What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-05-15 compared with 2024-11-14 · 283 added, 281 removed, 131 unchanged (81% of the section changed)

3 unchanged sentences

as well as the Company’s audited financial statements and notes thereto included in its Annual Report on Form 10-K for the year

ended December 31, 2023 that was filed with the SEC on April 16, 2024.

ended December 31, 2024 that was filed with the SEC on March 28, 2025.

Certain information contained in the discussion and analysis set

6 unchanged sentences

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

Conduit Pharmaceuticals Limited

entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Murphy Canyon Acquisition Corp.

on November 8, 2022.

The transaction contemplated by the terms of the Merger Agreement was completed on September 22, 2023 (the “Merger”),

in conjunction with which MURF changed its name to Conduit Pharmaceuticals Inc.

(hereafter referred to, collectively with is subsidiaries

as “Conduit”, the “Company”, “we”, “us” or “our”, unless the context otherwise

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 need and lengthens the intellectual property for

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

are led by highly experienced pharma executives, Dr.

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

Board of Directors, and Dr.

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

our Chief Executive Officer.

simultaneously leveraging the capabilities of our Cambridge laboratory facility and highly experienced team of solid-form experts to

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

Our own intellectual property

portfolio comprises a 20-year patent pending (in certain remaining jurisdictions) solid-form compound, the AZD1656 Cocrystal (a HK-4

Glucokinase Activator), targeting a wide range of autoimmune diseases.

Our pipeline research includes a number of compounds that serve

as promising alternatives to existing clinical assets currently marketed and sold by large pharmaceutical companies, which we have identified

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

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

with external contract research organizations (“CROs”) and Key Opinion Leaders (“KOLs”) to run clinical trials

that are managed, funded, and overseen by us.

We intend to leverage our comprehensive clinical and scientific expertise in order to facilitate

development of clinical assets through Phase II trials in an efficient manner by using CROs and third-party service providers.

also collaborate closely with disease specific KOLs to collectively assess and determine the most appropriate indications for all our

current and forthcoming assets.

All dollar amounts are expressed

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

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

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 pursuant to the Agreement and Plan of Merger, dated November

8, 2022, as amended, (the “Merger Agreement”).

Pursuant to the terms of the Merger Agreement, at the closing, (i) Merger

Sub merged with and into Old Conduit, with Old Conduit surviving the Business Combination as a wholly-owned subsidiary of MURF, and (ii)

MURF changed its name from Murphy Canyon Acquisition Corp.

to Conduit Pharmaceuticals Inc.

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

new treatments for patients.

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

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

We continue to

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

give Conduit a competitive advantage.

We are led by highly experienced

Freda Lewis-Hall, former Chief Medical Officer of Pfizer Inc., the Chair of our Board of Directors, and Dr.

Andrew Regan.

Our management team includes active senior scientists who have an extensive understanding of the pharmaceuticals market, which supports

our strategy of developing clinical assets in a cost-efficient manner while focusing on therapeutic efficacy and patient safety.

Simultaneously,

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

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

Our own intellectual property portfolio

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

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

Our pipeline research includes a number of

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

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

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

and collaborate with external CROs and Key Opinion Leaders (“KOLs”) to run clinical trials that are managed, funded, and

overseen by us.

We intend to leverage our comprehensive clinical and scientific expertise in order to facilitate development of clinical

assets through Phase II trials in an efficient manner by using CROs and third-party service providers.

We will also collaborate closely

with disease specific KOLs to collectively assess and determine the most appropriate indications for all our current and forthcoming

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

5 unchanged sentences

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

of our proprietary owned patented clinical assets, AstraZeneca AB (PUBL) (“AstraZeneca”) agreed to grant a license to the

Company under certain intellectual property rights controlled by AstraZeneca related to HK-4 Glucokinase activators AZD1656 and AZD5658

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

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

Agreement (the “Licensed Products”).

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

the Licensed Products.

of our proprietary owned patented clinical assets, AstraZeneca agreed to grant a license to the Company under certain intellectual property

rights controlled by AstraZeneca related to HK-4 Glucokinase activators AZD1656 and AZD5658 in all indications and myeloperoxidase inhibitor

AZD5904 for the treatment, prevention, and prophylaxis of idiopathic male infertility.

The Company will be responsible for the development

and commercialization of the Licensed Products under the related License Agreement.

The Company is required to use commercially reasonable

efforts to develop and commercialize the Licensed Products.

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

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

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

this relationship, there are considerable active pharmaceutical ingredients (“APIs”) that were manufactured by AstraZeneca

in conducting its clinical trials available.

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

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

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

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

this relationship, there are considerable APIs that were manufactured by AstraZeneca (prior to conducting its clinical trials) available

As a result, Conduit may not have to develop the APIs, which is often a time consuming and expensive process, and the APIs

already produced were subject to rigorous quality control measures.

collaboration with SARBORG Limited (“Sarborg”), a related party, Conduit intends to leverage an advanced AI and cybernetics

platform to evaluate key deliverables across multiple areas of the Company’s operations, including drug repurposing, drug discovery,

solid-form identification, and clinical trial monitoring.

The Sarborg Agreement entered

into between the Company and Sarborg on December 12, 2024 (the “Sarborg Agreement”) is designed to address longstanding challenges

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

and asset identification.

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

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

a competitive advantage in the sector.

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

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

These tools will drive faster, more accurate decisions,

improving efficiency and reducing costs.

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

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

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

by Sarborg in association with the deliverables.

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

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

This partnership reinforces

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

edge in the pharmaceutical sector.

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

the pharmaceutical industry.

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

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

long-term growth and market leadership.

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

1 unchanged sentence

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

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

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

Component of Result of Operations

13 unchanged sentences

The prepaid amounts are expensed as the benefits are

incurred approximately $3.1 million and $3.2 million on research and development activities during the three and nine months ended

September 30, 2024, respectively.

There was no comparable research and development funding during the three and nine months ended

September 30, 2023.

Of the costs incurred in 2024, $1.5 million was due to the upfront payment to AstraZeneca in connection with the

license agreement and $1.6 million was related to the shares issued to AstraZeneca.

Our research and development activities have been wholly focused on developing co-crystals of AZD1656 to

increase patent life.

incurred approximately $1.3 million and $0.1 million on research and development activities during the three months ended March 31, 2025,

and March 31, 2024, respectively.

Our research and development activities have been wholly focused on developing co-crystals of AZD1656

to increase patent life.

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

currently have one pending international patent application and two pending national patent applications.

The successful completion

of clinical trials increases the value of clinical assets and may lead to the commercialization and/or licensing of such assets to

other pharmaceutical companies.

There is no assurance that any clinical trials on the assets owned or licensed by us will be

have one pending international patent application and two pending national patent applications.

The successful completion of clinical

trials increases the value of clinical assets and may lead to the commercialization and/or licensing of such assets to other pharmaceutical

There is no assurance that any clinical trials on the assets owned or licensed by us will be successful.

and Administrative Expenses

11 unchanged sentences

income (expense), net consists of change in the fair value of options, change in fair value of convertible notes, and expense incurred

upon the issuance of warrants during the quarter.

Other income (expense), net consists of change in the fair value of options, change

in fair value of convertible notes, and expense incurred upon the issuance of warrants during the quarter.

upon the issuance of warrants during the year.

expense, net consists primarily of interest expense on convertible loan notes and promissory notes and interest expense on deferred commissions

4 unchanged sentences

Three Months ended

September 30,

Nine Months ended

September 30,

(Dollar amounts in thousands)

(In thousands, except share and per share amounts)

Operating expenses:

8 unchanged sentences

Total other (expense) income, net

of the Three Months Ended September 30, 2024 and 2023

of the Three Months Ended March 31, 2025 and 2024

and Development Expenses

Three Months ended

September 30,

Three Months ended March 31,

(Dollar amounts in thousands)

Research and development expenses

and development expenses increased by $3.1 million, or 100%, for the three months ended September 30, 2024, as compared to $0 for

the three months ended September 30, 2023.

The increase was driven by the upfront payment made and shares issued to AstraZeneca in the third quarter of 2024 in

connection with the license agreement and issuance agreement, respectively.

and development expenses increased by $1.2 million, or 923%, to approximately $1.3 million for the three months ended March 31, 2025,

as compared to $0.1 million for the three months ended March 31, 2024.

The increase was primarily due to $1.1 million of expense recorded

under the Sarborg Service Agreement and $0.1 million of expense incurred under the Charles River MSA.

and Administrative Expenses

Three Months ended

September 30,

Three Months ended March 31,

(Dollar amounts in thousands)

General and administrative expenses

and administrative expenses increased by $2.3 million, or 532%, to $2.7 million for the three months ended September 30, 2024, as compared

to $0.4 million for the three months ended September 30, 2023.

The increase was primarily driven by a $0.8 million increase in salaries

and stock compensation expense, a $0.4 million increase in insurance related the amortization of D&O insurance, and $1.0 million

in professional fees and other general and administrative expenses.

and administrative expenses decreased by $0.1 million, or 4%, to $2.7 million for the three months ended March 31, 2025, as compared

to $2.8 million for the three months ended March 31, 2024.

The decrease was primarily driven by a $0.3 million decrease in salaries and

stock compensation expense, a $0.1 million decrease in travel and other general and administrative expenses, a $0.1 million decrease

in accounting and audit expenses, and a $0.1 million decrease in insurance expense related to the amortization of prepaid directors and

officers insurance, partially offset by a $0.5 million increase in legal expenses.

Income (Expense), Net

Three Months ended

September 30,

Three Months ended March 31,

(Dollar amounts in thousands)

Other income (expense), net

income (expense), net changed by $(3.4) million, or (111)%, to $0.3 million of expense for the three months ended September 30,

2024, as compared to $3.1 million of net income for the three months ended September 30, 2023.

The decrease was primarily driven a

$0.4 million contingent liability incurred in the third quarter of 2024, a change in the fair value of the Cizzle option of $1.0

million, a fair value change for the Vela option of $0.7 million and $1.5 million derecognition of the Cizzle deferred revenue in

further details refer to Note 14, “Other income (expense), net,” in the unaudited financial statements as of September 30,

2024 and September 30, 2023 included elsewhere in this document.

Three Months ended

September 30,

(Dollar amounts in thousands)

Interest expense, net

expense, net increased by $(0.3) million, or 557%, to $0.3 million of interest expense for the three months ended September 30, 2024, as compared to

$47,000 of interest expense for the three months ended September 30, 2023.

The increase was driven by $0.1 million of interest expense

related to the amortization of debt discount, $0.1 million of interest expense on the deferred commission payable to an advisor

for fees related to the Merger and $0.1 million of interest expense for interest on convertible note and note payables for the three

months ended September 30, 2024.

of the Nine Months Ended September 30, 2024 and 2023

and Development Expenses

Nine Months ended September 30,

(Dollar amounts in thousands)

Research and development expenses

and development expenses increased by $3.2 million, or 100%, for the nine months ended September 30, 2024, as compared to $0 for the

nine months ended September 30, 2023.

The increase was driven by the upfront payment made to and shares issued to AstraZeneca in the third quarter of 2024 in

connection with the license agreement and issuance agreement, respectively.

The remaining increase was due to the development of

certain co-crystals of AZD1656 (AZD1656 Co-Crystal PCT/IB2022/00075 - Patent Expires 02/09/2042) during the nine months ended

September 30, 2024.

There was no comparative activity during the nine months ended September 30,

and Administrative Expenses

Nine Months ended

September 30,

(Dollar amounts in thousands)

General and administrative expenses

and administrative expenses increased by $5.8 million, or 206%, to $8.6 million for the nine months ended September 30, 2024, as

compared to $2.8 million for the nine months ended September 30, 2023.

The increase was primarily driven by a $2.9 million increase

in salaries and stock compensation expense, $1.3 million increase in insurance related the amortization of D&O insurance, $0.3 million of advertising and marketing expenses, $0.2 million of board of directors’ fees, $0.2 million

increases in rent expenses, a $0.5 million other general and administrative expenses, and $0.5 million increase in professional fees and travel expense.

Income (Expense), Net

Nine Months ended

September 30,

(Dollar amounts in thousands)

Other income (expense), net

income (expense), net changed by $(5.1) million, or (238)%, to $2.9 million of net expense for the nine months ended September 30,

2024, as compared to $2.1 million of net income for the nine months ended September 30, 2023.

The increase was primarily driven by

an increase of $2.7 million related to the issuance of warrants in exchange for stockholders entering into lock-up agreements and a

$0.4 million contingent liability incurred during the nine months ended September 30, 2024.

The $2.1 million income for the nine

months ended September 30, 2023 was driven by a change in the fair value of the Cizzle option of $1.3 million, a fair value change

for the Vela option of $0.7 million and $1.5 million derecognition of the Cizzle deferred revenue in 2023, offset by a loss on the

issuance of the Vela option of $1.0 million.

further details refer to Note 14, “Other income (expense), net,” in the unaudited financial statements as of September 30,

2024 and September 30, 2023 included elsewhere in this document.

Nine Months ended

September 30,

changed by $0.5 million, or 99%, to $1.0 million of expense for the three months ended March 31, 2025, as compared to $0.5 million of

net expense for the three months ended March 31, 2024.

The $1.0 million in other income (expense) for the three months ended March 31,

2025 is primarily related to a $1.8 million loss on the change in fair value of convertible notes, partially offset by a $0.1 million

gain on the change in fair value of the warrant liability, $0.3 million gain on debt extinguishment, and $0.4 million gain on the waiver

of accrued interest.

The $0.5 million in other income (expense) for the three months ended March 31, 2024 was primarily related to a $0.5

million loss on the issuance of warrants.

further details refer to Note 13, “Other income (expense), net,” in the unaudited financial statements as of March 31, 2025

and March 31, 2024 included elsewhere in this Quarterly Report.

Three Months ended March 31,

(Dollar amounts in thousands)

Interest expense, net

expense increased by $(0.5) million, or 495%, to $0.5 million of net expense for the nine months ended September 30, 2024, as compared to

$92,000 of net expense for the nine months ended September 30, 2023.

The change was driven by $0.1 million of interest expense related

to the amortization of debt issuance costs, $0.2 million of interest expense on the deferred commission payable to an advisor for fees

related to the Merger and $0.2 million of interest expense for interest on convertible note and note payables for the three months ended

September 30, 2024.

expense was $0.2 million for the three months ended March 31, 2025 compared

to $0.1 million for the three months ended March 31, 2024.

The change was driven by $77,000 of interest expense on the A.G.P.

Note, $24,000 of interest expense on the August 2024 Nirland Note, $8,000 of interest expense on the October 2025 Nirland Note, and $65,000

of debt issuance cost amortization related to the Convertible Promissory Note Payable, partially offset by a $79,000 decrease of interest

expense related to the Deferred Commission Payable balance and a $40,000 of decrease of interest expense on the Convertible Promissory

Note Payable.

and Capital Resources

4 unchanged sentences

To date, our primary sources of capital have

been through private placements of equity securities and convertible debt as well as PIPE financing as a result of the Merger.

the nine months ended September 30, 2024 and 2023, we had net losses of $15.4 million and $0.8 million, respectively.

expect to incur additional losses and higher operating expenses for the foreseeable future as we continue to invest in research and development

We have determined that additional financing will be required to fund our operations for the next 12 months and our ability

to continue as a going concern is dependent upon obtaining additional capital and financing.

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

During the three months

ended March 31, 2025 and 2024, we incurred operating losses of $5.1 million and $3.6 million, respectively.

and Uses of Liquidity

primary uses of cash are to fund our operations as we continue to develop our product candidates.

We will require a significant amount

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

Until such time as we can generate

significant revenue from commercialization or licensing, we expect to finance our cash needs for ongoing research and development and

business operations through public or private equity or debt financings or other capital sources, including strategic partnerships.

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

To the extent

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

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

rights of our common stockholders.

Debt financing and equity financing, if available, may involve agreements that include covenants limiting

or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.

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

reduce research and development efforts.

While the Company believes in the viability of its ability to raise additional funds, there

can be no assurances to that effect.

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

We will require a significant amount of cash for

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

Until such time we can generate significant revenue

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

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

partnerships.

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

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

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

adversely affect the rights of our common stockholders.

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

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

or declaring dividends.

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

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

and its financial results.

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

We have based

our estimates on assumptions of operating costs that may prove to be wrong.

As a result, we could deplete our capital resources sooner

than we currently expect.

If, for any reason, our expenses differ materially from our assumptions or we utilize our cash more quickly

than anticipated, or if we are unable to obtain funding on a timely basis we may be required to revise our business plan and strategy,

which may result in significantly curtailing, delaying or discontinuing one or more of our research or development programs or the commercialization

of any product candidates or may result in our being unable to expand our operations or otherwise capitalize on our business opportunities.

As a result, our business, financial condition, and results of operations could be materially affected.

has concluded that there is substantial doubt regarding our ability to continue as a going concern for a period of at least 12 months

from the date of the filing of this Quarterly Report.

This is based on our analysis under applicable accounting principles.

These financial

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

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

outcome of this uncertainty.

material cash requirements include the following contractual and other obligations.

Convertible Note

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

Note”) payable to an investor.

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

Convertible Note.

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

date of the March 2023 Convertible Note until the maturity date.

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

On October 9, 2024, the Company executed an agreement to extend the maturity date for the March 2023 Convertible Note.

The March 2023 Convertible Note’s maturity date is

currently November 19, 2024.

For additional information regarding our convertible promissory note, see Note 7 of the notes to the unaudited financial

May 2022, we entered into two loan agreements, with an aggregate principal amount of $0.2 million, with two lenders.

loans payable were to mature and become payable in full two years from the date of the loan agreement and they bear no interest.

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

August 2024, we entered into a senior secured promissory note with an aggregate principal amount of $2.7 million with one lender.

The note matures

and is payable in full, 12 months from the date of the note.

The note bears interest at the rate of 12% per annum and interest is

payable monthly in arrears as cash or accrued at the lender’s discretion from the date of the note until the maturity date.

additional information regarding our loans payable note, see Note 8 of the notes to the unaudited financial statements.

currently anticipate that cash required for working capital for the next 12 months is approximately $13.7 million, which

includes deferred financing fees payable of $5.7 million, accrued expenses and other current liabilities of $3.2 million, a

convertible promissory note, if not converted prior to maturity, of $0.8 million, notes payable of $0.2 million, and a note payable

of $2.7 million.

We do not anticipate being able to fund required capital expenditures for the next 12 months with cash and cash

equivalents on hand as we have a history of limited cash on hand.

We have historically been able to access funds through the

issuance of our convertible notes and believe we can continue to obtain funding through debt and equity financing agreements as

needed to meet cash requirements for the next 12 months.

On November 25, 2024, the

Company issued to A.G.P.

a convertible promissory note (the “A.G.P.

Convertible Note”) in the principal amount of $5.7 million

to evidence A.G.P.’s currently owed deferred commission payable.

Unless earlier converted as specified in the A.G.P.

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

Convertible Note accrues interest at 5.5% per annum.

any time prior to the full payment of the A.G.P.

Convertible Note, provided that A.G.P.

has given at least three business days written

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

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

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

into account any future share splits or reverse splits.

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

Convertible Note may not occur prior to

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

Refer to Note 4 to our financial statements included elsewhere in this Quarterly Report on Form 10-Q.

March 31, 2025, A.G.P exercised their conversion option and converted $0.4 million of principal and interest for 430,000 shares of common

As of March 31, 2025, $5.5 million of principal and interest remained outstanding.

We currently anticipate that

cash required for working capital for the next 12 months is approximately $12.7 million, which includes forecasted research and development

costs of $1.3 million, forecasted general and administrative costs of $7.2 million, and a convertible promissory note payable, if not

converted prior to maturity of $4.2 million.

We do anticipate being able to fund required working capital for the next 12 months with

cash and cash equivalents on hand and current borrowings.

Management believes that we will be able to fund cash required for the next

12 months through borrowings and equity raises.

We have historically been able to access funds through the issuance of debt, and more

recently the at the market offering program agreement, and believe we can continue to obtain funding through such debt financing agreements

and Sales agreement as needed to meet cash requirements for the next 12 months.

As of March 31, 2025, we had

raised $11.9 million (net of fees) out of the $23.9 million available to us through the Sales agreement and expect to raise the additional

$11.6 million (net of fees) over the next 12 months.

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

Nine Months ended September 30,

Net cash (used in) provided by:

Three Months ended

Net cash provided by (used in):

Operating Activities

2 unchanged sentences

Effect of exchange rate changes on cash and cash equivalents

Net (decrease) increase in cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

Flows Used in Operating Activities

cash used in operating activities for the nine months ended September 30, 2024, was $5.9 million, resulting primarily from a net loss

of $15.1 million, net a change in the fair value of warrants of $0.1

million, adjusted for non-cash items including $1.3 million of stock-based compensation, $1.3 million of amortization expense, $2.7 million

expense on the issuance of warrants, $0.2 million interest expense of the deferred commission payable, $1.7 million non-cash share issuance

and a $1.4 million cash inflow from operating assets and liabilities.

The $2.3 million cash inflow from operating assets and liabilities

is primarily due to a $2.5 million cash inflow from accounts payable and accrued expenses and other current liabilities and a $0.2 million

cash outflow from prepaid expenses.

cash used in operating activities for the nine months ended September 30, 2023 was $2.9 million, resulting primarily from a net loss

of $0.8 million, adjusted for non-cash items including a $1.5 million reduction of deferred income upon exercise of the Cizzle option,

a $2.0 million gain on the change in fair value of the Vela and Cizzle options, a $0.2 million change from the reversal of a reserve

for an uncollectible loan that was repaid in September 2023 and a $0.1 million gain on warrant remeasurement, partially offset by a $1.7

million cash inflow from net changes from operating assets and liabilities, a $1.0 million loss on issuance of the Vela option, a $0.4

million loss on change in fair value of convertible notes and a $0.1 million increase in interest expense on a convertible promissory

The $0.2 million cash inflow from operating assets and liabilities is primarily due to a $1.6 million cash inflow from accrued

Net cash used in operating

activities for the three months ended March 31, 2025, was $4.3 million, resulting primarily from a net loss of $5.1 million, adjusted

for non-cash items including a $1.8 million loss on the change in fair value of convertible notes payable, a $0.3 million gain on debt

extinguishment, $0.3 million gain on waiver of accrued interest, a $0.1 million gain on change in fair value of warrant liability, $0.2

million of stock-based compensation expense, $0.2 million of non-cash interest expense, $0.2 million of amortization expense, $0.4 million

of prepaid directors and officers insurance amortization and a $1.6 million cash outflow from operating assets and liabilities.

million cash outflow from operating assets and liabilities is primarily due to a $0.7 million cash outflow from accounts payable, a $0.2

million cash outflow from accrued expenses and other current liabilities, and a $0.3 million cash outflow from prepaid expenses and other

current assets.

cash used in operating activities for the three months ended March 31, 2024, was $2.4 million, resulting primarily from a net loss

of $3.6 million, adjusted for non-cash items including $0.4 million of stock-based compensation, a $0.4 million of amortization

expense, a $0.5 million expense on the issuance of warrants and a $0.1 million interest expense of the deferred commission payable.

The $0.2 million cash outflow from operating assets and liabilities is primarily due to a $0.1 million cash inflow from accrued

expense and other current liabilities due to differences in the timing of disbursements and a $0.2 million cash outflow from prepaid

Flows (Used in) Provided by Investing Activities

cash used in investing activities for the nine months ended September 30, 2024, was $0.1 million, resulting from $0.5 million purchases of

short term investments offset by $0.4 million in sales of short term investments.

cash provided by investing activities for the nine months ended September 30, 2023, was $0.2 million, resulting proceeds on the

issuance of an option of $0.6 million offset by the issuance of a loan to a related party of $0.4 million.

Flows (Used) Provided by Investing Activities

cash used in investing activities for the three months ended March 31, 2025 was $4,000, resulting from purchases of property, plant

and equipment of $4,000.

was no cash flow from investing activities for the three months ended March 31, 2024.

Flows Provided by Financing Activities

cash provided by financing activities for the nine months ended September 30, 2024, was $1.9 million, resulting from $1.6 million of

proceeds on the issuance of the promissory note to Nirland, $0.1 million of proceeds the issuance of the April 2024 warrants and a

$0.1 million bank overdraft.

cash provided by financing activities for the nine months ended September 30, 2023, was $11.3 million, resulting from the issuance of

a convertible note payable of $1.4 million and from the issuance of a convertible promissory note payable of $0.7 million.

cash provided by financing activities for the three months ended March 31, 2025 was $5.9 million, resulting from proceeds from the issuance

of common shares related to the ATM program of $8.1 million.

This was offset by repayments of notes payable of $0.6 million, repayments

of convertible notes payable – related parties of $0.9 million and repayment of convertible notes payable of $0.6 million.

was no cash flow from financing activities for the three months ended March 31, 2024.

Obligations and Other Commitments

of September 30, 2024, we had no non-cancellable commitments for the purchase of clinical materials, contract manufacturing, maintenance

and committed funding which we expect to pay within one year.

We are the lessee under a

laboratory space lease.

The annual rent payments are $0.1 million for the years ending December 31, 2025 and December 31, 2026.

The laboratory

space lease has a remaining lease term of approximately two years.

Accounting Estimates

10 unchanged sentences

financial results include the following:

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 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 estimated fair value of the warrant liability.

See Note 4 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 14 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.

Value of Convertible Notes

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 convertible debt, the Company utilizes Binomial Lattice Pricing Models.

The Binomial Lattice Pricing Models involve the construction

of various intermediate lattices:

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

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

We computed the notes payoff at

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

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

(i) the Company’s stock price;

(ii) the term of the convertible debt;

(iii) the sum of the notes’ principal and unpaid accrued

(iv) expected volatility;

(v) risk-free interest rate;

(vi) the corporate bond yield;

(vii) the credit spread;

(viii) probability

and (ix) the estimated recovery upon default.

Any change to the unobservable inputs to estimate fair value could produce significantly

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

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

Value of Warrants

The Company has issued warrants

to investors in our debt and equity offerings.

The Company has also issued warrants to service providers in relation to our financing

We evaluate all warrants issued to determine the appropriate classification under ASC 480 and ASC 815.

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

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

the Company’s liability classified warrants, we estimate fair value

using the Black-Scholes model.

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

(i) the Company’s

(ii) the risk-free rate;

(iii) the expected volatility;

and (iv) the dividend yield.

The use of these valuation models requires

the input of highly subjective assumptions.

Any change to these inputs could produce significantly higher or lower fair value measurements

and result in a material change within the financial statements.

Contingencies

the ordinary course of business, we are involved in various legal proceedings that are complex in nature and have outcomes that are difficult

We describe our legal proceedings and other matters that are significant or that we believe could become significant in Note

15 to the consolidated financial statements.

We record accruals for loss contingencies to the extent that we conclude it is probable

that a liability has been incurred and the amount of the related loss can be reasonably estimated.

We evaluate, on a quarterly basis,

developments in legal proceedings and other matters that could cause an increase or decrease in the amount of the liability that has

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

Growth Company Status and Smaller Reporting Company Status

9 unchanged sentences

the new or revised accounting pronouncements as of public company effective dates.

closing of the Merger, the surviving company remained an emerging growth company, as defined by the JOBS Act until the earliest of (i)

the last day of the combined entity’s first fiscal year following the fifth anniversary of the completion of MURF’s initial

public offering, (ii) the last day of the fiscal year in which the combined entity has total annual gross revenue of at least $1.235

billion, (iii) the last day of the fiscal year in which the combined entity is deemed to be a large accelerated filer, which means the

market value of the combined entity’s common stock that is held by non-affiliates exceeds $700.0 million as of the prior December

31st or (iv) the date on which the combined entity has issued more than $1.0 billion in non-convertible debt securities during the prior

three year period.

closing of the Merger, the surviving company remained an emerging growth

company, as defined by the Jumpstart Our Business Startups act of 2012, until the earliest of (i) the last day of the combined entity’s

first fiscal year following the fifth anniversary of the completion of MURF’s initial public offering;

(ii) the last day of the

fiscal year in which the combined entity has total annual gross revenue of at least $1.235 billion;

(iii) the last day of the fiscal year

in which the combined entity is deemed to be a large accelerated filer, which means the market value of the combined entity’s common

stock that is held by non-affiliates exceeds $700.0 million as of the prior December 31st or (iv) the date on which the combined entity

has issued more than $1.0 billion in non-convertible debt securities during the prior three year period.

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

9 unchanged sentences

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 2. Management’s Discussion and Analysis