What changed in this filing

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Item 1. Financial Statements

2025-05-15 compared with 2024-11-14 · 1070 added, 1081 removed, 298 unchanged (88% of the section changed)

3 unchanged sentences

thousands, except share and per share amounts)

September 30, 2024

December 31, 2023

Current assets

Cash and cash equivalents

Marketable Investments

R&D services- related party (see Note 7 and Note 12)

R&D services (see Note 7)

Prepaid expenses and other current assets

Total current assets

Operating lease right-of-use assets, net

Operating lease right-of-use assets.

Property, plant and equipment, net

Prepaid expenses and other long-term assets

LIABILITIES AND STOCKHOLDERS’ DEFICIT

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

Current liabilities

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Accrued expenses and other current liabilities

Bank overdraft

Convertible promissory note payable

Operating lease liability, current portion

Loans payable

Deferred commission payable

Convertible promissory note payable

Convertible promissory notes payable at fair value

Convertible promissory notes payable at fair value – related parties

Convertible promissory notes payable at fair value

Notes payable

Notes payable – related parties

Notes payable

Total current liabilities

Derivative warrant liability

Operating lease liability, non-current portion

Deferred commission payable

Derivative warrant liability

Total liabilities

Commitments and contingencies (see Note 15)

Stockholders’ deficit

Stockholders’ equity (deficit)

Common stock, par value $ 0.0001 ;

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

250,000,000 shares authorized at March 31, 2025 and December 31, 2024, respectively, 9,512,058 shares and 1,384,801 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively

Preferred stock, par value $ 0.0001 ;

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

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

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

nil shares issued and outstanding at March 31, 2025 and December 31, 2024

Additional paid-in capital

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Accumulated other comprehensive income

Total stockholders’ deficit

Total liabilities and stockholders’ deficit

Total stockholders’ equity (deficit)

Total liabilities and stockholders’ equity (deficit)

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

PHARMACEUTICALS INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

thousands, except share and per share amounts)

Three Months ended September 30,

Nine Months ended September 30,

Three Months ended March 31,

Operating expenses:

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Total other (expense) income, net

Net (loss) income

Basic earnings/(net loss) per share

Diluted earnings/(net loss) per share

Basic and diluted net loss per share

Basic weighted-average common shares outstanding

Diluted weighted-average common shares outstanding

Comprehensive Income (loss):

Comprehensive loss:

Foreign currency translation adjustment

Total comprehensive Income (loss)

Total comprehensive loss

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

PHARMACEUTICALS INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

thousands, except share amounts)

comprehensive

stockholders’

Balance at July 1, 2024

Issuance of Common Stock for note payable

Issuance of Common Stock for licensing right

Stock-based compensation

Foreign currency translation adjustment

Balance at September 30, 2024

comprehensive

stockholders’

Additional paid-in

Accumulated other comprehensive

Total stockholders’ Equity

Balance at January 1, 2025

Issuance of common stock for services

Issuance of Common Stock upon vesting of restricted stock units

Issuance of Common Stock for note payable

Issuance of Common Stock for licensing right

Issuance of Warrants

Stock-based compensation

Foreign currency translation adjustment

Balance at September 30, 2024

comprehensive

stockholders’

Balance at July 1, 2023

Retroactive application of Merger

Reclassification of additional paid-in-capital

Adjusted Balances, beginning of period

Reclassification of additional paid-in-capital

Issuance of Conduit Pharmaceuticals Inc.

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

Merger, net of redemptions (Note 3)

Issuance of Conduit Pharmaceuticals Inc.

common stock in connection with PIPE Financing (Note 3)

Issuance of Conduit Pharmaceuticals Inc.

common stock to Cizzle Biotechnology Holding PLC

Issuance of Conduit Pharmaceuticals Inc.

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

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

Capital contribution - related party

Issuance of common stock under the ATM program

Issuance of common stock upon exercise of conversion option

Stock-based compensation

Foreign currency translation adjustment

Balance at September 30, 2023

comprehensive

stockholders’

Balance at March 31, 2025

Additional paid-in

Accumulated other comprehensive

Total stockholders’

Balance at January 1, 2024

Retroactive application of Merger

Reclassification of additional paid-in-capital

Adjusted Balances, beginning of period

Reclassification of additional paid-in-capital

Issuance of Conduit Pharmaceuticals Inc.

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

Merger, net of redemptions (Note 3)

Issuance of Conduit Pharmaceuticals Inc.

common stock in connection with PIPE Financing (Note 3)

Issuance of Conduit Pharmaceuticals Inc.

common stock to Cizzle Biotechnology Holding PLC

Issuance of Conduit Pharmaceuticals Inc.

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

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

Capital contribution - related party

Issuance of Warrants for lock-up

Stock-based compensation

Foreign currency translation adjustment

Balance at September 30, 2023

Balance at March 31, 2024

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

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CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months ended September 30,

Three Months ended March 31,

Cash flows used in operating activities:

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

Gain on change in fair value of Cizzle option

Gain on change in fair value of Vela option

Loss on issuance of Vela option

Change in reserve for related party uncollectible loan

Loss on change in fair value of convertible notes payable

Loss on related party loan forgiveness

Unrealized foreign exchange gain

Unrealized foreign exchange loss

Loss on debt extinguishment, net

Unrealized foreign exchange loss (gain)

Gain on debt extinguishment

Gain on change in fair value of warrants

Gain on waiver of accrued interest

Operating lease obligations

Issuance of warrants for lock-up

Interest expense on convertible promissory note

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

Gain on change in fair value of derivative warrant liability

Stock-based compensation expense

Non-cash interest expense

Operating lease obligations

Amortization of financed Directors and Officers insurance

Amortization of debt issuance costs

Depreciation expense

Issuance of common stock for services and licensing right

Amortization of financed Directors and Officers insurance

Amortization Expense

Changes in operating assets and liabilities:

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Accrued expenses and other liabilities

Lease liability

Net cash flows used in operating activities

Cash flows used in investing activities:

Issuance of loan - related party

Purchases of property and equipment

Purchases of short term investments

Proceeds from the sale of short-term investments

Proceeds from the issuance of options

Purchases if property and equipment

Net cash flows used in investing activities

Cash flows provided by financing activities:

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

Net proceeds from the issuance of notes payable

Capital contribution - related party

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

Interest paid on convertible promissory note, carried at cost

Proceeds from issuance of warrants from lock-up

Bank Overdraft

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

Proceeds from issuance of common shares related to ATM program

Repayment of notes payable – related parties

Repayment of notes payable

Repayment of convertible notes payable - related parties

Repayment of convertible notes payable

Net cash flows provided by financing activities

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Cash and cash equivalents at end of period

Supplemental cash flow information:

Cash paid for interest

Non-cash investing and financing activities

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

Receivables from issuance of warrants for lock-up

Receivable from issuance of note payable

Issuance of Conduit Pharmaceuticals Inc.

common stock to Cizzle Biotechnology Holding PLC upon exercise of option

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

common stock in connection with the Merger

Accrued transaction costs

Non-cash directors and officers insurance

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

Net Liabilities assumed in the Merger

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

Right of Use Asset obtained in exchange for Operating Lease Liabilities

Issuance of Common Stock Upon Exercise of Conversion Option

Supplemental Cash Disclosures

Cash paid for interest

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

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

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.

Conduit Pharmaceuticals Inc.,

a Delaware corporation (“Conduit” or the “Company”), is a dynamic, multi-asset clinical stage, life science company

delivering an efficient model for compound development.

Conduit both acquires and funds the development of Phase 2-ready assets, building

an integrated and advanced platform-driven approach powered by artificial intelligence (AI) and cybernetics, and seeking an exit through

third-party license deals following successful clinical trials.

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.

Led by a highly experienced team of executives including Dr.

Andrew Regan and Dr.

Freda Lewis-Hall, this

novel approach is a departure from the traditional pharma/biotech business model of taking assets through regulatory approval.

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 for each such clinical asset that would provide that such third party would pursue

the further development, commercialization, and marketing of such assets.

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 3) pursuant to the initial merger agreement

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

Pursuant to the terms of the Merger Agreement, on the Closing Date, (i) Merger Sub merged with and into Old Conduit,

with Old Conduit surviving the merger as a wholly-owned subsidiary of MURF, and (ii) MURF changed its name from Murphy Canyon Acquisition

to Conduit Pharmaceuticals Inc.

The common stock of the Company (the “Common Stock”) commenced trading on The Nasdaq

Global Market under the symbol “CDT” on September 25, 2023, and the Company’s warrants commenced trading on The Nasdaq

Capital Market under the symbol “CDTTW” on September 25, 2023.

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

of America (“U.S.

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.

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

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

Pursuant to the terms of the Merger Agreement, on the Closing Date, (i) Merger Sub merged with and into Old Conduit, with Old Conduit

surviving the merger as a wholly-owned subsidiary of MURF, and (ii) MURF changed its name from Murphy Canyon Acquisition Corp.

Pharmaceuticals Inc.

The common stock of the Company commenced trading on The Nasdaq Global Market under the symbol “CDT”

on September 25, 2023, and the Company’s warrants commenced trading on The Nasdaq Capital Market under the symbol “CDTTW”

on September 25, 2023.

of Presentation

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

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

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

The condensed

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

the footnote disclosures from the annual financial statements.

for a fair statement of its financial position as of March 31, 2025, and its results of operations for the three months ended March 31,

2025 and 2024, and cash flows for the three months ended March 31, 2025 and March 31, 2024.

The condensed consolidated balance sheet

at December 31, 2024, was derived from the audited annual financial statements but does not contain all of the footnote disclosures from

the annual financial statements.

Reclassifications

certain instances, amounts reported in prior years’ consolidated financial statements have been reclassified to conform to the current

presentation.

Such reclassifications had no effect on previously reported stockholders’ equity (deficit) or net loss.

of Consolidation

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and Going Concern

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

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

date the financial statements are issued.

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

2024, the Company had an accumulated deficit of $ 26.7

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

short term investments of $ 34,000 and

$ 4.2 million,

respectively.

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

million and $ 2.8

million, respectively, and cash used in operating activities of $ 5.9

million and $ 2.9

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.

accordance with Accounting Standards Codification (“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 March 31, 2025, the Company had an accumulated deficit of $ 34.2 million.

As of March 31, 2025 and December 31, 2024,

the Company had cash and cash equivalents of $ 2.1 million and $ 0.6 million, respectively.

For the three months

ended March 31, 2025 and 2024, the Company had net losses of $ 5.1 million and $ 3.6 million, respectively, and cash used in operating

activities of $ 4.3 million and $ 2.4 million, respectively.

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

These factors

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

financial statement filing date.

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

funding to support its current business plan.

Management’s plans to alleviate the conditions that raise substantial doubt include

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.

To date, management has executed

on the following plans (see Note 17).

However, the plans executed to date do not alleviate

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

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

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

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

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

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

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

in exchange for funds in such amount.

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

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

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

Bridge Agreement”),

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

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

(the “Commitment”).

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

warrants to purchase up to

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

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

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

Bridge Note”) to A.G.P.

in the original principal amount of $ 600,000 .

Bridge Note bears interest at a rate of 4.21 %

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

funding to support its current business plan in addition to the remaining at the market offering program (the “Sales

Agreement”) of approximately $ 12.0

million (see Note 10), as of the financial statement issuance 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.

there is no assurance that such funding will be available when needed or on acceptable terms.

If additional funding is not available

when required, the Company would need to delay or curtail its operations and its research and development activities until such

funding is received, all of which could have a material adverse effect on the Company and its financial condition

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

1 unchanged sentence

from the outcome of this uncertainty.

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

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 Quarterly Report on Form 10-Q 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.

Risks and Uncertainties

Company is subject to risks common to companies in the pharmaceutical industry including, but not limited to, uncertainties related to

commercialization of competitor products, regulatory approvals, dependence on key products, dependence on key customers and suppliers,

and protection of intellectual property rights.

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.

efforts will require significant amounts of additional capital, adequate personnel, infrastructure, and extensive compliance and reporting

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.

Even if the Company’s efforts are successful, it is uncertain when, if ever, the Company will realize

significant revenue and cash flow from royalties or product sales.

Company licenses clinical assets from AstraZeneca.

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

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

Listing Deficiencies

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

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

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

resignation of Ms.

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

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

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

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

The notice has no immediate

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

The Company intends to regain compliance with the requirement that

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

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

of Failure to Satisfy a Continued Listing Rule

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

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

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

Price Rule”).

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

Nasdaq Global Market.

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

period of 180 calendar days, or until February 10, 2025 (the “Compliance Date”), to regain compliance with the Bid Price

If, at any time before the Compliance Date, the closing bid price for the Company’s Common Stock closes at $ 1.00 or more

for a minimum of 10 consecutive business days as required under the Compliance Period Rule, the Staff will provide written notification

to the Company that it complies with the Bid Price Rule, unless the Staff exercises its discretion to extend this 10 day period pursuant

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

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

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

To qualify, the Company would be

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

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

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

If the Nasdaq staff determines that the

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

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

The Company would have the right to

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

appeal process is complete.

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

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

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

with the Bid Price Rule, which could include effecting a reverse stock split.

However, there can be no assurance that the Company will

be able to regain compliance with the Bid Price Rule.

Value of Publicly Held Shares Requirement

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

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

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

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

MVPHS Requirement.

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

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

The notice has no immediate effect on the

listing of the Company’s securities on Nasdaq.

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

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

Alternatively,

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

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

Value of Listed Securities Requirement

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

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

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

at least $ 50

million (the “MVLS Requirement”).

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

the MVLS Requirement.

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

close at $ 50

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

The notice has no immediate effect on the listing of the

Company’s securities on Nasdaq.

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

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

Alternatively,

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

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

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.

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

Capital Market Listing application.

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

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

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

The Company had until February

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

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

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

trading days.

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

Market, on December 27, 2024.

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

Hearings Panel (the “Panel”).

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

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

On March 5, 2025, the Company received a written

notification (the “Notice”) from the Panel confirming it 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 the Company believe it has.

To date, the Company has not been notified

by Nasdaq whether its application to transfer to the Nasdaq Capital has been accepted and the Company continues to trade on the Nasdaq

Global Market.

Additionally, the Company was also notified in the Notice that as of February 26, 2025, it had regained compliance with

the Bid Price Rule.

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

of Significant Accounting Policies

and Cash Equivalents

and cash equivalents are primarily maintained with major financial institutions in the 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 Company’s

Switzerland bank accounts, which hold immaterial cash balances, are uninsured, and the Company’s U.K.

bank account, with a balance

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

The Company’s U.S.

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

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

The Company has not experienced

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

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

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

All investments in marketable

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

Investments with remaining

maturities or that are due within one year from the balance sheet date are classified as current.

The Company reviews its short-term

investments for other-than-temporary impairment whenever the fair value of a marketable security is less than the amortized cost and

evidence indicates that a short-term investment’s carrying amount is not recoverable within a reasonable period of time.

Plant and Equipment

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

preparation of financial statements in conformity with U.S.

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are determined.

and Cash Equivalents

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

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 UK bank account, with a

year-end balance of approximately £ 206,000

(or approximately $ 266,000 )

exceeds the country’s deposit limit of £ 85,000

(approximately $ 110,000 ).

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 three

months ended March 31, 2025.

Company had $ 2.1 million and $ 0.6 million in cash and cash equivalents on hand as of March 31, 2025 and December 31, 2024, respectively.

As of March 31, 2025, $ 4,000 of the Company’s $ 2.1 million cash and cash equivalents balance was invested in money market

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

Value Measurements

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.

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.

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.

A fair value hierarchy

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

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

Observable inputs are those that market participants would

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

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

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

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

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

the Consolidated Balance Sheets.

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

Statements of Operations and Comprehensive Loss.

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

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

on observable inputs other than quoted prices.

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

asset in an active market.

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

at fair value.

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

deficit within the condensed consolidated balance sheets.

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

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

Changes in the assumptions around the volatility could have

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

See Note 15 for further information on the warrants classified

within stockholders’ deficit.

Based Compensation

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

Stock Compensation,

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

required to perform service in exchange for the award.

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

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

Changes in the assumptions around the volatility can

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

The Company accounts for forfeitures when they occur.

and Development and Funding

of March 31, 2025, the Company has two financial liabilities, warrant liabilities for which the fair value is determined based on Level

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

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

in active markets.

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

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

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

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

Convertible Note was recorded

at fair value upon issuance.

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

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

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

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

and Development

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

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

programs, see Note 7 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:

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

costs related to the purchase of licensed intellectual property;

related to compliance with quality and regulatory requirements;

18 unchanged sentences

any tax benefits of which future realization is uncertain.

December 2023, the FASB issued ASU 2023-09, which introduces new income tax disclosure requirements.

The standard is effective for fiscal

years beginning after December 15, 2024, with early adoption permitted.

After reviewing the provisions of the new standard, the Company

has determined that these changes will not materially affect our financial condition, results of operations, or cash flows as presented

in our financial statements.

Earnings/(Net

10 unchanged sentences

to any liability-classified dilutive instruments.

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

liability classification in accordance with ASC 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.

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

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

In order for an instrument to be considered indexed to

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

(a) the fair value of a fixed

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

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

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

the settlement amount of the Liability Classified Warrants would not equal the difference between the fair value of a fixed number of

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

Equity Classified Warrants are recorded in stockholders’ equity (deficit) and the Liability Classified Warrants are recorded as liabilities

in the 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 Loss.

Currency Translation

6 unchanged sentences

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.

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

Non-monetary items in the subsidiaries’

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of the transaction).

Revision of Previously Issued Financial Statements

In connection

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

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

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

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

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

The accounting for legal costs was deemed to be

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

Management has evaluated

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

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

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

Schedule of Impact of the Errors on Financial Statement

As of September 30, 2023 (Unaudited)

(Dollar amounts in thousands)

Condensed Consolidated Balance Sheets

Stockholders’ deficit

Additional paid-in capital

Accumulated deficit

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

months ended September 30, 2023, is as follows:

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

(Dollar amounts in thousands, except per share amounts)

Statements of Operations and Comprehensive Loss

Operating expenses:

General and administrative expenses

Total operating costs and expenses

Operating loss

Net income (loss)

Basic earnings/(net loss) per share

Diluted earnings/(net loss) per share

Total comprehensive income (loss)

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

months ended September 30, 2023, is as follows:

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

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

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

Operating expenses:

General and administrative expenses

Total operating costs and expenses

Operating loss

Net income (loss)

Basic earnings/(net loss) per share

Diluted earnings/(net loss) per share

Total comprehensive income (loss)

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

30, 2023, is as follows:

(Dollar amounts in thousands)

As of September 30, 2023 (Unaudited)

(Dollar amounts in thousands)

Statements of Changes in Shareholders’ Deficit

Stockholders’ deficit

Additional paid-in capital

Accumulated deficit

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

is as follows:

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

(Dollar amounts in thousands)

Condensed Consolidated Statements of Cash Flows

Cash flows from operating activities:

Changes in operating assets and liabilities:

Prepaid expenses and other current assets

Non-cash investing and financing activities

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

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

Upon the closing of the Merger, the following occurred:

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

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

shares of the Company’s Common Stock.

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

to Conduit convertible note holders, resulting in a total of 65,000,000 shares of Common Stock being issued to Conduit shareholders

and holders of Conduit convertible notes payable.

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

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

share of MURF Class A common stock held by the MURF Sponsor prior to the closing of the Merger, which totaled 709,000 shares, was

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

share of MURF common stock subject to possible redemption that was not redeemed prior to the closing of the Merger, which totaled

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

connection with the Merger, 3,306,250

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

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

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

and Conduit, was due to receive (i) a cash fee of $ 6.5 million, 1,300,000 shares of Common Stock and warrants to purchase 54,000

shares of Common Stock at an exercise price of $ 11.00 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

Upon closing of the Merger, A.G.P.

received a cash payment of $ 5.6 million, 1,300,000 shares of Common Stock, and 54,000

warrants to purchase 54,000 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 %.

connection with the Merger, MURF entered into subscription agreements (the “Subscription Agreements”) with certain accredited

investors (the “PIPE Investors”) for an aggregate of 2,000,000 units, with each

unit consisting of one share of Common Stock (the “PIPE Shares”), together with one warrant exercisable into one share

of Common Stock (the “PIPE Warrants”), at a purchase price of $ 10.00 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, 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.

proceeds received by the Company from the Merger and PIPE Financing, net of transaction costs, totaled $ 8.5 million.

following table presents the total Common Stock outstanding immediately after the closing of the Merger:

of Common Stock Outstanding

Number of Shares

Exchange of MURF common stock subject to possible redemption for Conduit Pharmaceuticals Inc.

Exchange of MURF Class A common stock held by MURF Directors for Conduit Pharmaceuticals Inc.

Exchange of MURF Class A common stock held by MURF Sponsor for Conduit Pharmaceuticals Inc.

Subtotal - Merger, net of redemptions

Issuance of Conduit Pharmaceuticals Inc.

common stock in connection with PIPE Financing

Exchange of Conduit Pharmaceuticals Limited ordinary shares for Conduit Pharmaceuticals Inc.

common stock on the Closing Date

Issuance of Conduit Pharmaceuticals Inc.

common stock to holders of Conduit Pharmaceuticals Limited convertible notes on the Closing Date

Issuance of Conduit Pharmaceuticals Inc.

common stock to an advisor for services directly related to the Merger

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.

Marketable Investments

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

Schedule of Available for Sale Securities

As of September 30, 2024

Amortized Cost

Unrealized Gain

Unrealized Loss

Available-for-sale, short-term investments:

Investment in trading securities

Total available-for-sale, short-term investments

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

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

There were no significant realized gains or losses

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

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

(in thousands):

of Assets Subject to Measurement at Fair Value on Recurring Basis

Fair Value Measurements as of September 30, 2024

Investment in trading securities

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

basis (in thousands):

of Liabilities Subject to Measurement at Fair Value on Recurring Basis

Fair Value Measurements as of September 30, 2024

Derivative warrant Liability

Issued Accounting Standards Not Yet Adopted

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

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

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

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

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

Additionally, ASU 2023-09 requires

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

by federal, state, and foreign jurisdictions.

ASU 2023-09 is effective for the Company in its annual reporting for fiscal

2025 on a prospective basis.

Early adoption and retrospective reporting are permitted.

The Company does not plan to adopt this standard

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

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

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.

the period ended March 31, 2025, there were no transfers between Level 1 and Level 2, nor into or out of Level 3.

The following table

presents as of March 31, 2025 the Company’s 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 March 31, 2025

Cash equivalents

Convertible note payable, at fair value

Liability Classified Warrants

Total Liabilities

2 unchanged sentences

Fair Value Measurements as of December 31, 2024

Derivative warrant liability

Cash equivalents

Convertible notes payable, at fair value

Liability Classified Warrants

Total Liabilities

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

therefore been classified as a Level 3 fair value measurement.

The Company had no investment in trading securities as of December

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

ended September 30, 2024.

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

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

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

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

active market.

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

of liability classified warrants.

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

equivalents consist of highly liquid money market funds with maturities of three months or less and are reflected in the Condensed consolidated

balance sheets at carrying value, which approximates fair value due to their short-term nature.

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

Liability Classified Warrants

Balance as of December 31, 2024

Repayment of convertible note

Change in fair value

Balance as of March 31, 2025

Notes Payable

As discussed in Note 4, on

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

August 6, 2024 (the “August 2024 Nirland Note”), whereby the August 2024 Nirland Note was amended to provide for the conversion

of the August 2024 Nirland Note into shares of common stock, at Nirland’s discretion, in a multiple of any unpaid amounts, if not

otherwise previously paid, pursuant to the conversion rate contained therein.

The August 2024 Nirland Note was then amended for a second

time on November 22, 2024.

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

Additionally, as discussed in Note 4, 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.

As of March 31, 2025, no obligations remain under the August 2024 Nirland Note (refer to Note 4 for details) and therefore only

the fair value of the A.G.P.

Convertible Note was estimated using a binomial lattice model.

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

Convertible Note

as of March 31, 2025, and December 31, 2024:

Schedule of Fair Value of Assumptions

Corporate bond yield

Credit Spread

Probability of Default

Recovery upon default

Classified Warrants

2024 Warrants, as defined in Note 14, are accounted for as liabilities in accordance with

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

Warrant liabilities are measured

at fair value at inception and on a recurring basis, with changes in fair value presented within other income (expense), net in the condensed

consolidated statements of operations and comprehensive loss.

measurement of the A.G.P.

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

inputs and requires significant judgement.

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

2024 Warrants as of March 31, 2025 and

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

Schedule of Fair Value of Assumptions

March 31, 2025

December 31, 2024

Closing stock price

Contractual exercise price

Risk-free rate

Estimated volatility

Time period to expiration (in years)

Balance Sheet Details

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

of Balance Sheet Details

September 30, 2024

Prepaid expenses and other current

assets consisted of the following as of March 31, 2025 and December 31, 2024 (in thousands):

Schedule of Balance Sheet Details

March 31, 2025

December 31, 2024

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Prepaid expenses

Loan Receivable *

Prepaid expenses – related parties

Prepaid expenses

Other receivables

Total prepaid expenses and other current assets

* Refer to Note

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

of Accrued Expenses and Other Current Liabilities

Expenses and other current liabilities consisted of the following as of March 31, 2025 and December 31, 2024 (in thousands):

Schedule of Accrued Expenses and Other Current Liabilities

March 31, 2025

December 31, 2024

Accrued professional fees

Accrued board of director fees

Accrued research & development costs

Accrued payroll

Accrued Contingency **

Accrued legal contingency

Accrued interest

Accrued Expenses

Accrued commission payable

Total accrued expenses and other current liabilities

** Refer to Note 16.

Convertible Notes Payable

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

permitting the Company to issue convertible notes payable for a maximum aggregate principal amount of up to $ 3.3 million (£ 3.0

The convertible notes payable issuable under the 2022 Convertible Loan Note Instrument mature three years after issuance to

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

of the terms of the 2022 Convertible Loan Note Instrument.

In the event of a Change of Control (as defined in the 2022 Convertible Loan

Note Instrument), the convertible notes payable issued under the 2022 Convertible Loan Note Instrument automatically convert into common

shares of the Company at a conversion price equal to a 20 % discount to the price per share paid for the most senior class of shares in

respect of such Change of Control.

The Company, with consent from the noteholders, may prepay the convertible notes payable issued under

the 2022 Convertible Loan Note Instrument without penalty.

The convertible notes payable issued under the 2022 Convertible Loan Note

Instrument are general, unsecured obligations of the Company.

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

payable with an aggregate principal amount of $ 0.9

million (£ 0.8

million) to non-related third parties.

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

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

aggregate principal amount of $ 0.4

million (£ 0.3

million) to the CEO of Corvus.

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

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

issued converted into 373,570 shares of Common Stock.

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

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

comprehensive loss.

Promissory Notes Payable

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

aggregate principal amount of $ 0.8

million to an unrelated third party.

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

The March 2023 Convertible Note contains a conversion option which allows

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

a conversion price of $ 10

The March 2023 Convertible Note carries 20 %

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

The promissory convertible note

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

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

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

For the nine months

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

and $ 40,000 ,

respectively.

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

the interest expense was included in accrued expenses.

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

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

an additional 30-day period.

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

November 19, 2024.

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

interest due on the loan.

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

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

shares of Common Stock.

On October 11,

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

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

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

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

The Company issued

the third party 850,000

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

Loans Payable

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

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

Each loan was made

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

(ii) $ 33,000

and (iii) $ 28,000 (£ 25,000 ),

totaling $ 0.2 million.

The Loans provided for

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

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

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

million and $ 0.2 million, respectively.

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

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

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

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

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

shares of Common stock.

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

shares ( 1,138,086

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

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

principal amount of $ 2,650,000 ,

inclusive of a $ 500,000

original issuance discount.

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.

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

in order to settle the March 2023 Convertible Note in full.

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

March 13, 2025 .

The Settlement Agreement and subsequent repayment was treated as a debt extinguishment under ASC 470-50.

the three months ended March 31, 2025, the Company recorded a gain on debt extinguishment of $ 0.1 million, calculated as the difference

between (i) the $ 0.8 million carrying value of the Convertible Promissory Note Payable immediately prior to the amendment (ii) the $ 0.7

million repayment of the March 2023 Convertible Note.

The $ 0.1 million gain on debt extinguishment was recorded within other income (expense)

in the condensed consolidated statement of operations and comprehensive loss for the three months ended March 31, 2025.

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

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

In exchange for negotiating the Settlement Agreement, the Company

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

On March 31, 2025, the Company issued 73,074 shares of Common Stock.

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

million, divided by the closing share price on March 28, 2025 (prior trading date) of $ 0.89 .

The $ 0.1 million was recorded as interest expense in the condensed consolidated statement of operations and comprehensive income

loss for the three months ended March 31, 2025.

the three months ended March 31, 2025, and March 31, 2024, the Company incurred interest expense on the Convertible Promissory Note Payable

of $ 0 and $ 40,000 , respectively.

2024 Nirland Note

On August 6, 2024, the Company

entered into 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.

Note 11 for further reference to the relationship between the Company and Nirland.

Of the total amount of the August 2024 Nirland Note,

was issued upon execution of the August 2024 Nirland Note.

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

Nirland 12,500,000

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

The balance of $ 475,000

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

In the event the Company completes any public or

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

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

financing, in an amount of no less than 75 %

$1.7 million was issued upon execution of the August 2024 Nirland Note.

The balance of $0.5 million was provided 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

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

rate transaction without prior written consent from Nirland.

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

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

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

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

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

The Company determined that loan agreement and share issuance should were

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

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

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

The remaining

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

The $ 1.2 million allocated to the common

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

less a total debt discount of $ 1.5 million.

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

over the life of the note.

of September 30, the Company has $ 2.7 million

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

million receivable related to the loan.

As of September 30, 2024 the Company recorded $ 0.2

million in interest expense of which $ 0.1

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

accrued interest.

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

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

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

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

equity or debt offerings of the Company.

Deferred Commission Payable

discussed in Note 3, A.G.P was a financial advisor to both MURF and Old Conduit in connection with the Merger transaction.

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

(i) received a cash fee of $ 6.5

The August 2024 Nirland Note bore 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 was scheduled to mature 12 months from August 6, 2024.

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) 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

would 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.

Company 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 was carried at amortized cost using the effective interest method.

Company accounted for the First Amendment as a debt extinguishment, as the First Amendment added a substantive conversion option.

On November 22, 2024, the

Company and Nirland entered into a Second Amendment to the August 2024 Nirland Note (the “Second Amendment”).

the Second Amendment, the August 2024 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 August 2024 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 had 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 was obligated to pay Nirland a penalty

of $0.1 million per day until the special meeting was 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.

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 condensed consolidated statements of operations and comprehensive

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.

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 remained outstanding and the August 2024 Nirland Note had a fair

value of $ 2.8 million.

January and February 2025, Nirland exercised their conversion option and converted $ 1.8

million of principal in exchange for 901,200 shares

of common stock.

In total the Company issued common stock with a fair value of $ 3.7 million

based on the closing stock price on each conversion date and recorded a loss on the change in fair value of $ 1.9

million, calculated as the difference between the fair value of the shares issued and the portion of principal and interest settled.

On February 12, 2025, the Company repaid the remaining unpaid principal and interest of $ 0.9 million

in cash and recorded a gain on extinguishment of $ 0.1

million, calculated as the difference between the remaining fair value of August 2024 Nirland Note, less the amount of cash paid.

of March 31, 2025, no

obligations remained under the August 2024 Nirland Note.

the three months ended March 31, 2025, the Company recorded $ 24,000 of interest expense, presented within Interest expense, net,

in the condensed consolidated statement of operations and comprehensive loss.

Convertible Note

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

Convertible Note in the principal

amount of $ 5.7 million to evidence A.G.P.’s currently owed deferred commission payable.

Refer to Note 6 for additional

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.

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

(the “Conversion Price Floor”), subject to adjustment as provided therein and to take into account any future share splits or reverse splits.

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.

Per the terms of the

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

permit the entire conversion of the convertible promissory note.

In addition, the conversion of the convertible promissory note

could 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, A.G.P.

will not be entitled to receive the Company’s common stock upon conversion, if

such conversion would result in A.G.P.

owning greater than 9.99 %

of the Company’s then currently outstanding common stock.

is also entitled to resale registration rights as identified

in the convertible promissory note.

As of January 25, 2025, the Company had sufficient authorized shares of common stock to permit

the entire conversion of the convertible promissory note and the Company has also received shareholder approval to allow for the

entire conversion of the convertible promissory note.

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

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

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

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

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.

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 condensed consolidated statements of operations and comprehensive 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 condensed consolidated statements of operations and comprehensive loss.

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

Convertible Note to be $ 3.4 million

as of November 25, 2024 through the use of a binomial lattice model.

See Note 2 for additional information regarding the fair value

measurement of the A.G.P Convertible Promissory Note.

As of December 31, 2024, $ 6.1 million

of principal and accrued interest remained outstanding and the A.G.P.

Convertible Note had a fair value of $ 3.0 million.

March 31, 2025, A.G.P.

exercised their conversion option and converted $ 0.4

million of principal and interest in exchange for 430,000

shares of common stock.

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

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

to convert at a

price of $ 0.89 /share (prior trading day closing stock price).

Upon conversion, the Company recorded a $ 0.2

million loss on the change in fair value based on the difference between (i) the fair value of the common stock issued and (ii) the

percentage of total principal and interest converted ( 6.54 %),

multiplied by the December 31, 2024 valuation of $ 3.0

Additionally,

on March 31, 2025, the Company remeasured the fair value of the A.G.P.

Convertible Note through the use of a binomial lattice model and

calculated a fair value of approximately $ 2.7

For the three months ended March 31,

2025, the Company recorded a $ 0.2 million

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

Convertible Note and interest expense of approximately $ 0.1

As of March 31, 2025, there was approximately $ 5.5 million in outstanding principal and interest remaining

Loans Payable

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) $ 33,000 (£ 30,000 );

(ii) $ 33,000 (£ 30,000 ) and (iii) $ 28,000 (£ 25,000 ), totaling

$ 0.2 million.

shares of Common Stock, and warrants to purchase 54,000

shares of Common Stock at an exercise price of $ 11.00

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 initial public offering.

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

balance sheet as of September 30, 2024.

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

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

Company will pay to A.G.P.

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

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

million and $ 0.1

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

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

also agreed to amend a fee letter agreement

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

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

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

Refer to Note 16 for more information.

Research and Development License Agreement

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.

October 9, 2024, the Company and holders of the Loans 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).

Company repaid the lenders the outstanding principal balance of $ 0.1

million in February 2025, in which no obligations remain under the terms of the Loans.

interest expense was recorded for each of the three months ended March 31, 2025 and March 31, 2024.

2024 Nirland Note

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.

October 2024 Nirland Note bore interest at a rate of 12 %

per annum, was due and payable semi-annually in arrears, and was scheduled to mature on October 31, 2025.

If an event of default

under and as defined in the October 2024 Nirland Note occurs, the interest rate would have been be increased to 18 %

per annum or to the maximum rate permitted by law.

In connection with the October 2024 Nirland Note, the Company has agreed to pay

Nirland a 1 %

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

arrangement fee is accounted for as a debt discount and was 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

December 11, 2024, the Company reduced the exercise price of the PIPE Warrants held by Nirland to $ 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 were used

to pay down the October 2024 Nirland Note.

Company repaid principal and interest of $ 0.1 million, $ 0.2 million, and $ 0.1 million on January 14, 2025, January, 31, 2025, and February

7, 2025, respectively.

As of March 31, 2025, no obligations remain under the October 2024 Nirland Note.

the three months ended March 31, 2025, the Company recorded approximately $ 8,000

of interest expense.

Deferred Commission Payable

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.

Accrued interest was recorded as a liability on the Company’s

consolidated balance sheet under accrued expenses and other current liabilities and totaled $ 0.4 million as of December 31, 2024.

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

to waive all previously accrued interest.

the Company removed accrued interest of $ 0.4 million and recorded other income of $ 0.4 million for the three months ended March 31, 2025.

November 25, 2024, the Company issued 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 Note 4 for additional information.

the three months ended March 31, 2024, the Company recorded $ 0.1 million of interest expense related to the deferred commission payable

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

Research and Development Expense

2024 License Agreement

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

3 unchanged sentences

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

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

Agreement (the “Licensed Products”).

The Company will be responsible for the development and commercialization of the Licensed Products under the August 2024 License Agreement.

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

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

million, and (iii) is obligated to pay AstraZeneca

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

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

The Issuance Agreement provides AstraZeneca

with resale registration rights for such shares.

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

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

“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.

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

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

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

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

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

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

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

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

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

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

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The parties agreed that the project funding provisions of such Funding

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

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

See Note 13, Related Party Transactions .

Based Compensation

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.

Service Agreement

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 12 for further reference to the relationship between the Company

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.

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

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.

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

mutual written agreement of the parties.

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

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

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

trustee, or similar authority.

Sarborg Service Agreement 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.

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.

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.

The initial cash payment of $0.2 million was made on December 20, 2024, and the 22,727 shares of common stock were issued on January

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.

determined that the cost incurred under the Sarborg Service Agreement should be recorded to research and development expense in the condensed

consolidated 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.

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

with research and development expense in the condensed consolidated statement of operations and comprehensive income loss.

the three months ended March 31, 2025, Sarborg was paid $ 1.1 million for completed milestones under the Sarborg Service Agreement.

Company recorded the $ 1.1 million in expense within research and development expense in the condensed consolidated statement of operations

and comprehensive income loss for the three months ended March 31, 2025.

Service Agreement – Conduit and Charles River Laboratories

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

(the “Charles River MSA”).

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

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

The services are defined in

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

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

Charles River will

conduct the studies in compliance with applicable laws and industry standards, and Conduit will provide necessary test articles and

The Charles River MSA includes provisions for confidentiality, intellectual property ownership, indemnification, and

dispute resolution.

The Charles River MSA has a term of five years and can be terminated by either party under specified conditions.

For the three months ended March 31, 2025, the Company recognized $ 0.1

million in research and development expense in the condensed consolidated statement of operations and comprehensive loss related to

the Charles River MSA.

Additional Agreement

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

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

the Company’s acquired AstraZeneca assets.

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

payment, in aggregate, of $ 2.0

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

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

On March 31, 2025, the Company prepaid $ 1.65

million of the Sarborg Additional Agreement through the issuance of 1,853,933

fully vested unregistered shares of Common Stock.

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

their fair value, as determined by the closing price of the Company’s Common Stock on March 30, 2025, $ 0.89 ,

and adjusted for an 7 %

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

The Company recorded the fair value of $ 1.5

million as a prepaid within the condensed consolidated balance sheets, as no services had been provided as of March 31,

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

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

Total fees under the Consulting Agreement total

to $ 0.3 million and was settled through the issuance of 337,079 fully vested unregistered shares of Common Stock on March 31, 2025.

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

Common Stock on March 30, 2025, $ 0.89 , and adjusted for a 7 % discount for lack of marketability, as determined by a third-party valuation

The Company recorded the fair value of $ 0.3 million as a prepaid within the condensed consolidated balance sheets, as no services

had been provided as of March 31, 2025.

Share Based Compensation

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

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

The 2023 Plan initially provides for the issuance

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, the number of shares

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

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

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

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

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

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

or other cash-based awards.

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

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

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

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

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

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

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

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

issued 96,154

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

The Company valued the Service Shares at $ 1.56

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

The total compensation for these shares is $ 0.2

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

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

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

to those agreements without the Company’s knowledge.

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

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

of the Company.

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

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

taken by the Company in response thereto.

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

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

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

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

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

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

Upon the then Chief Financial

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

On June 7, 2024 by Unanimous Written Consent of the

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

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

The shares of restricted stock were fully vested as of

the grant date.

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

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

following table summarizes restricted stock activity for the 2023 Plan:

of Restricted Stock Activity

Weighted Average

Grant Date Fair

Value Per Unit

Outstanding at December 31, 2023

Cancelled/forfeited

Outstanding at September 30, 2024

Pursuant to the 2023 Plan’s “evergreen” provision, on February 6,

2025 and January 10, 2024, the Company increased the number of shares of Common Stock available for issuance under the 2023 Plan by 69,240

and 36,914 shares, respectively.

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 March 31, 2025, there were 154,544 shares of Common

Stock available for issuance under the 2023 Plan.

March 30, 2025, certain non-employee directors elected to receive their unpaid cash retainers due as of March 31, 2025, and cash

retainers owed for the period from April 1, 2025 to June 30, 2025, under the Director Compensation Program, in the form of fully

vested shares of Common Stock.

In total, $ 0.1 million

of unpaid retainers was settled through the issuance 155,257 unregistered shares

of Common Stock (the “Retainer Shares”).

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

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

The fair value of the shares issued for cash

retainers due as of March 31, 2025, $ 78,000 , was recorded within general & administration expense in the condensed consolidated

statement of operations and comprehensive loss.

The fair value of the shares issued for cash retainers owed for the period from

April 1, 2025 to June 30, 2025, $ 58,000 , was recorded as a prepaid expense in the condensed consolidated balance sheets.

RSU’s or shares of restricted common stock were granted during the three months ended March 31, 2025 and March 31, 2024.

were 745 shares of restricted common stock vested as of March 31, 2025 and no RSUs vested as of March 31, 2024.

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

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there any plans to declare a dividend.

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

Company did not grant stock options during the three months ended March 31, 2025 or March 31, 2024.

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

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of Stock Option Activity

(in thousands)

Number of Options

Weighted Average Exercise Price

Weighted Average Remaining Contractual Term (years)

Intrinsic Value (in thousands)

Outstanding at December 31, 2024

Cancelled/forfeited

Outstanding at September 30, 2024

Outstanding at March 31, 2025

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

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common stock.

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

As of March 31, 2025, the total compensation cost related to non-vested option awards not yet recognized was $ 2.0 million

with a weighted average remaining vesting period of 1.64 years.

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

following table presents the calculation of basic and diluted earnings/(net loss) per share attributable to holders of Common Stock (in

thousands, except share and per share amounts):

of Basic and Diluted Net Loss Per Share

For the three months ended

September 30,

For the nine months ended

September 30,

Net loss - basic

Change in fair value and income impact of Cizzle option liability

Change in fair value and income impact of Vela option liability

Net loss - diluted

Weighted average Common Stock outstanding, basic

Cizzle option liability shares

Vela option liability shares

Weighted average shares used in computing net loss per share - diluted

Net loss per share attributable to common stockholders, basic

Net income loss per share attributable to common stockholders, diluted

For the three months ended March

31, 2025 and March 31, 2024, there was a total of $ 0.2 million and $ 0.4 million, respectively in stock-based compensation expense recognized

within General and Administrative expenses on the condensed consolidated statements of operations and comprehensive loss, respectively.

the three months ended March 31, 2025, and 2024, the Company’s effective tax rate was 0.0 % and 0.0 %, respectively, due to the current

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

jurisdiction, respectively.

Common Stock and Preferred Stock

At-the-Market

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

relating to shares of the Company’s Common Stock.

accordance with the terms of the Sales Agreement, the Company may offer and sell shares of our Common Stock having an aggregate offering

price of up to $ 23.9 million from time to time through A.G.P., acting as our sales agent or principal.

compensation to A.G.P.

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.

the three months ended March 31, 2025, 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.

As of the date of this Quarterly Report on Form 10-Q, the Company has approximately $ 12.0

million available under the Sales Agreement.

Net Loss Per Share Attributable to Common Stockholders

dilutive securities (upon conversion) that were not included in the diluted per share calculations because they would have been anti-dilutive

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of Potentially Dilutive Securities

September 30, 2024

September 30, 2023

Equity classified warrants

Liability classified warrants

Restricted Stock Options

Stock options

As of March 31,

Public warrants

PIPE Warrants

Convertible Promissory Notes Payable

Stock Options

Restricted stock Units

Convertible Note

March 2024 Warrants

April 2024 Warrants

2024 Warrants

Antidilutive Securities

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Capital Limited

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

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

In conjunction with the execution of the

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

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

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

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

Corvus to transfer certain of its shares to such investor.

No share transfers have been made to date.

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

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

Refer to Note 11 for additional information.

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

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

CEO of Corvus of $ 0.3 million.

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

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

George Street Capital

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

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

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

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

The parties agreed that

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

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

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

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

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

Nirland Limited

On August 6, 2024, the

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

Refer to Note 8 above for additional

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

Company and Nirland amended the August 2024 Nirland Note.

Refer to Note 17 below for additional information.

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.

Shares held by Corvus on the closing date of the Merger were

exchanged for shares of the Company’s Common Stock.

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

Andrew Regan,

is a member of Conduit’s board of directors and was appointed as the Chief Executive Officer of the Company on April 15, 2025.

Regan has not entered into any compensation plans and will continue to waive all compensation fees in connection with his service

as Chief Executive Officer of the Company, and is entitled to reimbursement of expenses incurred in connection with his role as Chief

Executive Officer.

the three months ended March 31, 2025 and 2024, the Company incurred director travel expenses payable to Dr.

Regan of approximately $ 0.1

million and $ 0.2 million, respectively.

As of March 31, 2025, and December 31, 2024, the Company did not owe Dr.

Regan any director’s

Regan and the Company agreed to cease director’s fees effective at the closing of the Merger.

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

Agreement “) for an aggregate purchase price of $ 20.0 million, the Company issued an aggregate of 20,000 shares of the Company’s

Common Stock and PIPE Warrants (the “PIPE Warrants”) to purchase 20,000 shares of Company Common Stock.

At the time of the

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

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

In certain circumstances, Nirland may have a right

to cause Corvus to transfer 300,484 shares held by Corvus to Nirland.

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

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.

As of March 31, 2025, no obligations remained under the terms of the August 2024 Nirland Note and

October 2024 Nirland Note, and Nirland did not own or beneficially own shares of the Company’s common stock.

Refer to Note 4 and

Note 5 for additional information.

December 12, 2024, and March 31, 2025, the Company entered into the Sarborg Service Agreement and the Sarborg Additional Agreement, respectively.

Andrew Regan, Chief Executive Officer and 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 three months ended March 31, 2025, the Company recorded $ 1.1 million as research

and development expense related to the Sarborg Service Agreement.

Additionally, on March 31, 2025, the Company issued 1,853,933 fully vested unregistered shares of Common Stock to

prepay the Sarborg Additional Agreement.

The fair value of the shares issued was $ 1.5 million and was recorded as a prepaid within the

condensed consolidated balance sheets.

Refer to Note 7 above for additional information.

and Directors

April 22, 2024, the Company issued in a private placement common stock purchase warrants (the “April Warrants”) to third

parties which also included certain directors, to purchase up to an aggregate of 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, an additional $ 12.50

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.

Other Income (expense), net

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

following table presents other income (expense), net, for the three months ended March 31, 2025 and 2024 (in thousands):

of Other Expense, Net

For the three months ended

September 30,

For the Nine Months ended

September 30,

Other income:

Change in fair value of Cizzle option

Change in fair value of Vela option liability

Unrealized foreign Currency gain

Gain on change in fair value of derivative warrant liability

Unrealized foreign currency transaction gain

Gain on change in fair value of the warrants

Gain on the change in fair value of convertible notes payable

Interest income

Gain on debt extinguishment

Gain on waiver of accrued interest

Gain on the issuance of shares for services

Total other income:

Other expense:

Loss on issuance of Cizzle option

Change in fair value of convertible notes payable

Interest Expense on Deferred Commission payable

Interest expense on convertible promissory note payable

Amortization of Debt Issuance costs

Interest Expense on Note payable

Loss on contingent liability

Realized foreign currency transaction loss

Unrealized Foreign currency Loss

Issuance of Warrants for lock up

Loss on the change in fair value of convertible notes payable

Interest expense

Loss on issuance of warrants

Unrealized foreign currency transaction loss

Total other expense

Total other expense, net

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

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

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

Placement Warrants”).

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

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

Warrants,” and together with the

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

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

between the fair value of a fixed number of shares and a fixed monetary amount (or a fixed amount of a debt instrument) and must be classified

as equity, while the settlement amount of the Liability Classified Warrants would not equal the difference between the fair value of

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

Equity Classified Warrants

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

party to purchase up to an aggregate 260,000

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 2024 Lock-Up Agreement”).

Classified Warrants

Publicly Traded Warrants, Private Placement Warrants, March 2024 Warrants, and the April 2024 Warrants (collectively the “Equity

Classified Warrants”), are classified within permanent equity on the condensed consolidated balance sheets, as

the settlement amount 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).

Traded and Private Placement Warrants

to MURF’s initial public offering, the Company sold 132,250 units at a price of $ 1,000 per unit.

Each unit consisted of one share

of MURF Class A common stock and one redeemable warrant “the “Publicly Traded Warrant”).

Each whole Publicly Traded

Warrant entitled the holder to purchase one share of Class A common stock at a price of $ 1,150 per share, subject to adjustment.

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 $ 1,000 per private placement unit.

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

one warrant (the “Private Placement Warrant”).

Each Private Placement Warrant was exercisable to purchase one share of MURF

Class A common stock at a price of $ 1,150 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.

the closing of the Merger, the Company assumed the Publicly Traded Warrants and Private Placement Warrant.

The Publicly Traded Warrant

and Private Placement Warrant were amended to entitle each holder to purchase one share of the Company’s Common Stock.

2024 Warrants

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

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

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

the following assumptions:

$ 0.5 million loss on the issuance of the warrants during the three months ended March 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:

of Black-Scholes Option Pricing Model

5 unchanged sentences

Time period to expiration

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

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

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

fair value of $ 0.5 million was calculated and recorded within additional paid-in capital on the condensed 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 $ 318 (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.

2024 Warrants

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”).

Of the total April 2024 Warrants issued, 907,725

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

The Company received cash of $ 0.2

million and recognized a $ 2.2

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

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

the following assumptions:

9,077 of the total April 2024 Warrants issued were issued to directors, related parties and management of

The Company determined that the April 2024 Warrants should be classified within equity and estimated the fair value of the

warrants as of April 20, 2024, using a Black-Scholes option-pricing model utilizing the following assumptions:

April 20, 2024

4 unchanged sentences

Time period to expiration

to MURF’s initial public offering, the Company sold 13,225,000 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 MURF Sponsor of 754,000

private placement units at a price of $ 10.00

per private placement unit.

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

Placement Warrant.

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

per share, subject to adjustment.

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

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

of a Merger, subject to certain exceptions.

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

purchase one share of the Company’s Common Stock.

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.

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.

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.

may call the Publicly Traded Warrants in whole and not in part, at a price of $ 0.01 per warrant,

not less than 30 days’ prior written notice of redemption to each Publicly Traded Warrant holder;

and only if, the reported last sale price of the Common Stock equals or exceeds $ 18.00 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

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.

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 MURF Sponsor or its permitted transferees.

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

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

(as adjusted from time to time in accordance with the terms thereof) for a two-year period after the date of exercisability.

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

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

fair value of $ 2.4 million was calculated and recorded within additional paid-in capital on the condensed consolidated balance sheets.

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

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

(as adjusted from time to time in accordance with the terms thereof) for a two-year period after the date of exercisability.

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

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

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.

Classified Warrants

discussed in Note 3, 2,000,000 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 2,000,000 shares of Common Stock at an exercise price of $ 11.50 .

Additionally, on the Closing Date of the Merger, the Company issued 54,000 warrants to A.G.P.

Warrants”) for

services provided directly related to the Merger.

The warrants provide AGP the right to purchase up to 54,000 shares of Common Stock

at an exercise price of $ 11.00 per share.

Liability Classified Warrants contain materially the same terms and are exercisable for a period of five years, beginning on October

PIPE Warrants are exercisable for cash or on a cashless basis, at the holder’s option.

The PIPE Warrants are not redeemable by

Warrants are exercisable for cash or on a cashless basis, at the holder’s option.

The Company may call the A.G.P.

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 $ 0.01 per A.G.P.

not less than 30 days’ prior written notice of redemption to each warrant holder;

and only if, the reported last sale price of the Common Stock equals or exceeds $ 18.00 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

Warrants become exercisable and ending three business days before we send the notice of redemption to the warrant holders;

there is a current registration statement in effect with respect to the shares of Common Stock underlying the A.G.P.

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

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

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

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

The Liability Classified Warrants are initially measured at

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

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

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

million, respectively.

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 3 for additional information

regarding fair value).

the three months ended March 31, 2025 and March 31, 2024, the Company remeasured the fair value of the Liability Classified Warrants

and recorded a gain on the change in the fair value of $ 0.1 million and $ 19,000 , respectively.

The gains were recorded to other

income (expense), net, on the condensed consolidated statements of operations and comprehensive loss.

As of March 31, 2025 and December

31, 2024, the condensed consolidated balance sheets contained warrant liabilities of $ 8,000 and $ 0.1 million, respectively.

Warrants and A.G.P.

closing of the Merger, 20,000 PIPE Warrants were issued to the PIPE Investors 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.

provide the advisor the right to purchase up to 540 shares of Common Stock at an exercise price of $ 1,100 per share.

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.

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.

As of March 31, 2025, there are no outstanding PIPE Warrants.

2024 Warrants

partial consideration for an 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 $ 10.48 per share.

Company determined that the A.G.P.

2024 Warrants should be classified as a liability and recorded at fair value through use of a Black-Scholes

option-pricing model.

Refer to Note 3 above for additional information.

Commitments and Contingencies

4 unchanged sentences

As such, there can be no assurance that any pending legal action,

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

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

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

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

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

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

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

million shares of Common Stock.

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

liability of $ 0.4 million in the accompanying

financial statements.

We intend to vigorously defend against these claims.

Regardless of its outcome, the litigation may impact our

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

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

for a lease term commencing in March 2024 and ending in January 2027.

The Company recorded a right-of-use asset of $ 0.4 million and corresponding

lease liability of $ 0.3 million, using an incremental borrowing rate of 11.23 %.

The Company classified $ 0.1 million of the lease liability

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

Subsequent Events

October 9, 2024, the

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

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

times, each by an additional 30-day period.

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

is currently November 19, 2024.

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

repayment of the remaining interest due on the loan.

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

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

does not become material in the future.

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

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

Conduit rejected

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 65,000

shares of common stock.

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

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

In connection with the extension of

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

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

The Company issued the third party 850,000

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

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

extend the maturity date for each Loan to December

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

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

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

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

additional shares of Common stock.

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

shares ( 1,138,086

shares in total).

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

relating to shares of our common stock.

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

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

or principal.

On October 29, 2024, the

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

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

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

“Commitment”).

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

warrants to purchase up to 2,862,596 shares

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

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

price of $ 0.1048 per

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

Bridge Note”) to A.G.P.

original principal amount of $ 600,000 .

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

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

Pursuant to the A.G.P.

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

also agreed to

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

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

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

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

On October 28, 2024, the

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

in exchange for funds in such amount.

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

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

If an event of default under and as defined

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

per annum or to the maximum rate permitted by law.

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

agreed to pay Nirland a 1 %

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

On October 31, 2024, the Company

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

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

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

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

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

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

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

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

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

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

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

As of March 31, 2025,

a potential contingency of $ 0.4 million is considered probable and reasonably estimable and as such, the Company accrued an estimated

liability 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.

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

As of March 31, 2025, the range of possible loss cannot be estimated and is not considered

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.

Company has a lease agreement with respect to approximately 2,100 square feet of space in Cambridge, England, for a lease term commencing

in March 2024 and ending in January 2027.

As of March 31, 2025, the Company has a right-of-use asset of $ 0.2 million and corresponding

lease liability of $ 0.2 million recorded on the condensed consolidated balance sheets.

Of the $ 0.2 million lease liability, $ 0.1 million

is classified as short-term and $ 0.1 million is classified as long-term.

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 Andrew Regan, Chief Executive Officer,

manages the Company’s operations on a consolidated basis, assesses performance for the operating segment and decides how to allocate

resources based on consolidated net loss, which is reported on the condensed consolidated statements of operations and comprehensive

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.

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.

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.

following table presents certain financial data for the Company’s reportable segment (in thousands):

of Financial Data for the Company’s Reportable Segment

Research & development expense – clinical asset development

Research & development expense – related parties

General and administrative expenses – legal & professional fees

General and administrative expenses – accounting & audit fees

General and administrative expenses – salaries, payroll and stock-based compensation

General and administrative expenses – other

Loss from segment operations

segment items consist of the items within Note 13 to the condensed consolidated financial statements.

Subsequent Events

Repurchase Program

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

to $ 1.0 million

of its outstanding common stock.

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

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

Purchases will be executed by The Benchmark Company, the Company’s appointed

broker, and will be subject to market conditions, corporate liquidity requirements, regulatory considerations, and other factors.

of the date of this Quarterly Report on Form 10-Q, the Company has repurchased an aggregate of 175,694 shares of its outstanding common

stock at an average price of $ 0.59 /share and paid approximately $ 2,000 in commission to the broker.

of David Tapolczay

April 12, 2025 (the “Effective Date”), Dr.

David Tapolczay notified the Board of Directors (the “Board”) of

Company of his resignation from both the Board and his position as Chief Executive Officer effective immediately.

Tapolczay’s decision to resign was not the result of any disagreement with the Company on any matter relating to the

Company’s operations, policies, or practices.

In connection with Dr.

Tapolczay’s resignation, Dr.

existing employment contract as Chief Executive Officer was terminated and Conduit UK Management LTD, a wholly owned subsidiary of

the Company, entered into an Employment Agreement (the “Employment Agreement”) with Dr.

Tapolczay pursuant to which Dr.

Tapolczay will provide strategic advisory services as Head of Licensing & Strategy, reporting to the Chief Executive Officer.

exchange for Dr.

Tapolczay’s services, he will receive a sign-on bonus of $ 129,000

(£ 100,000 ) base salary of $ 311,000

(£ 240,000 ).

Consistent with the terms of the Company’s 2023 Stock Incentive Plan and subject to Dr.

Tapolczay’s continued

service pursuant to his Employment Agreement, his outstanding equity awards he has previously received will remain outstanding and

continue to vest based on the vesting dates thereof.

Tapolczay will provide the Company with a release of claims and will be

subject to certain non-competition, non-solicitation, non-disparagement, and confidentiality covenants.

of Andrew Regan

April 15, 2025, the Company appointed Andrew Regan as Chief Executive Officer, effective immediately (the “Appointment”).

As a result of the Appointment, Dr.

Regan will serve as Chief Executive Officer of the Company and will continue to serve as a director

on the Board.

Regan has not entered into any compensation plans and will continue to waive all compensation fees in connection with

his service as Chief Executive Officer and will be entitled to reimbursement of expenses incurred in connection with his role as Chief

Executive Officer, although the Board may assess this determination from time to time.

of Faith Charles

On April 16, 2025, Ms.

Charles notified the Board of her resignation due to personal reasons, and resigned as a member of the Board of the Company and from all

committees on which she served, effective immediately.

Charles’s resignation was not due to any disagreement with management

or the Company’s operations, policies or practices.

Conversion of A.G.P.

Convertible Note

April 11, 2025, and April 16, 2025, the holder of the A.G.P.

convertible note converted $ 0.5 million and $0.8 million of principal and

interest into 430,000 and 1,065,395 shares of the Company’s common stock, respectively.

As of April 16, 2025, the Company’s common stock price was trading below the Conversion Price Floor.

purpose of the April 16, 2025 conversion, the Company waived the Conversion Price Floor and allowed A.G.P.

to convert at a price of $ 0.78 /share

(the April 16, 2025 closing stock price).

As of the date of this Quarterly Report

on Form 10-Q, approximately $ 4.2 million in principal and interest remain outstanding under the A.G.P.

Convertible Note .

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

What changed 10-Q

Item 1. Financial Statements