identify new therapeutic applications for existing

Company’s pipeline includes candidates that target autoimmune disorders, as well as idiopathic male infertility, oncology, dermatology,

and animal health.

Ongoing in vitro and in vivo studies, guided by AI insights, are designed to support licensing and commercialization

partnerships.

The Company will seek an exit through third-party license deals following successful in vitro and in vivo pre-clinical

trials, by entering into agreements with third-parties to pursue further development, FDA approval, commercialization and marketing of

the Company’s assets.

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

We avoid the cost burden

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

On May 23, 2025, the Company’s Common Stock commenced trading, as

further described herein, on The Nasdaq Capital Market under the symbol “CDT”.

Effective August 5, 2025, the Company changed

its name from Conduit Pharmaceuticals Inc.

We avoid the cost burden of late-stage

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

August 5, 2025, the Company changed its name from Conduit Pharmaceuticals Inc.

to CDT Equity Inc.

Our name 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.

Our change to CDT Equity Inc.

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.

September 25, 2023, the Company’s Common Stock commenced trading on the Nasdaq Capital Market under the

symbol “CDT”.

The Company completed four reverse stock splits:

a 1-for-100 split effective January 24, 2025 (the “January Reverse Stock

Split”), a 1-for-15 split effective May 19, 2025 (the “May Reverse Stock Split”), a 1-for-8 split effective October

10, 2025 (the “October Reverse Stock Split”) and a 1-for-25 reverse stock split effective March 26, 2026 (the “March

2026 Reverse Stock Split”).

The January Reverse Stock Split, May Reverse Stock Split, October Reverse Stock Split and March 2026

Reverse Stock Split are reflected collectively (the “Reverse Stock Splits”).

Each split reduced the number of issued and

outstanding shares without affecting the number of authorized shares or the par value of the Common Stock.

No fractional shares were

instead, stockholders received cash in lieu of fractional shares based on the respective post-split closing share prices.

share and per-share information has been retroactively adjusted to reflect the Reverse Stock Splits for all periods presented.

historical share and per-share amounts reflected throughout the accompanying unaudited consolidated financial statements and related

disclosures as of and for the three months ended March 31, 2026 and 2025 have been retroactively adjusted to reflect the January

Reverse Stock Split, May Reverse Stock Split, October Reverse Stock Split and March 2026 Reverse Stock Split as if the Reverse Stock

Splits occurred as of the earliest period presented.

Liquidity and Going Concern

accordance with ASC 205-40, Going Concern, the Company has evaluated whether there are conditions and events, considered in the

aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the

date the unaudited condensed consolidated financial statements are issued.

Since its inception, the Company has generated

significant losses and as of March 31, 2026, the Company had an accumulated deficit of $ 72.4 million.

As of March 31, 2026, the Company had cash and cash equivalents of $ 0.1 million.

For the three months ended March 31, 2026, the Company had net operating losses of $ 3.7 million,

and cash used in operating activities of $ 1.9 million.

has determined that it does not currently have sufficient cash and other sources of liquidity to fund its current business plan.

These factors raise substantial doubt regarding the Company’s ability to continue as a going concern for at least the next 12

months from the financial statement filing date.

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

funding to support its current business plan in addition to the funds available from the at the market offering program (the

“Sales Agreement”).

The Company currently has approximately $ 76

million available funds from the Sales Agreement as of the financial statement release date.

However, there is no assurance that such

funding will be available when needed.

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

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

material adverse effect on the Company and its financial condition.

unaudited condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern and

do not include adjustments to reflect the possible effects on the recoverability and classification of assets or the amounts and

classification of liabilities that may result from the outcome of this uncertainty.

Basis of Presentation and Summary of Significant Accounting Policies

of Presentation

accompanying unaudited condensed consolidated financial statements have been prepared by the Company in accordance with U.S.

set forth by the Financial Accounting Standards Board (“FASB”) and pursuant to the rules and regulations of the United States

Securities and Exchange Commission (“SEC”).

accompanying unaudited condensed consolidated financial statements have been prepared by the Company in accordance with accounting

principles generally accepted in the United States of America (“U.S.

GAAP”) as set forth by the Financial Accounting

Standards Board (“FASB”) and pursuant to the rules and regulations of the United States Securities and Exchange

Commission (“SEC”).

References to U.S.

GAAP issued by the FASB in these notes to the accompanying

unaudited condensed consolidated financial statements are to the FASB Accounting Standards Codifications (“ASC”) and Accounting

Standards Update (“ASUs”).

GAAP issued by the FASB in these notes to the accompanying unaudited condensed

consolidated financial statements are to the FASB Accounting Standards Codifications (“ASC”) and Accounting Standards

Updates (“ASUs”).

accompanying unaudited condensed consolidated financial statements and related notes have been prepared in accordance with U.S.

for interim financial information, and with the rules and regulations of the SEC set forth in Article 8 of Regulation S-X.

they do not include all of the information and footnotes required by U.S.

Accordingly, they do not include all of the information and footnotes required by U.S.

GAAP for complete financial statements.

The unaudited interim

financial statements furnished reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management,

necessary to a fair statement of the results for the interim periods presented.

Unaudited interim results are not necessarily indicative

of the results for the full fiscal year.

These condensed consolidated financial statements should be read along with our Annual Report

on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 28, 2025.

The consolidated balance sheet as of December

31, 2024 was derived from the audited consolidated financial statements as of and for the year then ended.

unaudited interim financial statements furnished reflect all adjustments (consisting of normal recurring accruals) which are, in the

opinion of management, necessary to a fair statement of the results for the interim periods presented.

Unaudited interim results are

not necessarily indicative of the results for the full fiscal year.

These unaudited condensed consolidated financial statements

should be read along with our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on April 15, 2026.

The consolidated balance sheet as of December 31, 2025 was derived from the audited consolidated financial statements as of and for

the year then ended.

of Consolidation

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Conduit UK Management Ltd.

(United Kingdom) and Conduit Pharmaceuticals, Ltd.

(United Kingdom) and Taamja Limited, formerly Conduit Pharmaceuticals, Ltd.

(Cayman Islands).

As used herein, references to the “Company”

or “CDT” include references to CDT Equity Inc.

As used herein,

references to the “Company” or “CDT” include references to CDT Equity Inc.

and its subsidiaries.

All intercompany balances and transactions have been

eliminated in consolidation.

and Going Concern

accordance with ASC 205-40, Going Concern , the Company has evaluated whether there are conditions and events considered in the

aggregate that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date

the financial statements are issued.

Since its inception, the Company has generated significant losses and as of September 30, 2025,

the Company had an accumulated deficit of $ 47.0 million.

As of September 30, 2025 and December 31, 2024, the Company had cash and cash

equivalents of $ 3.8 million and $ 0.6 million, respectively.

For the nine months ended September 30, 2025 and 2024, the Company had net

losses of $ 17.9 million and $ 15.4 million, respectively, and cash used in operating activities of $ 10.9 million and $ 5.9 million, respectively.

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

funding to support its current business plan in addition to the remaining at the market offering program of approximately $ 1.8

million (see Note 10), which has been utilized as of the financial statement issuance date (see Note 16).

Management’s plans

to alleviate the conditions that raise substantial doubt through the pursuit of additional cash resources through public or private

equity or debt financings.

The Company has also considered exploring strategic alternative paths to fund raising through a shift in

the Company’s fundamental operations as a pharmaceutical development company to a digital asset treasury management company.

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.

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

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

from the outcome of this uncertainty.

During 2025, the Company completed three reverse stock splits:

a 1-for-100 split effective January 24, 2025 (the

“January Reverse Stock Split”), a 1-for-15 split effective May 19, 2025 (the “May Reverse Stock Split”), and a

1-for-8 split effective October 10, 2025 (the “October Reverse Stock Split”).

Each split reduced the number of issued and

outstanding shares without affecting the number of authorized shares or the par value of the Common Stock.

No fractional shares were issued;

instead, stockholders received cash in lieu of fractional shares based on the respective post-split closing share prices.

All share and

per-share information has been retroactively adjusted to reflect these reverse stock splits for all periods presented.

historical share and per-share amounts reflected throughout the accompanying consolidated financial statements and other financial information

in this Quarterly Report on Form 10-Q have been retroactively adjusted to reflect the January Reverse Stock Split, May Reverse Stock

Split and October Reverse Stock Split as if the splits occurred as of the earliest period presented.

All intercompany

balances and transactions have been eliminated in consolidation.

Risks and Uncertainties

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Even if the Company’s

efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue and cash flow from royalties or product

The Company licenses clinical assets from AstraZeneca (see Note 7 for further

A breach or other termination of such agreements could have a material adverse effect on the Company’s business, financial

condition, operating results, and prospects.

Related party transactions and arrangements, specifically research and

development related transactions, the Company enters into subject the Company to certain risks.

Related party transactions in general

are regarded as increasing the risk of omissions or misstatements in financial reporting, the risk of transactions being done on other

than arm’s length terms due to the close ties between the parties involved and the risk of regulatory non-compliance.

related-party transactions present potential conflicts of interest that could result in decisions prioritizing the economic interests

of certain individuals over the primary objectives of the Company’s research and development activities, the interests of the Company,

and the interests of its stockholders.

In the instance of a dispute under any related-party agreement, the interests of affiliated parties

may not align with the Company’s interest, and the resolution of such disputes may be less favorable than what the Company might

achieve in a transaction with an unaffiliated third party.

Company is also subject to risks associated with the Nasdaq Stock Market (“Nasdaq”) correspondence.

August 2024, the Company received deficiency letters from Nasdaq notifying the Company that it was not in compliance with Listing Rule

5450(a)(1) (the “Bid Price Rule”), Listing Rule 5450(b)(2)(C) (the “MVPHS Rule”) and Listing Rule 5450(b)(2)(A)

(the “MVLS Rule”, together with the Bid Price Rule and the MVPHS Rule, the “Rules”).

The Company had until February

10, 2025, and February 11, 2025, to regain compliance with the Rules.

On December 17, 2024, Nasdaq issued a letter to the Company that

as of December 17, 2024, it determined that the Company’s securities had a closing bid price of $ 0.10 or less for ten consecutive

trading days.

As a result, Nasdaq had determined to delist the Company’s Common Stock and redeemable warrants from The Nasdaq Global

Market, on December 27, 2024.

The Company subsequently requested and received a hearing (the “Nasdaq Hearing”) from the Nasdaq

Hearings Panel (the “Panel”).

The Company submitted a written plan of compliance to cure its Rule deficiencies to Nasdaq

on January 22, 2025, and attended the Nasdaq Hearing for the Company on February 11, 2025.

On March 5, 2025, the Company received a written

notification (the “Notice”) from the Panel confirming it had granted the Company an extension to regain compliance with the

MVPHS and MVLS Rules, provided that the Company, (i) on or before March 12, 2025, files an application to transfer to The Nasdaq Capital

Market, which application was submitted on March 7, 2025, and (ii) on or before March 31, 2025, demonstrates compliance with all Nasdaq

listing rules.

The Company was notified in the Notice that as of February 26, 2025, it had regained compliance with the Bid Price Rule.

There is no guarantee that the Company can maintain ongoing compliance with the Bid Price Rule.

On May 15, 2025, the Company received

formal notice from Nasdaq that the Company had regained compliance with Nasdaq’s minimum bid price requirement (the “Bid

Price Requirement”) set forth in Nasdaq Listing Rule 5550(a)(2), as well as Nasdaq’s stockholders’ equity requirement

(“Equity Requirement”) set forth in Nasdaq Listing Rule 5550(b)(1).

On May 21, 2025, the Company received formal notice from

Nasdaq that the Company’s application to transfer the listing of its Common Stock to The Nasdaq Capital Market had been approved

and the Company’s securities were transferred to The Nasdaq Capital Market at the opening of business on May 23, 2025.

of Significant Accounting Policies

efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from royalties or product sales.

Company licenses clinical assets from AstraZeneca (see Note 8 for further detail).

A breach or other termination of such agreements

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

preparation of financial statements in conformity with U.S.

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are determined.

Our significant accounting policies that involve significant judgment and estimates include accounting for the fair

value of convertible notes payable, stock based compensation, contingencies and going concern.

and Cash Equivalents

and cash equivalents are primarily maintained with major financial institutions in the United States and the United Kingdom.

considers cash equivalents to be short-term, highly liquid investments that (a) are readily convertible into known amounts of cash, (b)

are traded and held for cash management purposes, and (c) have original maturities of three months or less at the time of purchase.

UK bank account, with a balance at September 30, 2025 of approximately £ 124,000 (or approximately $ 167,000 ) exceeds the country’s

deposit limit of £ 85,000 (approximately $ 114,000 ).

The Company’s US 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

The Company has not experienced any losses on any accounts through the nine months ended September 30, 2025.

Company had $ 3.8 million and $ 0.6 million in cash and cash equivalents on hand as of September 30, 2025 and December 31, 2024, respectively.

As of September 30, 2025, $ 4 thousand of the Company’s $ 3.8 million cash and cash equivalents balance was invested in money market

The money market funds do not have significant liquidity restrictions that would require their exclusion from cash and cash equivalents .

assets are included in current assets in the consolidated balance sheets.

Digital assets are accounted for as indefinite-lived intangible

assets and are initially measured in accordance with FASB Accounting Standards Codification (“ASC”) Topic 350 - Intangibles-Goodwill

The Company measures gains or losses on the disposition of digital assets in accordance with the first-in-first-out (“FIFO”)

method of accounting.

Refer to Note 3, Digital Assets, for further information regarding the Company’s impact of the adoption of

of September 30, 2025, the Company held Bitcoin (“BTC”) as digital assets totaling approximately $ 1.0

The Company did not hold any digital assets as of December 31, 2024.

Bitcoin is classified on our balance sheet as a

current asset due to the Company’s ability to sell it in a highly liquid marketplace and its intent to liquidate its Bitcoin

to support operations when needed.

As of September 30, 2025, the Company determined that there were no impairments of its digital

Our significant accounting policies that involve significant judgment and estimates include accounting for the fair value

of convertible notes payable, stock based compensation, contingencies, equity method investment and going concern.

Value Measurements

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Fair value is to be determined based on the exchange price that would be received

for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability

in an orderly transaction between market participants.

In determining fair value, the Company used various valuation approaches.

value hierarchy has been established for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes

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

Observable inputs are those that

market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company.

for an asset or paid in order to transfer a liability (an exit price) in the principal or most advantageous market for the asset or

liability in an orderly transaction between market participants.

In determining fair value, the Company used various valuation

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

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

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

independent of the Company.

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

10 unchanged sentences

These valuations require significant judgment.

Company’s Level 1 assets consist of cash and cash equivalents, inclusive of Bitcoin, in the accompanying balance sheets, the value of accrued expenses and other current liabilities approximate fair value due to the short-term nature of these assets and

of September 30, 2025, the Company has two financial liabilities, warrant liabilities for which the fair value is determined based on

Level 2 and Level 3 inputs, and convertible debt carried at fair value for which the fair value is determined based on Level 3 input.

The Level 2 inputs are valued based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar

instruments in active markets.

The Level 3 inputs as such inputs are based on unobservable inputs and require significant judgement.

Company has elected the fair value measurement option for convertible debt with embedded derivatives that would otherwise require bifurcation

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

the August 2024 Nirland Note was recorded at fair value subsequent to the Second Amendment and the A.G.P.

Convertible Note was recorded

at fair value upon issuance.

The notes will subsequently be remeasured at fair value each reporting date until settled or converted.

The Company reports interest expense, including accrued interest, related to the convertible debt under the fair value option, separately

from within the change in fair value of the convertible debt in the accompanying condensed consolidated statement of operations and comprehensive

Any changes in fair value caused by instrument-specific credit risk are presented separately in other comprehensive income.

and Development

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

programs, see Note 7 for further discussion of research and development expense.

CDT licenses its assets from a large pharmaceutical

company and conducts clinical research with third-party contract research organizations.

The Company expenses research and development

costs and intangible assets acquired that have no alternative future use as incurred.

These expenses include:

incurred under agreements with organizations that support the Company’s drug discovery and development activities;

incurred in connection with the preclinical and clinical development of the Company’s clinical assets and programs, including

under agreements with contract research organizations, or CROs;

related to contract manufacturing organizations, or CMOs, that are primarily engaged to provide drug substance and product for our

clinical trials, research and development programs, as well as investigative sites and consultants that conduct the Company’s

clinical trials, nonclinical studies and other scientific development services;

costs of acquiring and manufacturing nonclinical and clinical trial materials, including manufacturing registration and validation

employee-related

expenses, including salaries, related benefits and equity-based compensation expense, for employees engaged in research and development

costs related to the purchase of licensed intellectual property;

related to compliance with quality and regulatory requirements;

made under third-party licensing agreements; and

and allocated costs related to facilities, information technology, personnel and other overhead.

payments that we make for goods or services to be received in the future for use in research and development activities are recorded

as prepaid expenses.

Such amounts are recognized as an expense as the goods are delivered or consumed or the related services are performed,

or until it is no longer expected that the goods will be delivered, or the services rendered.

Research and Development Assets

The Company accounts for its research and development costs in accordance

with ASC 730, Research and Development .

ASC 730 requires that research and development are generally recognized as an expense as

However, some costs associated with research and development activities that have an alternative future use may be capitalizable.

Purchases of assets related to research and development activities are evaluated based on the usefulness to the Company currently and

for alternative future uses.

Purchased research and development assets with alternative future use are recorded at cost and subsequently

amortized using the straight-line method over their estimated useful lives.

To date, the Company has one purchased asset, a diagnostic

tool used to monitor clinical trials, aggregate data on an ongoing basis and tracking intellectual property patent status.

determined that the diagnostic tool has an alternative future use, namely using its predictive modeling capability to track and evaluate

delisted patents in the marketplace, potentially facilitating strategic entry into de-prioritized asset markets that might otherwise be

overlooked by other market participants.

The asset is depreciated on a straight-line basis over its useful life of two years.

ASC Topic 740, Income Taxes , sets forth standards for financial

presentation and disclosure of income tax liabilities and expense.

Interest and penalties recognized have been classified in the unaudited

condensed consolidated statements of operations and comprehensive loss as income taxes.

Deferred tax assets and liabilities are recognized

for future tax consequences attributable to temporary differences between the financial statement carrying amount of existing assets and

liabilities and their respective tax bases and operating losses carried forward.

Deferred tax assets and liabilities are measured using

enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or

The effects of changes in tax rates on deferred tax assets and liabilities are recognized in the unaudited condensed consolidated

statements of operations and comprehensive loss in the period that includes the enactment date.

The measurement of deferred tax assets

is reduced, if necessary, by a valuation allowance for any tax benefits of which future realization is uncertain.

Loss per Share Attributable to Common Stockholders

Company calculates basic and diluted net loss per share under ASC Topic 260, Earnings Per Share .

Basic net loss per share is computed

by dividing the net loss by the number of weighted-average common shares outstanding for the period.

Diluted net loss is computed by

adjusting net loss based on the impact of any dilutive instruments.

Diluted net loss per share is computed by dividing the diluted net

loss by the number of weighted-average common shares outstanding for the period including the effect, if dilutive, of any instruments

that can be settled in common shares.

When computing diluted net loss per share, the numerator is adjusted to eliminate the effects that

have been recorded in net loss (net of tax, if any) attributable to any liability-classified dilutive instruments.

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 Topic 480, Distinguishing Liabilities from Equity (“ASC 480”).

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:

(a) a fixed monetary amount known at inception;

(b) variations in something other than

the fair value of the issuer’s equity shares;

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

equity shares.

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.

The Company determined that the settlement amount of the Equity Classified Warrants would equal the difference between the fair value

of a fixed number of shares and a fixed monetary amount (or a fixed amount of a debt instrument) and must be classified as equity, while

the settlement amount of the Liability Classified Warrants would not equal the difference between the fair value of 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 are recorded in stockholders’ equity (deficit) and the Liability Classified Warrants are recorded as

liabilities in the Condensed Consolidated Balance Sheet.

The Liability Classified Warrants are remeasured each period with changes in

fair value recorded in the Condensed Consolidated Statements of Operations and Comprehensive Loss.

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

then recognizes the grant date fair value of each option as compensation expense ratably using the straight-line attribution method over

the service period (generally the vesting period).

The Black-Scholes model incorporates the following assumptions:

volatility – the Company estimates the volatility of the share price of their peer companies at the date of grant using a “look-back”

period which coincides with the expected term, defined below.

The Company believes using a “look-back” period which coincides

with the expected term is the most appropriate measure for determining expected volatility.

term – the Company estimates the expected term using the “simplified” method outlined in SEC Staff Accounting Bulletin

107, “Share-Based Payment.”

interest rate – the Company estimates the risk- free interest rate using the U.S.

Treasury Yield curve for periods equal to

the expected term of the options in effect at the time of grant.

– the Company uses an expected dividend yield of zero because the Company has not declared nor paid a cash dividend, nor are

there any plans to declare a dividend.

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

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

of March 31, 2026 and December 31, 2025, the Company had three financial liabilities, warrant liabilities for which the fair value is

determined based on Level 2 and Level 3 inputs, and two convertible notes carried at fair value for which the fair value is determined

based on Level 3 inputs.

The Level 2 inputs are valued based on observable inputs other than quoted prices included in Level 1, such as

quoted prices for similar instruments in active markets.

The Level 3 inputs are based on unobservable inputs and require

significant judgment.

Company has elected the fair value measurement option for convertible debt with embedded derivatives that would otherwise require

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

Instruments .

As a result, the March 2026 note (“Ascent Note”) with Ascent Partners LLC (“Ascent”) and

Convertible Note was recorded at fair value upon issuance.

The notes will subsequently be remeasured at fair value each

reporting date until settled or converted.

The Company reports interest expense, including accrued interest, related to the

convertible debt under the fair value option, separately from within the change in fair value of the convertible debt in the

accompanying unaudited condensed consolidated statement of operations and comprehensive loss.

Any changes in fair value caused by

instrument-specific credit risk are presented separately in other comprehensive income.

During the period ended March 31, 2026, the

Company did not record any changes in fair value related to instrument-specific credit risk.

accordance with ASC 323, Investments – Equity

Method and Joint Ventures (“ASC 323”),

the Company accounts for investments in entities over which it has the ability to exercise significant influence, but does not hold a

controlling financial interest, using the equity method of accounting.

Significant influence is generally presumed to exist when the

Company owns between 20% and 50% of the outstanding voting stock of the investee.

Investments in which the Company does not have the

ability to exercise significant influence are accounted for in accordance with ASC 321, Investments – Equity Securities

Investments are initially recorded at cost and subsequently adjusted to recognize the Company’s share of the

investee’s net income or loss, with distributions recorded as reductions to the investment’s carrying amount.

records its share of the results of these investees within other expense, net in the unaudited condensed consolidated statements of operations

and comprehensive loss.

Company evaluates its investments for impairment whenever events or changes in circumstances indicate that the carrying amount may not

be recoverable.

Any impairment is recognized in earnings for the amount by which the carrying value exceeds fair value and is determined

to be other-than-temporary.

There was no impairment of Sarborg identified or recorded during the three months ended March 31, 2026.

January 16, 2026, the Company entered into a directed stock purchase agreement (the “Purchase Agreement”) with an

institutional investor relating to an equity line of credit facility (the “ELOC”).

Pursuant to the ELOC, the Company

will have the right from time to time at its option to sell to the purchaser up to $ 25

million of the Company’s Common Stock, par value $ 0.0001

Purchase Agreement is subject to certain customary conditions and limitations, including that (i) the Purchaser shall not be obligated

to purchase or acquire any shares of Common Stock that would result in its beneficial ownership exceeding 9.99% of the Company’s

then-outstanding voting power and (ii) the Purchaser shall not be obligated to purchase shares of Common Stock if the volume weighted

average price for the Common Stock on an advance notice date is less than a floor price of $ 15 .

On each six-month anniversary, the

floor price will adjust to the lower of the Nasdaq Official Closing Price for the day prior to the relevant adjustment date, and the

average of the Nasdaq Official Closing Price for the five-day period prior to the relevant adjustment date.

March 3, 2026, the Company and the institutional investor entered into an amendment to the ELOC.

The amendment updated the definition

of the regular price floor from the minimum price as of the date of this agreement to $ 0.60 with no adjustment for reverse splits where applicable within the ELOC.

No consideration

was payable in connection with the amendment.

the three months ended March 31, 2026, the Company did not utilize the ELOC.

Currency Translation

Company translated the assets and liabilities of foreign subsidiaries from their respective functional currency, the British pound, to

United States dollars at the appropriate spot rates as of the balance sheet date.

Income and expenses of operations are translated to

United States dollars using weighted average exchange rates during the year.

The foreign subsidiaries use the local currency as their

functional currency.

The effects of foreign currency translation adjustments are included as a component of accumulated other comprehensive

income in the accompanying consolidated statements of changes in stockholders’ equity (deficit).

Non-monetary items in the subsidiaries’

functional currency are re-measured into the reporting currency at the historical exchange rate (i.e., the rate of exchange at the date

of the transaction).

Company translates the assets and liabilities of foreign subsidiaries from their respective functional currency, the British pound,

to United States dollars at the appropriate spot rates as of the balance sheet date.

Income and expenses of operations are

translated to United States dollars using weighted average exchange rates during the year.

The foreign subsidiaries use the local

currency as their functional currency.

The effects of foreign currency translation adjustments are included as a component of

accumulated other comprehensive income in the accompanying unaudited condensed consolidated statements of changes in

stockholders’ equity (deficit).

Non-monetary items in the subsidiaries’ functional currency are re-measured into the

reporting currency at the historical exchange rate (i.e., the rate of exchange at the date of the transaction).

Issued Accounting Standards Adopted

December 2023, the FASB issued ASU No.

2023-08, Intangibles-Goodwill and Other-Crypto Assets (Subtopic 350-60):

Accounting for and Disclosure

of Crypto Assets.

The amendments in ASU No.

2023-08 are intended to improve the accounting for certain crypto assets by requiring an

entity to measure those crypto assets at fair value each reporting period with changes in fair value recognized in net income.

The amendments

also improve the information provided to investors about an entity’s crypto asset holdings by requiring disclosure about significant

holdings, contractual sale restrictions, and changes during the reporting period.

The amendments are effective for all entities for fiscal

years beginning after December 15, 2024, including interim periods within those fiscal years.

Early adoption is permitted for both interim

and annual financial statements.

The Company elected to adopt ASU 2023-08, effective as of July

1, 2025, the first quarter in which the Company held digital assets.

Refer to Note 3 for further information.

Recently Issued

Accounting Standards Not Yet Adopted

December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures (“ASU 2023-09”).

ASU 2023-09 modifies the reporting requirements for income tax disclosures related to effective tax rates and cash income taxes paid.

Pursuant to ASU 2023-09, public business entities are required to disclose certain categories in the income tax rate reconciliation,

as well as additional information for reconciling items that meet a specific quantitative threshold.

Additionally, ASU 2023-09 requires

annual disclosures of income taxes paid for all entities, including the amount of income taxes paid, net of refunds received, disaggregated

by federal, state, and foreign jurisdictions.

ASU 2023-09 is effective for the Company in its annual reporting for fiscal 2025 on a prospective

Early adoption and retrospective reporting are permitted.

is currently evaluating the impact of ASU 2023-09 on its consolidated financial statements.

July 2025, the FASB issued ASU 2025-05, Financial Instruments-Credit Losses (Topic 326):

Measurement of Credit Losses for

Accounts Receivable and Contract Assets .

This ASU introduces a practical expedient for estimating expected credit losses on

current accounts receivable and current contract assets arising from transactions accounted for under ASC 606, Revenue from

Contracts with Customers .

Under the expedient, entities may assume that the current conditions applied in determining credit

loss allowances remain unchanged for the remaining life of those assets.

This ASU is required to be adopted on a prospective basis.

ASU 2025-05 is effective for annual reporting periods beginning after December 15, 2025, including interim periods within those

years, with early adoption permitted.

The Company adopted this standard, effective January 1, 2026.

The adoption of ASU 2025-05 did

not have a material impact on the Company’s unaudited condensed consolidated financial statements.

Issued Accounting Standards Not Yet Adopted

December 2025, the FASB issued Accounting Standards Update No.

2025-11, Interim Reporting (Topic 270) Narrow-Scope Improvements

(“ASU 2025-11”), to improve the navigability and clarity of interim reporting guidance in the FASB Accounting Standards Codification

and clarify when Topic 270 applies.

The amendments add a comprehensive list of interim disclosure requirements currently required by

GAAP and a new disclosure principle requiring an entity to disclose events since the end of the most recent fiscal year that have a material

impact on the entity’s interim financial statements.

ASU 2025-11 is effective for interim reporting periods within annual reporting

periods beginning after December 15, 2027 for public business entities and after December 15, 2028 for entities other than public business

Early adoption is permitted.

The Company is currently evaluating the potential impact of adopting ASU 2025-11 on our interim

reporting practices and related disclosures.

November 2024, the FASB issued ASU 2024-03 , Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic

9 unchanged sentences

impact that the adoption of ASU 2024-03 will have on its consolidated financial statements and disclosures.

following table presents as of September 30, 2025 the Company’s assets and liabilities subject to measurement at fair value on

a recurring basis (in thousands):

February 19, 2026, the Company acquired a 20.0 %

equity interest in Sarborg, a Cayman Islands-based related party, for total consideration of $ 123 million.

Total consideration consisted of 23,920 shares

of the Company’s Common Stock, pre-funded warrants to purchase up to 4,399,156 shares

of the Company’s Common Stock and $ 8 million

of cash, payable upon the Company raising no less than $ 20 million

through the use of an at-the-market facility program (the “Sales Agreement”).

The Company expects to raise the $ 20 million

and pay the investors of Sarborg the $ 8 million

cash consideration within the next 12 months.

pre-funded warrants portion of the consideration transferred have an exercise price of $ 0.0025 per share, subject to adjustment as set

forth therein and may not be exercised until such time as the Company obtains the requisite approval from its stockholders in accordance

with applicable Nasdaq rules and requirements, including approval for the issuance of the pre-funded warrant shares upon exercise of

the pre-funded warrants, as a whole and in the aggregate, in excess of 19.99% of the Common Stock or the voting power that was outstanding

on the date of the Securities Purchase Agreement.

On March 19, 2026, all 4,399,156 of the pre-funded warrants were exercised through

a cashless exercise into 4,398,218 shares of the Company’s Common Stock.

See Note 16 for further discussion of the pre-funded warrants

issued to the investors of Sarborg.

Company determined that it does have the ability to exercise significant influence over Sarborg through its ownership interest and participation

in certain strategic and operating decisions and, accordingly, accounts for this investment under the equity method of accounting in

accordance with ASC 323.

The Company will account for the investment at its carrying value less any impairment.

the three months ended March 31, 2026, the Company recognized a loss of approximately $ 68 thousand, representing its proportionate share

of Sarborg’s results of operations during the three months ended March 31, 2026.

As of March 31, 2026, the carrying value of the

Company’s investment in Sarborg was approximately $ 122.9 million.

Company evaluated the equity method investment for impairment as of March 31, 2026 and determined that the decline in the Company’s

share price triggered that an impairment indicator was present.

Based on the impairment indicator present, the Company evaluated Sarborg

for impairment and determined no impairment existed as of March 31, 2026.

The Company will continue to periodically assess the equity

method investment for impairment and record an impairment if deemed necessary in accordance with ASC 323.

to the Company’s review of the transactions and financial statements for the quarter ended March 31, 2026, and in conjunction with

discussions with the Company’s auditors, management determined that the accounting treatment for the Sarborg transaction requires

the filing of Sarborg’s historical financial statements pursuant to applicable SEC reporting requirements.

The Company intends

to file such historical financial statements in an amendment to the Company’s Current Report on Form 8-K filed on February 24,

2026, as promptly as practicable.

investment in Sarborg has been accounted for using the equity method as follows:

of Investment in Sarborg Using Cost Method

March 31, 2026

Balance as of December 31, 2025

Investment in Sarborg

Loss on equity investment in Sarborg

Impairment on equity investment in Sarborg

Balance as of March 31, 2026

following table presents the summarized financial information for Sarborg:

of Financial Information for Sarborg

March 31, 2026

Current assets

Non-current assets

Current liabilities

Total liabilities

Net liabilities

Company share of net liabilities

Company share of net loss

following table presents, as of March 31, 2026, the Company’s assets and liabilities subject to measurement at fair value on a

recurring basis (in thousands):

Schedule of Assets Subject to Measurement at Fair Value on Recurring Basis

Fair Value Measurements as of September 30, 2025

Fair Value Measurements as of March 31, 2026

Cash equivalents

Digital assets

Convertible notes payable, at fair value

Liability Classified Warrants

Total Liabilities

4 unchanged sentences

Convertible notes payable, at fair value

Liability Classified Warrants

Total Liabilities

2 unchanged sentences

Schedule of Additional Information About the Financial Liabilities Subject To Measurement at Fair Value

Notes Payable

Classified Warrants

Balance as of December 31, 2025

Repayment of convertible notes

Change in fair value

Balance as of March 31, 2025

Conversion of convertible notes

Interest expense

Change in fair value

Balance as of June 30, 2025

Fair value at issuance

Conversion of convertible notes

1 unchanged sentence

Change in fair value

Balance as of September 30, 2025

the three and nine months ended September 30, 2025, there were no transfers between Level 1 and Level 2, nor into or out of Level 3.

Digital assets are

measured at fair value on a recurring basis using quoted prices in their principal market (Level 1 inputs).

The Company has designated

a principal market based on the market the Company has access to and that has the greatest volume and level of orderly transactions for

The Company reassesses its principal market when facts and circumstances change, including but not limited to when new markets become

accessible, or the volume/activity in the current principal market declines.

Balance as of March 31, 2026

the three months ended March 31, 2026, there were no transfers between Level 1 and Level 2, nor into or out of Level 3.

Notes Payable

discussed in Note 5, on October 31, 2024, the Company and Nirland agreed to amend the Senior Secured Promissory Note entered into by

the Company and Nirland on August 6, 2024 (the “August 2024 Nirland Note”), whereby the August 2024 Nirland Note was amended

to 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.

The August 2024 Nirland Note

was then amended for a second time on November 22, 2024.

On February 12, 2025, the August 2024 Nirland Note was repaid in full.

November 2024, the Company issued to Alliance Global Partners (“A.G.P.”) a convertible promissory note (the “A.G.P.

Convertible Note”) in the principal amount of $5.7 million to evidence the A.G.P.’s currently owed deferred commission payable.

Additionally,

as discussed in Note 4, during November 2024, the Company issued to A.G.P./Alliance Global Partners (“A.G.P.”) a convertible

promissory note (the “A.G.P.

Convertible Note”) in the principal amount of $ 5.7 million to evidence the A.G.P.’s currently

owed deferred commission payable.

Company elected to account for the August 2024 Nirland Note and A.G.P.

as discussed in Note 3 and Note 7, during March 2026, the Company issued to Ascent a convertible promissory note in the principal amount

of $0.6 million.

Company elected to account for the Ascent Note and A.G.P.

Convertible Note (collectively the “Convertible Notes Payable”)

4 unchanged sentences

probability of default, and recovery upon default.

of September 30, 2025, no obligations remain under the August 2024 Nirland Note (refer to Note 5 for details) and therefore only the

fair value of the A.G.P.

Convertible Note was estimated using a binomial lattice model.

following table outlines the range of significant unobservable inputs used in calculating the fair value of the A.G.P.

Convertible Note

as of September 30, 2025, and December 31, 2024:

as of March 31, 2026, and December 31, 2025:

Schedule of Fair Value of Assumptions

September 30,

Corporate bond yield

1 unchanged sentence

Probability of default

Probability of maturity extension (six months)

Recovery upon default

Classified Warrants

2024 Warrants, as defined in Note 14, are accounted for as liabilities in accordance with ASC 815-40 and are presented within

Warrant liabilities in the condensed consolidated balance sheets.

Warrant liabilities are measured at fair value at inception and on

a recurring basis, with changes in fair value presented within other income (expense), net in the condensed consolidated statements of

operations and comprehensive loss.

measurement of the A.G.P.

2024 Warrants is classified as Level 3 due to the use of an option-pricing model that utilizes unobservable

inputs and requires significant judgment.

The Company estimated the fair value of the A.G.P.

2024 Warrants as of September 30, 2025

and December 31, 2024, utilizing a Black-Scholes option-pricing model with the following assumptions:

following table outlines the range of significant unobservable inputs used in calculating the fair value of the Ascent Note as of March

31, 2026, and at inception of the Ascent Note on March 3, 2026:

Schedule of Fair Value of Assumptions

September 30,

Closing stock price

Contractual exercise price

Risk-free rate

Estimated volatility

Time period to expiration (in years)

Digital Assets

of ASU 2023-08, Accounting for and Disclosure of Crypto Assets

during the third quarter of 2025, the Company adopted ASU 2023-08, which requires entities to measure crypto assets at fair value with

changes recognized in the Consolidated Statement of Operations each reporting period.

The Company’s did not hold any digital assets

prior to the release of ASU 2023-08 and no accounting for the transition guidance was necessary.

following table presents the Company’s significant Digital Asset holdings as of September 30, 2025:

Schedule of Digital Assets

Fair Value as of September 30, 2025

Total digital assets held as of September 30, 2025

The following table presents a reconciliation of the fair values of the

Company’s investments in digital assets as of September 30, 2025.

of Investments Digital Assets

Digital Assets

Balance as of December 31, 2024

Realized gains (losses) on dispositions

Unrealized gains (losses) from changes in fair value of digital assets

Balance as of September 30, 2025

Balance Sheet Details

expenses and other current assets consisted of the following as of September 30, 2025 and December 31, 2024 (in thousands):

expenses and other current assets consisted of the following as of March 31, 2026 and December 31, 2025 (in thousands):

Schedule of Balance Sheet Details

September 30, 2025

March 31, 2026

December 31, 2025

2 unchanged sentences

Prepaid directors’ and officers’ insurance

Prepaid expenses – related parties

Other receivables

Total prepaid expenses and other current assets

expenses and other current liabilities consisted of the following as of September 30, 2025 and December 31, 2024 (in thousands):

expenses and other current liabilities consisted of the following as of March 31, 2026 and December 31, 2025 (in thousands):

Schedule of Accrued Expenses and Other Current Liabilities

September 30, 2025

March 31, 2026

December 31, 2025

1 unchanged sentence

Accrued legal contingency

Accrued research & development costs

Other Accrued payroll

Accrued board of director fees

Accrued interest

Accrued commission payable

Investment payable

Accrued other

Total accrued expenses and other current liabilities

Convertible Notes Payable

Promissory Note Payable

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

aggregate principal amount of $ 0.8 million to a non-related third party.

The Convertible Promissory Note Payable had a maturity date

of 18 months from the date of issuance and carries interest at a rate of 20 % annually, which is payable every six (6) months from the

date of the note until the maturity date.

March 6, 2025, the Company reached a Settlement Agreement (the “Settlement Agreement”) with the loan holder to pay $ 0.7 million

in order to settle the Convertible Promissory Note Payable in full.

The Company repaid the loan holder the settlement amount of $ 0.7

million on March 13, 2025 .

The Settlement Agreement and subsequent repayment was treated as a debt extinguishment.

During the nine months ended September 30, 2025, the Company recorded a gain on debt extinguishment of $ 0.1 million, calculated as the

difference between (i) the $ 0.8 million carrying value of the Convertible Promissory Note Payable immediately prior to the amendment,

and (ii) the $ 0.7 million repayment of the Convertible Promissory Note Payable.

The $ 0.1 million gain on debt extinguishment was recorded

within other income (expense) in the condensed consolidated statement of operations and comprehensive loss for the nine months ended

September 30, 2025.

connection with the Settlement Agreement, the Company entered into a consulting agreement with a third party to negotiate the settlement

of the Convertible Promissory Note Payable with the loan holder on behalf of the Company.

In exchange for negotiating the Settlement

Agreement, the Company agreed to pay $ 0.1 million through the issuance of shares of Common Stock or cash.

On March 31, 2025, the Company

issued 609 shares of Common Stock.

The number of shares issued was determined based on the agreement amount of $ 0.1 million, divided

by the closing share price on March 28, 2025 (prior trading date) of $ 106.80 .

The $ 0.1 million was recorded as interest expense in the

condensed consolidated statement of operations and comprehensive income loss for the nine months ended September 30, 2025.

the three months ended September 30, 2025 and 2024, the Company incurred interest expense on the Convertible Promissory Note Payable

of nil and $ 40,000 , respectively.

For the nine months ended September 30, 2025 and 2024, the Company incurred interest expense on the

Convertible Promissory Note Payable of $ 0.1 million and $ 0.1 million, respectively.

2024 Nirland Note

January and February 2025, Nirland exercised their conversion option and converted $ 1.8 million of principal in exchange for 7,510 shares

of Common Stock.

In total the Company issued Common Stock with a fair value of $ 3.7 million based on the closing stock price on each

conversion date and recorded a loss on the change in fair value of $ 1.9 million, calculated as the difference between the fair value

of the shares issued and the portion of principal and interest settled.

On February 12, 2025, the Company repaid the remaining unpaid

principal and interest of $ 0.9 million in cash and recorded a gain on extinguishment of $ 0.1 million, calculated as the difference between

the remaining fair value of August 2024 Nirland Note, less the amount of cash paid.

As of September 30, 2025, no obligations remained

under the August 2024 Nirland Note.

the nine months ended September 30, 2025, the Company recorded $ 24,000 of interest expense, presented within interest expense, net, in

the condensed consolidated statement of operations and comprehensive loss.

No interest expense was recorded for the three months ended

September 30, 2025 as the August 2024 Nirland Note was settled prior to the third quarter of 2025.

Convertible Note

was a financial advisor to both MURF and Old Conduit in connection with the Merger transaction.

was a financial advisor to both Murphy Canyon Acquisition Corp.

(“MURF”) and Old Conduit in connection with the merger

transaction (the “merger”).

Upon the completion of the Merger, A.G.P.:

(i) received a cash fee of $ 6.5 million, 867 shares of Common Stock, and warrants to purchase 36 shares of Common Stock at an exercise

price of $ 16,500 per share pursuant to its engagement agreement with Old Conduit entered into on August 2, 2022, and (ii) agreed to defer

payment, to be paid in the future under certain circumstances by a date no later than March 21, 2025, of $ 5.7 million of fees plus annual

interest of 5.5 % (the “Deferred Commission Payable”) as a result of its engagement for MURF’s IPO.

Accrued interest

was recorded as a liability on the Company’s consolidated balance sheet under accrued expenses and other current liabilities and

totaled $ 0.4 million as of December 31, 2024.

During the nine months ended September 30, 2025, the Company reached an agreement with

(i) received a cash fee of $ 6.5 million, 867 shares

of Common Stock, and warrants to purchase 36 shares

of Common Stock at an exercise price of $ 16,500 per

share pursuant to its engagement agreement with Old Conduit entered into on August 2, 2022, and (ii) agreed to defer payment, to be

paid in the future under certain circumstances by a date no later than March 21, 2025, of $ 5.7 million

of fees plus annual interest of 5.5 %

(the “Deferred Commission Payable”) as a result of its engagement for MURF’s IPO.

During the three months ended

March 31, 2025, the Company reached an agreement with A.G.P.

to waive all previously accrued interest.

As such, the Company removed accrued interest of $ 0.4 million and recorded other income

of $ 0.4 million for the nine months ended September 30, 2025.

the three and nine months ended September 30, 2025, the Company recorded $ 0.1 million and $ 0.2 million of interest expense related to

the deferred commission payable balance in the condensed consolidated statement of operations and comprehensive income loss, respectively.

As such, the Company removed

accrued interest of $ 0.4 million

and recorded other income of $ 0.4 million

for the three months ended March 31, 2025.

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

Convertible Note in the principal amount of $ 5.7 million to evidence

A.G.P.’s currently owed Deferred Commission Payable, at which time the Deferred Commission Payable balance was removed.

earlier converted as specified in the Convertible Note, the principal amount, plus all accrued but unpaid interest, is due on November

25, 2025 (the “Maturity Date”).

The convertible promissory note accrues interest at 5.5 % per annum.

the terms of the A.G.P.

Convertible Note, conversion could not occur prior to the Company having sufficiently authorized shares of Common

Stock to permit the entire conversion of the convertible promissory note.

In addition, the conversion of the A.G.P.

Convertible Note

could also not occur prior to receipt of stockholder approval to provide for such conversion, and subsequent issuance of the Company’s

Common Stock, pursuant to the stockholder approval rules under the rules and regulations of The Nasdaq Stock Market.

Further, A.G.P.

will not be entitled to receive the Company’s Common Stock upon conversion, if such conversion would result in A.G.P.

owning greater

than 9.99 % of the Company’s then currently outstanding Common Stock.

is also entitled to resale registration rights as identified

in the A.G.P.

Convertible Note.

As of January 25, 2025, the Company had sufficient authorized shares of Common Stock to permit the entire

conversion of the A.G.P.

Convertible Note and the Company had also received shareholder approval to allow for the entire conversion of

the convertible promissory note.

Company may prepay the A.G.P.

Convertible Note in whole or in part.

In the event of certain Events of Default (as defined in the A.G.P.

Convertible Note), all outstanding principal and accrued interest under the A.G.P.

Convertible Note will become, or may become at A.G.P.’s

election, immediately due and payable to the A.G.P.

Company determined the fair value of the A.G.P.

Convertible Note to be $ 3.4 million as of November 25, 2024 through the use of a binomial

lattice model.

See Note 2 for additional information regarding the fair value measurement of the A.G.P Convertible Note.

As of December

31, 2024, $ 6.1 million of principal and accrued interest remained outstanding and the A.G.P.

Convertible Note had a fair value of $ 3.0

March 31, 2025, A.G.P.

exercised their conversion option and converted $ 0.4 million of principal and interest in exchange for 3,583 shares

of Common Stock.

As of March 31, 2025, the Company’s Common Stock price was trading below the Conversion Price Floor.

For the purpose

of the March 31, 2025 conversion, the Company waived the Conversion Price Floor and allowed A.G.P.

to convert at the prior trading days

closing stock price.

Upon conversion, the Company recorded a $ 0.2 million loss on the change in fair value based on the difference between

(i) the fair value of the Common Stock issued and (ii) the percentage of total principal and interest converted ( 6.54 %), multiplied by

the December 31, 2024 valuation of $ 3.0 million.

April 11, 2025, April 16, 2025, June 2, 2025, June 17, 2025, June 26, 2025 and September 29, 2025, the holder of the A.G.P.

Convertible Note converted $ 0.5

million, $ 0.8

million, $ 0.1

million, $ 0.2

million and $ 0.3

million of principal and interest into 3,583 , 8,878 , 5,000 , 11,250 , 12,500

and 60,000 shares of the Company’s Common Stock, respectively.

As of April 16, 2025, the Company’s Common Stock price

was trading below the Conversion Price Floor.

For the purpose of the April 16, 2025 conversion, the Company waived the Conversion

Price Floor and allowed A.G.P.

to convert at the April 16, 2025 closing stock price.

September 30, 2025, the Company remeasured the fair value of the A.G.P.

Convertible Note through the use of a binomial lattice model

and calculated a fair value of approximately $ 1.7 million.

For the three months ended September 30, 2025, the Company recorded a $ 0.1

million loss in the change in fair value of the A.G.P.

Convertible Note in the principal amount of $ 5.7

million to evidence A.G.P.’s currently owed Deferred

Commission Payable, at which time the Deferred Commission Payable balance was removed.

Unless earlier converted as specified in the Convertible

Note, the principal amount, plus all accrued but unpaid interest, was due on November 25, 2025 (the “Maturity Date”).

convertible promissory note accrued interest at 5.5 %

On March 31, 2026, the Company remeasured the fair value of the A.G.P.

Convertible Note through the use of a binomial

lattice model and calculated a fair value of approximately $ 0.5 million.

See Note 5 for additional information regarding the fair value

measurement of the A.G.P Convertible Note.

the three months ended March 31, 2026, the holder of the A.G.P.

Convertible Note converted $ 0.7 million of principal and interest into

25,760 shares of the Company’s Common Stock, respectively.

the three months ended March 31, 2025, the holder of the A.G.P.

Convertible Note converted $ 0.4 million of principal and interest into

143 shares of the Company’s Common Stock.

As of March 31, 2025, the Company’s Common Stock price was trading

below the Conversion Price Floor.

For the purpose of the March 31, 2025 conversion, the Company waived the Conversion Price Floor and

allowed A.G.P.

to convert at the prior trading days closing stock price.

Upon conversion, the Company recorded a $ 0.2 million loss on

the change in fair value based on the difference between (i) the fair value of the Common Stock issued and (ii) the percentage of total

principal and interest converted ( 6.54 %), multiplied by the December 31, 2024 valuation of $ 3.0 million.

the three months ended March 31, 2026, the Company recorded a $ 0.1 million gain in the change in fair value of the A.G.P.

Note and interest expense of approximately $ 25 thousand.

For the three months ended March 31, 2025, the Company recorded a $ 0.1 million

gain in the change in fair value of the A.G.P.

Convertible Note and interest expense of approximately $ 0.1 million.

months ended September 30, 2025, the Company recorded a $ 0.1 million gain in the change in fair value of the A.G.P.

Convertible Note

and interest expense of approximately $ 0.2 million.

As of September 30, 2025, there was approximately $ 3.4 million in outstanding principal

and interest remaining.

Loans Payable

On May 1, 2022, the Company entered into two non-interest-bearing loan

agreements totaling $ 0.2 million, funded in multiple tranches.

As of December 31, 2024, all tranches under the first loan and two tranches

under the second loan had been drawn.

October 9, 2024, the parties amended the loan agreements to extend the maturity date to December

19, 2024 and modify repayment terms to include (i) a £ 60,000 cash payment, (ii) £ 25,000

Common Stock valued at the market price prior to issuance, and (iii) 20 additional shares of Common Stock as consideration for the extension.

On October 11, 2024, the Company issued a total of 94

to the lenders.

Company repaid the remaining principal balance of $ 0.1

million in February 2025, and no obligations remained as of September 30, 2025.

interest expense was recorded for the three or nine months ended September 30, 2025.

2024 Nirland Note

October 2024, the Company issued a $ 0.6 million promissory note to Nirland, a related party (the “October 2024 Nirland Note”).

The note bore interest at 12 % per annum, included a 1 % arrangement fee accounted for as a debt discount, and was scheduled to mature

on October 31, 2025.

See Note 12 for further reference to the relationship between the Company and Nirland.

December 2024, the Company reduced the exercise price of the PIPE Warrants held by Nirland to $ 8.83 ,

after which all such warrants were exercised , resulting in proceeds of approximately $ 0.2

These proceeds were applied to reduce the outstanding balance of the October 2024 Nirland Note.

Company made additional repayments of $ 0.1

million, $ 0.2

million, and $ 0.1

million on January 14, 2025, January 31, 2025, and February 7, 2025, respectively.

As of September 30, 2025, the October 2024

Nirland Note had been fully repaid and no

obligations remained outstanding.

the three and nine months ended September 30, 2025, the Company recorded nil and approximately $ 8,000 of interest expense, respectively.

As of March 31, 2026,

there was approximately $ 1.9 million in outstanding principal and interest remaining.

During June 2026, the holder of

Convertible Note converted the remaining principal and interest into 1,273,375 shares of the Company’s Common Stock.

Prior to the conversion the A.G.P.

Convertible Note was overdue but not considered to be in default by either party.

March 3, 2026, the Company issued to Ascent a convertible promissory note, defined above as the Ascent Note, with an aggregate principal

amount of $ 0.6 million.

The Ascent Note has a maturity date of four months from the date of issuance and carries interest at a rate of

10 % annually, which is payable monthly from the issuance date of the Note until the sooner of the maturity date or the date the Ascent

Note is fully repaid or converted into shares of the Company’s Common Stock.

Company received net cash proceeds of approximately $ 0.5

The Ascent Note was accounted for under the fair value

option elected pursuant to ASC 825 and was initially recognized at its estimated fair value.

As a result, the original issue discount

and lender-related fees were reflected in the initial fair value measurement and were not separately recognized as debt discounts or

debt issuance costs.

The Company subsequently remeasured the Ascent Note to fair value at reporting date, with changes in fair value

recognized in earnings, except for the portion attributable to instrument-specific credit risk, which is recognized in other comprehensive

any time prior to the full payment of the convertible promissory note, Ascent, at 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 a conversion

price equal to the lower of the closing price of the Company’s Common Stock on the date shareholder approval is obtained, which

has not yet occurred, or the dollar volume-weighted average price of the Company’s Common Stock for the five trading days immediately

preceding the date of such delivery.

The conversion price is subject to change, proportionate to any stock splits that may occur.

conversion of the convertible promissory 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.

In addition, the conversion of the convertible promissory note may

also not occur prior to receipt of stockholder approval to provide for such conversion of the convertible promissory note, and subsequent

issuance of the Company’s common stock, pursuant to the stockholder approval rules under the rules and regulations of The Nasdaq

Stock Market.

Further, following Ascent’s ability to convert the convertible promissory note, if at all, Ascent will not be entitled

to receive the Company’s common stock upon conversion, if such conversion would result in Ascent owning greater than 9.99 % of the

Company’s then currently outstanding common stock.

Ascent is also entitled to resale registration rights as identified within the

convertible promissory note.

Company may prepay the convertible promissory note in whole or in part.

In the event of certain Events of Default (as defined in the

convertible promissory note), all outstanding principal and accrued interest under the convertible promissory note will become, or may

become, at Ascent’s election, immediately due and payable to Ascent within five days of an Event of Default.

the three months ended March 31, 2026, the Company recognized approximately $ 4 thousand

of contractual interest expense related to the Ascent Note.

As of March 31, 2026, the Company remeasured the Ascent Note to an estimated

fair value of approximately $ 0.2 million, with the resulting fair value adjustment recognized in the condensed consolidated statement of operations and comprehensive loss.

See Note 3 and Note 5 for further discussion of the Ascent Note.

Research and Development Expense

2024 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 the Licensed Products under the August 2024 License Agreement.

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 792 shares of the Company’s Common Stock.

Agreement provides AstraZeneca with resale registration rights for such shares.

has been granted a right of first negotiation to develop, manufacture, and commercialize a Licensed Product (as defined in the August

2024 License Agreement) 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 Product.

If AstraZeneca exercises such right, the parties will negotiate in good faith

for an agreed period of time on an exclusive basis.

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 August 2024 License Agreement, the Company is no longer funding 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 to 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 parties 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-parties to fund projects in addition to the Company.

In November and December 2024, the Company received a letter from St George

Street Capital and formal complaints filed with the Intellectual Property Office claiming the Company was not the sole owner of the AZD

1656 co-crystal patent.

See Note 14 for additional details on the claim.

Service Agreement – Related Party

5 unchanged sentences

processes and maximize the value of its pharmaceutical asset portfolio.

will perform the services to CDT comprised of three phases:

the Initial Phase (0-24 weeks) focuses on establishing a foundation for collaboration

and aligning Sarborg’s services with CDT’s strategic goals;

the Development Phase (24-36 weeks) involves building technological

infrastructure, including dashboards and predictive models;

and the Ongoing Services Phase (36-52 weeks) ensures the sustained functionality

and relevance of Sarborg’s deliverables while supporting CDT’s growth through iterative improvements and updates.

will create specific deliverables, including reports, computer programs, software applications, APIs, mobile applications, source code,

written technical specifications and designs, operating and maintenance manuals, and other recorded data and information arising from

or relating to the services.

Sarborg will provide all necessary resources to perform the services and deliver the deliverables in accordance

with the Sarborg Service Agreement.

Sarborg Service Agreement has an initial term of 12 months, which commenced in December 2024, and may be renewed or extended upon mutual

written agreement of the parties.

Either party may terminate the Sarborg Service Agreement for any reason upon 90 days’ written

notice or immediately upon written notice if the other party breaches any material term of the Sarborg Service Agreement and fails to

cure such breach within thirty days or becomes insolvent, files for bankruptcy, or is placed under the control of a receiver, trustee,

or similar authority.

Sarborg Service Agreement has an initial term of 12 months, which commenced on the effective date, and may be renewed or extended upon

mutual written agreement of the parties.

Either party may terminate the Sarborg Service Agreement for any reason upon 90 days’

written notice or immediately upon written notice if the other party breaches any material term of the Sarborg Service Agreement and

fails to cure such breach within thirty days or becomes insolvent, files for bankruptcy, or is placed under the control of a receiver,

trustee, or similar authority.

Sarborg Service Agreement includes provisions for the ownership and use of intellectual property.

14 unchanged sentences

The initial cash payment of $0.2 million was made on December 20, 2024, and the 7 shares of Common Stock were issued on January 17, 2025.

Further milestone payments payable in conjunction with the achievement of certain milestones over the term of the Sarborg Service

Agreement, totaling up to $ 1.8 million, are payable in cash or stock, at the discretion of CDT.

Sarborg will be reimbursed for pre-approved,

necessary, and reasonable out-of-pocket expenses directly incurred in connection with the performance of the services.

initial cash payment of $ 0.2 million and issuance of 189 shares of Common Stock were recorded to prepaid expense and will be amortized

over the initial term of the Sarborg Service Agreement to research and development expense.

For the three and nine months ended September

30, 2025, the Company recorded amortization expense of $ 0.1 million and $ 0.3 million, respectively, with research and development expense

in the condensed consolidated statement of operations and comprehensive income loss, respectively.

As of September 30, 2025, $ 0.1 million

of the prepaid balance remains within the condensed consolidated balance sheets.

Further milestone payments payable in conjunction with the achievement of certain milestones over the term of the Sarborg Service Agreement,

totaling up to $ 1.8 million.

Sarborg will be reimbursed for pre-approved, necessary, and reasonable out-of-pocket expenses directly incurred

in connection with the performance of the services.

Company made an initial cash payment of $ 0.2 million and issued 7 shares of Common Stock in connection with the Sarborg Service Agreement.

These costs were capitalized as prepaid expenses and are being amortized to research and development expense over the initial term of

the agreement.

For the three months ended March 31, 2026, and March 31, 2025, the Company recorded amortization expense of nil and $ 0.1

million, respectively, in research and development expenses in the consolidated statement of operations and comprehensive loss.

balance remained as of March 31, 2026.

the Sarborg Service Agreement, the Company will be provided with a dashboard that will be utilized for both the Company’s existing

10 unchanged sentences

dashboard was placed in service on March 18, 2025.

During the three and nine months ended September 30, 2025, the Company recorded $ 50

thousand and $ 0.1 million in amortization expense, respectively.

During the three months ended March 31, 2026 and March 31, 2025, the Company recorded

$ 50 thousand and $ 7 thousand of amortization expense, respectively.

other costs under the Sarborg Service Agreement shall be expensed as incurred and recorded within research and development expense in

the condensed consolidated statement of operations and comprehensive income loss, as the services are designed to aid in the Company’s

research and development activities.

the three and nine months ended September 30, 2025, Sarborg was paid $ 0.2 million and $ 2.0 million, respectively, for completed milestones

under the Sarborg Service Agreement and did not have an outstanding payable balance as of September 30, 2025.

The Company recorded $ 0.1

million and $ 1.7 million in expense within research and development expense in the condensed consolidated statement of operations and

comprehensive income loss for the three and nine months ended September 30, 2025, respectively.

The remaining $ 0.4 million was related

to the delivery of the dashboard, which was recorded as a diagnostic asset on the condensed consolidated balance sheet as of March 31,

the consolidated statement of operations and comprehensive loss, as the services are designed to aid in the Company’s research

and development activities.

the three months ended March 31, 2026 and March 31, 2025, Sarborg was paid nil and $ 1.1 million for completed milestones under the Sarborg

Service Agreement.

Additional Agreement

March 31, 2025, the Company entered into an additional license and use agreement (the “Sarborg Additional Agreement”) with

Sarborg, a related party, covering certain additional deliverables and incorporating a new scope of work focused on analysis of the Company’s

acquired AstraZeneca assets.

The term of the Sarborg Additional Agreement is for six months and provides for the payment, in aggregate,

of $ 2.0 million, which includes an up-front license fee for the term of such agreement, in cash or stock at the Company’s election

at the closing price on the day preceding the effective date of such agreement.

March 31, 2025, the Company entered into an additional license and use agreement (the “Sarborg Additional Agreement”)

with Sarborg, a related party, covering certain additional deliverables and incorporating a new scope of work focused on analysis of

the Company’s acquired AstraZeneca assets.

The term of the Sarborg Additional Agreement is for six months and provides for the

payment, in aggregate, of $ 2.0 million,

which includes an up-front license fee for the term of such agreement, in cash or stock at the Company’s election at the

closing price on the day preceding the effective date of such agreement.

On March 31, 2025, the Company prepaid $ 1.65 million

of the Sarborg Additional Agreement through the issuance of 15,449 fully vested unregistered shares of Common Stock.

The Company recorded

the shares issued under the Sarborg Additional Agreement at their fair value, as determined by the closing price of the Company’s

Common Stock on March 30, 2025, $ 106.80 , and adjusted for a 7 % discount for lack of marketability, as determined by a third-party valuation

Effective May 2, 2025, the term was extended to be 12 months from the effective date of the Sarborg Additional Agreement at no

of the Sarborg Additional Agreement through the issuance of 617 fully

vested unregistered shares of Common Stock.

The Company recorded the shares issued under the Sarborg Additional Agreement at their

fair value, as determined by the closing price of the Company’s Common Stock on March 30, 2025, $ 2,669.87 .

Effective June 24, 2025, the term was extended to be 12 months from the effective date of the Sarborg Additional Agreement at no

additional cost to the Company.

The Company recorded the fair value of $ 1.5 million as prepaid within the condensed consolidated balance

During the three and nine months ended September 30, 2025, the Company recorded research and development expense of $ 0.4 million

and $ 0.8 million within the condensed consolidated statements of operations and comprehensive loss related to the amortization of the

As of September 30, 2025, $ 0.7 million of the prepaid balance remains within the condensed consolidated balance sheets.

the three and nine months ended September 30, 2025, Sarborg was paid $ 0.1 million and $ 0.4 million for deliverables under the Sarborg

Additional Agreement and had no outstanding payable balance as of September 30, 2025.

The Company recorded the $ 0.4 million and $ 1.3

million in expense within research and development expense in the condensed consolidated statement of operations and comprehensive income

loss for the three and nine months ended September 30, 2025.

Addendum to the SARBORG Additional Agreement

July 1, 2025 the Company entered into an Addendum (the “First Addendum”) to the Additional Agreement with Sarborg,

a related party.

Under the terms of the Addendum, Sarborg will expand the scope of the Additional Agreement to provide external analysis

of third-party pharma companies assets suitable for drug re-purposing and evaluate the efficacy of the assets utilizing Conduit’s

license to Sarborg’s machine learning platform.

The scope of work is expected to be completed in 4 weeks, which may be renewed

or extended upon the mutual written agreement of the parties.

The total consideration for the additional services, payable in cash in

two tranches, was $ 0.3 million.

The Company paid $ 0.3 million during the three and nine months ending September 30, 2025 and included

in the consolidated statement of operations and comprehensive loss.

Addendum to the SARBORG Additional Agreement

August 11, 2025 the Company entered into Addendum 2 (the “Second Addendum”) to the Additional Agreement with Sarborg.

the terms of the Second Addendum, Sarborg expanded the scope of work to integrate a Cryptocurrency AI Agent, developed specifically for

identifying, forecasting and recommending digital currencies into CDT Equity’s operations as part of its treasury strategy.

term of the Second Addendum is a minimum of four (4) months, which may be renewed or extended upon the mutual written agreement of

the Company and Sarborg.

The initial consideration for the expanded scope of work was $ 0.2

million, which was paid during the three and nine months ended September 30, 2025 and included in the consolidated statement of

operations and comprehensive loss.

The Company agreed to pay further consideration of $ 0.2

million in cash or shares, at the Company’s sole discretion, at such time as the Company invests more than $ 0.6

million in cryptocurrency as part of its treasury strategy.

The Company accrued $ 0.2

million on the consolidated balance sheet as of September 30, 2025.

In total, the Company

recorded $ 1.2

million and $ 3.6

million of research and development expense for the three and

nine months ended September 30, 2025, respectively, all of which related to services and costs incurred through the SARBORG Agreement,

SARBORG Additional Agreement, First Addendum to the SARBORG Additional Agreement and the Second Addendum to the SARBORG Additional Agreement,

collectively.

Service Agreement – CDT Equity Inc.

and Charles River Laboratories

February 7, 2025, the Company and Charles River Laboratories (“Charles River”) entered into a Master Services Agreement (the

“Charles River MSA”).

Under the Charles River MSA, Charles River agreed to provide preclinical testing and research services

to CDT, including the evaluation of compounds in animal models and other related services.

The services are defined in individual Statements

of Work (“SOWs”) or Protocols, which outline the specific scope, design, and timelines for each study.

To date, one SOW,

dated February 11, 2025, has been entered into with a total commitment of $ 0.2 million.

Charles River will conduct the studies in compliance

with applicable laws and industry standards, and CDT will provide necessary test articles and materials.

The Charles River MSA includes

provisions for confidentiality, intellectual property ownership, indemnification, and dispute resolution.

The Charles River MSA has a

term of five years and can be terminated by either party under specified conditions.

For the three and nine months ended September 30,

2025, the Company recognized $ 0.1 million and $ 0.2 million in research and development expense in the condensed consolidated statement

of operations and comprehensive loss related to the Charles River MSA.

March 25, 2025, the Company entered into a Consulting Agreement (the “Consulting Agreement”) with Thesprogen PC (“Thesprogen”),

an expert in advising clients on strategies for pharmaceutical and biotech development.

Total fees under the Consulting Agreement total

to $ 0.3 million and was settled through the issuance of 2,809 fully vested unregistered shares of Common Stock on March 31, 2025.

Company recorded the shares issued under the Consulting Agreement at their fair value, as determined by the closing price of the Company’s

Common Stock on March 30, 2025, $ 106.80 , and adjusted for a 7 % discount for lack of marketability, as determined by a third-party valuation

The Company recorded the fair value of $ 0.3 million as prepaid within the condensed consolidated balance sheets.

three and nine months ended September 30, 2025, the Company recorded research and development expense of $ 0.1 million and $ 0.2 million

within the condensed consolidated statements of operations and comprehensive loss related to the amortization of the prepaid.

Effective October 1, 2025, the term was extended to be 12 months from the previous extension date of

May 2, 2025 to extend the term of the license to March 31, 2027 at no additional cost to the Company.

The Company recorded the fair

value of $ 1.5 million

as prepaid within the consolidated balance sheet as of March 31, 2025.

For the three months ended March 31, 2026 and March 31, 2025,

the Company recognized $ 0.1 million

and nil expense

related to the amortization of the Sarborg Additional Agreement.

Second Additional Agreement

January 2, 2026, the Company and Sarborg entered into the Second Additional Agreement (the “Second Additional Agreement”).

The Second Additional Agreement has a term of six weeks and can be renewed upon the mutual written agreement of both parties.

Total consideration

payable from the Company to Sarborg totals $ 0.4 million, with $ 0.2 million due, and paid, upon execution of the Second Additional Agreement

and the remaining balance due as mutually agreed by the parties.

During the three months ended March 31, 2026, the Company recorded $ 0.4

million of expense related to the Second Additional Agreement.

total, the Company recorded $ 0.6 million and $ 0.7 million of research and development expense and amortization for the three months ended

March 31, 2026 and March 31, 2025, respectively, all of which related to services and costs incurred through the Sarborg Agreement, Sarborg

Additional Agreement and the Sarborg Second Additional Agreement, collectively.

Joint Development Agreement

June 3, 2025, the Company entered into a joint development agreement (the “Joint Development Agreement”) with Manoira

Corporation (“Manoira”) for a term of one year, which will be automatically renewed for successive one-year terms unless

advance termination notice is provided in accordance with the terms of the Joint Development Agreement.

Manoira is an entity

controlled by Dr.

Andrew Regan, of which he is sole director, and is therefore considered a related party of the Company.

for additional details.

June 3, 2025, the Company entered into a joint development agreement (the “Joint Development Agreement”) with Manoira Corporation

(“Manoira”) for a term of one year, which will be automatically renewed for successive one-year terms unless advance termination

notice is provided in accordance with the terms of the Joint Development Agreement.

Manoira is an entity controlled by Dr.

Andrew Regan,

of which he is sole director, and is therefore considered a related party of the Company.

Refer to Note 13 for additional details.

to the Joint Development Agreement, CDT granted Manoira a non-exclusive, non-transferable, non-sublicensable, fully paid-up, royalty-free

5 unchanged sentences

the right to distribute, market, promote or sell the products or services that are related to or incorporate the CDT Assets.

June 3, 2025, in exchange for the approximate $ 0.5 million of consideration to be paid by CDT under the Joint Development Agreement,

CDT issued to Manoira 19,349 shares of its Common Stock, (the “Consideration Shares”) valued at the closing price of the

Common Stock immediately preceding execution of the Joint Development Agreement.

The Company recorded the shares issued under the Joint

Development Agreement at their fair value, as determined by the closing price of the Company’s Common Stock on June 2, 2025, $ 31.52 ,

and adjusted for a 20 % discount for lack of marketability, as determined by a third-party valuation expert.

The Company recorded the

fair value of $ 0.4 million as prepaid within the condensed consolidated balance sheets.

During the three and nine months ended September

30, 2025, the Company recorded $ 0.1 million amortization expense for research and development activities provided to date.

June 3, 2025, in exchange for the approximate $ 0.5

million of consideration to be paid by CDT under the Joint Development Agreement, CDT issued to Manoira 774

shares of its Common Stock, (the “Consideration Shares”) valued at the closing price of the Common Stock immediately

preceding execution of the Joint Development Agreement.

The Company recorded the shares issued under the Joint Development Agreement

at their fair value, as determined by the closing price of the Company’s Common Stock on June 3, 2025, $ 646 .

The Company recorded the fair value of $ 0.4

million as prepaid within the unaudited condensed consolidated balance sheets.

During the three months ended March 31, 2026, the

Company recorded nil

of amortization expense as no significant work was performed by Manoira in relation to the Joint Development Agreement.

the three months ended March 31, 2026, the Company did not record any amortization expense related to research and development activities.

Share Based Compensation

17 unchanged sentences

and approved by the Board on July 8, 2025.

As of September 30, 2025, there were 20,132 shares of Common Stock available for issuance

under the 2023 Plan.

January 1, 2026, in accordance with the 2023 Plan, the number of authorized shares under the 2023 plan increased by 4,630 shares.

of March 31, 2026, there were 5,842 shares of Common Stock available for issuance under the 2023 Plan.

of Directors Shares

1 unchanged sentence

2025, under the Director Compensation Program, in the form of fully vested shares of Common Stock.

In total, $ 0.1 million of unpaid retainers

was settled through the issuance 1,294 unregistered shares of Common Stock (the “Retainer Shares”).

The Company recorded

the Retainer Shares at their fair value, as determined by intraday share prices of the Company’s Common Stock on March 31, 2025.

In relation to the Retainer Shares, the Company recorded nil and $ 0.1 million of expense within general & administration expense

in the condensed consolidated statement of operations and comprehensive loss during the three and nine months ended September 30, 2025,

respectively.

April 16, 2025, 960

shares of the Company’s Common Stock were issued to a non-employee director.

The shares were approved by the Board as a

one-time award for services provided to the Company.

The Company recorded the shares at their fair value, as determined by the

Company’s closing share price on the prior trading day, April 14, 2025.

The Company recorded zero and $ 0.1

million within general & administration expense in the condensed consolidated statement of operations and comprehensive loss

during the three and nine months ended September 30, 2025 in relation to the shares.

August 5, 2025, the Company approved and granted equity awards to non-employee directors under the 2023 Plan, in the form of 5,625 options

to purchase the Company’s Common Stock, which vested immediately upon issuance.

The Company compensation expense based on the weighted-average

fair market value per share of the awards on the grant date of $ 0.1 million.

Cryptocurrency

June 27, 2025, the Company entered into an agreement (the “Crypto Consulting Agreement”) for a third-party consultant to

evaluate and advise on the potential adoption of a part cryptocurrency treasury reserve strategy.

The Crypto Consulting Agreement contains

a term of 12 months and required compensation of $ 0.2 million in the form of shares of the Company’s Common Stock.

2025, the Company issued 11,952 shares of Common Stock valued at the closing price for the previous day, $ 20.08 .

The $ 0.2 million of

compensation was recorded as a prepaid expense in the condensed consolidated balance sheets.

For the three and nine months ended September

30, 2025, the Company recorded $ 0.1 million and $ 0.1 million of general and administrative expense within the condensed consolidated

statements of operations and comprehensive loss related to the amortization of the prepaid expenses.

September 19, 2025, 140,000 and 60,000 shares of the Company’s Common Stock were issued to the Company’s CEO and CFO, respectively.

The shares were approved by the Board as a one-time award for services provided to the Company.

The Company recorded the shares at their

fair value, as determined by the Company’s closing share price on the prior trading day, September 18, 2025.

The Company recorded

$ 1.1 million within general & administration expense in the condensed consolidated statement of operations and comprehensive loss

during the three and nine months ended September 30, 2025 in relation to the shares.

By unanimous written consent of the Board, the Company granted 13,125 Restricted Stock Units to three Board members ( 4,375 RSUs per Board member) for past

services performed on August 12, 2025.

The RSUs fully vested on the grant date and the expense was recorded to general administrative

expense in the condensed consolidated statement of operations and comprehensive loss based upon the CDT closing share price of $ 13.92

on the date of the grants.

were 6 shares of restricted Common Stock vested as of September 30, 2025 and September 30, 2024.

Company granted 5,625 stock options during the three and nine months ended September 30, 2025.

The Company did not grant stock

options during the three and nine months ended September 30, 2024.

In total, $ 0.1

million of unpaid retainers was settled through the issuance 53

unregistered shares of Common Stock (the “Retainer Shares”).

The Company recorded the Retainer Shares at their fair

value, as determined by intraday share prices of the Company’s Common Stock on March 31, 2025.

In relation to the Retainer

Shares, the Company recorded $ 0.1

million of expense within general & administration expense in the unaudited condensed consolidated statement of operations and

comprehensive loss during the three months ended March 31, 2025, respectively.

Company did no t grant stock options during the three months ended March 31 2026 or March 31, 2025.

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 September 30, 2025

Outstanding at March 31, 2026

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

1 unchanged sentence

Common Stock.

As of September 30, 2025, the total compensation cost related to non-vested option awards not yet recognized was $ 1.4 million

As of March 31, 2026, the total compensation cost related to non-vested option awards not yet recognized was $ 1.4 million

with a weighted average remaining vesting period of 1.23 years.

the three months ended September 30, 2025 and 2024, there was a total of $ 1.6 million and $ 0.4 million, respectively in stock-based compensation

expense recognized within general and administrative expenses on the condensed consolidated statements of operations and comprehensive

loss, respectively.

the nine months ended September 30, 2025 and 2024, there was a total of $ 2.0 million and $ 1.3 million, respectively in stock-based compensation

expense recognized within general and administrative expenses on the condensed consolidated statements of operations and comprehensive

loss, respectively.

the three months ended March 31, 2026 and 2025, there was a total of $ 0.2

million and $ 0.2

million, respectively, recorded in stock-based compensation expense recognized within general and administrative expenses on the

unaudited condensed consolidated statements of operations and comprehensive loss, respectively.

July 4, 2025, the United States Congress passed the budget reconciliation bill H.R.

1, known as the One Big Beautiful Bill Act

Key provisions include the repeal of Section 174 R&D capitalization requirements, the extension of 100% bonus

depreciation, restoration of the Section 163(j) interest limitation to an EBITDA basis, and the introduction of a 1% charitable contribution

deduction floor.

As of September 30, 2025, the immediate expensing of R&D costs under Section 174, the continuation of 100% bonus

depreciation, and the restoration of the EBITDA-based Section 163(j) limitation are expected to decrease cash taxes in the short term

and generate a federal net operating loss.

These changes did not have a material impact on the Company’s effective tax

the nine months ended September 30, 2025, and 2024, the Company’s effective tax rate was 0.0 % due to the current year tax loss

and valuation allowance established against the Company’s net deferred tax assets, and due to operating in a zero tax jurisdiction,

1, known as the One Big Beautiful Bill Act (“OBBBA”).

Key provisions include the repeal of Section 174 R&D capitalization requirements, the extension of 100% bonus depreciation, restoration

of the Section 163(j) interest limitation to an EBITDA basis, and the introduction of a 1% charitable contribution deduction floor.

of March 31, 2026, the immediate expensing of R&D costs under Section 174, the continuation of 100% bonus depreciation, and the restoration

of the EBITDA-based Section 163(j) limitation are expected to decrease cash taxes in the short term and generate a federal net operating

These changes did not have a material impact on the Company’s effective tax rate.

the three months ended March 31, 2026, and 2025, the Company’s effective tax rate was 0.0 % due to the current year tax loss and

valuation allowance established against the Company’s net deferred tax assets, and due to operating in a zero tax jurisdiction,

respectively.

2 unchanged sentences

October 23, 2024, the Company entered into the Sales Agreement with A.G.P.

(the “Sales Agreement”) relating to the sale

of shares of the Company’s Common Stock.

In accordance with the terms of the Sales Agreement, the Company may offer and sell

shares of our Common Stock having an aggregate offering price of up to $ 23.9

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

(the “Sales Agreement”) relating to the sale of

shares of the Company’s Common Stock.

In accordance with the terms of the Sales Agreement, the Company may offer and sell shares

of our Common Stock having an aggregate offering price of up to $ 23.9 million from time to time through A.G.P., acting as our sales agent

or principal.

compensation to A.G.P.

1 unchanged sentence

any shares of Common Stock sold under the Sales Agreement.

the three and nine months ended September 30, 2025, the Company sold 704,270

shares of the Company’s Common Stock through the Sales Agreement, respectively.

For the nine months ended September 30, 2025,

the Company received proceeds of $ 18.0

million, net of commissions payable to A.G.P.

As of the date of this Quarterly Report on Form 10-Q, the Company has utilized the remaining $ 1.8

million available under the Sales Agreement (see Note 16).

Repurchase Program

April 10, 2025, the Company’s Board of Directors authorized a share repurchase program under which the Company may purchase up

million of its outstanding Common Stock.

Under the program, CDT may repurchase shares from time to time through open market

transactions or other methods in compliance with SEC Rule 10b-18.

Purchases will be executed by The Benchmark Company, the

Company’s appointed broker, and will be subject to market conditions, corporate liquidity requirements, regulatory

considerations, and other factors.

As of September 30, 2025, the Company has repurchased an aggregate of 1,464

shares of its outstanding Common Stock at an average price of $ 70.80 per

share and paid approximately $ 2,000

in commission to the broker.

The repurchased shares were recorded as treasury stock within the condensed consolidated balance

During the third quarter, the Company cancelled all of the previously repurchased shares and removed the share activity

from treasury stock on the condensed consolidated statements of changes in shareholders’ deficit.

As of September 30, 2025, no balance

remains within treasury stock on the condensed consolidated balance sheets and the cancelled shares are no longer included within the

issued and outstanding Common Stock balance.

the three months ended March 31, 2026 and 2025, the Company sold nil and 1,448 shares of the Company’s Common Stock through the

Sales Agreement, respectively.

For the three months ended March 31, 2025, the Company received proceeds of $ 8.2 million, net of commissions

payable to A.G.P.

of $ 0.2 million.

discussed in Note 4, on February 19, 2026, the Company made an investment in Sarborg to acquire 20 % of the outstanding shares of Sarborg

from its investors.

The Company issued Sarborg 23,920 shares of the Company’s Common Stock at a closing share price of $ 26 on February

18, 2026, totaling $ 0.6 million as a portion of the total consideration transferred for the investment.

Net Loss Per Share Attributable to Common Stockholders

2 unchanged sentences

of Potentially Dilutive Securities

September 30,

Public Warrants

PIPE Warrants

Convertible Promissory Notes Payable

3 unchanged sentences

April 2024 Warrants

Restricted stock units

2024 Warrants

2 unchanged sentences

Capital Limited

Capital Limited (“Corvus”) is a significant investor in the Company through subscribing to 1,000 common shares prior to the

Capital Limited (“Corvus”) is a significant investor in the Company through subscribing to 1 common share prior to the

closing of the Merger on September 22, 2023.

Shares held by Corvus on the closing date of the Merger were exchanged for shares of the

Company’s Common Stock.

The Chief Executive Officer and principal owner of Corvus, Dr.

Andrew Regan, is a member of the Board and

was appointed as the Chief Executive Officer of the Company on April 15, 2025.

Regan has not entered into any compensation plans

and will continue to waive all compensation fees in connection with his service as Chief Executive Officer of the Company and is entitled

to reimbursement of expenses incurred in connection with his role as Chief Executive Officer.

the three months ended September 30, 2025 and 2024, the Company incurred director travel expenses payable to Dr.

Regan of approximately

$ 0.2 million and $ 0.1 million, respectively.

For the nine months ended September 30, 2025 and 2024, the Company incurred director travel

expenses payable to Dr.

Regan of approximately $ 0.5 million and $ 0.4 million, respectively.

As of September 30, 2025, and December 31,

2024, the Company did not owe Dr.

Regan any director’s fees, as Dr.

Regan and the Company agreed to cease director’s fees

effective at the closing of the Merger.

September 2023, concurrently with the completion of the Merger, pursuant to the PIPE Subscription Agreement (the “PIPE Subscription

Agreement “) for an aggregate purchase price of $ 20.0 million, the Company issued an aggregate of 166 shares of the Company’s

Common Stock and PIPE Warrants (the “PIPE Warrants”) to purchase 166 shares of Company Common Stock.

At the time of the execution

of the PIPE Subscription Agreement, Corvus and its affiliates entered into a participation and inducement agreement with Nirland whereby

Corvus agreed to provide certain payments and economic benefits to Nirland.

In certain circumstances, Nirland may have a right to cause

Corvus to transfer 2,504 shares held by Corvus to Nirland.

August 6, 2024, the Company entered into the August 2024 Nirland Note with Nirland, a related party of the Company.

determined that Nirland was a related party due to Nirland’s ownership interest in the Company concurrently with the execution

of the August 2024 Nirland Note.

Additionally, on October 28, 2024, the Company issued Nirland the October 2024 Nirland Note;

on October 31, 2024, the Company and Nirland amended the August 2024 Nirland Note;

and on November 22, 2024, the

Company and Nirland amended the August 2024 Nirland Note for a second time.

As of September 30, 2025, no obligations remained under

the terms of the August 2024 Nirland Note and October 2024 Nirland Note, and Nirland did not own or beneficially own shares of the

Company’s Common Stock.

Refer to Note 5 and Note 6 for additional information.

December 12, 2024, March 31, 2025, July 1, 2025 and August 11, 2025, the Company entered into the Sarborg Service Agreement, the Sarborg

Additional Agreement, the First Addendum and Second Addendum respectively.

Andrew Regan, Chief Executive Officer and member of the

Board, also sits on the board of directors of Sarborg but does not have an equity interest in Sarborg.

On January 17, 2025, the Company

shares of fully vested unregistered Common Stock as an initial

fee for the Sarborg Services Agreement.

The fair value of the shares issued was $ 0.2

million and was recorded as prepaid within the condensed consolidated

balance sheets.

The shares are being amortized over the initial 12-month term of the Sarborg Service Agreement to research and development

On March 31, 2025, the Company issued 15,449

fully vested unregistered shares of Common Stock to prepay

the Sarborg Additional Agreement.

The fair value of the shares issued was $ 1.5

million and was recorded as prepaid within the condensed consolidated

balance sheets.

There were no share issuances for initial fees payable to Sarborg in relation to the First Addendum and Second

During the three and nine months ended

September 30, 2025, the Company recorded $ 0.1

million and $ 1.7

million, respectively, in research and development expense related to the Sarborg Service Agreement.

During the three and nine

months ended September 30, 2025, the Company recorded $ 0.4

The shares held by Corvus on the closing date of the Merger were exchanged for shares

of Conduit Pharmaceuticals Inc.

common stock.

The Chief Executive Officer of the Company is also the principal owner of Corvus.

Occasionally, Corvus provides advisory services to the Company and is paid a fee for the

As of March 31, 2026, and December 31, 2025, no advisory fees were due to Corvus.

the three months ended March 31, 2026 and 2025, the Company incurred director travel expenses payable to members of the Board of Directors

of approximately $ 0.2

million and $ 0.1

million as research and development expense related to the Sarborg Additional Agreement.

During the three and nine months ended September 30, 2025, the Company recorded $ 0.3 million and $ 0.3 million as research and development

expense related to the First Addendum.

During the three and nine months ended September 30, 2025, the Company recorded $ 0.4 million and

$ 0.4 million as research and development expense related to the Second Addendum.

Refer to Note 7 above for additional information.

and Directors

April 22, 2024, the Company issued in a private placement Common Stock purchase warrants (the “April Warrants”) to third

parties which also included certain directors, to purchase up to an aggregate of 75 shares of the Company’s Common Stock, in exchange

for entering into a lock-up with respect to the shares of Common Stock held by such holder and for such directors, an additional $ 1,500

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

Each April Warrant is exercisable into

one share of the Company’s Common Stock at a price per share of $ 37,440 (as adjusted from time to time in accordance with the terms

thereof) for a two-year period after the date of exercisability.

million, respectively.

August 6, 2024, the Company entered into the August 2024 Nirland Note with Nirland, a related party of the Company.

The Company determined

that Nirland was a related party due to Nirland’s ownership interest in the Company concurrently with the execution of the August

2024 Nirland Note.

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

2024, the Company and Nirland amended the August 2024 Nirland Note, and on November 22, 2024, the Company and Nirland amended the August

2024 Nirland Note for a second time.

During the three months ended March 31, 2025, the Company repaid Nirland through conversions and

a final cash payment.

December 12, 2024 and March 31, 2025, the Company entered into the Sarborg Service Agreement and the Sarborg Additional Agreement, respectively.

During 2025, the Company and Sarborg also executed the First and Second Addendum to the Sarborg Additional Agreement.

Andrew Regan, Chief

Executive Officer and a member of the Company’s Board of Directors, also serves on the board of directors of Sarborg but does not

hold an equity interest in Sarborg.

the three months ended March 31, 2026 and 2025, the Company recorded approximately $ 0.6 million and $ 0.7 million, respectively, as research

and development expense related to the Sarborg arrangements.

During the three months ended March 31, 2025, the Company also recorded

approximately $ 0.4 million as an acquired diagnostic asset with alternative future use.

March 31, 2025, the Company issued 618 fully

vested unregistered shares of Common Stock to prepay amounts due under the Sarborg Additional Agreement.

The shares had a fair value

of approximately $ 1.5 million

and were recorded as a prepaid asset within the unaudited condensed consolidated balance sheets.

As of March 31, 2026 and December

31, 2025, the remaining prepaid balance was $ 0.5 million

and $ 0.6 million,

respectively.

Refer to Note 8 for additional information regarding the Company’s agreements with Sarborg.

for discussion of the Company’s investment in Sarborg.

June 3, 2025, the Company entered into a joint development agreement (the “Joint Development Agreement”) with Manoira

Andrew Regan, Chief Executive Officer and member of the Board, also is a director and controlling member of

Through the Joint Development Agreement, the Company

and Manoira intend to jointly evaluate AZD1656, and any of its derivatives, as well as AZD5658, in animal health indications and

produce transitional data to inform the Company’s human clinical programs while exploring veterinary market opportunities.

Company delivered shares of the Company’s Common Stock worth $ 0.5

million to Manoira as its contribution to the Joint Development Agreement, with Manoira bearing all subsequent costs incurred during

the joint development period.

During the three and nine months ended September 30, 2025, the Company recorded $ 0.1

million of research and development expense in the condensed consolidated statement of operations and comprehensive loss.

September 30, 2025, the Company has a $ 0.3

million prepaid expense related to the Joint Development Agreement recorded in the condensed consolidated balance sheet.

Through the Joint Development Agreement, the Company and Manoira intend to jointly evaluate AZD1656, and any of its

derivatives, as well as AZD5658, in animal health indications and produce transitional data to inform the Company’s human

clinical programs while exploring veterinary market opportunities.

The Company delivered shares of the Company’s Common Stock

worth $ 0.5 million

to Manoira as its contribution to the Joint Development Agreement, with Manoira bearing all subsequent costs incurred during the

joint development period.

During the three months ended March 31, 2026 and 2025, there were no research and development expenses

recorded in the unaudited condensed consolidated statement of operations and comprehensive loss.

As of March 31, 2026, the Company

has a $ 0.3 million

prepaid expense related to the Joint Development Agreement recorded in the unaudited condensed consolidated balance sheet.

As of December 31, 2025, the Company had a $ 0.3 million prepaid expense

related to the Joint Development Agreement recorded in the consolidated balance sheet.

Note 8 for additional details.

Other Expense, net

following table presents other income (expense), net, for the three and nine months ended September 30, 2025 and 2024 (in thousands):

following table presents other income (expense), net, for the three months ended March 31, 2026 and 2025 (in thousands):

of Other Expense, Net

For the three months ended

September 30,

For the nine months ended

September 30,

the three months ended March 31,

Other income:

1 unchanged sentence

Gain on change in fair value of derivative warrant liability

Gain on change in fair value of convertible notes payable

Interest income

1 unchanged sentence

Gain on waiver of accrued interest

Research and development tax receivable

Gain on the issuance of shares for services

2 unchanged sentences

Loss on the change in fair value of convertible notes payable

Loss on the change in fair value of digital assets

Interest expense

Interest expense on deferred commission payable

Interest expense on convertible promissory note payable

Amortization of debt issuance costs

Loss on contingent liability

Loss on issuance of warrants for lock-up

Loss on equity method investment

Total other expense

2 unchanged sentences

Company is subject to certain claims and contingent liabilities that arise in the normal course of business.

While we do not expect that

the ultimate resolution of any of these pending actions will have a material effect on our consolidated results of operations, financial

position or cash flows, litigation is subject to inherent uncertainties.

As such, there can be no assurance that any pending legal action,

does not become material in the future.

As of September 30, 2025, a contingency of $ 0.4 million is considered probable and reasonably

estimable in relation to the Company’s legal proceedings.

As such, the Company accrued an estimated liability in the accompanying

financial statements.

In August 2023, prior to the Business Combination, Conduit Pharmaceuticals

Limited, our now wholly-owned subsidiary, received a letter from

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

the claim from Strand 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 4,333 shares of Common Stock.

The trial in this matter concluded during October 2025, with a determination

not expected until the first quarter of 2026.

Regardless of its outcome, the litigation may impact our business due to, among other factors,

legal costs and the diversion of management’s attention.

November and December 2024, the Company received a letter from St George Street Capital and formal complaints filed with the Intellectual

Property Office claiming the Company was assigned the US Application, and was not the sole owner, of the AZD 1656 co-crystal patent.

In January 2025, CDT issued a counterstatement to the Intellectual Property Office disputing the claim filed by St George Street Capital.

As of September 30, 2025, the range of possible loss cannot be estimated and is not considered probable.

As such, the Company has not

accrued a loss contingency in the accompanying financial statements.

The Company intends to vigorously defend against these claims.

of its outcome, the litigation may impact our business due to, among other factors, legal costs and the diversion of management’s attention.

Company has a lease agreement for approximately 2,100 square feet of space in Cambridge, England, with a term from March 2024 to January

As of September 30, 2025, the Company has a right-of-use asset of $ 0.2 million and a corresponding lease liability of $ 0.2 million

recorded on the condensed consolidated balance sheets.

Of the $ 0.2 million in lease liability, $ 0.1 million is classified as short-term

and $ 8 thousand as long-term.

As of September 30, 2025, the Company has $ 0.2 million in future minimum lease payments remaining.

Company has one operating segment focused on the research and development of clinical assets.

While we do not expect

that the ultimate resolution of any of these pending actions will have a material effect on our unaudited consolidated results of

operations, financial position or cash flows, litigation is subject to inherent uncertainties.

As such, there can be no assurance

that any legal action, pending or otherwise, does not become material in the future.

September 7, 2023, following the merger between Conduit Pharmaceuticals Limited and Conduit Merger Sub, Inc., a Cayman Islands exempted

company, Strand filed a claim in the Business and Property Courts of England and Wales claiming it was entitled to be paid the sum of

$ 2 million and, as a result of the completion of the Business Combination, to be issued 21 shares of the Company’s Common Stock

as a market value calculated by Strand of $ 65 million.

The trial in this matter ended in October 2025, with a judgment finalized on December

16, 2025, in the amount of approximately $ 7 million, plus interest and repayment of a fraction of Strand’s costs totaling $ 9.6

CDT is not a party to the CPL judgment.

to the issuance of the judgment, the Company completed the sale of CPL to Corvus, pursuant to the Sale and Purchase Agreement.

Note 16 for further discussion of the sale of CPL in relation to the Strand litigation.

In connection with the transaction, the

Company obtained legal advice and structured the arrangement such that CPL retained the obligation associated with the Strand

litigation following the sale on December 8, 2025.

However, in accordance to the principles of consolidation as discussed in Note 3,

the Company evaluated the accounting implications of the transaction, including the assessment of isolation, and concluded that the

arrangement did not satisfy isolation of the Company from CPL.

Accordingly, in connection with the judgment, Conduit Pharmaceuticals

Limited recorded a $ 9.6 million

litigation liability and it is included in the Company’s consolidated balance sheet.

To date, no legal action against the

Company has commenced to enforce the judgment against the Company and the Company will continue to vigorously defend its position

as it relates to the litigation with Strand.

during November and December 2024, the Company received a letter from St George Street Capital and formal complaints filed with the

Intellectual Property Office claiming the Company was incorrectly assigned the US Application, and was not the correct owner, of the

AZD 1656 co-crystal patent.

In January 2025, Conduit issued a counter statement to the Intellectual Property Office disputing the

claim filed by St George Street Capital.

The litigation challenges the registration of the patent and the Company does not believe

there to be any financial implications from the litigation.

As of March 31, 2026, the damages sought by St George Street Capital are

non-monetary and the potential contingency is not considered probable.

As such, the Company has not accrued a loss contingency in the

accompanying unaudited condensed consolidated financial statements.

We intend to vigorously defend against these IP claims.

Regardless of the eventual outcome, the patent dispute may impact our business due to, among other things, legal costs and the

diversion of the attention of our management.

Company has a lease agreement for approximately 2,100

square feet of space in Cambridge, England, with a term from March 2024 to January 2027.

As of March 31, 2026, the Company has a

right-of-use asset of $ 0.1

million and a corresponding lease liability of $ 0.1

million recorded on the unaudited condensed consolidated balance sheets.

The full balance of the $ 0.1

million in lease liability is classified as short-term.

As of March 31, 2026, the Company has $ 0.1

million in future minimum lease payments remaining.

Warrants – Corvus and Sarborg

connection with the Sale and Purchase Agreement with Corvus, the Company issued Pre-Funded Warrants to purchase up to 147,432

shares of the Company’s Common Stock at an exercise price

per Pre-Funded Warrant.

The Pre-Funded Warrants are exercisable

at any time on or after shareholder approval (the “Shareholder Approval Date”) and remains outstanding until exercised in

The exercise price is considered nominal, and the holder is only required to pay the exercise price upon exercise to receive the

underlying common shares.

The Pre-Funded Warrants do not expire.

On March 24, 2026, all 147,432 of the Pre-Funded Warrants were exercised through a cashless exercise into 147,401 shares of the Company’s

Common Stock.

connection with the investment in Sarborg, the Company issued Pre-Funded Warrants to purchase up to 4,399,156

shares of the Company’s Common Stock at an exercise price

per Pre-Funded Warrant.

The Pre-Funded Warrants mirror the

terms of the Pre-Funded Warrants issued to Corvus and are exercisable at any time on or after shareholder approval (the “Shareholder

Approval Date”) and remains outstanding until exercised in full.

The exercise price is considered nominal, and the holder is only

required to pay the exercise price upon exercise to receive the underlying common shares.

The Pre-Funded Warrants do not expire.

March 19, 2026, all 4,399,156 of the pre-funded warrants were exercised through a cashless exercise into 4,398,218 shares of the Company’s

Common Stock.

Company has one

operating segment focused on the research and development of clinical assets.

The accounting policies of the single operating

segment are identical to those described in Note 1.

The Chief Operating Decision Maker (“CODM”), which the Company has identified

Andrew Regan, Chief Executive Officer, manages the Company’s operations on a consolidated basis, assesses performance for

the operating segment and decides how to allocate resources based on consolidated net loss, which is reported on the condensed consolidated

statements of operations and comprehensive loss.

Depreciation expense, amortization expense, stock-based compensation expense, and non-cash

lease expense are significant noncash items included in consolidated net loss reviewed by the CODM and are reported on the consolidated

statements of cash flows.

The Chief Operating Decision Maker (“CODM”), which the Company has

identified as Dr.

Andrew Regan, Chief Executive Officer, manages the Company’s operations on a consolidated basis, assesses

performance for the operating segment and decides how to allocate resources based on consolidated net loss, which is reported on the

unaudited condensed consolidated statements of operations and comprehensive loss.

Depreciation expense, amortization expense,

stock-based compensation expense, gain or loss from equity method investments and non-cash lease expense are significant noncash

items included in consolidated net loss reviewed by the CODM and are reported on the unaudited condensed consolidated statements of

The measure of segment assets is reported on the consolidated balance sheets as total consolidated assets.

Expenditures for additions to long-lived assets, which include purchases of property and equipment, are included in total consolidated

assets reviewed by the CODM and are reported on the consolidated statements of cash flows.

for additions to long-lived assets, which include purchases of property and equipment, are included in total consolidated assets

reviewed by the CODM and are reported on the unaudited condensed consolidated statements of cash flows.

CODM uses consolidated net loss and budget-to-actual variances to assess the operating segment’s performance and determine whether

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of Financial Data for the Company’s Reportable Segment

Three Months ended

September 30,

Nine Months ended

September 30,

(Dollar amounts in thousands)

Months ended March 31,

(Dollar amounts in thousands)

Operating expenses:

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Research & development expense – related parties

Research & development expense – related parties-digital assets

Research & development expense

General and administrative expenses – legal & professional fees

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General and administrative expenses - other

General and administrative expenses - digital asset

General and administrative expenses

Total operating costs and expenses

Operating loss

Other income (expenses):

Other income (expense), net

Other Expenses:

Other expense

Loss on investment

Interest Income

1 unchanged sentence

Total other (expense) income, net

segment items consist of the items within Note 13 to the condensed consolidated financial statements.

segment items consist of the items within Note 13 to the unaudited condensed consolidated financial statements.

Subsequent Events

Agreement with A.G.P.

the date of issuance of the financial statements, the Company utilized the remaining $ 1.8 million, net of fees, through the Sales Agreement

As of the date of this filing, the Company has utilized the full $ 23.9 million, net of fees, of funding available through

the Sales Agreement.

Conversion of A.G.P.

Convertible Note

October 28, 2025, the holder of the A.G.P.

April and June 2026, the holder of the A.G.P.

convertible note converted $ 1.6

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shares of the Company’s Common Stock.

The remaining outstanding principal and interest balance post-conversion totals $ 3.2

Following the conversions,

there is no remaining outstanding principal or interest balances and the A.G.P Convertible Note was considered settled by both parties.

During April 2026, the Company

has sold 39,907 shares of the Company’s Common Stock for total gross proceeds of $ 0.1 million pursuant to the ELOC.

Amendment No.2

May 15, 2026, the “Company entered into the second amendment (the “Amendment No.

2”) to the ELOC agreement, dated January

Pursuant to Amendment No.

2, the parties mutually agreed to set the gross purchase price to be paid without the consent of

the Purchaser at any closing of a regular purchase at $ 0.5 million.

Amendment No.

2 also extends the Adjustment Period, as defined in

the Purchase Agreement, to such time as the Purchaser has entered into committed and binding trades to sell all of the shares it purchased

under the Purchase Agreement.

Amendment to the Ascent Note

May 15, 2026, the Company and Ascent entered into an amendment (the “Note Amendment”) to Ascent Note, originally issued on

March 3, 2026.

Pursuant to the Note Amendment, 90% of the proceeds raised by the Company in any debt or equity financing or capital-raising

transaction, including pursuant to the ELOC, may be retained by the Company, with the remaining 10% required to go towards payment of

amounts due under the Ascent Note.

Agreement with A.G.P.

May 2026, the Company sold 275,121

shares of Common Stock under the Sales Agreement and generated

$ 0.4 million

in net proceeds after paying an immaterial amount

of fees to A.G.P.

Secured Promissory Note with J.J.

June 11, 2026, the Company issued a senior secured convertible promissory note (the “Note”) to J.J.

(the “Lender”), in the principal amount of $ 2.0 million.

The Company will receive net proceeds of $ 1.5 million, before deduction

of closing fees and was funded in two tranches.

Note is payable to the Lender over twenty-four equal weekly installments of $ 82 thousand commencing on June 18, 2026, which may be paid

in cash or, at the option of the Company once an applicable resale registration statement is declared effective by the Securities and

Exchange Commission covering the resale of any shares of the Company’s common stock, par value $ 0.0001 per share that may be received

on such conversion.

Additionally,

the Company issued the Lender, common stock purchase warrants to purchase 912,500 shares of the Company’s Common Stock at an exercise

price of $ 0.72 per share.

The Warrants will become exercisable beginning on the effective date of stockholder approval of the issuance

of the Warrant Shares (such date, the “Stockholder Approval Date”) and will expire five years after the Stockholder Approval

Note Settlement

During June 2026, with funds

received from the Note from J.J.

Astor, the Company repaid $ 0.5 million of principal and interest against the Ascent Note.

or interest remained following the repayment and the Ascent note is considered settled by both parties.

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