CDT Equity Inc. 10-K

Item 9A. Controls and Procedures Controls and Procedures Disclosure controls are procedures that are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Exchange Act, such as this Annual Report, is recorded, processed, summarized, and reported within the time period specified in the SEC’s rules and forms. Disclosure controls are also designed with the objective of ensuring that such information is accumulated and communicated to our management, including the chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure. Our management evaluated, with the participation of our current chief executive officer and chief financial officer (our “Certifying Officers”), the effectiveness of our disclosure controls and procedures as of December 31, 2024, pursuant to Rule 13a-15(b) under the Exchange Act. We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Management’s Report on Internal Controls Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f). Under the supervision and with the participation of our Management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting. In connection with the preparation and audit of the financial statements as of and for the fiscal years ended December 31, 2024 and 2023, material weaknesses were identified in our internal control over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of annual or interim financial statements will not be prevented or detected on a timely basis. These material weaknesses primarily relate to the following: ● The segregation of duties is limited and heavily reliant on interim personnel and third-party consultants to perform these activities. ● The Company lacks a formal process for review and approval of significant transactions and accounts on a contemporaneous basis and there have been numerous, recurring errors in account balances and disclosures. ● The Company has not designed adequate and appropriate internal controls under an appropriate internal control over financial reporting framework. ● The Company did not appropriately review and evaluate the accounting implications of all material transactions that occurred in the audit period which resulted in a restatement of previous periods. ● The review controls around certain related party transactions did no operate consistently and the review of such transactions was not always contemporaneously documented. 70 If these material weaknesses are not remediated, it could result in a misstatement of account balances or disclosures that would result in a material misstatement to the annual or interim financial statements that would not be prevented or detected. We are reviewing measures designed to improve our internal control over financial reporting to remediate these material weaknesses, although they have not been fully remediated as of the date of this filing. We anticipate hiring additional qualified accounting personnel with experience with complex GAAP and SEC rules while, meanwhile, continuing to engage consultants to assist with our financial statement close process, segregating duties among accounting personnel to enable adequate review controls, further developing and documenting our accounting policies, and designing, implementing, and/or expanding IT systems and application controls in our systems relevant to the preparation of the consolidated financial statements. We also expect to engage an external advisor to assist with evaluating and documenting the design and operating effectiveness of internal controls and assisting with the remediation of deficiencies, as necessary if sufficient capital resources become available. The ability to perform these remediation plans are dependent on our ability to enhance funding and liquidity. The primary costs associated with such measures are corresponding recruiting and additional salary and consulting costs, which are difficult to estimate but which may be significant. These additional resources and procedures are intended to enable us to broaden the scope and quality of our internal review of underlying information related to financial reporting and to formalize and enhance our internal control procedures. The material weaknesses will not be considered remediated until a remediation plan has been fully implemented, the applicable controls operate for a sufficient period of time, and we have concluded, through testing, that the newly implemented and enhanced controls, provided we are able to obtain sufficient capital resources to cover the cost of our remediation plan, are operating effectively. A failure to implement and maintain effective internal control over financial reporting could result in errors in our financial statements that could result in a restatement of our financial statements and could cause us to fail to meet our reporting obligations, any of which could diminish investor confidence in us and cause a decline in the price of our common stock. Our independent registered public accounting firm will not be required to formally attest to the effectiveness of our internal control over financial reporting until after we are no longer an “emerging growth company,” as defined in the JOBS Act. At such time, our independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which our internal control over financial reporting is documented, designed, or operating. Changes in Internal Control over Financial Reporting There have been a number of changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most recent fiscal year that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. These changes include the implementation of enterprise resource planning accounting systems, and increased accounting and financial reporting consulting resources. Item 9B. Other Information During the fiscal quarter ended December 31, 2024, none of the Company’s directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted or terminated any contract, instruction or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement”. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections Not applicable. 71 PART III Item 10. Directors, Executive Officers and Corporate Governance Executive Officers and Directors The following table sets forth certain information concerning our executive officers and directors as of March 28, 2025: Name Age Position David Tapolczay 65 Chief Executive Officer and Director James Bligh 37 Interim Chief Financial Officer and Director Freda Lewis-Hall 70 Chairperson of the Board of Directors Faith L. Charles 63 Director Chele Chiavacci Farley 58 Director Simon Fry 65 Director Andrew Regan 59 Director Executive Officers David Tapolczay . Dr. Tapolczay has more than 20 years of experience in research and development management. He has served as our Chief Executive Officer and a member of the board of directors since September 2023. He was a co-founder and served as the Chief Executive Officer a member of the board of directors of Old Conduit from 2019 until the Business Combination in September 2023. He served as Chief Executive Officer of St George Street Capital, a United Kingdom-based medical research charity that is a business partner to Conduit, from July 2018 to September 2023. He also serves as Chief Executive Officer of Medeor Pharma Ltd, a pharmaceutical consultancy company, a position which he has held since 2006. From February 2008 to December 2018, he served as Chief Executive Officer at LifeArc (formerly the Medical Research Counsel Technology Group (MRCT)), a United-Kingdom based charity advancing lab-based scientific discoveries to a point at which they can be developed into the next generation of diagnostics, treatments and cures. He previously served as joint worldwide head of chemistry for Zeneca Agrochemicals, a research and development unit of AstraZeneca, and as senior manager of chemical development for GlaxoSmithKlein plc, a pharmaceutical and biotechnology company. Dr. Tapolczay served as Executive Vice President at Cambridge Discovery Chemistry, where he was responsible for the rapid growth of Cambridge Discovery Chemistry and was a key figure in two successful sales of that company, the first to Oxford Molecular and the second to Millennium Pharmaceuticals. After this last acquisition, Dr. Tapolczay was Senior Vice President of Pharmaceutical Sciences at Millennium Pharmaceuticals, with responsibility for over 230 scientists. On leaving Millennium, Dr. Tapolczay was a founder and Chairman of Pharmorphix Ltd., which was acquired by Sigma Aldrich Fine Chemicals in August 2006. He has also been involved with the start-up of five companies, all of which are still trading and one of which has been AIM listed. He was VP of Technology Development for GSK Pharmaceuticals from December 2005 to April 2007. He was awarded visiting Professorial Chair in Chemistry at Sussex University from August 1999 to May 2007 and has previously held the position of visiting lecturer at Nottingham, Reading and Durham Universities and a member of both the Technical Opportunities Panel and the User Panel of the EPSRC. He holds a BSc Hons and PhD in Chemistry from the University of Southampton. Dr. Tapolczay also completed his Post-Doctoral Experience in Organic Chemistry from the University of Oxford. Dr. Tapolczay was selected to serve on our board of directors following the Business Combination based on his deep knowledge of Conduit, his extensive experience in research and development of clinical assets, and his in-depth knowledge of the pharmaceutical industry. 72 James (“Jamie”) Bligh. Mr. Bligh has served as a member of our board of directors since September 2023, and also currently serves as our Interim Chief Financial Officer. He was a co-founder of Conduit Pharmaceuticals Limited in 2019 and has served as a member of its board of directors since its inception. From 2008 to 2019, Mr. Bligh worked closely with investment vehicle Corvus Capital Limited, including as a Partner, where he led a number of reverse takeover transactions, stock market listings, initial public offerings, secondary fundraisings, and merger transactions. Mr. Bligh’s prior transaction experience includes advising several special purpose acquisition vehicles in listing on the London Stock Exchange, including the listing of Bermele Plc, a special purpose acquisition vehicle, and the subsequent acquisition of Bermele by East Imperial Pte. Ltd., a global purveyor of ultra-premium beverages, in June 2019; the listing of Leverett Plc, which subsequently acquired Nuformix Plc, a pharmaceutical development company targeting unmet medical needs in fibrosis and oncology via drug repurposing; and Cizzle Biotechnology Holdings PLC, a UK-based diagnostics developer. Jamie previously served as a director of Bermele Plc from June 2021 through February 2022; Mertz Plc from January 2021 through March 2022; and East Imperial Pte. Ltd. from September 2017 through April 2018. Jamie graduated from the University of Bristol with a BSc in Economics & Finance. Mr. Bligh was selected to serve on our board of directors following the Business Combination based on his past experience with business development, capital raising, financings, public offerings and other strategic transactions, including mergers and acquisitions. Directors Freda Lewis-Hall, M.D., DFAPA . Dr. Lewis-Hall has served as a member of our Board since September 2023. She served as Senior Medical Advisor to the CEO of Pfizer Inc., or Pfizer, from December 2019 until her retirement in March 2020. Before assuming that responsibility, beginning January 2019, Dr. Lewis-Hall served as Chief Patient Officer and Executive Vice President of Pfizer. Dr. Lewis-Hall served as Pfizer’s Chief Medical Officer from 2009 to January 2019. Prior to joining Pfizer in 2009, Dr. Lewis-Hall held various senior leadership positions including Chief Medical Officer and Executive Vice President, Medicines Development at Vertex Pharmaceuticals Incorporated from June 2008 to May 2009; Senior Vice President, U.S. Pharmaceuticals, Medical Affairs for Bristol-Myers Squibb Company from 2003 until May 2008; Vice President Research and Development at Pharmacia Corporation from 2002-2003; Product Team Leader at Pharmacia and Eli Lilly and Company from 1998 to 2002; Director of Lilly Center for Women’s Health from 1996-1999; and Clinical Research Physician at Eli Lilly from 1994 through 1996. In October 2021, Dr. Lewis-Hall became a member of the board of directors for Pyxis Oncology (Nasdaq: PYXS), (where she serves as a member of the Nominating and Corporate Governance Committee); she serves as a member of the board of directors for Milliken & Company since July 2019, as a member of the Audit and HR and Compensation Committees; and as a member of the board of directors of SpringWorks Therapeutics, Inc. (Nasdaq GS: SWTX) since 2017, where she serves as the chair of the Nominating and Governance Committee and as a member of the audit committee. Dr. Lewis-Hall served as a member of the board of directors for Exact Sciences Corporation (Nasdaq: EXAS) from April 2020 to June 2024 where she served as a member of the Human Capital and Innovation, Technology and Pipeline Committees; a member of 1LifeHealthCare, Inc. (Nasdaq: ONEM) board from November 2019 to 2023, serving as a member of the Nominating and Corporate Governance Committee; she also served as a member of the board of directors for Tenet Healthcare Corporation (NYSE: THC) from 2014 to 2017. Dr. Lewis-Hall holds an M.D. from Howard University College of Medicine and a B.A. in natural sciences from the Johns Hopkins University. The Company believes Dr. Lewis-Hall is qualified to serve on the Board based on her expertise and experience in the biopharmaceutical industry and her leadership experience as a senior executive at various biopharmaceutical companies. 73 Faith L. Charles . Ms. Charles has served as a member of our board of directors since September 2023. She has been a corporate transactions and securities partner at the law firm of Thompson Hine LLP since 2010. She leads Thompson Hine’s Life Sciences practice and co-heads the securities practice, advising public and emerging biotech and pharmaceutical companies in the U.S. and internationally. Ms. Charles negotiates complex private and public financing transactions, mergers and acquisitions, licensing transactions and strategic collaborations. She serves as outside counsel to a myriad of life sciences companies and is known in the industry as an astute business advisor, providing valuable insights into capital markets, corporate governance and strategic development. Ms. Charles has been a member of the board of directors of: CNS Pharmaceuticals, Inc. (Nasdaq: CNSP), a biotechnology company developing novel treatments for cancers of the brain and central nervous system, since December 2022; Avenue Therapeutics, Inc. (Nasdaq: ATXI), a specialty pharmaceutical company specializing in developing and commercializing therapies for the treatment of the central nervous system, since May 2022; and Abeona Therapeutics, Inc. (Nasdaq: ABEO), a fully integrated gene and cell therapy company, since March 2021. Ms. Charles serves as Chair of CNS Pharmaceuticals, on the Audit Committee of Avenue Therapeutics and on the Audit Committee and as the Chair of the Nominating and Governance Committee of Abeona Therapeutics. From 2018 until October 2021, Ms. Charles served on the Board of Directors and as a member of the Audit Committee and Chair of the Compensation Committee of Entera Bio Ltd., a publicly-traded biotechnology company. Ms. Charles founded the Women in Bio Metro New York chapter and chaired the chapter for five years. She also served on the national board of Women in Bio. Ms. Charles is also a member of the board of Red Door Community (formerly Gilda’s Club New York City.) She has been recognized as a Life Sciences Star by Euromoney’s LMG Life Sciences, has been named a BTI Client Service All-Star, and was named by Crain’s New York Business to the list of 2020 Notable Women in the Law. Ms. Charles holds a J.D degree from The George Washington University Law School and a B.A. in Psychology from Barnard College, Columbia University. Ms. Charles is a graduate of Women in Bio’s Boardroom Ready Program, an Executive Education Program taught by The George Washington University School of Business. Ms. Charles’ qualifications to serve on our Board include her leadership skills and her vast legal experience representing companies in the biotech and pharmaceutical field. Chele Chiavacci Farley . Ms. Chiavacci Farley has served on our board of directors since the closing of our initial public offering. She currently serves as a partner and managing director of Mistral Capital International (“Mistral”), a private equity firm, that she has been a part of since 1995. In her role as Partner and Managing Director of Mistral, Ms. Farley originates, evaluates and executes equity investment opportunities, creates and implements deal and financial structures, negotiates with banks for credit facilities, and oversees management. Ms. Farley is the President and a member of the Board of Directors and Management Committee of Palmilla San Jose Inmobiliaria, the Master Developer of the luxury Palmilla resort development in Cabo San Lucas, Mexico. Prior to Mistral, Ms. Farley was Vice President of Tricap International from 1994 to 1995. From 1992 to 1994, Ms. Farley was an Associate at UBS Capital Corporation, and analyzed and evaluated principal investment and financing opportunities for the firm’s internal $1 billion fund. Ms. Farley began her career as a Financial Analyst in the Global Finance department - Energy and Telecom Group of Goldman, Sachs & Co. Ms. Farley has also had an active political career. In 2020, Ms. Farley ran for election to the U.S. House of Representatives to represent New York’s 18th Congressional district. In 2018, Ms. Farley ran for election to the U.S. Senate to represent New York. Ms. Farley graduated from Stanford University with a B.S. and M.S. in Industrial Engineering. She is a member of YPO - Young Presidents’ Organization. Ms. Farley was selected to serve on our board of directors following the Business Combination based on her past experience with business development, capital raising, financings, and banking. 74 Simon Fry. Mr. Fry has served as a member of our board of directors since November 2024. Mr. Fry has over 30 years’ experience in investment banking having held senior executive positions at various top-tier institutions, such as Nomura and Credit Suisse First Boston. In 2003, Mr. Fry was appointed as Chief Executive Officer at Crosby Asset Management. He previously worked at Nomura, where he was Managing Director and European Board member, as well as a member of the risk committee and credit committee. During his time at Nomura, Mr. Fry initiated and built the Company’s Asset Investment Group, whose focus was to create specific product and strategy groups within it to invest in mis-priced and undervalued credit and equity exposures. During this period, Mr. Fry was also responsible for building Nomura’s highly regarded International Markets Division, which was responsible for all the European capital market activity in equity, fixed income and derivatives including primary origination. Prior to this, Mr. Fry spent 14 years at Credit Suisse First Boston (CSFB) trading a variety of securities including both fixed income and equities. From 1990, Mr. Fry developed CSFB’s Asset Trading Group, and as Managing Director built a team that generated significant returns over a number of years for CSFB. Mr. Fry is based in Los Angeles. His expertise in capital markets and strategic asset management is expected to contribute to Conduit’s growth goals as the company pursues development-ready assets and aims to enhance shareholder value. Andrew Regan . Dr. Regan is a British born polar explorer and entrepreneur. He has served as a member of our board of directors since September 2023. He was a co-founder of Conduit Pharmaceuticals Limited and has served as a board member of Old Conduit since 2019. Dr. Regan also founded Corvus Capital Limited and has been its Chief Executive Officer since 2008. Corvus Capital is an investment vehicle that was previously listed on the London Stock Exchange prior to being taken private in 2008. Corvus Capital continues to invest in a number of industries and sectors. Dr. Regan also has experience as an investor in a number of public and private companies, including ASOS.com Ltd, a global online fashion and beauty retailer, Virtual Internet, an IT services company that specializes in hosting infrastructure such as VMWare cloud hosting and Managed and Dedicated Servers, and Imperial Energy Corporation plc, an upstream oil and gas exploration and production company. Prior to that, Dr. Regan was the Chief Executive Officer of Hobson Plc, which was listed on the London Stock Exchange, until its sale in 1996 through a cash takeover. Dr. Regan has a strong interest in the use of bio-inspired science to create solutions for present day problems. In 2014, he was awarded a PhD from Oxford Brookes University for his research in writing and developing a bio-inspired algorithm for forecasting the financial markets. He is passionate about the polar regions and is an accomplished polar explorer having led a number of expeditions to both the Arctic and Antarctica. Dr. Regan was selected to serve on our board of directors following the Business Combination based on his knowledge of Old Conduit and his extensive experience in investing, financing, overseeing and developing companies. Board Composition Our business and affairs are organized under the direction of our board of directors. The board of directors will meet on a regular basis and additionally as required. In accordance with the terms of the amended and restated certificate of incorporation, the board of directors may establish the authorized number of directors from time to time by resolution. Our board of directors currently consists of seven directors. Director Independence Under the Nasdaq listing standards, a majority of the members of our board of directors must qualify as “independent,” as affirmatively determined by the board of directors. The Company’s board of directors affirmatively determined that all of the Company’s directors, except for Messrs. Bligh, Tapolczay, and Regan are independent directors within the meaning of the applicable Nasdaq listing standards. A majority of the members of the board of directors and all members of the Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee are independent directors under the applicable Nasdaq listing standards. 75 Board Leadership Structure The board of directors is responsible for the control and direction of the Company. We separate the positions of Chairperson of the board of directors and Chief Executive Officer of the Company. Dr. Lewis-Hall serves as the Chairperson of the board of directors and Dr. Tapolczay serves as the Chief Executive Officer of the Company and as a member of the board of directors. The board of directors believe that this structure serves us well by maintaining a link between management, through Dr. Tapolczay’s membership on the board of directors, and the non-executive directors led by Dr. Lewis-Hall in her role as a non-executive Chairperson. Board Oversight of Risk One of the key functions of our board of directors is to conduct informed oversight of our risk management process. The board of directors does not anticipate having a standing risk management committee, but rather administers this oversight function directly through the board of directors as a whole, as well as through various standing committees of the board of directors that address risks inherent in their respective areas of oversight. In particular, the board of directors will be responsible for monitoring and assessing strategic risk exposure and the Audit Committee will have the responsibility to consider and discuss the Company’s major financial risk exposures and the steps our management will take to monitor and control such exposures, including guidelines and policies to govern the process by which risk assessment and management is undertaken. The Audit Committee also monitors compliance with legal and regulatory requirements. The Compensation Committee assesses and monitors whether our compensation plans, policies, and programs comply with applicable legal and regulatory requirements. Committees of the Board of Directors The board of directors has formed the committees described below. Each of the committees operates pursuant to a written charter adopted by the committee or our board of directors. Each charter sets forth the committee’s specific functions and responsibilities. The board of directors of may from time to time establish other committees. Audit Committee The Audit Committee assists the board of directors with its oversight of the integrity of the financial statements; the compliance with legal and regulatory requirements; the qualifications, independence and performance of the independent registered public accounting firm; the design and implementation of the financial risk assessment and risk management. Among other things, the Audit Committee is responsible for reviewing and discussing with management the adequacy and effectiveness of disclosure controls and procedures. The Audit Committee also discusses with management and independent registered public accounting firm the annual audit plan and scope of audit activities, scope, and timing of the annual audit of the financial statements, and the results of the audit, quarterly reviews of the financial statements and, as appropriate, initiates inquiries into certain aspects of the financial affairs. The Audit Committee is responsible for establishing and overseeing procedures for the receipt, retention, and treatment of any complaints regarding accounting, internal accounting controls or auditing matters, as well as for the confidential and anonymous submissions by employees of concerns regarding questionable accounting or auditing matters. In addition, the Audit Committee has direct responsibility for the appointment, compensation, retention, and oversight of the work of the independent registered public accounting firm. The Audit Committee has sole authority to approve the hiring and discharging of the independent registered public accounting firm, all audit engagement terms and fees and all permissible non-audit engagements with the independent auditor. The Audit Committee reviews and oversees all related party transactions in accordance with policies and procedures. The Audit Committee is comprised of three members: Ms. Farley (Chairperson), Dr. Lewis-Hall and Mr. Fry. Each member of the Audit Committee meets the requirements for independence under the current Nasdaq and SEC rules and regulations and each member is financially literate. In addition, the board of directors has determined that each of Ms. Farley and Mr. Fry is an “audit committee financial expert” as defined in Item 407(d)(5)(ii) of Regulation S-K promulgated under the Securities Act. 76 Compensation Committee The Compensation Committee assists the board of directors with its oversight of the forms and amount of compensation for executive officers (including officers reporting under Section 16 of the Exchange Act), the administration of equity and non-equity incentive plans for employees and other service providers and certain other matters related to compensation programs. The Compensation Committee, among other responsibilities, evaluates the performance of our Chief Executive Officer and, in consultation with the Chief Executive Officer, evaluates the performance of other executive officers (including officers reporting under Section 16 of the Exchange Act). The Compensation Committee is comprised of three members: Ms. Charles (Chairperson), Ms. Farley, and Mr. Fry. The composition of the Compensation Committee meets the requirements for independence under the current Nasdaq and SEC rules and regulations. Each member of the Compensation Committee is a “non-employee” director within the meaning of Rule 16b-3 promulgated under the Exchange Act. Nominating and Governance Committee The Nominating and Corporate Governance Committee assists the board of directors with its oversight of and identification of individuals qualified to become members of the board of directors, consistent with criteria approved by the board of directors, and selects, or recommends that the board of directors selects, director nominees; develops and recommends to the board of directors a set of corporate governance guidelines; oversees the evaluation of the board of directors; and reviews the environmental, safety, sustainability, and corporate social responsibility policies, objectives, and practices on a periodic basis. The Nominating and Corporate Governance Committee is comprised of two members: Dr. Lewis-Hall (Chairperson) and Ms. Charles. The composition of the Nominating and Corporate Governance Committee meets the requirements for independence under the current Nasdaq and SEC rules and regulations. Compensation Committee Interlocks and Insider Participation No member of our Compensation Committee was at any time during fiscal year 2024, or at any other time, one of our officers or employees. None of our executive officers have served as a director or member of a compensation committee (or other committee serving an equivalent function) of any entity, one of whose executive officers served as a director of our board of directors or member of our Compensation Committee. Family Relationships There are no family relationships among our directors and executive officers. Code of Conduct We adopted a written Code of Conduct applicable to all of our directors, officers, and employees, which is available on the Company’s website at http://www.conduitpharma.com. Our Internet website address is provided as an inactive textual reference only. The Code of Conduct covers fundamental ethical and compliance-related principles and practices such as accurate accounting records and financial reporting, avoiding conflicts of interest, the protection and use of property and information, and compliance with legal and regulatory requirements. The Code of Conduct is a “code of ethics,” as defined in Item 406(b) of Regulation S-K. The Company will make any legally required disclosures regarding amendments to, or waivers of, provisions of its Code of Conduct on its corporate website. Director and Officer Liability and Indemnification We have purchased directors’ and officers’ liability insurance and have entered into indemnification agreements with each of directors and executive officers. The indemnification agreements and our amended and restated certificate of incorporation and amended and restated bylaws require us to indemnify our directors and officers to the fullest extent permitted by Delaware law. 77 Insider Trading Policy The use of material non-public information in securities transactions or the communication of such information to others who use it in securities trading (“Tipping”) violates the federal securities laws. Such violations are likely to result in harsh consequences for the individuals involved including exposure to investigations by the SEC, criminal and civil prosecution, disgorgement of any profits realized or losses avoided through use of the non-public information and penalties equal to three times such profits or losses. Further, insider trading violations expose the Company, its management, and other personnel acting in supervisory capacities to potential civil liabilities and penalties for the actions of employees under their control who engage in Insider Trading violations. Our Insider Trading Policy (the “Insider Trading Policy”) prohibits our executive officers, the non-employee members of our board of directors and certain other employees from engaging in the following transactions: ● selling any of our securities that they do not own at the time of the sale (referred to as a “short sale”); ● passing material nonpublic information on to others or recommending that another engage in transactions in any securities that they have information on; ● buying or selling puts, calls, other derivative securities of the Company or any derivative securities that provide the economic equivalent of ownership of any of our securities or an opportunity, direct or indirect, to profit from any change in the value of our securities or engaging in any other hedging transaction with respect to our securities; ● using our securities as collateral in a margin account; and ● pledging our securities as collateral for a loan (or modifying an existing pledge). While the Company has not adopted a formal policy governing transactions by the Company in its securities, the Company will not engage in transactions in Company securities, or adopt any securities repurchase plans, while in possession of material non-public information relating to the Company or its securities other than in compliance with applicable law, subject to the policies and procedures adopted by the Company. On or around August 14, 2024, the Company was first made aware that one of its directors, through a wholly owned subsidiary, had previously entered into certain collateral pledge agreements that resulted in the disposition of a substantial amount of shares in the Company pursuant to those agreements without the Company’s knowledge. In addition, the Company also became aware that approximately 300,000 thousand shares (or 31% of our then outstanding common stock as of August 14, 2024) were subject to a further third-party pledge arrangement with a then significant stockholder of the Company. Upon learning of these transactions, the board of directors has appointed an independent committee of the board of directors (the “Special Committee”) and delegated to the Special Committee the authority to review these matters and determine action(s), if any, to be taken by the Company in response thereto. Additionally, the Company formed another committee of the board of directors (the “Trading Review Committee”) and delegated to the Trading Review Committee the authority to investigate and review the trading patterns of certain of the Company’s stockholders and determine action(s), if any, to be taken by the Company in response thereto. The Company values its stockholders and wants to have all available data at its disposal to act in its fiduciary capacity. Section 16(a) Beneficial Ownership Reporting Compliance Section 16(a) of the Exchange Act requires that our directors and executive officers, and persons who own more than ten percent of a registered class of our equity securities, to file with the SEC initial reports of ownership and reports of changes in ownership of common stock and other equity securities of the Company. Officers, directors and greater than ten percent stockholders are required by SEC regulation to furnish us with copies of all Section 16(a) forms they file. To our knowledge, based solely on a review of the copies of such reports furnished to us and written representations that no other reports were required, during the year ended December 31, 2024, all Section 16(a) filing requirements applicable to our officers, directors and greater than ten percent beneficial owners were complied with, except for the Form 4 filed Andrew Regan on September 19, 2024 reporting a pledging of shares on June 14, 2024 and the sale of shares from July 2, 2024 to July 17, 2024. The delinquent filing was inadvertent. 78 Item 11. Executive Compensation Fiscal 2024 Summary Compensation Table The following table summarizes the compensation earned by or paid to our principal executive officer and our principal financial officer, who constitute all of our executive officers, for fiscal 2024 and fiscal 2023. We have no defined benefit or actuarial pension plan, and no deferred compensation plan. NAME AND PRINCIPAL POSITION FISCAL YEAR SALARY (1) ($) STOCK AWARDS (2) ($) OPTION AWARDS (3) ($) NONEQUITY INCENTIVE PLAN COMPENSATIONS ($) ALL OTHER COMPENSATION (4) TOTAL ($) David Tapolczay 2024 $ 558,578 $ - $ 58,800 $ - $ - $ 617,378 Chief Executive Officer and Director 2023 $ 139,933 $ - $ 1,203,239 $ - $ - $ 1,343,172 James Bligh, Interim Chief Financial Officer 2024 $ 438,060 $ 105,852 $ 132,300 $ - $ 16,732 $ 692,944 Adam Sragovicz (5) 2024 $ 143,333 $ - $ - $ - $ 103,300 $ 246,333 Chief Financial Officer 2023 $ 116,667 $ 410,743 $ - $ - $ - $ 527,410 (1) Salaries converted from British Pounds to US Dollars based on the following exchange rate in effect as of December 31, 2024: 1.2549. (2) Reflects the grant date fair value of the 372 fully vested shares issued to Mr. Bligh in June 2024 to reflect his increased responsibilities as interim Chief Executive Officer, based on a stock price of $284 on the date of grant. (3) Reflects the grant date fair value of stock option awards for the applicable year computed in accordance with FASB ASC Topic 718. See Note 11 to the consolidated financial statements included in this Annual Report for a discussion of the relevant assumptions used in calculating the grant date fair value pursuant to FASB ASC Topic 718. As required by SEC rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. Our named executive officers will only realize compensation to the extent the trading price of our common stock is greater than the exercise price of such stock options. (4) The amounts shown for 2024 represent 401(k) matching contributions of $16,732 and $3,300 for Mr. Bligh and Mr. Sragovicz, respectively. (5) For Mr. Sragovicz, includes severance benefits of continued payment of his base salary, and subsidized health insurance premiums, for a period of four months after the effective date of his resignation. Compensation Adjustments for 2024 Annual Base Salaries We provide a base salary to retain and attract key executive talent and to align our compensation with market practices. Base salaries are reviewed and established by the Compensation Committee and the board of directors on a competitive basis each year to align with market levels. In 2024, the board of directors (i) increased Dr. Tapolczay’s base salary by 3%, and (ii) increased Mr. Bligh’s base salary by £60,000 to compensate for his additional duties as Chief Financial Officer. Equity Awards The Compensation Committee believes that a competitive long-term incentive program is an important component of the compensation of our named executive officers because it: (i) enhances the retentive value of our compensation; (ii) rewards executives for increasing our stock price and developing long-term value; and (iii) provides executives with an opportunity for stock ownership to align their interests with those of our stockholders. In November 2024, the board of directors, with the help of Aon, its independent compensation consultant, conducted a review of the long-term incentive opportunities for our named executive officers. Based on a review of each executive’s individual performance, Mr. Bligh’s additional duties as interim Chief Financial Officer, and the applicable market data, the board of directors approved the following stock option grants: (i) Dr. Tapolczay received a stock option to purchase 8,400 shares, and (ii) Mr. Bligh received a stock option to purchase 18,900 shares. Each stock option vests 50% of the grant date and 50% in three equal annual installments thereafter. Also, Mr. Bligh received a one-time grant of 372.72 full vested shares in June 2024, in recognition of his increased responsibilities as interim Chief Executive Officer. These grant levels have been adjusted to reflect the 1-for-100 reverse stock split on January 24, 2025. Employment Agreements We entered into an employment agreement with our chief executive officer on September 22, 2023, which was the closing date of the Business Combination. Mr. James Bligh is serving as the Company’s interim chief financial officer. These agreements are summarized below. Dr. Tapolczay On September 22, 2023, we entered into an employment agreement (the “Tapolczay Employment Agreement”) with Dr. Tapolczay, pursuant to which he serves as our Chief Executive Officer of and a member of our board of directors. Under the Tapolczay Employment Agreement, Dr. Tapolczay is entitled to (i) an annual base salary of $550,000 increased to $566,500 effective November 1, 2024, and (ii) a target annual bonus opportunity equal to 50% of his base salary, payable based on the achievement of performance objectives as determined by our board of directors. In addition, the Tapolczay Employment Agreement provides that Dr. Tapolczay is entitled to receive a sign-on stock option award to purchase 0.40% of the shares of our Common Stock pursuant to the terms of the 2023 Stock Incentive Plan, which shall vest in equal annual installments on the first four anniversaries of the Business Combination. The Tapolczay Employment Agreement provides that if we terminate Dr. Tapolczay’s employment other than for cause or disability, or if he terminates his employment for good reason, in either case other than the change in control protection period (described below), he would be entitled to receive (i) continued payment of his annual base salary for 12 months following the date of termination, (ii) a lump sum payment of his annual cash performance bonus that had been earned by him for a completed fiscal year or other measuring period but that had not yet been paid to him as of the date of termination, (iii) a lump sum payment equal to his then target annual bonus opportunity, pro-rated based on the total number of days elapsed in the calendar year through the date of termination, (iv) payment or reimbursement of the COBRA premiums for him and his eligible dependents, or if COBRA is not available under our group health plan, a cash amount equal to such payments or reimbursements (in either case, less the premiums he was paying for such coverage while employed), until the earliest of (x) the last day of the applicable salary continuation period specified above, or (y) the date he becomes eligible for comparable health insurance coverage under a subsequent employer’s group health plan; and (v) accelerated vesting of such number of his unvested equity awards as would have vested had he remained employed during the 12-month period following his date of termination (provided, however, that, any equity awards that vest in whole or in part based on the attainment of performance-vesting conditions shall be governed by the terms of the applicable award agreement). The Tapolczay Employment Agreement provides that if we terminate Dr. Tapolczay’s employment other than for cause or disability, or if he terminates his employment for good reason, in either case within three months prior to or 12 months after a change in control (such period, the change in control period), he would be entitled to receive (i) continued payment of his annual base salary for 18 months following the date of termination, (ii) a lump sum payment of his annual cash performance bonus that had been earned by him for a completed fiscal year or other measuring period but that had not yet been paid to him as of the date of termination, (iii) a lump sum payment equal to 150% of his then target annual bonus opportunity (without pro-ration), (iv) payment or reimbursement of the COBRA premiums for him and his eligible dependents, or if COBRA is not available under our group health plan, a cash amount equal to such payments or reimbursements (in either case, less the premiums he was paying for such coverage while employed), until the earliest of (x) the last day of the applicable salary continuation period specified above, or (y) the date he becomes eligible for comparable health insurance coverage under a subsequent employer’s group health plan; and (v) accelerated vesting of 100% of his unvested equity awards (provided, however, that, any equity awards that vest in whole or in part based on the attainment of performance-vesting conditions shall be governed by the terms of the applicable award agreement). Additionally, to the extent that any payment or benefit received in connection with a change in control would be subject to an excise tax under Section 4999 of the Code, such payments and/or benefits will be subject to a “best pay cap” reduction if such reduction would result in a greater net after-tax benefit to the executive than receiving the full amount of such payments. In exchange for the severance benefits described above, Dr. Tapolczay must (i) sign and not revoke a release of claims in favor of the Company, (ii) comply with his proprietary information and inventions assignment agreement, (iii) refrain from soliciting employees of the Company for a period of one year after his termination of employment, and (iv) comply with the other provisions of the Tapolczay Employment Agreement. James Bligh On November 15, 2024, Conduit Pharmaceuticals Limited and Conduit UK Management LTD., wholly-owned subsidiaries of the Company, entered into an amended and restated employment agreement (the “Bligh Employment Agreement”) with James Bligh, pursuant to which Mr. Bligh will continue to be employed by Conduit UK Management LTD. and continue to serve as the Interim Chief Financial Officer and Senior Vice President - Strategy of the Company. Under the Bligh Employment Agreement, Mr. Bligh will receive an annual base salary of £400,000 and will be entitled to a discretionary cash bonus of up to 40% of his base salary, subject to the achievement of certain milestones that may be established by the Board of Directors or a committee thereof, from time to time. Mr. Bligh is also entitled to reimbursement for reasonable out-of-pocket expenses incurred by him in the performance of his duties, subject to the terms of any expenses policy the Company may have. The Bligh Employment Agreement requires at least six months’ advanced written notice for Mr. Bligh or Conduit UK Management LTD. to terminate Mr. Bligh’s employment, except in the case of a summary dismissal (as described in the Bligh Employment Agreement). However, Conduit UK Management LTD. may, at its sole discretion and by written notice, terminate Mr. Bligh’s employment immediately and provide compensation to Mr. Bligh for the unexpired portion of such notice period. The Bligh Employment Agreement replaces and supersedes the prior employment agreement between Conduit Pharmaceuticals Limited and Mr. Bligh. Mr. Sragovicz On May 10, 2024, Adam Sragovicz informed the Board of Directors of his intention to resign as Chief Financial Officer of the Company. In connection with his resignation, Mr. Sragovicz agreed to continue in his current role, with the same responsibilities and obligations as he previously had, through the day after the filing of this Quarterly Report on Form 10-Q, so that his resignation will become effective on May 15, 2024. Mr. Sragovicz’s resignation was not due to any disagreement with management or the Company’s operations, policies or practices. The Company entered into a separation agreement with Mr. Sragovicz on May 12, 2024, which provides for continued payment of his base salary, and subsidized health insurance premiums, for a period of four months after the effective date of his resignation. In exchange for these benefits, Mr. Sragovicz has signed a mutual release of claims, agreed to a mutual non-disparagement covenant, and re-affirmed certain confidentiality, non-solicitation and post-departure cooperation covenants. 79 Outstanding Equity Awards at 2024 Fiscal Year-End The following table summarizes all of the outstanding equity-based awards held by our named executive officers as of December 31, 2024, the end of our fiscal year. The option shares reported below have been adjusted to reflect the 1-for-100 reverse stock split on January 24, 2025. OPTION AWARDS NAME OPTION OR STOCK AWARD GRANT DATE NUMBER OF SECURITIES UNDERLYING UNEXERCISED OPTIONS (#) EXERCISABLE NUMBER OF SECURITIES UNDERLYING UNEXERCISED OPTIONS (#) UNEXERCISABLE OPTION EXERCISE PRICE ($) OPTION EXPIRATION DATE David Tapolczay 11/18/2024 (2) 4,200 4,200 $ 9.20 11/17/2034 12/1/2023 (1) 745 2,236 551 11/30/2033 James Bligh 11/18/2024 (2) 9,450 9,450 $ 9.20 11/17/2034 11/18/2024 (1) 559 1,677 551 11/30/2033 (1) The stock option vests as to 1/4 of the underlying shares on each of the first four anniversaries of the vesting commencement date (2) The stock options vests 50% of the grant date and 50% in three equal annual installments thereafter 2023 Stock Incentive Plan On September 20, 2023, MURF stockholders approved the Conduit Pharmaceuticals Inc. 2023 Stock Incentive Plan (the “2023 Plan”). The 2023 Plan permits our board of directors or compensation committee to grant may grant or issue stock options, stock appreciation rights, restricted stock, restricted stock units, performance stock units, other stock- or cash-based awards and dividend equivalents, or any combination thereof, to officers, employees, directors or consultants of the Company. Subject to adjustment for stock splits or similar events, the 2023 Plan initially reserved 114,976 shares of Common Stock for issuance pursuant to awards, plus an annual increase on the first day of each calendar year beginning in 2024 and ending in 2033 equal to the lesser of (i) 5% of the shares of Common Stock outstanding on the last day of the immediately preceding calendar year and (ii) such smaller number of shares of Common Stock as determined by our board of directors. The 2023 Plan was increased by 36,914 shares of common stock effective January 1, 2024, and by 69,240 shares of common stock effective January 1, 2025. On February 6, 2025, the Company filed a registration statement on Form S-8 that increased the number of shares of Common Stock available for issuance under the 2023 Plan by 69,240 shares. 80 Securities Authorized for Issuance under Equity Compensation Plans The following table provides a summary of the securities authorized for issuance under our equity compensation plans as of December 31, 2024. Plan category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (a) (b) (c) Equity compensation plans approved by security holders 2023 Plan 65,509 $ 81.52 84,885 Equity compensation plans not approved by security holders - - - Total 65,509 $ 81.52 84,885 Director Compensation The following table sets forth the compensation we paid to our non-employee directors during fiscal 2024: Name Fees earned or paid in cash ($) Stock awards ($) (1)(2) Option awards ($) (3) All Other Compensation TOTAL ($) Faith L. Charles $ 24,500 $ 31,400 $ 21,000 $ - $ 76,900 Chele Chiavacci Farley $ 27,500 $ 133,352 $ 21,000 $ - $ 181,852 Freda Lewis-Hall $ 40,250 $ 40,250 $ 21,000 $ - $ 101,500 Simon Fry $ - $ - $ 21,000 $ - $ 21,000 Jennifer I. McNealey (4) $ 11,875 $ - $ - $ - $ 11,875 Andrew Regan (5) $ - $ - $ - $ - $ - (1) Dr. Lewis-Hall elected to receive $40,250 of her cash fees in the form of fully vested shares, Ms. Chiavacci Farley elected to receive $27,500 of her cash fees in the form of fully vested shares, and Ms. Charles elected to receive $24,500 of her cash fees in the form of fully vested shares. (2) Reflects the grant date fair value of (i) the 372 fully vested shares issued to Ms. Chiavacci Farley in June 2024, based on a stock price of $284 on the date of grant, and (ii) the 750 fully vested shares issued to Ms. Charles in November 2024, based on a stock price of $9.20 on the date of grant. (3) Amounts in this column represents the aggregate grant date fair value, determined in accordance with FASB ASC Topic 718, of option awards granted to participating non-employee directors in 2024. For a description of the assumptions we used to calculate these amounts, see Note 11 to the consolidated financial statements included in this Annual Report. (4) On May 12, 2024, Ms. McNealey announced her resignation, due to personal reasons, as a member of the Board of Directors of the Company and from all committees on which she served, effective as of May 13, 2024. Ms. McNealey’s resignation was not due to any disagreement with management or the Company’s operations, policies or practices. (5) Dr. Regan waived his right to receive any compensation for services as a non-employee director of the Company, effective as of the closing of the Business Combination. As a result, Dr. Regan has not been paid any cash retainers or received any equity retainers since the closing date. 81 As of December 31, 2024, our non-employee directors held the following stock options: OPTION AWARDS NAME OPTION OR STOCK AWARD GRANT DATE NUMBER OF SECURITIES UNDERLYING UNEXERCISED OPTIONS (#) EXERCISABLE NUMBER OF SECURITIES UNDERLYING UNEXERCISED OPTIONS (#) UNEXERCISABLE OPTION EXERCISE PRICE ($) OPTION EXPIRATION DATE Faith L. Charles 12/18/2024 (2) - 4,200 $ 7.10 12/17/2034 12/1/2023 (1) 217 433 551 11/30/2033 Chele Chiavacci Farley 12/18/2024 (2) - 4,200 $ 7.10 12/17/2034 12/1/2023 (1) 217 433 551 11/30/2033 Freda Lewis-Hall 12/18/2024 (2) - 4,200 $ 7.10 12/17/2034 12/1/2023 (1) 217 433 551 11/30/2033 Simon Fry 12/18/2024 (2) - 4,200 $ 7.10 12/17/2034 (1) The stock option vests as to 1/3 of the underlying shares on each of the first three anniversaries of the vesting commencement date (2) The stock options vests 100% of the underlying shares on the first anniversary of the vesting commencement date Compensation Program for the Board of Directors We adopted a compensation program for our board of directors, which became effective upon completion of the Business Combination, and was amended on November 15, 2024. Under the compensation program, the non-employee directors will receive the following annual cash retainers for their service on the board of directors and its committees: ● $35,000 for each non-employee director; ● $30,000 for the Chairperson of the board of directors; ● $15,000 for the chair of the Audit Committee and $7,500 for each of the other members of that committee; ● $10,000 for the chair of the Compensation Committee and $5,000 for each of the other members of that committee; and ● $8,000 for the chair of the Nominating and Corporate Governance Committee and $4,000 for each of the other members of that committee. In addition, each non-employee director who is initially elected or appointed to the board of directors will automatically be granted on the day of such first election or appointment a stock option to purchase 4,200 shares of our Common Stock (the “Initial Award”). Each Initial Award will vest and become exercisable in substantially equal installments on each of the first three anniversaries of the date of grant, subject to the non-employee director continuing in service on the board of directors through each such vesting date. A non-employee director who is serving on the board of directors as of the date of any annual meeting after the effective date of the new program, and who will continue to serve as a non-employee director immediately following such meeting, will automatically be granted on the date of such annual meeting a stock option to purchase 4,200 shares of our Common Stock, which amount is pro-rated for new directors to reflect their service since the last annual meeting (the “Annual Award”). Each Annual Award will vest and become exercisable on the earlier of (i) the first anniversary of the date of grant, or (ii) the date immediately prior to the next annual meeting of the Company’s stockholders following the date of grant, subject to the non-employee director continuing in service on the board of directors through such vesting date. Upon a change in control, all outstanding equity awards that are held by a non-employee director shall become fully vested and exercisable. In 2024, the board of directors appointed Dr. Hall and Ms. Charles to serve on the Special Committee and approved an additional cash retainer of $7,500 for each of them to reflect her service on the Special Committee. In June 2024, the board of directors authorized the grant of a one-time additional equity retainer to Ms. Chiavacci Farley in the form of 372 fully vested shares to recognize the significant time she has devoted to the Company since September 2023, in her capacity as a member of the board, assisting and advising the Company on certain strategic transactions, financings and accounting matters. In November 2024, the board of directors authorized the grant of a one-time additional equity retainer to Ms. Charles in the form of 750 fully vested shares to recognize the significant time she has devoted to the Company since September 2023, in her capacity as a member of the board, assisting and advising the Company on certain strategic transactions and financings. Board members who are also employees of the Company, such as Dr. Tapolczay and Mr. Bligh, are not eligible to participate in the non-employee director compensation program described above and did not receive any compensation for service on the board of directors. Moreover, Dr. Regan waived his right to receive any compensation under the program. The 2023 Plan provides that the sum of the grant date fair value of all equity-based awards and the maximum amount of cash that may become payable to any individual for services as a non-employee director during any calendar year may not exceed $750,000, increased to $1,000,000 in the calendar year of a non-employee director’s initial service as a non-employee director. The plan administrator may make exceptions to this limit for individual non-employee directors in extraordinary circumstances, as the plan administrator may determine in its discretion, provided that the non-employee director receiving such additional compensation may not participate in the decision to award such compensation or in other contemporaneous compensation decisions involving non-employee directors. 82 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The following table sets forth beneficial ownership of the Company’s Common Stock as of March 28, 2025 by: ● each person known to be the beneficial owner of more than 5% of the outstanding Common Stock of the Company; ● each of the Company’s executive officers and directors; and ● all of the Company’s current executive officers and directors as a group. Beneficial ownership is determined according to the rules of the SEC, which generally provide that a person has beneficial ownership of a security if he, she or it possesses sole or shared voting or investment power over that security. Under those rules, beneficial ownership includes securities that the individual or entity has the right to acquire, such as through the exercise of warrants or stock options or the vesting of restricted stock units, within 60 days of March 28, 2025. Shares subject to warrants or options that are currently exercisable or exercisable within 60 days of March 28, 2025 or subject to restricted stock units that vest within 60 days of March 28, 2025 are considered outstanding and beneficially owned by the person holding such warrants, options, or restricted stock units for the purpose of computing the percentage ownership of that person but are not treated as outstanding for the purpose of computing the percentage ownership of any other person. Except as noted by footnote, and subject to community property laws where applicable, based on the information provided to the Company, the persons and entities named in the table below have sole voting and investment power with respect to all shares shown as beneficially owned by them. Unless otherwise indicated, the business address of each beneficial owner listed in the table below is c/o Conduit Pharmaceuticals Inc., 4581 Tamiami Trail North, Suite 200 Naples, Florida 34103. The beneficial ownership of our Common Stock is based on 6,662,755 shares of Common Stock issued and outstanding as of March 28, 2025, which number excludes the shares of Common Stock issuable upon exercise of the warrants. Unless otherwise indicated, we believe that all persons named in the table have sole voting and investment power with respect to all of the shares shown to be beneficially owned by them. Name and Address of Beneficial Owner (1) Number of shares of Common Stock % of Common Stock* Directors and executive officers James Bligh 10,381 (2) * Faith L. Charles 3,631 (3) * Chele Chiavacci Farley 5,914 (4) * Freda Lewis-Hall 34,836 (5) * Andrew Regan 302,926 (6) 4.55 % David Tapolczay 30,987 (7) * Simon Fry 2,000 (8) * All directors and executive officers as a group (6 individuals) 390,675 5.81 % * Indicates beneficial ownership of less than 1%. (1) The table does not include Adam Sragovicz, the Company’s former Chief Financial Officer, who resigned effective May 15, 2024, and following such resignation, to the Company’s knowledge, did not beneficially own any securities of the Company. (2) Consists of (i) 372 shares of Common Stock and (ii) options to purchase 10,009 shares Common Stock that are currently exercisable. Excludes 11,127 unvested options to purchase shares of Common Stock that are not exercisable within 60 days. (3) Consists of (i) 3,415 shares of Common Stock and (ii) options to purchase 216 shares of Common Stock that are currently exercisable. Excludes 4,633 unvested options to purchase shares of Common Stock that are not exercisable within 60 days. (4) Consists of (i) 3,515 shares of Common Stock, (ii) warrants to purchase 2,183 shares of Common Stock and (iii) options to purchase 216 shares of Common Stock that are currently exercisable. Excludes 4,633 unvested options to purchase shares of Common Stock that are not exercisable within 60 days. (5) Includes 234,836 shares of Common Stock, of which (i) 4,379 are held directly by Dr. Lewis-Hall, (ii) 20,033 were issued to Intelmed LLC, of which Dr. Lewis-Hall is the Managing Director, (iii) 5,169 shares of Common Stock were received by Mr. Emerson Hall, Jr., Dr. Lewis-Hall’s spouse, and (iv) 216 are underlying options that are currently exercisable and are held directly by Dr. Lewis-Hall, (v) warrants to purchase 1,033 shares of Common Stock held directly by Dr. Lewis-Hall and (vi) warrants to purchase 4,006 shares of Common Stock held by Intelmed LLC. By virtue of this relationship with both Intelmed LLC and her spouse, Dr. Lewis-Hall may be deemed to share beneficial ownership of the securities held of record by Intelmed LLC and Mr. Emerson Hall, Jr. Dr. Lewis-Hall disclaims any such beneficial ownership except to the extent of her pecuniary interest therein. Excludes 4,633 unvested options to purchase shares of Common Stock that are not exercisable within 60 days. The business address of Intelmed LLC is 11421 Golden Eagle Court Naples, Florida 34120. 83 (6) Consists of (i) 666 shares of Common Stock held directly by Dr. Regan, (ii) 300,484 shares of Common Stock held by Corvus Capital Limited, and (iii) 1,776 shares of Common Stock held by Algo Holdings, Inc. Dr. Regan is the Chief Executive Officer of Corvus Capital Limited and Algo Holdings, Inc. is a wholly owned subsidiary of Corvus Capital Limited. By virtue of this relationship, Dr. Regan may be deemed to share beneficial ownership of the securities held of record by Corvus Capital Limited and Algo Holdings, Inc. Dr. Regan disclaims any such beneficial ownership except to the extent of his pecuniary interest therein. Pursuant to a participation and inducement agreement with Nirland Limited, the 30,048 shares of Common Stock held by Corvus Capital Limited may, in certain circumstances, be subject to transfer to Nirland Limited and all such shares of Common Stock are subject to a pledge agreement with respect to such arrangement. The business address of Corvus Capital Limited is Floor 2, Willow House, Cricket Square PO Box 709 Grand Cayman KY1-1107, Cayman Islands. (7) Consists of (i) 20,033 shares received pursuant to the Agreement and Plan of Merger, dated as of November 8, 2022 and as amended on January 27, 2023 and May 11, 2023, by and among the Company, Conduit and the Merger Sub and (ii) options to purchase 4,945 shares of Common Stock that are currently exercisable and, (iii) warrants to purchase 6,009 shares of Common Stock. Excludes 6,436 options to purchase shares of Common Stock that are not exercisable within 60 days. (8) Consist of 2,000 shares of common stock and excludes 4,200 options to purchase shares of Common Stock that are not exercisable within 60 days. Item 13. Certain Relationships and Related Transactions, and Director Independence In addition to the compensation arrangements with directors and executive officers described under the sections titled “Executive Compensation” and “Management,” the following is a description of each transaction since January 1, 2023 and each currently proposed transaction, in which: ● we have been or are to be a participant; ● the amount involved exceeds or will exceed $120,000; and ● any of our directors, executive officers, or beneficial holders of more than 5% of our capital stock, or any immediate family member of, or person sharing the household with, any of these individuals (other than tenants or employees), had or will have a direct or indirect material interest. Policies and Procedures for Related Party Transactions Our board of directors adopted a policy, at the closing of the Business Combination, with respect to the review, approval, and ratification of related party transactions. Under the policy, the audit committee of the board of directors is responsible for reviewing and approving related party transactions. In the course of its review and approval of related party transactions, the audit committee will consider the relevant facts and circumstances to decide whether to approve such transactions. In particular, the policy requires the audit committee to consider, among other factors it deems appropriate: ● whether the transaction was undertaken in the ordinary course of business of the Company; 84 ● whether the related party transaction was initiated by the Company, a subsidiary, or the related party; ● whether the transaction with the related party is proposed to be, or was, entered into on terms no less favorable to the Company than terms that could have been reached with an unrelated third party; ● the purpose of, and the potential benefits to the Company of, the related party transaction; ● if the approximate dollar value of the amount involved in the related party transaction, particularly as it relates to the related party; ● the related party’s interest in the related party transaction; ● whether the related party transaction would impair the independence of an otherwise independent director; and ● any other information regarding the related party transaction or the related party that would be material to investors in light of the circumstances of the particular transaction The audit committee may approve the related party transaction only if the audit committee determines in good faith that, under all of the circumstances, the transaction is in the best interests of the Company and its stockholders. Founder Shares On November 16, 2021, the Sponsor, Murphy Canyon Acquisition Sponsor LLC, previously an affiliate of MURF, purchased an aggregate of 43,125 shares of Common Stock for the aggregate price of $25,000 (the “Founder Shares”). The Founder Shares included an aggregate of up to 7,500 shares subject to forfeiture by the Sponsor to the extent that the underwriters’ over-allotment was not exercised in full or in part, or 10,062 shares if the underwriters’ over-allotment was exercised in full, so that the Sponsor would collectively own 20% of the Company’s issued and outstanding shares after the IPO (assuming that, in the IPO, the Sponsor only purchased Class A common stock consisting of (i) the Founder Shares and (ii) the 7,540 shares of Class A common stock included in the units purchased by the Sponsor in connection with the IPO (together, the “Private Shares”). As a result of the underwriters’ election to exercise their over-allotment option, on January 26, 2022, the Sponsor surrendered and forfeited 10,062 Founder Shares. Following such forfeiture, the Sponsor held 33,062 Founder Shares. The Sponsor agreed, subject to certain limited exceptions, not to transfer, assign or sell any of the Founder Shares until the earlier to occur of: (A) six months after the completion of our initial business combination, and (B) subsequent to the initial business combination if we complete a liquidation, merger, stock exchange or other similar transaction that results in all of our public stockholders having the right to exchange their public shares for cash, securities or other property. Notwithstanding the foregoing, the Sponsor shall have the right to transfer its ownership in the Founder Shares at any time to the extent that it determines, in good faith, that such transfer is necessary to ensure that it and/or any of its parents, subsidiaries or affiliates are in compliance with the Investment Company Act of 1940. Private Units Contemporaneously with the closing of the IPO and the exercise of the overallotment option, the Sponsor purchased an aggregate of 754,000 private units of MURF in a private placement at a price of $10.00 per private unit. Each private unit consists of one Private Share and one Private Warrant (the “Private Warrant”). The private units are identical to the units sold in the IPO except that the (a) the placement units and their component securities will not be transferable, assignable or saleable until October 22, 2023 except to permitted transferees and (b) the warrants and rights included as a component of the placement units, so long as they are held by the Sponsor or its permitted transferees, will be entitled to registration rights, respectively. Additionally, the warrants underlying the placement units contain a cashless exercise provision and shall be non-redeemable while held by the initial purchasers thereof or their permitted assignees. The Sponsor had agreed not to transfer, assign or sell any of the private units and underlying securities (except in connection with the same limited exceptions that the Private Shares may be transferred as described above) until after the Business Combination. In connection with completion of the Business Combination, the Sponsor transferred 45,000 placement units (15,000 each) to each of Mrs. Knuettell and Feinberg, former Directors of MURF, and Ms. Chiavacci Farley, former Director of MURF and current Director of Conduit. 85 Sponsor Support Agreement Concurrently with the execution of the Merger Agreement, the Company entered into a support agreement with the Sponsor pursuant to which the Sponsor agreed to, among other things, vote all of the shares of MURF common stock legally and beneficially owned by it in favor of the Business Combination. On September 20, 2023, the Sponsor voted all of the shares of MURF common stock then legally and beneficially owned by it in favor of the Business Combination. PIPE Subscription Agreement In September 2023, concurrently with the completion of the Business Combination, 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 20,000 shares of the Company’s Common Stock and PIPE Warrants (the “PIPE Warrants”) to purchase 20,000 shares of Company Common Stock. In conjunction with the execution of the PIPE Subscription Agreement, Corvus Capital and its affiliates entered into a participation and inducement agreement with the Private Placement Investor whereby Corvus agreed to provide certain payments and economic benefits to such investor in the event Corvus Capital sold or pledged in a debt transaction any of the shares it was receiving in the Business Combination. In certain circumstances, such investor may have a right to cause Corvus Capital to transfer certain of its shares to such investor. The PIPE Subscription Agreement contains registration rights, pursuant to which within 15 business days after the closing of the PIPE Financing, the Company was required to use reasonable best efforts to file with the SEC a registration statement registering the resale of shares of the Company’s common stock. On October 17, 2023, the Company filed a registration statement on Form S-1 (SEC File No. 333-275056) to satisfy that contractual requirement, which registration statement was declared effective by the SEC on December 15, 2023. The PIPE Warrants are exercisable until September 22, 2028 (five years after the completion of the Business Combination) and have an exercise price of $11.50 per share, subject to adjustment as set forth in the PIPE Warrants for stock splits, stock dividends, recapitalizations and similar customary adjustments. The Private Placement Investor may exercise each PIPE Warrant on a cashless basis if the shares underlying the PIPE Warrants are not then registered for resale pursuant to an effective registration statement. The Company common stock and PIPE Warrants to purchase Company common stock issued pursuant to the PIPE Subscription Agreement were not registered under the Securities Act and were issued in reliance upon the exemption provided under Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder. On December 11, 2024, the warrants were modified to reduce the exercise price to $0.0883 and the warrants were exercised on December 31, 2024. 86 Consulting Agreement with Jack K. Heilbron Jack K. Heilbron, who served as the MURF’s Chief Executive Officer, President, and Chairman of the board of directors until September 22, 2023, has entered into a Consulting Agreement (the “Consulting Agreement”) with the Company, which became effective upon the closing of the Business Combination. The Consulting Agreement provides that Mr. Heilbron will provide advisory and consulting services from time to time to the Company until September 22, 2024. Pursuant to the terms of the Consulting Agreement, Mr. Heilbron is entitled to rights as an observer to the Company’s board of directors. Mr. Heilbron is entitled to be paid $25,000 per calendar quarter for his consulting services and is also entitled to a stock option to purchase the number of shares of Common Stock determined by dividing (i) $300,000, by (ii) the per share Black-Scholes valuation as of the grant date, utilizing the same assumptions used in preparation of the financial statements, with the resulting quotient rounded down to the nearest whole share. Mr. Heilbron was award stock options to purchase 30,000 shares of Common Stock on December 1, 2023. As of December 31, 2024, and subsequent agreement between the parties, the Company has paid Mr. Heilbron approximately $25,000 and granted Mr. Heilbron 6,900 shares of the Company’s common stock. Shareholder Support Agreements Concurrently with the execution of the Merger Agreement, MURF, Old Conduit, and certain shareholders of Old Conduit (the “Old Conduit Shareholders”) entered into a certain shareholder support agreement dated November 8, 2022, pursuant to which the Old Conduit Shareholders agreed to vote all Old Conduit shares beneficially owned by them, including any additional shares of Old Conduit they acquire ownership of or the power to vote, in favor of the Business Combination and related transactions. Under the support agreements, each Old Conduit Shareholder also agreed that, prior to the termination of the applicable support agreement, such Old Conduit Shareholder would not transfer or otherwise enter into any agreement or understanding with respect to a transfer relating to any shares of Old Conduit owned by such shareholder. The support agreements automatically terminated on September 22, 2023. Old Conduit Shareholder Lockup Agreements Under the Merger Agreement, as a condition to receiving Common Stock of the Company after the closing of the Business Combination in respect of their Old Conduit shares, certain shareholders of Old Conduit executed lockup agreements pursuant to which such shareholders agreed not to sell, transfer or take certain other actions with respect to such shares of our Common Stock for a period of 180 days after the closing of the Business Combination, subject to certain customary exceptions. Transactions with Corvus Capital Limited Corvus Capital Limited (“Corvus Capital”) received 311,484 shares of our common stock, pursuant to the terms of the Merger Agreement, following the completion of the Business Combination. As of December 31, 2024, Corvus Capital owned 300,484 shares of our Common Stock directly and 1,776 shares of our Common Stock through its wholly-owned subsidiary Algo Holdings, Inc., or in the aggregate approximately 21.8% of the then outstanding shares of our Common Stock. Dr. Andrew Regan, the Chief Executive Officer of Corvus Capital and 100% ultimate beneficial owner, is also a member of our board of directors. 87 August 2024 Nirland Note On August 6, 2024, the Company entered into a Senior Secured Promissory Note (the “August 2024 Nirland Note”) with Nirland, a related party of the Company, pursuant to which the Company issued and sold to Nirland the August 2024 Note in the original principal amount of $2,650,000, inclusive of a $500,000 original issuance discount. Refer to Note 7 for additional details. On October 31, 2024, the Company and Nirland amended the August 2024 Nirland Note, whereby the August 2024 Nirland Note was amended to (i) provide for the conversion of the August 2024 Nirland Note into shares of Common Stock, at Nirland’s discretion, in a multiple of any unpaid amounts, if not otherwise previously paid, pursuant to the conversion rate contained therein, (ii) remove Nirland’s Mandatory Prepayment Right, and (iii) remove Nirland’s right of first refusal to participate in any future equity or debt offerings of the Company. The number of shares of Common Stock issuable upon conversion of any Conversion Amount pursuant to shall be determined by dividing (x) such conversion amount by (y) the conversion price. Conversion amount means two and one quarter times the sum of (x) portion of the principal to be converted, redeemed or otherwise with respect to which this determination is being made and (y) all accrued and unpaid interest with respect to such portion of the principal amount, if any. Conversion price means, as of any conversion date or other date of determination, $10, subject to adjustment as provided within the amended agreement. October 2024 Nirland Note On October 28, 2024, the Company issued a promissory note (the “October 2024 Nirland Note”) to Nirland, a related party, in the original principal amount of $600,000 in exchange for funds in such amount. In connection with the October 2024 Nirland Note, the Company paid Nirland a 1% arrangement fee. The October 2024 Nirland Note bears interest at a rate of 12% per annum, is due and payable semi-annually in arrears, and matures on October 31, 2025. Refer to Note 8 for additional details. Sarborg Agreement On December 12, 2024, the Company entered into the Sarborg Agreement with Sarborg. Under the terms of the Sarborg Agreement, Sarborg will provide algorithmic and cybernetic technology services to Conduit, including the development of decision-support tools and advanced cybernetic systems tailored to enhance Conduit’s decision-making processes and maximize the value of its pharmaceutical asset portfolio. Sarborg will perform the services to Conduit comprised of three phases: the Initial Phase (0-24 weeks) focuses on establishing a foundation for collaboration and aligning Sarborg’s services with Conduit’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 Conduit’s growth through iterative improvements and updates. Sarborg 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 Agreement. The Sarborg Agreement has an initial term of twelve months, commencing on the effective date, and may be renewed or extended upon mutual written agreement of the parties. Either party may terminate the Sarborg Agreement for any reason upon ninety days’ written notice or immediately upon written notice if the other party breaches any material term of the Sarborg 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. In consideration of the services, Conduit has agreed to pay Sarborg an initial cash payment of $200,000 and $200,000 payable through the issuance of 22,727 shares of common stock, determined by the closing price on the day preceding the execution of the Sarborg Agreement. Further milestone payments payable in conjunction with the achievement of certain milestones over the term of the Sarborg Agreement, totaling up to $1,800,000, are payable in cash or shares, at the discretion of Conduit. Sarborg will be reimbursed for pre-approved, necessary, and reasonable out-of-pocket expenses directly incurred in connection with the performance of the services. The Sarborg Agreement includes provisions for the ownership and use of intellectual property. Sarborg will own its pre-existing intellectual property rights, including proprietary tools and methodologies used in the performance of the services. Conduit will own all deliverables resulting from the services performed by Sarborg under the Sarborg Agreement. The Sarborg Agreement provides Sarborg with registration rights for any common stock of Conduit that Sarborg receives as consideration under the Sarborg Agreement. Conduit must use commercially reasonable efforts to prepare and file a registration statement covering the resale of the common stock within sixty days after the issuance of the shares to Sarborg. The Company must cause the registration statement covering such shares to become effective withing ninety days of the filing of the registration statement. The Sarborg Agreement also includes confidentiality obligations, representations and warranties, indemnification, limitation of liability, and insurance requirements. Dr. Andrew Regan, a member of Conduit’s board of directors, also sits on the board of directors of Sarborg. Directors and Officers Certain of the individuals that serve as members of our board of directors since completion of the Business Combination have relationships with MURF, Old Conduit, and/or one of their respective stockholders. Dr. Freda Lewis-Hall, the Chairperson of our board of directors, was an indirect shareholder of Conduit and indirectly received 2,003 shares of our Common Stock upon completion of the Business Combination. Dr. David Tapolczay, our Chief Executive Officer and a member of our board of directors, was a shareholder of Old Conduit and received 2,003 shares of our Common Stock upon completion of the Business Combination. Dr. Tapolczay is also a director of Old Conduit. Dr. Andrew Regan, a member of our board of directors, is a director of Old Conduit and received 67 shares of our Common Stock upon completion of the Business Combination. James Bligh, a member of our board of directors and interim chief financial officer, was an employee of Old Conduit and currently serves as a member of its board of directors. Faith L. Charles, a member of our board of directors, is a partner at Thompson Hine LLP, a law firm that provides legal services to us. On April 22, 2024, the Company issued in a private placement common stock purchase warrants (the “April Warrants”) to third parties, including certain directors, to purchase up to an aggregate of 9,077 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, $12.50 per warrant. 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 $312 (as adjusted from time to time in accordance with the terms thereof) for a two-year period after the date of exercisability. There is no established public trading market for the April Warrants. The issuance of the April Warrants were made in reliance on the exemption from registration provided by Section 4(a)(3) of the Securities Act, and/or Regulation D promulgated thereunder. 88 Item 14. Principal Accountant Fees and Services The following is a summary of fees paid or to be paid to Marcum LLP, or Marcum, for services rendered. Audit Fees . Audit fees consist of fees billed for professional services rendered for the audit of our year-end financial statements and services that are normally provided by Marcum in connection with regulatory filings. The aggregate fees billed by Marcum for professional services rendered for the audit of our annual financial statements for the year ended December 31, 2024 totaled approximately $341,200, and for the year ended December 31, 2023 totaled approximately $440,200. Audit-Related Fees . Audit-related services consist of fees billed for assurance and related services that are reasonably related to performance of the audit or review of our financial statements and are not reported under “Audit Fees.” Audit related fees primarily include review of regulatory documents filed with the SEC. For the year ended December 31, 2024, we paid Marcum audit-related fees totaling approximately $120,170. For the year ended December 31, 2023, we paid Marcum audit-related fees totaling approximately $118,525. Tax Fees . Tax fees consists of fees billed for tax compliance, tax planning and tax advice. We paid Marcum tax fees for the year ended December 31, 2024 totaling approximately $83,405. We did not pay Marcum tax fees for the year ended December 31, 2023. All Other Fees . We did not pay Marcum for other services for the years ended December 31, 2024 or December 31, 2023. Pre-Approval Policy Our audit committee was formed upon the consummation of our initial public offering. As a result, the audit committee did not pre-approve all of the foregoing services, although any services rendered prior to the formation of our audit committee were approved by our board of directors. Since the formation of our audit committee, and on a going-forward basis, the audit committee has and will pre-approve all auditing services and permitted non-audit services to be performed for us by our auditors, including the fees and terms thereof (subject to the de minimis exceptions for non-audit services described in the Exchange Act which are approved by the audit committee prior to the completion of the audit). 89 PART IV Item 15. Exhibits, Financial Statement Schedules The following documents are filed as part of this annual report: 1. Financial Statements: (see “Financial Statements and Supplementary Data” at Item 8 and incorporated herein by reference). 2. Financial Statement Schedule: (Schedules to the Financial Statements have been omitted because the information required to be set forth therein is not applicable or is shown in the accompanying Financial Statements or notes thereto). 3. Exhibits: The exhibits listed in the accompanying “Exhibit Index” are filed or incorporated by reference as part of this Annual Report on Form 10-K. EXHIBIT INDEX Exhibit No. Description 2.1 Agreement and Plan of Merger Agreement dated as of November 8, 2022, by and among Murphy Canyon Acquisition Corp., Conduit Merger Sub, Inc. and Conduit Pharmaceuticals Limited (filed as Annex A-1 to the Registrant’s Proxy Statement/Prospectus filed on August 11, 2023, and incorporated herein by reference). 2.2 Amendment to Agreement and Plan of Merger dated as of January 27, 2023, by and among Murphy Canyon Acquisition Corp., Conduit Merger Sub, Inc. and Conduit Pharmaceuticals Limited (filed as Annex A-2 to the Registrant’s Proxy Statement/Prospectus filed on August 11, 2023, and incorporated herein by reference). 2.3 Second Amendment to Agreement and Plan of Merger dated as of May 11, 2023, by and among Murphy Canyon Acquisition Corp., Conduit Merger Sub, Inc. and Conduit Pharmaceuticals Limited (filed as Annex A-3 to the Registrant’s Proxy Statement/Prospectus filed on August 11, 2023, and incorporated herein by reference). 3.1 Second Amended and Restated Certificate of Incorporation of the Registrant (filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on September 29, 2023, and incorporated herein by reference). 3.2 Amended and Restated Bylaws of the Registrant (filed as Exhibit 3.2 to the Registrant’s Current Report on Form 8-K filed on September 29, 2023, and incorporated herein by reference). 3.3 Amendment No.1 to the Amended and Restated Bylaws (filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on November 19, 2024, and incorporated herein by reference) 3.4 Certificate of Amendment filed with the Delaware Secretary of State on January 22, 2025 (filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on January 23, 2025, and incorporated herein by reference). 4.1* Description of Registered Securities 4.2 Form of Senior Secured Promissory Note (filed as Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed on August 7, 2024, and incorporated herein by reference). 4.4 Form of Warrant (Filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed on November 1, 2024, and incorporated herein by reference). 4.5 Nirland Note (Filed as Exhibit 4.3 to the Registrant’s Current Report on Form 8-K filed on November 1, 2024, and incorporated herein by reference). 4.6 Amendment to the Senior Secured Promissory Note and Security Agreement, dated October 31, 2024, between Nirland Limited and Conduit Pharmaceuticals Inc. (filed as Exhibit 4.4 to the Registrant’s Current Report on Form 8-K filed on November 1, 2024, and incorporated herein by reference). 4.7 Convertible Promissory Note, dated November 25, 2024, between Conduit Pharmaceuticals Inc. and A.G.P./Alliance Global Partners (filed as Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed on November 25, 2024, and incorporated herein by reference). 4.8 Second Amendment to the Senior Secured Promissory Note, dated November 22, 2024, between Conduit Pharmaceuticals Inc. and Nirland Limited (filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed on November 25, 2024, and incorporated herein by reference). 10.1 Letter Agreement, dated February 2, 2022, among Murphy Canyon Acquisition Corp., Murphy Canyon Acquisition Sponsor, LLC, and each of the executive officers and directors of Murphy Canyon Acquisition Corp. (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on February 8, 2022, and incorporated herein by reference). 10.2 Underwriting Agreement (filed as Exhibit 1.1 to the Registrant’s Current Report on Form 8-K filed February 8, 2022, and incorporated herein by reference). 10.3 Promissory Note, dated November 4, 2021, issued to Murphy Canyon Acquisition Sponsor, LLC, by Murphy Canyon Acquisition Corp. (filed as Exhibit 10.2 to the Registrant’s Registration Statement on Form S-1 (File No. 333-262036) filed on January 6, 2022, and incorporated herein by reference). 10.4 Investment Management Trust Agreement, dated February 2, 2022, between Murphy Canyon Acquisition Corp. and Wilmington Trust Company (filed as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed on February 2, 2022, and incorporated herein by reference). 10.5 Registration Rights Agreement, dated February 2, 2022, among Murphy Canyon Acquisition Corp. and certain securityholders (filed as Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed on February 2, 2022, and incorporated herein by reference) 90 10.6 Securities Subscription Agreement, dated November 4, 2021, between Murphy Canyon Acquisition Corp. and Murphy Canyon Acquisition Sponsor, LLC (filed as Exhibit 10.5 to the Registrant’s Registration Statement on Form S-1 (File No. 333-262036) filed on January 6, 2022, and incorporated herein by reference). 10.7 Placement Unit Purchase Agreement, dated February 2, 2022, between Murphy Canyon Acquisition Corp. and Murphy Canyon Acquisition Sponsor, LLC (filed as Exhibit 10.4 to the Registrant’s Current Report on Form 8-K filed on February 8, 2022, and incorporated herein by reference). 10.8 Form of Conduit Pharmaceuticals Inc. Indemnity Agreement (filed as Exhibit 10.9 to the Registrant’s Current Report on Form 8-K filed on September 29, 2023, and incorporated herein by reference). 10.9 Administrative Support Agreement, dated February 2, 2022, by and between Murphy Canyon Acquisition Corp. and Murphy Canyon Management Group, Inc. (filed as Exhibit 10.6 to the Registrant’s Current Report on Form 8-K filed on February 8, 2022, and incorporated herein by reference). 10.10 Form of Lock-Up Agreement (filed as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed on November 14, 2022, and incorporated herein by reference). 10.11 Sponsor Support Agreement, dated as of November 8, 2022, by and among Murphy Canyon Acquisition Corp. and each of the Persons set forth on Schedule I attached thereto (filed as Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed on November 14, 2022, and incorporated herein by reference). 10.12 Shareholder Support Agreement dated as of November 8, 2022, by and among Murphy Canyon Acquisition Corp., Conduit Pharmaceuticals Limited and each of the Persons set forth on Schedule I attached thereto (filed as Exhibit 10.4 to the Registrant’s Current Report on Form 8-K filed November 14, 2022, and incorporated herein by reference). 10.13 Form of Amended and Restated Warrant (filed as Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed on January 30, 2023, and incorporated herein by reference). 10.14 Form of Note, issued March 7, 2023, by and between Murphy Canyon Acquisition Corp. and Murphy Canyon Acquisition Sponsor, LLC (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed March 7, 2023, and incorporated herein by reference). 10.15 Form of Subscription Agreement between Murphy Canyon Acquisition Corp. and the investor named therein (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on September 13, 2023, and incorporated herein by reference). 10.16 Form of PIPE Warrant (filed as Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed on September 13, 2023, and incorporated herein by reference). 10.17# Conduit Pharmaceuticals Inc. 2023 Stock Incentive Plan (filed as Annex C to the Registrant’s Proxy Statement/Prospectus filed on August 11, 2023, and incorporated herein by reference). 10.18# Form of Stock Option Agreement under Conduit Pharmaceuticals Inc. 2023 Stock Incentive Plan (filed as Exhibit 10.17 to the Registrant’s Registration Statement on Form S-4 (File No. 333-271903) filed on May 12, 2023, and incorporated herein by reference). 10.19# Form of Employment Agreement with David Tapolczay (filed as Exhibit 10.17 to the Registrant’s Amendment No. 2 to Registration Statement on Form S-4 (File No. 333-271903) filed on July 28, 2023, and incorporated herein by reference). 10.22+ AZD1656 Project Funding Agreement For Use In Renal Transplant between St George Street Capital Limited and Conduit Pharmaceuticals Limited, dated November 2, 2022 (filed as Exhibit 10.21 to the Registrant’s Registration Statement on Form S-4 (File No. 333-271903) filed on May 12, 2023, and incorporated herein by reference). 10.23+ AZD1656 Project Funding Agreement For Use In Preterm Labor between St George Street Capital Limited and Conduit Pharmaceuticals Limited, dated November 2, 2022 (filed as Exhibit 10.22 to the Registrant’s Registration Statement on Form S-4 (File No. 333-271903) filed on May 12, 2023, and incorporated herein by reference). 10.24+ AZD1656 Project Funding Agreement For Use In Hashimoto’s Thyroiditis between St George Street Capital Limited and Conduit Pharmaceuticals Limited, dated November 2, 2022 (filed as Exhibit 10.23 to the Registrant’s Registration Statement on Form S-4 (File No. 333-271903) filed on May 12, 2023, and incorporated herein by reference). 10.25+ AZD1656 Project Funding Agreement For Use In Uveitis between St George Street Capital Limited and Conduit Pharmaceuticals Limited, dated November 2, 2022 (filed as Exhibit 10.24 to the Registrant’s Registration Statement on Form S-4 (File No. 333-271903) filed on May 12, 2023, and incorporated herein by reference). 91 10.26+ AZD5904 Project Funding Agreement between St George Street Capital Limited and Conduit Pharmaceuticals Limited, dated November 2, 2022 (filed as Exhibit 10.25 to the Registrant’s Registration Statement on Form S-4 (File No. 333-271903) filed on May 12, 2023, and incorporated herein by reference). 10.27# Consulting Agreement between with Jack Heilbron and Murphy Canyon Acquisition Corp. (filed as Exhibit 10.24 to the Registrant’s Amendment No. 1 to Registration Statement on Form S-4 (File No. 333-271903) filed on July 11, 2023, and incorporated herein by reference). 10.28# Form of Non-Employee Director Compensation Program (filed as Exhibit 10.26 to the Registrant’s Amendment No. 2 to Registration Statement on Form S-4 (File No. 333-271903) filed on July 28, 2023, and incorporated herein by reference). 10.29 Separation Agreement, dated May 12, 2024, between Mr. Sragovicz and Conduit Pharmaceuticals Inc. (filed as Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q filed on May 14, 2024, and incorporated herein by reference). 10.30 Security Agreement, dated August 6, 2024, between Nirland Limited and Conduit Pharmaceuticals Inc. (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on August 7, 2024, and incorporated herein by reference). 10.31 Convertible Promissory Note between Conduit Pharmaceuticals Limited and Vrezh and Sharon Lee Isayan, dated March 20, 2023 (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on October 15, 2024, and incorporated herein by reference). 10.32 Bridge Loan Agreement, dated October 29, 2024, between A.G.P./Alliance Global Partners and Conduit Pharmaceuticals (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on November 1, 2024, and incorporated herein by reference). 10.33# Employment Agreement, dated November 15, 2024, between James Bligh, Conduit Pharmaceuticals Limited and Conduit UK Management LTD. (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on November 19, 2024, and incorporated herein by reference). 10.34 Services Agreement dated December 12, 2024, between Conduit Pharmaceuticals Inc. and SARBORG Limited. (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on December 17, 2024, and incorporated herein by reference). 19.1* Conduit Pharmaceuticals, Inc. Insider Trading Policy 21.1 Subsidiaries of Conduit Pharmaceuticals Limited (filed as Exhibit 21.1 to the Registrant’s Amendment No. 2 to Registration Statement on Form S-4 (File No. 333-271903) filed on July 28, 2023, and incorporated herein by reference). 23.1* Consent of Marcum LLP, independent public accounting firm of Conduit Pharmaceuticals Inc. 24.1 Power of Attorney (reference is made to the signature page hereto). 31.1* Certification of Principal Executive Officer pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2* Certification of Principal Financial Officer pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1§ Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 32.2§ Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 97.1 Conduit Pharmaceuticals, Inc. Compensation Recovery Policy (filed as Exhibit 97.1 to the Registrant’s Annual Report filed on April 16, 2024, and incorporated herein by reference). 101.INS* Inline XBRL Instance Document. 101.CAL* Inline XBRL Taxonomy Extension Calculation Linkbase Document. 101.SCH* Inline XBRL Taxonomy Extension Schema Document. 101.DEF* Inline XBRL Taxonomy Extension Definition Linkbase Document. 101.LAB* Inline XBRL Taxonomy Extension Labels Linkbase Document. 101.PRE* Inline XBRL Taxonomy Extension Presentation Linkbase Document. 104 Cover Page Interactive Data File (embedded within the Inline XBRL document). * Filed herewith. # Management contract or compensatory plan or arrangement. + Certain portions of this Exhibit have been omitted in accordance with Item 601(b)(10) of Regulation S-K. The Registrant agrees to furnish supplementally an unredacted copy of this Exhibit to the SEC upon its request. § In accordance with Item 601(b)(32)(ii) of Regulation S-K and SEC Release Nos. 33-8238 and 34-47986, Final Rule: Management’s Reports on Internal Control Over Financial Reporting and Certification of Disclosure in Exchange Act Periodic Reports, the certifications furnished in Exhibits 32.1 and 32.2 hereto is deemed to accompany this Annual Report on Form 10-K and will not be deemed “filed” for purposes of Section 18 of the Exchange Act. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference. Item 16. Form 10–K Summary None. 92 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. CONDUIT PHARMACEUTICALS INC. Date: March 28, 2025 By: /s/ David Tapolczay Name: David Tapolczay Title: Chief Executive Officer POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints David Tapolczay and James Bligh, and each of them, as his or her attorneys-in-fact, with the power of substitution, for him or her in any and all capacities, to sign any amendments to this report, and to file the same, with exhibits thereto and other documents in connection therewith with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorneys-in-fact, and each of them, or his or her substitute or substitutes may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Title Date /s/ David Tapolczay Chief Executive Officer and Director March 28, 2025 David Tapolczay (Principal Executive Officer) /s/ James Bligh Interim Chief Financial Officer March 28, 2025 Jamie Bligh (Principal Financial Officer and Principal Accounting Officer) /s/ Freda Lewis-Hall Director and Chairperson of the Board of Directors March 28, 2025 Freda Lewis-Hall /s/ James Bligh Director March 28, 2025 James Bligh /s/ Faith L. Charles Director March 28, 2025 Faith L. Charles /s/ Chele Chiavacci Farley Director March 28, 2025 Chele Chiavacci Farley /s/ Simon Fry Director March 28, 2025 Simon Fry /s/ Andrew Regan Director March 28, 2025 Andrew Regan 93 CONDUIT PHARMACEUTICALS INC. INDEX TO FINANCIAL STATEMENTS Page Audited Financial Statements of Conduit Pharmaceuticals Inc.: Report of Independent Registered Public Accounting Firm (PCAOB No. 688 ) F-2 Consolidated Balance Sheets as of December 31, 2024 and 2023 F-3 Consolidated Statements of Operations and Comprehensive Income (Loss) for the years ended December 31, 2024 and 2023 F-4 Consolidated Statements of Changes in Stockholders’ Deficit for the years ended December 31, 2024 and 2023 F-5 Consolidated Statements of Cash Flows for the years ended December 31, 2024 and 2023 F-7 Notes to Financial Statements F-8 F- 1 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders and Board of Directors of Conduit Pharmaceuticals Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Conduit Pharmaceuticals Inc. (the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of operations and comprehensive income (loss), stockholders’ deficit and cash flows for each of the two years in the period ended December 31, 2024, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America. Explanatory Paragraph – Going Concern The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As more fully described in Note 1, the Company has a significant working capital deficiency, has incurred significant losses and needs to raise additional funds to meet its obligations and sustain its operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ Marcum LLP Marcum LLP We have served as the Company’s auditor since 2022. Morristown, NJ March 28, 2025 F- 2 CONDUIT PHARMACEUTICALS INC. CONSOLIDATED BALANCE SHEETS (in thousands, except share amounts) December 31, 2024 December 31, 2023 ASSETS Current assets Cash and cash equivalents $ 554 $ 4,228 Prepaid expenses 2,161 1,505 Total current assets 2,715 5,733 Operating lease right-of-use assets. net 263 - Property, plant and equipment, net 40 - Prepaid expenses and other long-term assets 1,175 1,491 Total assets $ 4,193 $ 7,224 LIABILITIES AND STOCKHOLDERS’ DEFICIT Current liabilities Accounts payable $ 1,428 $ 215 Accrued expenses and other current liabilities 1,963 601 Operating lease liability, current portion 119 - Convertible promissory note payable 800 800 Convertible promissory notes payable at fair value 2,985 - Convertible promissory notes payable at fair value – related parties 2,871 - Convertible promissory notes payable at fair value 2,871 - Notes payable 150 185 Notes payable – related parties 425 - Notes payable 425 - Total current liabilities 10,741 1,801 Operating lease liability, non-current portion 107 - Derivative warrant liability 138 142 Deferred commission payable - 5,738 Total liabilities 10,986 7,681 Commitments and contingencies (see note 15) - - Stockholders’ deficit Common stock, par value $ 0.0001 ; 250,000,000 shares authorized at December 31, 2024 and December 31, 2023, respectively, 1,384,801 shares and 738,295 shares issued and outstanding at December 31, 2024 and December 31, 2023, respectively 14 7 Preferred stock, par value $ 0.0001 ; 1,000,000 shares authorized at December 31, 2024 and December 31, 2023, respectively; nil shares issued and outstanding at December 31, 2024 and December 31, 2023 - - Additional paid-in capital 21,880 10,424 Accumulated deficit ( 29,101 ) ( 11,299 ) Accumulated other comprehensive income 414 411 Total stockholders’ deficit ( 6,793 ) ( 457 ) Total liabilities and stockholders’ deficit $ 4,193 $ 7,224 The accompanying notes are an integral part of these consolidated financial statements. F- 3 CONDUIT PHARMACEUTICALS INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS ) (in thousands, except share amounts and per share data) 2024 2023 Year Ended December 31, 2024 2023 Operating expenses: Research and development expenses $ 3,378 $ 90 General and administrative expenses 12,041 5,172 Total operating costs and expenses 15,419 5,262 Operating loss ( 15,419 ) ( 5,262 ) Other income (expenses): Other income (expense), net ( 890 ) 4,923 Interest income 13 15 Interest expense, net ( 1,506 ) ( 211 ) Total other (expense) income, net ( 2,383 ) 4,727 Net income (loss) $ ( 17,802 ) $ ( 535 ) Less: Change in fair value and income impact of option liabilities - ( 5,521 ) Net income (loss) - diluted ( 17,802 ) ( 6,056 ) Basic earnings/(net loss) per share $ ( 20.53 ) $ ( 0.79 ) Diluted earnings/(net loss) per share $ ( 20.53 ) $ ( 8.92 ) Basic weighted-average common shares outstanding 867,096 669,739 Diluted weighted-average common shares outstanding 867,096 678,939 Comprehensive income (loss): Foreign currency translation adjustment 3 ( 264 ) Total comprehensive income (loss) $ ( 17,799 ) $ ( 799 ) The accompanying notes are an integral part of these consolidated financial statements. F- 4 CONDUIT PHARMACEUTICALS INC. CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT (in thousands, except share amounts) Shares Amount capital deficit income deficit Common stock Additional paid-in Accumulated Accumulated other comprehensive Total stockholders’ Shares Amount capital deficit income deficit Balance at January 1, 2023 20 $ - $ - $ ( 10,764 ) $ 675 $ ( 10,089 ) Retroactive application of Merger 646,244 6 ( 6 ) - - - Reclassification of additional paid-in-capital ** - - 6 ( 6 ) - - Adjusted Balances, beginning of period * 646,264 $ 6 $ - $ ( 10,770 ) $ 675 $ ( 10,089 ) Reclassification of additional paid-in-capital *** - - ( 6 ) 6 - - Issuance of Conduit Pharmaceuticals Inc. common stock to holders of Conduit Pharmaceuticals Limited convertible notes on the Closing Date (Note 2) 3,735 - 3,685 - - 3,685 Issuance of common stock upon conversion of MURF Class A & Class B common stock in connection with merger (Note 2) 41,183 1 ( 15,219 ) - - ( 15,218 ) Issuance of Conduit Pharmaceuticals Inc. common stock in connection with PIPE Financing (Note 2) 20,000 - 19,779 - - 19,779 Issuance of Conduit Pharmaceuticals Inc. common stock to Cizzle Biotechnology Holding PLC 3,955 - 151 - - 151 Issuance of Conduit Pharmaceuticals Inc. common stock to Vela Technologies PLC 10,158 - 544 - - 544 Issuance of Conduit Pharmaceuticals Inc. common stock to an advisor for services directly related to the Merger (Note 2) 13,000 - - - - - Reduction of excise tax liability associated with the Merger (Note2) - - 1,141 1,141 Capital contribution - related party - - 150 - - 150 Stock-based compensation - - 199 - - 199 Foreign currency translation adjustment - - - ( 264 ) ( 264 ) Net loss - - - ( 535 ) - ( 535 ) Balance at December 31, 2023 738,295 $ 7 $ 10,424 $ ( 11,299 ) $ 411 $ ( 457 ) * Shares of legacy common stock have been retroactively restated to give effect to the Merger. ** Reclassification is made as additional paid-in capital cannot be presented as a negative for either its beginning or ending balance. *** Reclassification is made as the impact of the retroactive application of the Merger can be shown as a reduction to additional paid-in capital during the period as presenting the reduction does not result in additional paid-in capital being presented as a negative for its ending balance. F- 5 Common stock Additional paid-in Accumulated Accumulated other comprehensive Total stockholders’ Shares Amount capital deficit income deficit Balance at January 1, 2024 738,295 $ 7 $ 10,424 $ ( 11,299 ) $ 411 $ ( 457 ) Balance 738,295 $ 7 $ 10,424 $ ( 11,299 ) $ 411 $ ( 457 ) Correction of immaterial error related to franchise tax expense - - 144 144 Issuance of Common Stock for services 19,500 - 242 - - 242 Issuance of Common Stock upon vesting of restricted stock units 745 - - - - - Issuance of Common Stock for note payable 95,045 2 995 - - 997 Issuance of Common Stock for licensing right 125,000 1 1,567 - - 1,568 Issuance of Common Stock under the ATM Program 323,273 3 3,218 - - 3,221 Issuance of Common Stock in Exchange for Debt Modification 39,193 1 488 - - 489 Issuance of Common Stock upon Exercise of Conversion Option 23,000 - 92 - - 92 Issuance of Warrants - - 2,890 - - 2,890 Issuance of Common Stock Upon Exercise of Warrants 20,000 - 188 - - 188 Stock-based compensation 750 - 1,632 - - 1,632 Foreign currency translation adjustment - - - - 3 3 Net loss - - - ( 17,802 ) - ( 17,802 ) Balance at December 31, 2024 1,384,801 $ 14 $ 21,880 $ ( 29,101 ) $ 414 $ ( 6,793 ) Balance 1,384,801 $ 14 $ 21,880 $ ( 29,101 ) $ 414 $ ( 6,793 ) The accompanying notes are an integral part of these consolidated financial statements. F- 6 CONDUIT PHARMACEUTICALS INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) 2024 2023 Year Ended December 31, 2024 2023 Cash flows from operating activities: Net loss $ ( 17,802 ) $ ( 535 ) Adjustments to reconcile net loss to net cash used in operating activities: Gain on change in fair value of Cizzle option - ( 1,280 ) Gain on change in fair value of Vela option - ( 970 ) Loss on issuance of Vela option - 987 Change in reserve for related party uncollectible loan - ( 240 ) Loss on debt extinguishment, net 707 - Loss on related party loan forgiveness - 12 Realized gain on short-term investments ( 8 ) - Unrealized foreign exchange gain 13 ( 39 ) Loss (gain) on change in fair value of convertible notes payable ( 2,018 ) 426 Gain on change in FV of the warrants ( 221 ) ( 81 ) Non-cash reduction of deferred income upon exercise of option liability - ( 4,254 ) Loss on issuance of warrants 2,710 - Non-cash lease expense 89 - Stock-based compensation expense 1,632 199 Issuance of Common Stock for licensing right 1,568 - Non-cash interest expense 536 87 Depreciation expense 10 - Amortization of financed Directors and Officers insurance 1,666 479 Amortization Expense 447 - Amortization of debt discount 929 - Issuance of common stock for services 202 - Changes in operating assets and liabilities: Prepaid expenses and other current assets ( 2,273 ) ( 990 ) Accounts payable 1,225 215 Accrued expenses and other current liabilities 1,030 ( 1,746 ) Lease liability ( 124 ) - Intangible assets - 5 Net cash flows from operating activities ( 9,682 ) ( 7,725 ) Cash flows from investing activities: Issuance of loan - related party - ( 357 ) Purchases of property and equipment ( 51 ) - Purchases of short-term investments ( 490 ) - Proceeds from the sale of short-term investments 498 - Proceeds from issuance of option - 497 Proceeds from loan repayment - related party - 585 Net cash flows from investing activities ( 43 ) 725 Cash flows from financing activities: Proceeds from Merger and related PIPE Financing, net of transaction costs - 8,493 Proceeds from the issuance of notes payable – related parties 2,626 - Proceeds from the issuance of notes payable – related parties 600 - Capital contribution - related party - 150 Proceeds from issuance of common shares related to ATM program 3,328 - Exercise of warrants 176 - Repayment of notes payable ( 776 ) - Proceeds from issuance of warrants 113 - Proceeds from issuance of convertible promissory note payable, carried at cost - 2,286 Net cash flows from financing activities 6,067 10,929 Net change in cash and cash equivalents before effect of exchange rate changes ( 3,658 ) 3,929 Effect of exchange rate changes on cash and cash equivalents ( 16 ) 299 Net change in cash ( 3,674 ) 4,228 Cash and cash equivalents at beginning of period 4,228 - Cash and cash equivalents at end of period $ 554 $ 4,228 Non-cash investing and financing activities Right of Use Asset obtained in exchange for Operating Lease Liabilities $ 352 $ - Correction of immaterial error related to franchise tax expense $ 144 $ - Issuance of Common Stock upon exercise of conversion option $ 92 $ - Issuance of Common Stock in exchange for debt extension $ 489 $ - Conversion of deferred commission payable to convertible promissory note $ 5,378 $ - Issuance of Conduit Pharmaceuticals Inc. common stock to Cizzle Biotechnology Holding PLC upon exercise of option $ - $ 151 Issuance of Conduit Pharmaceuticals Inc. common stock to Vela Technologies PLC upon exercise of option $ - $ 544 Exchange of Conduit Pharmaceuticals Limited convertible notes for shares of Conduit Pharmaceuticals Inc. common stock in connection with the Merger $ - $ 3,685 Deferred Underwriting Costs $ - $ 5,738 Prepaid expense of directors and officers insurance paid out of PIPE financings proceeds in connection with the Merger $ - $ 2,253 Accumulated deficit assumed to APIC as a result of the business combination $ - $ 6,124 Initial value of warrant liabilities issued in connection with PIPE Financing $ - $ 223 Non-Cash Assets Assumed in the Merger Financing $ - 91 Non-Cash Liabilities Assumed in the Merger Financing $ - 124 Supplemental Cash Disclosures Cash paid for interest $ 80 124 The accompanying notes are an integral part of these consolidated financial statements. F- 7 CONDUIT PHARMACEUTICALS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Nature of the Business, Basis of Presentation and Summary of Significant Accounting Policies Conduit Pharmaceuticals Inc., a Delaware corporation (“Conduit” or the “Company”), is a clinical-stage specialty biopharmaceutical company that was formed to facilitate the development and commercialization of clinical assets. The Company has developed a unique business model that allows it to act as a conduit to bring clinical assets from pharmaceutical companies and develop new treatments for patients. Our novel approach addresses unmet medical needs and lengthens the intellectual property for our existing assets through cutting-edge solid-form technology with the expectation of commercializing these products with life science companies. Our initial development plan is to conduct a Phase II clinical trial on AZD1656 in Lupus (including Lupus Nephritis) and ANCA Vasculitis (AAV). We anticipate developing our Initial Pipeline (which has already undergone pre-clinical and clinical trials) through the Phase II stage and then monetizing such clinical assets through a license, royalty, or other transaction at this stage. At this time, we do not expect that we will commercialize any clinical assets or seek marketing approval from the FDA (or similar organizations) as we intend to enter into agreements with third parties following Phase II clinical trials for each such clinical asset that would provide that such third party would pursue the further development, commercialization, and marketing of such assets. Merger Agreement On September 22, 2023 (the “Closing Date”), a merger transaction between Conduit Pharmaceuticals Limited (“Old Conduit”), Murphy Canyon Acquisition Corp (“MURF”) and Conduit Merger Sub, Inc., a Cayman Islands exempted company and a wholly owned subsidiary of MURF (“Merger Sub”), was completed (the “Merger”, see Note 2) pursuant to the initial merger agreement dated November 8, 2022 and subsequent amendments to the merger agreement dated January 27, 2023 and May 11, 2023 (together, the “Merger Agreement”). Pursuant to the terms of the Merger Agreement, on the Closing Date, (i) Merger Sub merged with and into Old Conduit, with Old Conduit surviving the merger as a wholly-owned subsidiary of MURF, and (ii) MURF changed its name from Murphy Canyon Acquisition Corp. to Conduit Pharmaceuticals Inc. The common stock of the Company (the “Common Stock”) commenced trading on The Nasdaq Global Market under the symbol “CDT” on September 25, 2023, and the Company’s warrants commenced trading on The Nasdaq Capital Market under the symbol “CDTTW” on September 25, 2023. On March 7, 2025, the Company filed an application to list our Common Stock on The Nasdaq Capital Market as part of our plan to regain compliance with all NASDAQ rules. See Note 20 for additional details. The Merger was accounted for as a reverse recapitalization in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Under the reverse recapitalization method, MURF was treated as the acquired company for financial reporting purposes, and the accounting acquirer was assumed to have issued shares of stock for the net assets of MURF, with no goodwill or other intangible assets recorded. Basis of Presentation The accompanying consolidated financial statements have been prepared by the Company in accordance with 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 consolidated financial statements are to the FASB Accounting Standards Codifications (“ASC”) and Accounting Standards Update (“ASUs”). Principles of Consolidation The accompanying consolidated financial statements include the accounts of Conduit Pharmaceuticals, Inc. and its wholly owned subsidiaries Conduit UK Management Ltd. (United Kingdom) and Conduit Pharmaceuticals, Ltd. (Cayman Islands). As used herein, references to the “Company” include references to Conduit Pharmaceuticals, Inc, and its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Liquidity and Going Concern In 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 December 31, 2024, the Company had an accumulated deficit of $ 29.1 million. As of December 31, 2024 and December 31, 2023, the Company had cash and cash equivalents and short-term investments of $ 0.6 million and $ 4.2 million, respectively. For the year ended December 31, 2024 and 2023, the Company had net operating losses of $ 15.4 million and $ 5.3 million, respectively, and cash used in operating activities of $ 9.7 million and $ 7.7 million, respectively. Management has determined that it does not have sufficient cash and other sources of liquidity to fund its current business plan. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern for at least the next 12 months from the financial statement filing date. The 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 (the “Sales Agreement”) of $ 12.0 million (See Note 20), as of the financial statement release date. 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. 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. These financial statements have been prepared assuming the Company will continue as a going concern and do not include adjustments to reflect the possible effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty. Reverse Stock Split On January 24, 2025, the Company amended its Second Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware in order to effect a 1-for-100 reverse stock split of its outstanding shares of common stock (the “Reverse Stock Split”). As a result of the reverse stock split, every 100 shares of the Company’s common stock issued or outstanding were automatically reclassified into one new share of common stock, subject to the treatment of fractional shares as described below, without any action on the part of the holders. All historical share and per-share amounts reflected throughout the accompanying consolidated financial statements and other financial information in this Annual Report on Form 10-K have been retroactively adjusted to reflect the 2025 Reverse Stock Split as if the split occurred as of the earliest period presented. The Reverse Stock Split did not affect the number of authorized shares of common stock or the par value of the common stock. No fractional shares were issued in connection with the Reverse Stock Split. Stockholders who would otherwise have been entitled to receive fractional shares as a result of the Reverse Stock Split were entitled to a cash payment in lieu thereof at a price equal to the fraction to which the stockholder would otherwise be entitled multiplied by the closing price per share of the common stock (as adjusted to give effect to the Reverse Stock Split) on The Nasdaq Global Market on January 24, 2025. F- 8 Other Risks and Uncertainties The Company is subject to risks common to companies in the development stage and pharmaceutical industry including, but not limited to, uncertainties related to pre-clinical and clinical outcomes competitor products, regulatory approvals, dependence on key products, dependence on key suppliers and protection of intellectual property rights (see note 15 for details on a claim against our AZD 1656 co-crystal patent). Clinical assets currently under development will require significant additional research and development efforts, including extensive preclinical and clinical testing and regulatory approval prior to commercialization. These efforts will require significant amounts of additional capital, adequate personnel, infrastructure, and extensive compliance and reporting capabilities. Even if the Company’s efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from royalties or product sales. The Company licenses clinical assets from AstraZeneca. See Note 10. If there is a breach or other termination of such agreements, there could be a material adverse effect on the Company’s business, financial condition, operating results, and prospects. The Company is also subject to risks associated with the Nasdaq Stock Market Correspondence and Subsequent Nasdaq Capital Market Listing. See note 20 for further details. Summary of Significant Accounting Policies Cash and Cash Equivalents Cash and cash equivalents are primarily maintained with major financial institutions in the United States, United Kingdom, and Switzerland. The Company 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. The Switzerland bank accounts holding cash balances are uninsured, and the UK bank account, with a year-end balance of approximately £ 100,000 (or approximately $ 125,000 ) exceeds the country’s deposit limit of £ 85,000 (approximately $ 107,000 ). 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 banks. The Company has not experienced any losses on any accounts through the year ended December 31, 2024. The Company had $ 0.6 million and $ 4.2 million in cash and cash equivalents on hand as of December 31, 2024 and December 31, 2023, respectively. As of December 31, 2024, $ 0.2 million of the Company’s $ 0.6 million cash and cash equivalents balance was invested in money market funds. The money market funds do not have significant liquidity restrictions that would require the exclusion from cash and cash equivalents. Property, Plant and Equipment Property, plant and equipment are initially recorded at cost. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets or, for leasehold improvements, the life of the lease, if shorter. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in other income or expense for the period. As of December 31, 2024, property, plant and equipment primarily consisted of leasehold improvements. Leases In accordance with ASC 842, Leases (ASC 842), the Company records a right-of-use (ROU) asset and a lease liability on the balance sheet for all leases with terms longer than 12 months and classifies them as either operating or finance leases. At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present and the classification of the lease including whether the contract involves the use of a distinct identified asset, whether the Company obtains the right to substantially all the economic benefit from the use of the asset, and whether the Company has the right to direct the use of the asset. Leases with a term greater than one year are recognized on the balance sheet as ROU assets, lease liabilities and, if applicable, long-term lease liabilities. The Company has elected not to recognize on the balance sheet leases with terms of one year or less under practical expedient in paragraph ASC 842-20-25-2. For contracts with lease and non-lease components, the Company has elected not to allocate the contract consideration, and to account for the lease and non-lease components as a single lease component. Lease liabilities and their corresponding ROU assets are recorded based on the present value of lease payments over the expected lease term. The implicit rate within our operating leases is generally not determinable and, therefore, the Company uses the incremental borrowing rate at the lease commencement date to determine the present value of lease payments. The determination of the Company’s incremental borrowing rate requires judgment. The Company determines the incremental borrowing rate for each lease using our estimated borrowing rate, adjusted for various factors including level of collateralization, term and currency to align with the terms of the lease. The operating lease ROU asset also includes any lease prepayments, offset by lease incentives. An option to extend the lease is considered in connection with determining the ROU asset and lease liability when it is reasonably certain we will exercise that option. An option to terminate is considered unless it is reasonably certain we will not exercise the option. F- 9 Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and related disclosures of contingent assets and liabilities at the date of the financial statements as well as the reported amounts of revenues and expenses during the reporting period. Estimates are based on several factors including the facts and circumstances available at the time the estimates are made, historical experience, risk of loss, general economic conditions and trends, and the assessment of the probable future outcome. Actual results could differ materially from such estimates. Estimates and assumptions are reviewed periodically by management and changes in estimates are made as management becomes aware of changes in circumstances surrounding the estimates. The effects of changes are reflected in the financial statements in the period that they are determined. Fair Value Measurements ASC Topic 820, Fair Value Measurements and Disclosures , defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. Fair value is to be determined based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. In determining fair value, the Company used various valuation approaches. A fair value hierarchy has been established for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are those that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs reflect the Company’s assumption about the inputs that market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The fair value hierarchy is categorized into three levels, based on the inputs, as follows: ● Level 1—Valuations based on quoted prices for identical instruments in active markets. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these instruments does not entail a significant degree of judgment. ● Level 2— Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for either similar instruments in active markets, identical or similar instruments in markets that are not active, or model-derived valuations whose inputs or significant value drivers are observable or can be corroborated by observable market data. ● Level 3—Valuations based on inputs that are unobservable. These valuations require significant judgment. The Company’s Level 1 assets consist of cash and cash equivalents, including money market funds, in the accompanying balance sheets and the value of accrued expenses and other current liabilities approximate fair value due to the short-term nature of these assets and liabilities. As of December 31, 2024, 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. As of December 31 2023, the Company has one financial liability, a warrant liability for which the fair value is determined based on Level 2 inputs as such 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. See Note 3 for further information on the Company’s financial liabilities carried at fair value. F- 10 Fair Value Option The 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 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 consolidated statement of operations and comprehensive income (loss). Any changes in fair value caused by instrument-specific credit risk are presented separately in other comprehensive income. During the year ended December 31, 2024, the Company did not record any changes in fair value related to instrument-specific credit risk. Research and Development Research and development expenses consist primarily of costs incurred in connection with the research and development of our clinical assets and programs, see Note 10 for further discussion of research and development expense. Conduit holds all licenses to conduct clinical research through a third-party pharmaceutical company. The Company expenses research and development costs and intangible assets acquired that have no alternative future use as incurred. These expenses include: ● expenses incurred under agreements with organizations that support the Company’s drug discovery and development activities; ● expenses 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; ● costs 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; ● the costs of acquiring and manufacturing nonclinical and clinical trial materials, including manufacturing registration and validation batches; ● employee-related expenses, including salaries, related benefits and equity-based compensation expense, for employees engaged in research and development functions; ● acquisition costs related to the purchase of licensed intellectual property; ● costs related to compliance with quality and regulatory requirements; ● payments made under third-party licensing agreements; and ● direct and allocated costs related to facilities, information technology, personnel and other overhead. Advance payments that we make for goods or services to be received in the future for use in research and development activities are recorded as prepaid expenses. 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. General and Administrative Expenses General and administrative expenses consist primarily of salaries and related costs for personnel in executive management, finance, corporate and business development, and administrative functions. General and administrative expenses also include legal fees relating to patent and corporate matters; professional fees for accounting, auditing, tax, and administrative consulting services; insurance costs; administrative travel expenses and other operating costs. Income Taxes 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 consolidated statements of operations and comprehensive income (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 settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the consolidated statements of operations and comprehensive income (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. F- 11 Earnings/(Net Loss) per Share The Company calculates basic and diluted earnings/(net loss) per share under ASC Topic 260, Earnings Per Share . Basic earnings/(net loss) per share is computed by dividing the net income/(loss) by the number of weighted-average common shares outstanding for the period. Diluted earnings/(net loss) is computed by adjusting net income/(loss) based on the impact of any dilutive instruments. Diluted earnings/(net loss) per share is computed by dividing the diluted net income/(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 income/(loss) per share, the numerator is adjusted to eliminate the effects that have been recorded in net income/(loss) (net of tax, if any) attributable to any liability-classified dilutive instruments. Warrants The Company determines the accounting classification of Warrants as either liability or equity by first assessing whether the Warrants meet liability classification in accordance with ASC 480, Distinguishing Liabilities from Equity (“ASC 480”). Under ASC 480, a financial instrument that embodies an unconditional obligation, or a financial instrument other than an outstanding share that embodies a conditional obligation, that the issuer must or may settle by issuing a variable number of its equity shares must be classified as a liability (or an asset in some circumstances) if, at inception, the monetary value of the obligation is based solely or predominantly 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. If financial instruments, such as the Warrants, are not required to be classified as liabilities under ASC 480, the Company assesses whether such instruments are indexed to the Company’s own stock under ASC 815-40. In order for an instrument to be considered indexed to an entity’s own stock, its settlement amount must always equal the difference between the following: (a) the fair value of a fixed number of the Company’s equity shares, and (b) a fixed monetary amount or a fixed amount of a debt instrument issued by the Company. 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. The Equity Classified Warrants are recorded in stockholders’ deficit and the Liability Classified Warrants are recorded as liabilities in the Consolidated Balance Sheet. The Liability Classified Warrants are remeasured each period with changes in fair value recorded in the Consolidated Statements of Operations and Comprehensive Income (Loss). Foreign Currency Translation The 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’ 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). F- 12 Emerging Growth Company Status The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that: (i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, these financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates. Following the Merger, the Company will remain an emerging growth company, as defined by the Jumpstart Our Business Startups act of 2012, until the earliest of (i) the last day of the combined entity’s first fiscal year following the fifth anniversary of the completion of MURF’s initial public offering (the “MURF IPO”), (ii) the last day of the fiscal year in which the combined entity has total annual gross revenue of at least $1.235 billion, (iii) the last day of the fiscal year in which the combined entity is deemed to be a large accelerated filer, which means the market value of the combined entity’s common stock that is held by non-affiliates exceeds $700.0 million as of the prior December 31st or (iv) the date on which the combined entity has issued more than $1.0 billion in non-convertible debt securities during the prior three year period. Recently Adopted Accounting Pronouncements In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) (“ASU 2023-07”), which enhances the segment disclosure requirements for public entities on an annual and interim basis. Under this proposal, public entities are required to disclose significant segment expenses that are regularly provided to the chief operating decision maker (the “CODM”) and included within each reported measure of segment profit or loss. Additionally, current annual disclosures about a reportable segment’s profit or loss and assets will be required on an interim basis. Entities are also required to disclose information about the CODM’s title and position at the Company along with an explanation of how the CODM uses the reported measures of segment profit or loss in their assessment of segment performance and deciding whether how to allocate resources. Finally, ASU 2023-07 requires all segment disclosures for public entities, even those with a single reportable segment. The amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and should be applied on a retrospective basis to all periods presented. As of December 31, 2024, the Company only has one reportable segment. The Company adopted this accounting standard as of January 1, 2024. See Note 19 for the Company’s segments disclosures. F- 13 Recently Issued Accounting Standards Not Yet Adopted In 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. The standard is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of ASU 2023-09 on its consolidated financial statements. In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which is intended to provide more detailed information about specified categories of expenses (purchases of inventory, employee compensation, depreciation and amortization) included in certain expense captions presented on the consolidated statements of operations and comprehensive income (loss). The guidance in this ASU is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The amendments may be applied either (1) prospectively to financial statements issued for periods after the effective date of this ASU or (2) retrospectively to all prior periods presented in the consolidated financial statements. The Company is currently evaluating the impact that the adoption of ASU 2024-03 will have on its consolidated financial statements and disclosures. 2. Merger and Financing As discussed in Note 1 – Nature of the Business, Basis of Presentation and Summary of Significant Accounting Policies , on September 22, 2023, the Company and MURF completed the Merger. Upon the closing of the Merger, the following occurred: ● Each share of Old Conduit common stock issued and outstanding immediately prior to the closing of the Merger, which totaled 2,000 shares, was exchanged for the right to receive 323 shares of the Company’s Common Stock (“Common Stock”) resulting in the issuance of 646,264 shares of Conduit Pharmaceuticals, Inc. Common Stock. ● In addition to the shares issued to legacy Conduit shareholders noted above, an additional 3,735 shares of Common Stock was issued to Conduit convertible note holders, resulting in a total of 650,000 shares of Common Stock being issued to Conduit shareholders and holders of Conduit convertible notes payable. ● In connection with the Merger, 450 shares of MURF Class A common stock held by the MURF Sponsor was transferred to MURF Directors. Each share was exchanged on a one-for-one basis for shares of Common Stock. ● Each share of MURF Class A common stock held by the MURF Sponsor prior to the closing of the Merger, which totaled 7,090 shares, was exchanged for, on a one-for-one basis for shares of Common Stock. ● Each share of MURF common stock subject to possible redemption that was not redeemed prior to the closing of the Merger, which totaled 580 shares, was exchanged for, on a one-for-one basis for shares of Common Stock. ● In connection with the Merger, 33,062 shares of MURF Class B common stock held by the Sponsor was automatically converted into shares of MURF Class A common stock and then subsequently converted into shares of Common Stock on a one-for-one basis. F- 14 ● In connection with the Merger, A.G.P./Alliance Global Partners (“A.G.P.”), whom acted as a financial advisor to both MURF and Conduit, was due to receive (i) a cash fee of $ 6.5 million, 13,000 shares of Common Stock and warrants to purchase 540 shares of Common Stock at an exercise price of $ 1,100 per share pursuant to its engagement agreement with Conduit entered into on August 2, 2022 and (ii) $ 4.6 million of deferred underwriting fees as a result of its engagement for MURF’s initial public offering. Upon closing of the Merger, A.G.P. received a cash payment of $ 5.6 million, 13,000 shares of Common Stock, and 540 warrants to purchase 540 shares of Common Stock. The remaining $ 5.7 million of cash payments due to A.G.P upon closing of the Merger was deferred and to be paid on or before March 21, 2025, with annual interest of 5.5 %. The remaining cash payments due, which were directly attributable to the Merger, were accounted for as a liability with an offset to additional paid-in capital in accordance with SAB Topic 5.A on the Company’s consolidated balance sheet. See Note 7 for discussion of amendment of the note that took place during the year ended December 31, 2024. ● In connection with the Merger, MURF entered into subscription agreements (the “Subscription Agreements”) with certain accredited investors (the “PIPE Investors”) for an aggregate of 20,000 units, with each unit consisting of one share of Company common stock (the “PIPE Shares”), together with one warrant exercisable into one share of Company common stock (the “PIPE Warrants”), at a purchase price of $ 1,000 per unit, for an aggregate purchase price of $ 20,000,000 (the “PIPE Financing”). Upon the closing of the PIPE Financing (which closed in connection with the closing of the Merger), the Company received $ 20.0 million in cash from the PIPE Financing, which was used to settle related party promissory notes issued by MURF to the MURF Sponsor and an affiliate of the MURF Sponsor as well as transaction costs. ● The proceeds received by the Company from the Merger and PIPE Financing, net of transaction costs, and other payments for existing liabilities and prepayments, totaled $8.5 million. ● The Merger was accounted for as a reverse recapitalization in accordance with U.S. GAAP. Under this method of accounting, MURF was treated as the acquired company for financial reporting purposes (see Note 1 for further details). Accordingly, for accounting purposes, the Merger was treated as the equivalent of the Company issuing shares for the net assets of MURF, accompanied by a recapitalization. The net assets of MURF were stated at historical cost with no goodwill or other intangible assets recorded. The following table presents the total Common Stock outstanding immediately after the closing of the Merger: Schedule of Common Stock Outstanding Number of Shares Exchange of MURF common stock subject to possible redemption for Conduit Pharmaceuticals Inc. common stock 580 Exchange of MURF Class A common stock held by MURF Directors for Conduit Pharmaceuticals Inc. common stock 450 Exchange of MURF Class A common stock held by MURF Sponsor for Conduit Pharmaceuticals Inc. common stock 40,152 Subtotal - Merger, net of redemptions 41,182 Issuance of Conduit Pharmaceuticals Inc. common stock in connection with PIPE Financing 20,000 Exchange of Conduit Pharmaceuticals Limited ordinary shares for Conduit Pharmaceuticals Inc. common stock on the Closing Date 646,264 Issuance of Conduit Pharmaceuticals Inc. common stock to holders of Conduit Pharmaceuticals Limited convertible notes on the Closing Date 3,735 Issuance of Conduit Pharmaceuticals Inc. common stock to an advisor for services directly related to the Merger 13,000 Total - Conduit Pharmaceuticals Inc. common stock outstanding as a result of the Merger, PIPE Financing, exchange of Conduit Pharmaceuticals Limited shares for shares of Conduit Pharmaceuticals Inc., issuance of Conduit Pharmaceuticals Inc. common stock to holders of Conduit Pharmaceuticals Limited convertible notes, and advisors. 724,181 F- 15 3. Fair Value During the period ended December 31, 2024, there were no transfers between Level 1 and Level 2, nor into or out of Level 3. The following table presents as of December 31, 2024 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 December 31, 2024 Level 1 Level 2 Level 3 Total Assets: Cash equivalents $ 192 $ - $ - $ 192 Total Assets $ 192 $ - $ - $ 192 Liabilities: Convertible notes payable at fair value $ - $ - $ 5,856 $ 5,856 Liability Classified Warrants - 0 138 138 Total Liabilities $ - $ - $ 5,994 $ 5,994 The following table presents as of December 31, 2023 the Company’s liabilities subject to measurement at fair value on a recurring basis (in thousands): Fair Value Measurements as of December 31, 2023 Level 1 Level 2 Level 3 Total Liabilities: Liability Classified Warrants $ - $ 142 $ - $ 142 Total Liabilities $ - $ 142 $ - $ 142 Cash equivalents consist of highly liquid money market funds with maturities of three months or less and are reflected in the Consolidated Balance Sheets at carrying value, which approximates fair value due to their short-term nature. The following table presents additional information about the Convertible Notes Payable subject to measurement at fair value on a recurring basis and warrant liabilities, for which the Company used significant unobservable inputs (Level 3) (in thousands): Schedule of Additional Information About the Financial Liabilities Subject To Measurement at Fair Value Convertible Notes Payable Liability Classified Warrants Balance as of December 31, 2023 $ - $ - Fair value at Issuance 7,899 229 Conversion of convertible note ( 92 ) - Change in fair value ( 1,951 ) ( 91 ) Balance as of December 31, 2024 $ 5,856 $ 138 Convertible Notes Payable As discussed in Note 7, during on October 31, 2024, the Company and Nirland agreed to amend 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.Additionally, as discussed in Note 7, during November 2024, the Company issued to 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. The Company elected to account for the August 2024 Nirland Note and A.G.P. Convertible Note (collectively the “Convertible Notes Payable”) at fair value. The fair value of the Convertible Notes Payable is estimated each period using a binomial lattice model. Significant estimates in the binomial lattice model include the Company’s stock price, volatility, risk-free rate, corporate bond yield, credit spread, probability of default, and recovery upon default. The fair value of the August 2024 Nirland Note and A.G.P. Convertible Note as of December 31, 2024 were estimated using a binomial lattice model. The following table outlines the range of significant unobservable inputs used in calculating the fair value of the August 2024 Nirland Note as of the dates noted below: Schedule of Fair Value of Assumptions October 31, 2024 November 22, 2024 December 31, 2024 Stock Price $ 9.10 $ 10.40 $ 6.90 Term (years) 0.8 0.7 0.6 Corporate bond yield 9.1 % 8.7 % 11.4 % Credit Spread 15.9 % 15.9 % 15.9 % Probability of default 40 % 40 % 40 % Recovery upon default 20 % 20 % 20 % Volatility 103.2 % 96.5 % 123.7 % The following table outlines the range of significant unobservable inputs used in calculating the fair value of the A.G.P. Convertible Note as of the dates noted below: Schedule of Fair Value of Assumptions November 25, 2024 December 31, 2024 Stock Price $ 9.10 $ 6.90 Term (years) 1 0.9 Corporate bond yield 8.8 % 9.0 % Credit Spread 26.2 % 26.2 % Probability of Default 40 % 40 % Recovery upon default 0 % 0 % Volatility 108.7 % 101.6 % F- 16 Liability Classified Warrants The PIPE Warrants, A.G.P. Warrants, and A.G.P. 2024 Warrants, as defined in Note 18, are accounted for as liabilities in accordance with ASC 815-40 and are presented within Warrant liabilities in the 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 consolidated statements of operations and comprehensive income (loss). The measurement of the PIPE Warrants and the measurement of the A.G.P warrants are classified as Level 2 fair value measurements due to the use of an observable market quote for the Company’s publicly traded warrants, which are considered to be a similar asset in an active market. The PIPE Warrant and A.G.P. Warrant liabilities are calculated by multiplying the quoted market price of the Company’s publicly traded warrants by the number of liability classified warrants. On December 11, 2024, the Company amended the exercise price of the PIPE Warrants to be $ 8.83 , at which time all PIPE Warrants were exercised. As the exercise price was amended on the same date that the PIPE Warrants were exercised, the Company remeasured the warrant liability immediately before exercise based on the difference between the closing stock price of the Company’s common stock on December 11, 2024, and the amendment exercise price of the PIPE Warrants, resulting in a gain on the change in fair value of warrant liability of approximately $ 12 thousand. Refer to Note 18 for additional information. Upon exercise of the PIPE Warrants, less than $ 1 thousand of Level 2 liability classified warrants remain on the consolidated balance sheet as of December 31, 2024. The 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 judgement. The Company estimated the fair value of the warrants issued as the issuance date, October 29, 2024, and as of December 31, 2024, using a Black-Scholes option-pricing model utilizing the following assumptions: Schedule of Fair Value of Assumptions October 29, 2024 December 31, 2024 Closing stock price $ 10.48 $ 6.90 Contractual exercise price $ 10 $ 10.00 Risk-free rate 4.11 % 4.38 % Estimated volatility 98.4 % 98.6 % Time period to expiration (in years) 5.2 5.0 4. Balance Sheet Details – Current Assets Current assets consisted of the following as of December 31, 2024 and December 31, 2023 (in thousands): Schedule of Balance Sheet Details As of As of December 31, 2024 December 31, 2023 Prepaid directors’ and officers’ insurance $ 1,187 $ 1,365 Prepaid expenses 85 140 Prepaid expenses – related parties 400 - Other receivables 489 - Total prepaid expenses and other current assets $ 2,161 $ 1,505 F- 17 5. Leases During the year ended December 31, 2024, we entered into an operating lease for laboratory space. The remaining lease terms for our operating lease is approximately two years and does not provide a renewal option. We apply the short-term lease policy election, which allows us to exclude from recognition leases with an original term of 12 months or less. Upon commencement of the laboratory lease on March 7, 2024, the Company recorded a right-of-use asset of $ 0.4 million, short-term lease liability of $ 0.2 million, and long-term lease liability of $ 0.2 million. Lease costs associated the Company’s operating and short-term leases are recorded within general and administrative expense in the consolidated statement of operations and comprehensive income (loss). The following table sets forth information about our lease costs for the year ended December 31, 2024 (in thousands): Schedule of Lease Cost Lease Cost December 31, 2024 Operating lease cost $ 116 Short-term lease cost 128 Variable lease cost 15 Total lease cost $ 259 The following table sets forth information about our operating lease for the year ended December 31, 2024 (in thousands): Schedule of Operating Lease Liabilities Supplemental cash flow and other information December 31, 2024 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 143 ROU assets obtained in the exchange for lease liabilities $ 352 Weighted-average remaining lease term (in years) 2.0 Weighted-average discount rate 11.2 % The Company’s future minimum lease payments for our operating lease as of the year ended December 31, 2024, are as follows (in thousands): Schedule of Future Minimum Lease Payments For Operating Lease December 31, 2024 Year ending December 31, 2025 $ 140 2026 113 Total 253 Less: imputed interest ( 27 ) Total lease liability $ 226 6. Liability Related to the Sale of Future Revenue Vela Technologies PLC The Company entered into an Agreement with SGSC to approve an Indirect Investment from Vela Technologies PLC (“Vela”) on October 20, 2020, whereby Vela agreed to provide funding to the Company for an indirect investment in AZD 1656 for use in the field in exchange for 8 % of future revenue earned if AZD 1656 is commercialized (the “Vela Agreement”). Total consideration under the Vela Agreement was $ 2.9 million (£ 2.35 million), consisting of $ 1.6 million (£ 1.25 million) cash and the issuance of 1.1 billion common shares in Vela, which based on the Vela’s fair value per share and was $ 1.3 million. During the year ended December 31, 2021, the Company sold all 1.1 billion of its Vela shares for $ 1.2 million and recorded a loss of $ 0.1 million on the sale. The Company received the $ 1.6 million (£ 1.25 ) million cash consideration during the year ended December 31, 2020. This consideration was recorded as a liability related to the future sale of revenue on the balance sheet in accordance with ASC 470-10. In April 2023, the Company entered into an agreement with Vela which granted Vela the right, but not the obligation, to sell its 8 % royalty interest in AZD 1656 back to Conduit. Vela paid a one-time, non-refundable option fee to Conduit of $ 0.5 million (£ 0.4 million). Total consideration payable to Vela upon exercise of the option was £ 4.0 million ($ 5.08 million on the exercise date) worth of new common shares in the combined entity after the Merger between Conduit Pharmaceuticals Limited and MURF, following the consummation of the Merger, at a price per share equal to the volume-weighted average price per share over the ten (10) business days prior to the date of the notice of exercise. The option contained a provision stating that in no event would the price per share for the consideration shares be lower than $ 5 or higher than $ 15 . The option was exercisable in whole at any time from the close of the Merger (the “Effective Time”) until the earlier of (i) the date that was six (6) months from the Effective Time, and (ii) February 7, 2024, the expiration date of the term. On November 30, 2023, Vela exercised its option to sell back its indirect investment in AZD 1656 in exchange for 10,157 shares of the Common Stock. The Company recognized the $ 2.8 million of deferred revenue and recorded $ 2.8 million to other income (expense), net, on the consolidated statement of operations and comprehensive income (loss) for the year ended December 31, 2023. As of December 31, 2023, there was no liability for the sale of future revenue related to Vela. F- 18 Cizzle Biotechnology Holdings PLC On February 11, 2022, the Company entered into an agreement with Cizzle PLC (“Cizzle”) whereby Cizzle agreed to purchase a percentage of future revenue earned in AZD 1656, should it reach the commercialization stage. Total consideration under the agreement is specified as $ 1.6 million (£ 1.2 million), consisting of the issuance of the fair value of 25.0 million new common shares in Cizzle on the date of the agreement and the fair value of 22.0 million shares to be issued at the earlier of Cizzle’s shareholder approval or one year from the date of the agreement. The 22.0 million shares were received by the Company in the fourth quarter of 2022 and were subsequently sold within the fourth quarter of 2022. The Company recorded a liability related to deferred revenue of $ 1.4 million for the consideration received from Cizzle as of December 31, 2022. The payments received for the sale of future revenue were classified as a liability related to the future sale of revenue. Under ASC 470-10-25, a seller of future revenue should evaluate whether the proceeds received should be accounted for as debt or deferred income. In assessing the factors that created a rebuttable presumption of debt within the guidance, the Company determined that there were factors present to overcome the debt presumption and deferred income classification to be appropriate. The main factors the Company considered were that the transactions in form were sales, and not debt transactions. Each agreement does not guarantee a return to each purchaser, the return is based solely on future performance of AZD 1656 should it reach commercialization, with neither purchaser having an involvement in generating future cash flows from AZD 1656. On December 15, 2022, the Company entered into an agreement with Cizzle whereby the Company granted Cizzle the option, but not the obligation, to sell its economic interest in AZD 1656 back to the Company. The agreement contained an option period of nine months from the date of the agreement for Cizzle to notify the Company of its intent to exercise the option to sell its economic interest in AZD 1656. Upon closing of the agreement, Cizzle agreed to pay the Company an option fee of $ 0.1 million (£ 0.1 million). On September 26, 2023, Cizzle exercised its option to sell back its indirect investment in AZD 1656 in exchange for 3,954 shares of the Common Stock. The Company recognized the $ 1.5 million of deferred revenue and recorded $ 1.5 million to other income (expense), net, on the consolidated statements of operations and comprehensive income (loss) for the year ended December 31, 2023. As of December 31, 2023, there was no liability for the sale of future revenue related to Cizzle. F- 19 7. Convertible Notes Payable Convertible Promissory Notes Payable During March 2023, the Company issued a convertible promissory note payable (the “Convertible Promissory Notes 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. The note 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. On October 9, 2024, the Company and the loan holder signed an extension to extend the maturity date from September 20, 2024 to October 20, 2024 with the option for the Company to further extend the maturity date two times, each by an additional 30-day period. The Company exercised both options to extend the maturity date to December 19, 2024 which included interest previously payable as well as the principal. As consideration for extending the maturity date, the Company amended the form of repayment of the remaining interest due on the loan. As payment for the interest, the Company issued the loan holder, (i) $ 80,000 worth of Common Stock to be issued at the closing market price on the date prior to issuance and (ii) 20,000 shares of Common Stock. On October 11, 2024, the Company issued the loan holder 27,812 shares of Common Stock in satisfaction of the obligations in (i) and (ii) in the preceding sentence. The extension met the criteria for as a debt extinguishment under ASC 470-50. As of October 9, 2024, 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 (ii) the $ 0.4 million fair value of the Convertible Promissory Note Payable immediately after the amendment and (iii) the $ 0.3 million fair value of the shares issued to the holder as consideration for extending the maturity date. The difference between the $ 0.8 million carrying value immediately prior to the amendment and the $ 0.4 million fair value immediately after the amendment was recorded as a debt discount and amortized over the amended maturity date of the Convertible Promissory Note using the effective interest method. In connection with the extension of the loan, the Company entered into a consulting agreement with an unrelated third party to negotiate the extension of the of the convertible note with the loan holder on behalf of the Company. The Company issued the third-party 8,500 shares on October 11, 2024, in exchange for services provided. The fair value of the shares were $ 0.1 million, as determined by multiplying the closing share price on October 10, 2024 (day prior to issuance) of $ 10.24 by the total number of shares issued, 8,500 . This amount was capitalized as a debt issuance cost and accreted over the amended term of the Convertible Promissory Notes Payable using the effective interest method. For the year ended December 31, 2024, and December 31, 2023, the Company incurred interest expense on the Convertible Promissory Note Payable of $ 0.5 million and $ 0.1 million, respectively. The promissory note payable remained outstanding as of December 31, 2024, therefore the Company was considered to be in default. On March 6, 2025, the Company reached an agreement with the loan holder to pay $ 0.7 million in order to settle the March 2023 Convertible Note in full. The Company repaid the loan holder the settlement amount $ 0.7 million on March 13, 2025. See Note 20 for additional details. August 2024 Nirland Note On August 6, 2024, the Company entered into a Senior Secured Promissory Note (the “August 2024 Nirland Note”) with Nirland, a related party of the Company, pursuant to which the Company issued and sold to Nirland the August 2024 Note in the original principal amount of $ 2.7 million, inclusive of a $ 0.5 million original issuance discount. See Note 16 for further reference to the relationship between the Company and Nirland. Of the total amount of the August 2024 Nirland Note, $ 1.7 million was issued upon execution of the August 2024 Nirland Note. In connection with the August 2024 Nirland Note, the Company issued to Nirland 125,000 shares of the Company’s Common Stock on August 6, 2024. The balance of $ 0.5 million became payable to the Company when the shares were registered for resale in September 2024. In the event the Company completes any public or private equity or debt financing, the Company shall be required to mandatorily prepay (“Mandatory Prepayment Right”), any amounts that may be then outstanding under the August 2024 Nirland Note, within two business days following the closing of such financing, in an amount of no less than 75 % of the net proceeds received. Per the terms of the August 2024 Nirland Note, the Company is prohibited from entering into a variable rate transaction without prior written consent from Nirland. The August 2024 Nirland Note bears interest at a rate of 12 % per annum, accruing daily on a 365-day basis, payable monthly in arrears as cash, or accrued at Nirland’s discretion. The August 2024 Nirland Note matures 12 months from August 6, 2024. As noted above, the Company issued to Nirland 125,000 shares of the Company’s Common Stock on August 6, 2024. The Company determined that loan agreement and share issuance should were part of a basket transaction and allocated the net proceeds on a relative fair value basis. Of the total $ 2.2 net proceeds, $ 1.2 million was allocated to the August 2024 Nirland Note including $ 1.5 million gross proceeds, less $ 0.3 million Original Issue Discount (“OID”). The remaining $ 1.0 million was allocated to the common stock, including $ 1.2 million gross proceeds less $ 0.2 OID. The $ 1.2 million allocated to the common stock was considered to be a discount on the August 2024 Nirland Note making the balance of the note to be $ 2.7 million note payable, less a total debt discount of $ 1.5 million. The debt discount will be amortized to interest expense using the effective interest method over the life of the note. On October 31, 2024, the Company and Nirland amended the August 2024 Nirland Note (the “First Amendment”), whereby the August 2024 Nirland Note was amended to (i) provides for the conversion of the August 2024 Nirland Note into shares of Common Stock, at Nirland’s discretion, in a multiple of any unpaid amounts, if not otherwise previously paid, pursuant to the conversion rate contained therein, (ii) removes Nirland’s Mandatory Prepayment Right, and (iii) removes Nirland’s right of first refusal to participate in any future equity or debt offerings of the Company. The number of shares of Common Stock issuable upon conversion of any Conversion Amount pursuant to shall be determined by dividing (x) such conversion amount by (y) the conversion price. Conversion amount means two and one quarter times the sum of (x) portion of the principal to be converted, redeemed or otherwise with respect to which this determination is being made and (y) all accrued and unpaid interest with respect to such portion of the principal amount, if any. Conversion price means, as of any conversion date or other date of determination, $ 10.00 , subject to adjustment as provided within the amended agreement. We evaluated the conversion feature of this note offering for embedded derivatives in accordance with ASC 815, Derivatives and Hedging , and the substantial premium model in accordance with ASC 470, Debt . Based on our assessment, separate accounting for the conversion feature of this note offering is not required and will be accounted for under the substantial premium model. Under the substantial premium model, the excess above the fair value of the August 2024 Nirland Note will be recorded in additional paid-in-capital. The August 2024 Nirland Note will be carried at amortized cost using the effective interest method. F- 20 The Company determined the fair value of the August 2024 Nirland Note to be $ 3.6 million as of October 31, 2024 through the use of a binomial lattice model. See Note 3 for additional information regarding the fair value measurement of the August 2024 Nirland Note. The Company accounted for the First Amendment as a debt extinguishment, as the First Amendment added a substantive conversion option. As of October 31, 2024, a loss on debt extinguishment of $ 2.2 million was recorded consisting of (i) the derecognition of the $ 1.3 million carrying value immediately prior to the First Amendment (ii) recognition of the $ 2.7 million par value and (iii) recognition of the $ 0.8 million substantial premium. On November 22, 2024, the Company and Nirland entered into a Second Amendment to the August 2024 Nirland Note (the “Second Amendment”). Pursuant to the Second Amendment, the Nirland Note may not be converted (other than partial conversions that may be permitted pursuant to the rules and regulations of NASDAQ (or any successor entity)) prior to receipt of stockholder approval to provide for such conversion of the Nirland Note, and subsequent issuance of the Company’s Common Stock, pursuant to the stockholder approval rules under the rules and regulations of The Nasdaq Stock Market. If the Company has not held a special meeting of the stockholders to approve the full conversion of the August 2024 Nirland Note on or before January 9, 2025, then the Company shall be obligated to pay Nirland a penalty of $ 0.1 million per day until the special meeting is held. In addition, the existing conversion rate was amended to be two and one half times the sum of (x) the portion of the principal to be converted, redeemed or otherwise with respect to which this determination is being made and (y) all accrued and unpaid interest (including default interest) with respect to such portion of the principal amount, if any divided by $ 0.10 , prior to the Reverse Stock Split, (or following any reverse splits that may occur in a ratio greater than 10 to 1, the lower of such reverse split price and the market price per share at the time of the Conversion Date, but in no event less than $1.00), subject to adjustment as provided therein and to take into account any future share splits or reverse splits to maintain the economic equivalence of the conversion rights as at the amendment effective date. The Company notes that the reverse split provision in the preceding sentence was tripped, effective January 25, 2025, following the 1-for-100 reverse stock split that occurred on that date. As of the Second Amendment, the Company elected to account for the August 2024 Nirland Note at fair value under ASC 825. The Company determined that the amendment to the conversion features present in the Second Amendment fall under the guidance within ASC 825 that notes that if a significant modification of debt occurs an entity is able to make an accounting election on that date to account for that debt under the fair value option. At the end of each reporting period, the Company calculates the fair value of the August 2024 Nirland Note, and any changes in fair value are reported in the current period’s consolidated statements of operations and comprehensive income (loss). The Company remeasured the fair value of the August 2024 Nirland Note as of the Second Amendment date and calculated a fair value of $ 4.5 million using a binomial lattice model. See Note 3 for additional information regarding the fair value measurement of the August 2024 Nirland Note. The Company accounted for the Second Amendment as a debt extinguishment, as the terms of the August 2024 Nirland Note were deemed to be substantially different after the Second Amendment. As of November 22, 2024, a loss on debt extinguishment of $ 0.9 million was recorded consisting of (i) the derecognition of the 2.7 million carrying value immediately prior to the First Amendment (ii) derecognition of $ 0.1 million in accrued interest (iii) derecognition of the $ 0.8 million substantial premium and (iv) recognition of the $ 4.4 million fair value. On December 9, 2024, and prior to obtaining shareholder approval, Nirland exercised their conversion option and converted $ 0.1 million of principal for 23,000 shares of common stock pursuant to the rules and regulations of the NASDAQ. As of December 31, 2024, $ 2.6 million of principal and accrued interest remains outstanding. As of December 31, 2024, the August 2024 Nirland Note had a fair value of approximately $ 2.8 million and is included within Convertible promissory notes payable at fair value – related parties on the consolidated balance sheets. For the year ended December 31, 2024, the Company recorded a $ 1.5 million gain from the change in fair value of convertible promissory note and interest expense of approximately $ 0.4 million. The interest expense of $ 0.4 million is comprised of (i) accrued interest of $ 0.2 million and (ii) $ 0.2 million in amortization expense related to the initial debt discount of $ 1.5 million. The $ 2.2 million loss on debt extinguishment from the Frist Amendment, $ 0.9 million loss on debt extinguishment from the Second Amendment, and the $ 1.5 million gain on the change in fair value are presented within other income (expense), net, while the $ 0.4 million of interest expense is presented within Interest expense, net, in the consolidated statement of operations and comprehensive income (loss). A.G.P. Convertible Note On November 25, 2024, the Company issued to 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. Refer to the Note 9 for additional information. Unless 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. F- 21 At any time prior to the full payment of the convertible promissory note, provided that the A.G.P. has given at least three business days written notice to the Company, A.G.P., in its sole discretion, may elect to have all or any portion of the outstanding principal amount and all interest accrued converted into shares of the Company’s common stock, at a fixed price of $ 10.00 (or following any reverse splits that may occur in a ratio greater than 10 to 1, the lower of such reverse split price and the market price per share at the time of the conversion date, but in no event less than $ 1.00 ), subject to adjustment as provided therein and to take into account any future share splits or reverse splits. The Company notes that the reverse split provision in the preceding sentence was tripped, effective January 25, 2025, following the 1-for-100 reverse stock split that occurred on that date . However, the 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 the A.G.P.’s ability to convert the convertible promissory note, if at all, 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. A.G.P. is also entitled to resale registration rights as identified in the convertible promissory note. The 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 Note will become, or may become at A.G.P.’s election, immediately due and payable to the A.G.P. The Company elected to account for the A.G.P. Convertible Note at fair value under ASC 825. The Company determined that the substantive conversion option within the A.G.P. Convertible Note falls under the guidance within ASC 825 that notes that if a significant modification of debt occurs an entity is able to make an accounting election on that date to account for that debt under the fair value option. At the end of each reporting period, the Company calculates the fair value of the A.G.P. Convertible Note, and any changes in fair value are reported in the current period’s consolidated statements of operations and comprehensive income (loss). The change in fair value attributable to instrument-specific credit risk, if any, will be recognize within other comprehensive income each reporting period. As an accounting policy, the Company elected to present interest expense separately from other changes in the A.G.P. Convertible Note’s fair value. Interest expense will be presented within Interest expense, net, while the other changes in the fair value with be presented within other income (expense), net in the consolidated statements of operations and comprehensive income (loss). The 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 3 for additional information regarding the fair value measurement of the A.G.P Convertible Promissory Note. The Company accounted for the issuance on the A.G.P. Convertible Promissory Note as a debt extinguishment, as it was issued to evidence the A.G.P.’s currently owed deferred commission payable discussed in Note 9. A gain on debt extinguishment of $ 2.4 million was recorded as of November 25, 2024, consisting of (i) the derecognition of the $ 5.7 million deferred commission payable and (ii) recognition of the $ 3.4 million fair value of the A.G.P. Convertible Note. For the year ended December 31, 2024, the Company recorded a $ 0.5 million gain in the change in fair value of the A.G.P. Convertible Note and interest expense of approximately $ 32 thousand. The $ 2.4 million gain on extinguishment and $ 0.5 million gain on the change in fair value are presented within other income (expense), net, while the $ 32 thousand of interest expense is presented within Interest expense, net, in the consolidated statement of operations and comprehensive income (loss). 8. Loans Payable Loans On May 1, 2022, the Company entered into Loan Agreements (the “Loans”) with two lenders, totaling $ 0.2 million. The Loans mature two years from the date of the agreement and bear no interest. Each loan was made available to the Company by the lenders in three tranches of (i) $ 33 thousand (£ 30 thousand); (ii) $ 33 thousand (£ 30 thousand) and (iii) $ 28 thousand (£ 25 thousand), totaling $ 0.2 million. The Loans provided for events of default, including, among others, failure to make payment, bankruptcy and non-compliance with the terms of the Loans. As of December 31, 2024, the Company utilized all three tranches of the first loan and two out of three tranches of the second loan, with loans payable totaling $ 0.2 million at December 31, 2023 and December 31, 2024 respectively. F- 22 On October 9, 2024, the Company and the Loans holders amended the loan agreements (the “Loans Amendment”) to extend the maturity date for the Loans to December 19, 2024 . The Loans Amendment also modified the payment terms for the Loans from a cash payment of £ 85,000 per loan to (1) a cash payment of £ 60,000 , (2) £ 25,000 worth of shares of Common Stock converted into USD at the prevailing exchange rate, to be issued at the closing market price on the date prior to issuance, and in consideration for the extension, and (3) 2,500 additional shares of Common stock. On October 11, 2024, the Company issued each of the Loan holders 5,690 shares ( 11,380 in total). The Loans remain outstanding as of December 31, 2024. The extension was accounted for as a debt extinguishment. On October 9, 2024, the Company recorded a loss on debt extinguishment of approximately $ 42 thousand calculated as the difference between (i) the $ 0.2 million carrying value of the Loans immediately prior to the Loans Amendment (ii) the $ 0.1 million fair value of the Loans immediately after the Loans Amendment and (iii) the $ 0.1 million fair value of the shares issued to the holder as consideration for extending the maturity date. The difference between the $ 0.2 million carrying value immediately prior to the Loans Amendment and the $ 0.1 million fair value immediately after the Loans Amendment was recorded as a debt discount and amortized over the term date of the Loans using the effective interest method. During the year ended December 31, 2024, the Company incurred interest expense on the Loans of approximately $ 40 thousand related to the amortization of the debt discount recorded as a result of the Loans Amendment. No interest expense was recorded for the year ended December 31, 2023. The Loans remained outstanding as of December 31, 2024, therefore the Company was considered to be in default. The Company repaid the lenders the outstanding principal balance of $ 0.1 million in February 2025. See Note 20 for additional details. F- 23 October 2024 Nirland Note On October 28, 2024, the Company issued a promissory note (the “October 2024 Nirland Note”) to Nirland, a related party, in the original principal amount of $ 0.6 million in exchange for funds in such amount. See Note 16 for further reference to the relationship between the Company and Nirland. The Nirland Note bears interest at a rate of 12 % per annum, is due and payable semi-annually in arrears, and matures on October 31, 2025. If an event of default under and as defined in the Nirland Note occurs, the interest rate will be increased to 18 % per annum or to the maximum rate permitted by law. In connection with the Nirland Note, the Company has agreed to pay Nirland a 1 % arrangement fee, which will be included with the principal and interest owed under the Nirland Note. The 1 % arrangement fee is accounted for as a debt discount and will be amortized to interest expense, net in the consolidated statement of operations and comprehensive income (loss) using the effective interest method over the life of the October 2024 Nirland Note. During the year ended December 31, 2024, the Company recorded approximately $ 14,000 of interest expense. The interest expense of $ 14,000 is comprised of (i) accrued interest of $ 13,000 based on the coupon rate of the debt and (ii) amortization of the debt discount of $ 1 thousand, with both components recorded within interest expense, net in the consolidated statement of operations and comprehensive income (loss). Accrued interest of $ 13,000 was recorded as a liability on the Company’s consolidated balance sheet within accrued expenses and other current liabilities. The $ 1,000 amortization of the debt discount decreased the debt discount contra-liability included within the Loans payable, current portion on the consolidated balance sheets. A.G.P. Bridge Note On October 29, 2024, the Company entered into a Bridge Loan Agreement (the “Bridge Agreement”), with A.G.P., pursuant to which AGP. made an advance (the “Advance”) to the Company in an amount not to exceed $ 0.6 million (the “Commitment”). As partial consideration for the Advance, the Company entered into a Common Stock Purchase Warrant Agreement (the “Warrant Agreement”) and issued AGP warrants to purchase up to 28,625 shares of the Company’s common stock, $ 0.0001 par value per share, which is equal to 50 % of the sum of the Commitment divided by the closing price of the Company’s Common Stock on October 29, 2024, at an exercise price of $ 10.48 per share. Refer to Note 18 for additional information on the warrants issued to A.G.P. In connection with the Advance, the Company issued a promissory note (the “A.G.P. Bridge Note”) to A.G.P. in the original principal amount of $ 0.6 million. The Bridge Note bears interest at a rate of 4.21 % per annum and is due and payable on December 31, 2024. As noted above, the Company issued to A.G.P. warrants to purchase up to 28,625 shares of the Company’s common stock. The Company determined that the Bridge Note and Warrant Agreement issuance were part of a basket transaction and allocated the net proceeds using the residual value method. The warrants issued under the Warrant Agreement were initially recorded at their fair value of $ 0.2 million. The warrants were classified as derivative liabilities because they do not meet the criteria in ASC 815-40 to be considered indexed to the entity’s own stock. Refer to Note 18 for additional information and discussion of liability classification. The $ 0.2 million recorded for the warrants was considered to be a discount on the A.G.P. Bridge Note making the balance of the note to be $ 0.6 million note payable, less a total debt discount of $ 0.2 million. The debt discount will be amortized to interest expense using the effective interest method over the life of the note. During the year ended December 31, 2024, the Company recorded and paid approximately $ 1 thousand of interest expense related to the A.G.P. Additionally, the entire debt discount of $ 0.2 million was amortized and recorded as interest expense during the year. The interest expense of $ 1 thousand and amortization of the debt discount of $ 0.2 million were recorded within Interest expense, net in the consolidated statement of operations and comprehensive income (loss). As of December 31, 2024, the A.G.P. Bridge note was fully repaid. F- 24 9. Deferred Commission Payable As discussed in Note 2, A.G.P was a financial advisor to both MURF and Old Conduit in connection with the Merger transaction. Upon the completion of the Merger, A.G.P.: (i) received a cash fee of $ 6.5 million, 13,000 shares of Common Stock, and warrants to purchase 540 shares of Common Stock at an exercise price of $ 1,100 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 % as a result of its engagement for MURF’s IPO. The $ 5.7 million deferred commissions payable was recorded as a non-current liability on the Company’s consolidated balance sheet as of December 31, 2023. 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 and $ 0.1 million as of December 31, 2024, and December 31, 2023, respectively. On November 25, 2024, the Company issued the A.G.P. Convertible Note in the principal amount of $ 5.7 million to evidence the currently owed deferred commission payable, at which time the deferred commission payable balance was removed. Refer to the Note 7 for additional information. 10. Research and Development Expense August 2024 License Agreement On 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. As 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 exceptions). The Issuance Agreement called for the Company to issue AstraZeneca 95,044 shares of the Company’s Common Stock. The Issuance Agreement provides AstraZeneca with resale registration rights for such shares. As of December 31, 2024, the Company recorded $ 1.6 million and $ 1.5 million in research and development expenses related to the share issuance and upfront payment to AstraZeneca, respectively. AstraZeneca has been granted a right of first negotiation to develop, manufacture, and commercialize a Licensed Product if the Company receives an offer for, or solicits, a transaction where a third party would obtain the right to develop, manufacture, or commercialize a Licensed Product. If AstraZeneca exercises such right, the parties will negotiate in good faith for an agreed period of time on an exclusive basis. Either 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 basis). 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 studies). As a result of the above, the Company will no longer fund the development of AZD1656 or AZD5904 under the terms of the Exclusive Funding Agreement, dated March 26, 2021 with St George Street Capital (the “Funding Agreement”). In this regard, the Company previously entered into a deed of amendment amending such Funding Agreement. The parties agreed that the project funding provisions of such Funding Agreement whereby the Company had the right to fund a project or refer other 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 15 for additional details on the claim. SARBORG Service Agreement On December 12, 2024, the Company entered into a Services Agreement (the “Sarborg Service Agreement”) with SARBORG Limited (“Sarborg”), a Cayman Islands company and related party of the Company. See Note 16 for further reference to the relationship between the Company and Sarborg. Under the terms of the Sarborg Service Agreement, Sarborg will provide algorithmic and cybernetic technology services to Conduit, including the development of decision-support tools and advanced cybernetic systems tailored to enhance Conduit’s decision-making processes and maximize the value of its pharmaceutical asset portfolio. F- 25 Sarborg will perform the services to Conduit comprised of three phases: the Initial Phase (0-24 weeks) focuses on establishing a foundation for collaboration and aligning Sarborg’s services with Conduit’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 Conduit’s growth through iterative improvements and updates. Sarborg 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. The 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. The Sarborg Service Agreement includes provisions for the ownership and use of intellectual property. Sarborg will own its pre-existing intellectual property rights, including proprietary tools and methodologies used in the performance of the services. Conduit will own all deliverables resulting from the services performed by Sarborg under the Sarborg Service Agreement. The Sarborg Service Agreement provides Sarborg with registration rights for any Common Stock of Conduit that Sarborg receives as consideration under the Sarborg Service Agreement. In such event, Conduit will use commercially reasonable efforts to (i) file a registration statement covering the resale of the Common Stock within 60 days after the issuance; and (ii) ensure that such registration statement becomes effective within 90 days after filing. This Agreement also includes confidentiality obligations, representations and warranties, indemnification, limitation of liability, and insurance requirements. In consideration of the services, Conduit agreed to pay Sarborg an initial cash payment of $ 0.2 million and $ 0.2 million payable through the issuance of 22,727 shares of common stock, determined by the closing price on the day preceding the execution of the Sarborg Service Agreement. 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 shares, at the discretion of Conduit. Sarborg will be reimbursed for pre-approved, necessary, and reasonable out-of-pocket expenses directly incurred in connection with the performance of the services. Management determined that the cost incurred under the Sarborg Service Agreement should be recorded to research and development expense in the statement of operations and comprehensive income (loss), as the Sarborg Service Agreement is designed to provide the Company with software/dashboard to aid in research and development activities. The initial cash payment of $ 0.2 million and issuance of 22,727 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. As of December 31, 2024, the 22,727 shares of common stock were yet to be issued and are recorded within accrued expense and other current liabilities in the consolidated balance sheets. As of December 31, 2024, the Company has recognized $ 0.2 million of amortization within research and development expense in the consolidated statement of operations and comprehensive income (loss). 11. Share Based Compensation On September 22, 2023, in connection with the Merger, the Company adopted the Conduit Pharmaceuticals Inc. 2023 Stock Incentive Plan (the “2023 Plan”). The 2023 Plan became effective upon the closing of the Merger. The 2023 Plan initially provided for the issuance of up to 114,976 shares of Common Stock. Pursuant to the 2023 Plan’s “evergreen” provision, on February 6, 2025, the Company increased the number of shares of Common Stock available for issuance under the 2023 Plan by 69,240 shares. Total shares available for issuance is 154,125 effective January 1, 2025. The number of authorized shares will automatically increase on January 1, 2026 and continuing annually on each anniversary thereof through (and including) January 1, 2033, equal to the lesser of (i) 5 % of the shares of common stock outstanding on the last day of the immediately preceding fiscal year and (ii) such smaller number of shares of common stock as determined by the Board or the applicable committee of the Board. The 2023 Plan allows for awards to be issued to employees and non-employee directors in the form of options, stock appreciation rights, restricted stock, restricted stock units (“RSUs”), performance stock units, dividend equivalents, other stock-based, or other cash-based awards. As of December 31, 2024, there were 84,885 shares of Common Stock available for issuance under the 2023 Plan. F- 26 During the year ended December 31, 2024, the Company issued a total of 56,700 stock options to employees and non-employee directors with an aggregate grant date fair value of $ 0.4 million. For the year ended December 31, 2024 and December 31, 2023, there was a total of $ 1.6 million and $ 0.2 million, respectively in stock-based compensation expense recognized within General and Administrative expenses on the consolidated statements of operations and Comprehensive Loss, respectively. On June 24, 2024, in connection with a services agreement with an unrelated third party to provide marketing services, the Company issued 961 shares of its Common Stock (the “Service Shares”). The Company valued the Service Shares at $ 156 per share, the closing price of the Company’s Common Stock on June 21, 2024, adjusted for the Reverse Stock Split. The total compensation for these shares is $ 0.2 million which will be recognized within general and administrative expense over the service period of the agreement. On November 18, 2024, certain non-employee directors elected to receive a portion of their unpaid cash retainers due under the Director Compensation Program in the form of shares. In total, $ 0.1 million of unpaid retainers was settled through the issuance 10,027 shares of Common Stock (the “Retainer Shares”). The Company valued the Retainer Shares at $ 9.0 per share, the closing price of the Company’s Common Stock on November 18, 2024, adjusted for the Reverse Stock Split. The Company previously accrued in the unpaid retainers in Accrued expenses and other current liabilities in the Company’s consolidated balance sheets. Upon issuance of the shares of Common Stock, the accrual was reduced based on the value of the shares issued. On November 18, 2024, the Board of Directors approved a one-time equity retainer in the form of 750 fully vested shares of Common Stock (the “Board Shares”) to a member of the Board of Directors for prior services. The Company valued the Board Shares at $ 9.20 per share, the closing price of the Company’s Common Stock on November 18, 2024, adjusted for the Reverse Stock Split. The total compensation for these shares is $ 75 thousand which was immediately recognized within General and administrative expense in the consolidated statement of operations and comprehensive income (loss). The shares of common stock were issued under the 2023 Plan. November 18, 2024, Mr. Heilbron elected to have the $ 0.1 million owed to him under the Consulting Agreement paid in share of the Company’s Common Stock. In total 8,161 shares are to be issued to Mr. Heilbron based on the closing price of the Company’s Common Stock on November 18, 2024, $ 9.20 per share, adjusted for the Reverse Stock Split. As of December 31, 2024, the shares had not been issued to Mr. Heilbron. The value of the shares are recorded as an accrued expense and other current liability on the consolidated balance sheets as of December 31, 2024. F- 27 Restricted Stock In connection with the Merger, as discussed in Notes 1 and 2, and by Unanimous Written Consent of the Board of Directors, the then Chief Financial Officer of the Company was granted 745 RSUs on December 1, 2023 at a weighted average grant date fair value of $ 551 per unit. The RSUs were to vest in equal annual instalments on the first three anniversaries of the closing of the Merger. Upon the then Chief Financial Officer’s resignation, effective May 15, 2024, all such RSUs were forfeited. On June 7, 2024, by Unanimous Written Consent of the Board of Directors, the Interim Chief Financial Officer of the Company and a Board member were each granted 372 shares of immediately vested restricted stock at a weighted average grant date fair value of $ 284 . The shares of restricted stock were fully vested as of the grant date. No additional RSU’s or shares of restricted common stock were granted during the year ended December 31, 2024. There were 745 shares of restricted common stock vested as of December 31, 2024 and no RSUs vested as of December 31, 2023. The following table summarizes restricted stock activity for the 2023 Plan: Schedule of Restricted Stock Activity Number of Awards Weighted Average Grant Date Fair Value Per Unit Outstanding at December 31, 2023 745 $ 551 Granted 745 $ 284 Cancelled/forfeited ( 745 ) $ ( 551 ) Vested ( 745 ) $ ( 284 ) Outstanding at December 31, 2024 - $ - Stock Options The Company estimates the fair value of each option award on the date of grant using the Black-Scholes option-pricing model. The Company 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: ● Expected 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. ● Expected term – the Company estimates the expected term using the “simplified” method outlined in SEC Staff Accounting Bulletin No. 107, “Share-Based Payment.” ● Risk-free 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. ● Dividends – 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. The Company estimated the fair value of stock options granted in the periods presented using a Black-Scholes option-pricing model utilizing the following assumptions: Schedule of Fair Value of Stock Option Granted For the year ended December 31, 2024 2023 Expected volatility (%) 83.2 - 85.4 % 79.0 % - 80.0 % Expected term (years) 5.5 - 5.6 3.5 - 6.5 Risk-free interest rate (%) 4.28 % - 4.40 % 4.16 % - 4.35 % Expected dividend yield (%) 0 % 0 % The Company accounts for forfeitures as they occur, which may result in the reversal of compensation costs in subsequent periods as the forfeitures arise. The following table summarizes stock option activity for the 2023 Plan: Schedule of Stock Option Activity Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (years) Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2023 10,717 $ 551 8.85 $ - Granted 56,700 $ 8.58 - $ - Cancelled/forfeited 1,908 $ 551 - $ - Exercised - $ - - $ - Outstanding at December 31, 2024 65,509 $ 81.52 9.72 $ - Exercisable 23,154 $ 84.18 9.66 $ - Unvested 42,355 $ 80.07 9.76 $ - F- 28 The aggregate intrinsic value of options is calculated as the difference between the exercise price of the underlying options and the fair value of the Company’s common stock for those options that had exercise prices lower than the fair value of the Company’s common stock. As of December 31, 2024, the total compensation cost related to non-vested option awards not yet recognized was $ 2.4 million with a weighted average remaining vesting period of 2.07 years. 12. Income Taxes Loss from operations before income taxes for the years ended December 31, 2024 and 2023 is summarized below (in thousands): Schedule of Income before Income Tax, Domestic and Foreign 2024 2023 For the year ended December 31, 2024 2023 Loss from operations before income taxes: US ( 12,855 ) ( 1,990 ) Foreign ( 4,947 ) 1,454 Loss from operations before income taxes ( 17,802 ) ( 536 ) The provision (benefit) for income taxes for the years ended December 31, 2024 and December 31, 2023 is as follows (in thousands): Schedule of Provision for Income Tax 2024 2023 For The Years Ended 2024 2023 Current Federal - - State - - Foreign - - Current income tax - - Deferred Federal ( 2,429 ) ( 843 ) State 355 ( 355 ) Foreign ( 931 ) ( 251 ) Deferred income tax ( 3,005 ) ( 1,449 ) Change in Valuation Allowance 3,005 1,449 Net Income Tax Expense - - Income tax provision differed from the amount computed by applying the U.S. federal income tax rate of 21 % to income (loss) before taxes, as follows (in thousands): Schedule of Federal Income Tax Rate US Foreign Consolidated For The Year Ended 2024 US Foreign Consolidated Taxes at federal statutory rate $ ( 2,705 ) $ ( 1,039 ) $ ( 3,744 ) Foreign Rate Differential - 91 91 Meals & Entertainment 0 - 0 Eq Comp Perm 84 - 84 Convertible Debt Adjustment 268 - 268 State Re-Rate 355 - 355 Other ( 76 ) 17 ( 59 ) Change In Valuation Allowance 2,074 931 3,005 Total provision (benefit) for income taxes $ - $ - $ - US Foreign Consolidated For The Year Ended 2023 US Foreign Consolidated Taxes at federal statutory rate $ ( 417 ) $ 305 $ ( 112 ) State Taxes ( 175 ) - ( 175 ) Foreign Rate Differential - 490 490 Meals & Entertainment 0 2 2 Eq Comp Perm 3 - 3 Convertible Debt Adjustment - ( 1,048 ) ( 1,048 ) Purchase Accounting Adjustment ( 609 ) - ( 609 ) Change In Valuation Allowance 1,198 251 1,449 Total provision (benefit) for income taxes $ - $ - $ - The tax effects of temporary differences which give rise to significant portions of deferred tax assets are as follows as of December 31 (in thousands): Schedule of Deferred Tax Assets and Liabilities US Foreign Consolidated For The Year Ended 2024 US Foreign Consolidated Deferred Tax Assets Stock options $ 280 $ - $ 280 Transaction Costs 393 - 393 Research & Development 671 - 671 Accruals 141 - 141 Net operating loss 1,788 1,182 2,970 Total deferred tax asset 3,273 1,182 4,455 Valuation allowance ( 3,273 ) ( 1,182 ) ( 4,455 ) Net deferred tax assets (liability) $ - $ - $ - US Foreign Consolidated For The Year Ended 2023 US Foreign Consolidated Deferred Tax Assets Stock options $ 37 $ - $ 37 Transaction Costs 599 599 Net operating loss 562 251 813 Total deferred tax asset 1,198 251 1,449 Valuation allowance ( 1,198 ) ( 251 ) ( 1,449 ) Net deferred tax assets (liability) $ - $ - $ - F- 29 As of December 31, 2024 and December 31, 2023, the Company had net operating loss (“NOL”) carryforwards for U.S. federal” purposes of approximately $ 8.5 million and $ 1.9 million, respectively, which carryforward indefinitely and can offset 80 % of taxable income in future years. As of December 31, 2024 and December 31, 2023, the Company had state NOL carryforwards of nil and $ 1.9 million, respectively. As of December 31, 2024 and December 31, 2023, the Company had net operating loss (“NOL”) carryforwards for foreign purposes of approximately $ 4.7 million and $ 1.0 million, respectively, which carryforward indefinitely. Net operating loss (NOL) carryforwards are subject to limitations in the event of a change in control under Section 382 of the Internal Revenue Code. This section limits the amount of taxable income that can be offset by NOLs after an ownership change. The limitation is calculated as the value of the old loss corporation multiplied by the long-term tax-exempt rate. If the new loss corporation does not continue the business enterprise of the old loss corporation for a specified period, the NOL carryforwards may be disallowed. The Company has not yet conducted a Section 382 study to determine whether any ownership changes have occurred that would impose annual limitations on its ability to utilize its NOL carryforwards. Until such a study is completed, there is substantial uncertainty regarding the amount of NOL carryforwards that could be utilized annually to offset future taxable income. The Company establishes a valuation allowance when it is more likely than not that the Company’s recorded net deferred tax asset will not be realized. In determining whether a valuation allowance is required, the Company must take into account all positive and negative evidence with regard to the utilization of a deferred tax asset. As of December 31, 2024 and December 31, 2023, the valuation allowance for deferred tax assets totaled approximately $ 4.5 million and $ 1.4 million, respectively. 13. Common Stock and Preferred Stock Common Stock As of December 31, 2024, and December 31, 2023, the Company has authorized the issuance of up to 250,000,000 shares of common stock, respectively, at a par value $ 0.0001 per share. As of December 31, 2024, and December 31, 2023 there were 1,384,801 and 738,295 shares of Common Stock issued and outstanding, respectively. No cash dividends have been declared or paid as of December 31, 2024. Holders of the Common Stock are entitled to one vote per share, and to receive dividends, on and if declared by the board of directors and, upon liquidation or dissolution, are entitled to receive all assets available for distribution, subordinate to the rights, preferences, and privileges of any outstanding preferred shares (if any) with respect to dividends and in connection with liquidation, winding up and dissolution of the Company. The holders have no preemptive or other subscription rights. Preferred Stock As of December 31, 2024, the Company has authorized the issuance of up to 1,000,000 shares of Conduit Pharmaceuticals, Inc. preferred stock (the “Preferred Stock”). As of December 31, 2024, and December 31, 2023, no preferred shares were issued and outstanding. At-the-Market Offering On October 23, 2024, the Company entered into the Sales Agreement with A.G.P. relating to 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 $ 3.6 million from time to time through A.G.P., acting as our sales agent or principal. The compensation to A.G.P. for sales of common stock sold pursuant to the Sales Agreement will be equal to 3.0 % of the gross proceeds of any shares of common stock sold under the sales agreement. During the year ended December 31, 2024, the Company sold 323,273 shares of Common Stock under the Sales Agreement and generated $ 3.3 million in net proceeds after paying fees to A.G.P. and other issuance costs of $ 0.2 million. See Note 20 for information on the issuances and increases to the aggregate offering price subsequent to December 31, 2024. F- 30 14. Earnings/(Net Loss) Per Share The following table presents the calculation of basic and diluted earnings/(net loss) per share (in thousands, except share amounts and per share data): Schedule of Basic and Diluted Net Loss Per Share 2024 2023 For the years ended December 31, 2024 2023 Numerator: Net income (loss) - basic $ ( 17,802 ) $ ( 535 ) Less: Change in fair value and income impact of option liabilities - ( 5,521 ) Net income (loss) - diluted $ ( 17,802 ) $ ( 6,056 ) Denominator: Weighted average common stock outstanding, basic 867,096 669,739 Add: Option liability conversion shares - 9,200 Weighted average shares used in computing net loss per share - diluted 867,096 678,939 Net income (loss) per share, basic $ ( 20.53 ) $ ( 0.79 ) Net income (loss) per share, diluted $ ( 20.53 ) $ ( 8.92 ) The Company notes that the adjustment to the numerator in 2023 for the change in fair value and income impact of Vela and Cizzle accounts for changes in fair value of each option, gains (losses) at the time of issuance of each option and the statement of operations impact of the derecognition of deferred revenue that originated upon the initial sale of royalties to both Vela and Cizzle. Potentially dilutive securities (upon conversion) that were not included in the diluted per share calculations because they would have been anti-dilutive were as follows: Schedule of Potentially Dilutive Securities As of As of December 31, 2024 December 31, 2023 Public warrants 139,790 139,790 PIPE Warrants - 20,000 A.G.P. Warrants 540 540 Convertible Promissory Notes Payable 800 805 Stock Options 65,509 10,717 Restricted stock Units - 1,470 August 2024 Nirland Note 672,007 - A.G.P. Convertible Note 576,949 - March 2024 Warrants 2,600 - April 2024 Warrants 14,477 - A.G.P. 2024 Warrants 28,626 - Antidilutive Securities 1,501,298 173,322 15. Commitments and Contingencies Legal Proceedings The 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. In August 2023, prior to the Business Combination, our now wholly-owned subsidiary, Conduit Pharmaceuticals Limited, received a letter from Strand Hanson Limited (“Strand”) claiming it was owed advisory fees pursuant to a previously executed letter. Conduit rejected 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 65 thousand shares of common stock. As of December 31, 2024, the potential contingency is considered probable and reasonably estimable and as such, the Company accrued an estimated liability of $ 0.4 million in the accompanying financial statements. The trial in this matter remains scheduled for October 20, 2025. We intend to vigorously defend against these claims. Regardless of its outcome, the litigation may impact our business due to, among other things, legal costs and the diversion of the attention of our management. 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 assigned the US Application, and was not the sole 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. As of December 31, 2024, the damages sought by St George Street Capital are unknown and the potential contingency is not considered probable. As such, the Company has not accrued a loss contingency in the accompanying financial statements. We intend to vigorously defend against these claims. Regardless of its outcome, the litigation may impact our business due to, among other things, legal costs and the diversion of the attention of our management. F- 31 16. Related Party Transactions Corvus Capital Limited Corvus Capital Limited (“Corvus”) is a significant investor in the Company through subscribing to 1,000 common shares prior to the closing of the Merger on September 22, 2023. As discussed in Note 2, 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 and principal owner of Corvus is a member of Conduit’s board of directors. Occasionally, Corvus provides advisory services to the Company and is paid a fee for the services. As of December 31, 2024, and December 31, 2023, no advisory fees were due to Corvus. For the years ended December 31, 2024 and 2023, the Company incurred director travel expenses payable to the board of directors member of approximately $ 0.4 million and $ 1.0 million, respectively. As of December 31, 2024, and December 31, 2023, the Company did not owe the CEO of Corvus any director’s fees as the CEO of Corvus and the Company agreed to cease director’s fees to the CEO of Corvus effective at the closing of the Merger. Amounts owed to this director are included in accrued expenses and other current liabilities in the balance sheet. During the year ended December 31, 2023, Corvus provided a $ 0.2 million cash contribution to the Company to maintain liquidity through the closing of the Merger. There was no intention of repayment by both Corvus and the Company, and as such, the Company recorded the contribution to the consolidated statement of changes in stockholders’ deficit. During January and February 2023, the Company issued convertible notes payable with an aggregate principal amount of $ 0.4 million (£ 0.3 million) to this related party. The convertible notes payable mature three years after issuance and bear 5 % interest, only to be paid in the event of a material breach by the Company. In the event of a Change of Control, the convertible notes payable automatically convert into common shares of the Company at a conversion price equal to a 20 % discount to the price per share paid for the most senior class of shares in respect of such Change of Control. All of the convertible notes payable converted into Common Stock upon the closing of the Merger at a 20 % discount as specified. Refer to Note 2 above for additional information. 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 300,484 shares held to Nirland. Related Party Loan The loans made to a related party were stated at a total principal amount of $ 0.8 million, with no balance outstanding at December 31, 2024 and December 31, 2023, respectively. The loan carried no interest, and as such, no interest receivable was recorded. The Company recorded a full reserve against the loan as the related party did not have the ability to repay the loans as of December 31, 2022. On September 22, 2023, the related party paid back a significant portion of its outstanding loan and the Company forgave the remaining portion of the loan and the Company recorded the $ 0.3 million payoff as a gain within general and administrative expense on the consolidated statement of operations and comprehensive income (loss), as it had previously been fully reserved. Nirland On 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. Refer to Note 7, Note 8 and Note 20 above for additional information. SARBORG On December 12, 2024, the Company entered into the Sarborg Service Agreement with Sarborg. Dr. Andrew Regan, a member of Conduit’s board of directors, also sits on the board of directors of Sarborg but does not have an equity interest in Sarborg. During the year ended December 31, 2024, the Company recorded $ 0.1 million as research and development expense related to the Sarborg Service Agreement. Refer to Note 10 above for additional information. Officers and Directors On 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 9,077 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, $ 12.50 per warrant. 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 $ 312 (as adjusted from time to time in accordance with the terms thereof) for a two-year period after the date of exercisability. F- 32 17. Other Income (expense), net The following table presents other income (expense), net, for the years ended December 31, 2024 and 2023 (in thousands): Schedule of Other Expense, Net 2024 2023 For the years ended December 31, 2024 2023 Other income: Recognition of Cizzle deferred revenue upon option exercise $ - $ 1,480 Recognition of Vela deferred revenue upon option exercise - 2,774 Change in fair value of Cizzle option - 1,280 Change in fair value of Vela option - 970 Change in fair value of warrant liability 221 81 Change in fair value of convertible note payment 2,018 - Gain on debt extinguishment 2,473 - Interest Income 13 15 Income Tax Refund 314 - Unrealized foreign currency transaction gain 2 39 Other 7 115 Total other income: 5,048 6,754 Other expense: Loss on issuance of Vela option - 987 Change in fair value of convertible notes payable - 426 Interest expense 577 211 Amortization of debt issuance costs 929 - Loss on issuance of warrants 2,710 - Loss on Debt Extinguishment 3,179 - Realized foreign currency transaction loss 16 403 Other expense 20 - Total other expense 7,431 2,027 Total other (expense) income, net $ ( 2,383 ) $ 4,727 18. Warrants Upon the closing of the Merger, the Company assumed (i) the warrants initially included in the MURF units issued in MURF’s initial public offering (the “Publicly Traded Warrants”), and (ii) the warrants that were included in the private placement units issued to the Sponsor simultaneously with the closing of MURF’s initial public offering (the “Private Placement Warrants”). In connection with the Merger, the Company also issued warrants to the PIPE Investors (the “PIPE Warrants”) pursuant to the Subscription Agreements and to an advisor (the “A.G.P. Warrants,” and together with the PIPE Warrants, the “Liability Classified Warrants”) pursuant to the Company’s engagement agreement with the advisor. The Company determined that the settlement amount of the Publicly Traded Warrants and the Private Placement 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. On March 20, 2024, the Company issued in a private placement equity classified common stock purchase warrants (the “March 2024 Warrants”) to an investor to purchase up to an aggregate 2,600 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 (the “March Lock-Up Agreement”). The Company recognized at $ 0.5 million loss on the issuance of the warrants during the year ended December 31, 2024. The Company determined that the March 2024 Warrants should be classified within equity and estimated the fair value of the warrants issued as of March 20, 2024, using a Black-Scholes option-pricing model utilizing the following assumptions: Schedule of Black-Scholes Option Pricing Model March 20, 2024 Closing stock price $ 347 Contractual exercise price $ 318 Risk-free rate 4.41 % Estimated volatility 78.5 % Time period to expiration 3 Years F- 33 On April 20, 2024, the Company issued in a private placement equity classified common stock purchase warrants (the “April 2024 Warrants”) to shareholders’ of the Company to purchase up to an aggregate 14,477 shares of the Company’s Common Stock, in exchange for (1) $ 12.50 per warrant and (2) entering into a lock-up with respect to the shares of common stock held by such holders (the “April Lock-Up Agreement”). 9,077 of the total April 2024 Warrants issued were issued to directors, related parties and management of the Company. The Company received cash of $ 0.2 million and recognized a $ 2.2 million loss on the issuance of the warrants during the year ended December 31, 2024. The Company determined that the April 2024 Warrants should be classified within equity and estimated the fair value of the warrants issued as of April 20, 2024, using a Black-Scholes option-pricing model utilizing the following assumptions: April 20, 2024 Closing stock price $ 308 Contractual exercise price $ 312 Risk-free rate 4.81 % Estimated volatility 78.3 % Time period to expiration 3 Years As partial consideration for the Advance issued to the Company by A.G.P. on October 29, 2024, the Company issued A.G.P. Warrants (the “A.G.P. 2024 Warrants”) to purchase up to 28,625 shares of the Company’s Common Stock at an exercise price of $ 0.1048 per share. The Company determined that the A.G.P. 2024 Warrants should be classified as a liability and estimated the fair value of the warrants as of October 29, 2024, and December 31, 2024, using a Black-Scholes option-pricing model. Refer to Note 3 above for additional information. Equity Classified Warrants Pursuant to MURF’s initial public offering, the Company sold 132,250 units at a price of $ 10.00 per unit. Each unit consisted of one share of MURF Class A common stock and one redeemable Publicly Traded Warrant. Each whole Publicly Traded Warrant entitled the holder to purchase one share of Class A common stock at a price of $ 11.50 per share, subject to adjustment. The warrants are publicly traded on The Nasdaq Capital Market under the trading symbol CDTTW. Simultaneously with the closing of its initial public offering, MURF consummated the private sale to the Sponsor of 7,540 private placement units at a price of $ 10.00 per private placement unit. Each private placement unit was comprised of one share of MURF Class A common stock and one Private Placement Warrant. Each Private Placement Warrant was exercisable to purchase one share of MURF Class A common stock at a price of $ 11.50 per share, subject to adjustment. The private placement units (including the Class A common stock issuable upon exercise of the warrants included in the private placement units) were not transferable, assignable, or saleable until 30 days after the completion of a Merger, subject to certain exceptions. In connection with the closing of the Merger on September 22, 2023, the Equity Classified Warrants were amended to entitle each holder to purchase one share of the Company’s Common Stock. The Equity Classified Warrants became exercisable 30 days after the Closing Date of the Merger. The Equity Classified Warrants will expire five years after the Closing Date of the Merger or earlier upon redemption or liquidation. The Company will not be obligated to deliver any shares of Common Stock pursuant to the exercise of an Equity Classified Warrant and will have no obligation to settle such exercise unless a registration statement under the Securities Act with respect to the shares of Common Stock underlying the warrants is then effective and a prospectus relating thereto is current, subject to our satisfying our obligations described below with respect to registration. No Equity Classified Warrant will be exercisable and we will not be obligated to issue shares of Common Stock upon exercise unless the Common Stock issuable upon such exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the Equity Classified Warrant. In the event that the conditions in the two immediately preceding sentences are not satisfied with respect to an Equity Classified Warrant, the holder of such warrant will not be entitled to exercise such warrant and such warrant may have no value and expire worthless. In no event will we be required to net cash settle any Equity Classified Warrant. In the event that a registration statement is not effective for the exercised Equity Classified Warrant, the purchaser of a unit containing such Equity Classified Warrant will have paid the full purchase price for the unit solely for the share of Common Stock underlying such unit. F- 34 Conduit may call the Publicly Traded Warrants in whole and not in part, at a price of $ 1.00 per warrant, ● upon not less than 30 days’ prior written notice of redemption to each Publicly Traded Warrant holder; and ● if, and only if, the reported last sale price of the Common Stock equals or exceeds $ 1,800.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period commencing once the Publicly Traded Warrants become exercisable and ending three business days before we send the notice of redemption to the warrant holders. If and when the Publicly Traded Warrants become redeemable by Conduit, Conduit may not exercise its redemption right if the issuance of shares of Common Stock upon exercise of the Publicly Traded Warrants is not exempt from registration or qualification under applicable state blue sky laws or Conduit are unable to effect such registration or qualification. Conduit will use its best efforts to register or qualify such shares of Common Stock under the blue sky laws of the state of residence in those states in which the Publicly Traded Warrants were offered by Conduit in the offering. If Conduit calls the Publicly Traded Warrants for redemption as described above, Conduit’s management will have the option to require any holder that wishes to exercise its Publicly Traded Warrant to do so on a “cashless basis.” In determining whether to require all holders to exercise their Publicly Traded Warrants on a “cashless basis,” Conduit’s management will consider, among other factors, Conduit’s cash position, the number of Publicly Traded Warrants that are outstanding and the dilutive effect on Conduit stockholders of issuing the maximum number of shares of Common Stock issuable upon the exercise of our Publicly Traded Warrants. If Conduit’s management takes advantage of this option, all holders of Publicly Traded Warrants would pay the exercise price by surrendering their Publicly Traded Warrants for that number of shares of Common Stock equal to the quotient obtained by dividing (x) the product of the number of shares of Common Stock underlying the Publicly Traded Warrants, multiplied by the difference between the exercise price of the Publicly Traded Warrants and the “fair market value” (defined below) by (y) the fair market value. The “fair market value” for this purpose shall mean the average reported last sale price of the Common Stock for the 10 trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the holders of Publicly Traded Warrants. If Conduit’s management takes advantage of this option, the notice of redemption will contain the information necessary to calculate the number of shares of Common Stock to be received upon exercise of the Publicly Traded Warrants, including the “fair market value” in such case. Requiring a cashless exercise in this manner will reduce the number of shares to be issued and thereby lessen the dilutive effect of a Publicly Traded Warrant redemption. The Private Placement Warrants are identical to the Publicly Traded Warrants, except that such warrants will be exercisable for cash or on a cashless basis, at the holder’s option, and will not be redeemable by Conduit, in each case so long as they are still held by the Sponsor or its permitted transferees. As summarized above, the Company has the option to redeem all of the Publicly Traded Warrants at a cash price of $ 0.01 per warrant during the exercisability period if the Company’s common stock has closed at a trading price above $ 18.00 for 20 days during a 30-day trading window. Management notes that this option is within the Company’s control, therefore it does not represent an “obligation” and does not create a liability under ASC 480. Management considered the guidance within ASC 815-40-15-7A, noting that an exercise contingency would not preclude permanent equity classification if all of the other equity criteria are met. As all other criteria to be classified as permanent equity are met, the Publicly Traded Warrants are classified as permanent equity on the Consolidated Balance Sheets. F- 35 Management assessed the Private Placement Warrants and determined that the warrants are considered to be indexed to the entity’s own stock and met all the criteria for permanent equity classification. As such, the Publicly Traded Warrants are classified as permanent equity on the Consolidated Balance Sheets. The March 2024 Warrants are not exercisable until one year after their date of issuance. Each March 2024 Warrant is exercisable into one share of the Company’s Common Stock at a price per share of $ 3.18 (as adjusted from time to time in accordance with the terms thereof) for a two-year period after the date of exercisability. There is no established public trading market for the March 2024 Warrants. Notwithstanding the foregoing, the March 2024 Warrants shall vest, and not be subject to forfeiture, with respect to 25% of such March 2024 Warrants commencing on the 90th day after the date of the March Lock-Up Agreement and 25% on each subsequent 90-day anniversary, in each case vesting only if the holder agrees to continue to have its shares of common stock remain locked up pursuant to the March Lock-Up Agreement on such date. The April 2024 Warrants are not exercisable until one year after their date of issuance. Each April 2024 Warrant is exercisable into one share of the Company’s Common Stock at a price per share of $ 312 (as adjusted from time to time in accordance with the terms thereof) for a two-year period after the date of exercisability. There is no established public trading market for the April 2024 Warrants. Notwithstanding the foregoing, the April 2024 Warrants shall vest, and not be subject to forfeiture, with respect to 25% of such March 2024 Warrants commencing on the 90th day after the date of the April Lock-Up Agreement and 25% on each subsequent 90-day anniversary, in each case vesting only if the holder agrees to continue to have its shares of common stock remain locked up pursuant to the April Lock-Up Agreement on such date. Liability Classified Warrants As discussed in Note 2, 20,000 PIPE Warrants were issued to the PIPE Investors as of the closing of the Merger pursuant to subscription agreements. The warrants provide the PIPE Investors the right to purchase up to 20,000 shares of Common Stock at an exercise price of $ 1,150 . Additionally, on the Closing Date of the Merger, the Company issued 540 A.G.P. Warrants to an advisor for services provided directly related to the Merger. The warrants provide the advisor the right to purchase up to 540 shares of Common Stock at an exercise price of $ 1,100 per share. The warrants issued to the PIPE Investors and the advisor contain materially the same terms and are exercisable for a period of five years, beginning on October 22, 2023. The PIPE Warrants are exercisable for cash or on a cashless basis, at the holder’s option. The PIPE Warrants are not redeemable by the Company. The A.G.P. Warrants are exercisable for cash or on a cashless basis, at the holder’s option. The Company may call the A.G.P. Warrants for redemption, in whole and not in part, at any time after the A.G.P. Warrants become exercisable and prior to their expiration, at a price of $ 1.00 per A.G.P. Warrant, ● upon not less than 30 days’ prior written notice of redemption to each warrant holder; ● if, and only if, the reported last sale price of the Common Stock equals or exceeds $ 1,800 per share (as adjusted for stock splits, stock dividends, recapitalizations and other similar events) for any 20 trading days within a 30-trading day period commencing once the A.G.P. Warrants become exercisable and ending three business days before we send the notice of redemption to the warrant holders; and ● provided there is a current registration statement in effect with respect to the shares of Common Stock underlying the A.G.P. Warrants for each day in the 30-trading day period and continuing each thereafter until the redemption date. If the Company calls the A.G.P. Warrants for redemption as described above, our management will have the option to require any holder that wishes to exercise its A.G.P. Warrant to do so on a “cashless basis.” If our management takes advantage of this option, holders of A.G.P. Warrants would pay the exercise price by surrendering their A.G.P. Warrants for that number of shares of Common Stock as calculated pursuant to the A.G.P. Warrant. Requiring a cashless exercise in this manner will reduce the number of shares to be issued and thereby lessen the dilutive effect of an A.G.P. Warrant redemption. The exercise of the A.G.P. 2024 Warrants and the issuance of the shares of Common Stock underlying the Warrants is subject to stockholder approval under applicable rules and regulations of Nasdaq. The warrants are exercisable for a period of five years, beginning on the stockholder approval date. The A.G.P 2024 Warrants are exercisable for cash, or on a cashless basis if at the time of exercise there is no effective registration statement registering the resale of the warrant shares. The A.G.P. 2024 Warrants are not redeemable by the Company. On October 29, 2024, the Company recorded a warrant liability of $ 0.2 million. As part of the special meeting of stockholders taking place on January 9, 2025, the stockholders approved the issuance of up to an aggregate of 28,625 shares of the Company’s common stock upon exercise of the A.G.P. 2024 Warrants. The PIPE Warrants, A.G.P. Warrants, and the A.G.P 2024 Warrants (collectively the “Liability Classified Warrants”) are classified as derivative liabilities because they do not meet the criteria in ASC 815-40 to be considered indexed to the entity’s own stock as the warrants could be settled for an amount that is not equal to the difference between the fair value of a fixed number of the entity’s shares and a fixed monetary amount. The Liability Classified Warrants are initially measured at fair value and are remeasured at fair value at subsequent financial reporting period end dates and upon exercise (see Note 7 for additional information regarding fair value). On December 11, 2024, the Company reduced the exercise price of the PIPE Warrants to be $ 8.83 , at which time all PIPE Warrants were exercised. The Company received approximately $ 0.2 million of proceeds from the exercise of the Warrants, all of which was used to pay down the October 2024 Nirland Note. For the years ended December 31, 2024, and December 31, 2023, the Company remeasured the fair value of the Liability Classified Warrants and recorded a gain on the change in the fair value of $ 0.2 million and $ 0.1 million, respective. The gains were recorded to other income (expense), net, on the consolidated statements of operations and comprehensive income (loss). As of December 31, 2024 and December 31, 2024, the balance sheets contained warrant liabilities of $ 0.1 million and $ 0.01 million, respectively. F- 36 19. Segments The 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 CODM, which the Company has identified as David Tapolczay, 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 consolidated statements of operations and comprehensive income (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 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 chief operating decision maker and are reported on the consolidated statements of cash flows. The CODM uses consolidated net loss and budget-to-actual variances to assess the performance of the operating segment and determine if the Company is progressing towards its goals. The following table presents certain financial data for the Company’s reportable segment (in thousands): Schedule of Financial Data for the Company’s Reportable Segment 2024 2023 December 31, 2024 2023 Research & development expense – new licenses $ 3,114 $ — Research & development expense – clinical asset development 264 90 General and administrative expenses – legal & professional fees 2,258 314 General and administrative expenses – accounting & audit fees 1,625 3,064 General and administrative expenses – salaries, payroll and stock-based compensation 4,098 721 General and administrative expenses – other 4,060 1,073 Loss from segment operations $ 15,419 $ 5,262 Other segment items consist of the items within Note 17 to the consolidated financial statements. 20. Subsequent Events Reverse Stock Split On January 24, 2025, the Company effected the Reverse Stock Split, pursuant to which every 100 shares of the Company’s common stock issued or outstanding were automatically reclassified into one new share of common stock, subject to the treatment of fractional shares as previously described, without any action on the part of the holders. For a description of the Reverse Stock Split, refer to Note 1 above. Nirland Notes Repayment On February 7, 2025, the Company fully repaid its outstanding October 2024 Nirland Note to Nirland Limited in the principal amount of $ 600,000 . This payment settled all obligations under the October 2024 Nirland Note. With respect to the August 2024 Nirland Note, the Lender converted approximately $ 1.7 million of the original principal amount of $ 2,650,000 under into shares of common stock of the Company. Of the $ 1.7 million of original principal that was converted into shares of common stock of the Company, $ 0.1 million was converted on December 12, 2024, while the remaining $ 1.6 million was converted between January 13, 2025 and February 10, 2025. On February 13, 2025, the Company paid the remaining outstanding portion of the August 2024 Nirland Note, approximately $ 0.9 million, and, accordingly, satisfied all of its obligations in all respects to Nirland. As a result of satisfying its obligations under the August 2024 Nirland Note, all of the Company’s assets are once again free and clear of any liens, security interests or encumbrances. March 2023 Convertible Note Repayment On March 13, 2025, the Company fully repaid its outstanding March 2023 Convertible Note. The Company notes that the note holder agreed on March 6, 2025 to reduce the principal from $ 0.8 million to $ 0.7 million. This payment settled all obligations under the March 2023 Convertible Note. The March 2023 Convertible Note Repayment was considered to be in default until payment on March 13, 2025. Nasdaq Stock Market Correspondence and Subsequent Nasdaq Capital Market Listing On February 11, 2025, the Company presented its plan of compliance to The Nasdaq Stock Market LLC Hearing Panel (the “Panel”) and requested an extension of time to achieve compliance with Nasdaq Listing Rules, the Minimum Bid Price (“Bid Price”), Market Value of Publicly Held Shares (“MVPHS”) and Market Value of Listed Securities (“MVLS”) rules, respectively. On March 5, 2025, the Company received a written notification from the Panel confirming it has granted the Company such an extension for the Company 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, which it intends to do. Additionally, the Company was also notified in the Notice that as of February 26, 2025, it had regained compliance with the Bid Price rule. The Company notes that there is no assurance that the Company can maintain ongoing compliance with the Bid Price Rule. The Company expects to submit its compliance document with respect to the MVPHS and MVLS rules which will be subject to review by the Panel. The Panel, may, in its discretion, request additional information before determining that the Company has complied with the terms of the exception. There can be no assurances that the Panel’s decision will agree with the Company’s compliance document. Common Stock Issuances in Relation to the Sales Agreement The Company increased the aggregate offering price under the Sales Agreement to up to $ 4,835,433 , $ 8,183,156 , $ 13,450,017 , $ 17,816,270 , and $ 23,922,782 on January 15, 2025, February 6, 2025, February 10, 2025, February 19, 2025, and March 10, respectively. From January 22, 2025 through the issuance of the Company’s consolidated financial statements, the Company sold 4,345,913 shares of the Company’s Common Stock through the Sales Agreement. The Company received proceeds of $ 8.1 million, net of commissions payable to A.G.P. of $ 0.2 million. As of the financial statement filing date, the Company has $ 12.0 million available under the Sales Agreement. F- 37