What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-14 compared with 2025-05-15 · 283 added, 246 removed, 168 unchanged (76% of the section changed)

6 unchanged sentences

forth below includes forward-looking statements that involve risks and uncertainties.

The following

discussion contains forward-looking statements based upon current expectations that involve risks, uncertainties and assumptions.

actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including

those set forth under the section titled “Risk Factors” or in other parts of this Quarterly Report .

Our historical

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

All dollar amounts are expressed

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

The following discussion contains forward-looking

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

Our actual results may differ materially

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

titled “Risk Factors” or in other parts of this Quarterly Report.

Our historical results are not necessarily indicative of

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

All dollar amounts are expressed in thousands of United States dollars

(“$”), unless otherwise indicated.

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

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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.

There is no assurance

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

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

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

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

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

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

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

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

The Company will be responsible for the development

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

The Company is required to use commercially reasonable

efforts to develop and commercialize the Licensed Products.

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

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

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

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

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,

to CDT Pharmaceuticals Inc.

Effective August 5, 2025, the Company changed

its name from Conduit Pharmaceuticals Inc.

to CDT Equity Inc.

Our change to CDT Equity Inc.

reflects the evolution of our strategy as

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

scientific innovation and strategic partnerships.

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

through scientific innovation and strategic partnerships.

The company has evolved into a broader, more agile platform that leverages

artificial intelligence, solid-form chemistry, and efficient asset repositioning to accelerate the development of novel therapeutic treatments.

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

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

Through advanced co-crystallization and solid-form technologies

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

up to 20 years.

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

and animal health.

The intellectual property portfolio comprises pending patent applications in several international jurisdictions describing

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

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.

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

opportunities against a database of over 800 disease signatures.

Sarborg’s insights have directly informed two new combination

patent filings, strengthening our intellectual property portfolio.

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

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

We will seek an exit through third-party license deals following

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

commercialization and marketing of our assets .

We continue to evaluate novel artificial intelligence and cybernetics approaches to drug

re-purposing, intellectual property and asset selection to give CDT a competitive advantage.

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

sector, in particular by reducing human error in critical decision-making processes in both clinical development and asset identification.

By integrating Sarborg’s algorithmic AI/cybernetics technology, CDT aims to enhance efficiency, lower costs, and accelerate timelines

by minimizing human intervention, ultimately optimizing the drug development cycle and giving CDT a competitive advantage in the sector.

this relationship, CDT 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.

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improving efficiency and reducing costs.

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

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

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

by Sarborg in association with the deliverables.

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

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

This partnership reinforces

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

edge in the pharmaceutical sector.

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

the pharmaceutical industry.

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

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

long-term growth and market leadership.

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

licensing of further assets which are currently deprioritized.

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

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

By leveraging these insights, CDT 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.

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

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

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

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

Repositioning

CDT Equity enables the company to explore multiple opportunities in the healthcare, biotech and broader technology innovation.

continue to evaluate a cryptocurrency treasury reserve strategy, working with consultants to best advise a novel market which has seen

significant recent activity and success for respective stakeholders.

Long-term exposure to digital assets can present both strategic and

financial benefits as part of a diversified capital management approach.

Operating with a lean, disease-agnostic

model, CDT Equity prioritizes speed, adaptability, and capital efficiency.

We avoid the cost burden of late-stage clinical trials, focusing

instead on high-leverage development strategies.

Led by highly experienced executives:

Freda Lewis-Hall, former Chief Medical Officer

of Pfizer Inc., the Chair of the Board;

Andrew Regan, CEO and James Bligh, CFO.

Our management team includes active senior scientists

who have an extensive understanding of the pharmaceuticals market, supporting our strategy of developing clinical assets in a cost-efficient

manner focused on therapeutic efficacy.

In 2024, AstraZeneca granted a

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

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

The Company will be responsible for development and commercialization of the Licensed Products under the related License

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

AstraZeneca has conducted initial

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

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 re-purpose.

Furthermore, CDT is well positioned

to pursue, and intends to pursue, additional relationships and/or partnerships with third parties for the licensing of further assets

which are currently deprioritized.

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

population where there is no present treatment or the present treatment, carries significant unwanted side effects.

Component of Result of Operations

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expenses related to research and development.

expense research and development costs as incurred.

Advance payments that we make for goods or services to be received in the future

for use in research and development activities are recorded as prepaid expenses.

The prepaid amounts are expensed as the benefits are

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.

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.

expense research and development costs with no alternative future use as incurred.

Advance payments that we make for goods or services

to be received in the future for use in research and development activities are recorded as prepaid expenses.

The prepaid amounts are

expensed as the benefits are consumed.

incurred approximately $1.8 million and $25,000 on research and development activities during the three months ended June 30, 2025,

and June 30, 2024, respectively.

We incurred approximately $2.8 million and $0.2 million on research and development activities during

the six months ended June 30, 2025, and June 30, 2024, respectively.

Our research and development activities have been focused on developing

co-crystals of AZD1656 to increase patent life as well as purchasing technology to help us determine the feasibility that AZD1656, and

potentially other de-prioritized assets, reaches commercialization.

Some of this work was completed by third-party CROs but all intellectual

property is retained by us.

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

The successful completion of clinical trials increases the value of clinical assets and may lead to the commercialization and/or licensing

of such assets to other pharmaceutical companies.

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

will be successful.

and Administrative Expenses

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income (expenses), net

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

income (expenses), 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 year.

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following table set forth our results of operations for the periods indicated:

Three Months ended

(In thousands, except share and per share amounts)

(Dollar amounts in thousands)

Operating expenses:

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Total other (expense) income, net

of the Three Months Ended March 31, 2025 and 2024

of the Three Months Ended June 30, 2025 and 2024

and Development Expenses

Three Months ended March 31,

Three Months ended

(Dollar amounts in thousands)

Research and development expenses

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 development expenses increased by $1.8 million, or 7,340%, for the three months ended June 30, 2025, as compared to $25 thousand

for the three months ended June 30, 2024.

The increase was primarily due $1.6 million of expense recorded under the Sarborg Service Agreement

and Sarborg Additional Agreement and $0.1 million of expense recorded under the Thesprogen Agreement, and $0.1 million in other research and development related activity.

and Administrative Expenses

Three Months ended March 31,

Three Months ended

(Dollar amounts in thousands)

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.

and administrative expenses decreased by $23,000, or approximately one percent, during the three months ended June

30, 2025, as compared to the three months ended June 30, 2024.

The decrease was driven by a $0.4 million decrease in

payroll and stock-based compensation expense, partially offset by a $0.2 million increase in legal fees, a $0.1 million increase in accounting

and audit expense and a $0.1 million increase in travel expense.

Income (Expense), Net

Three Months ended March 31,

Three Months ended

(Dollar amounts in thousands)

Other income (expense), net

income (expense), net changed by $1.1 million, or 52%, to $1.0 million of expense for the three months ended June 30, 2025, as compared

to $2.1 million of net expense for the three months ended June 30, 2024.

The decrease was primarily driven by a decrease of $2.2 million

related to the issuance of warrants in exchange for stockholders’ entering into lock-up agreements during the three months ended

June 30, 2024 partially offset by an increase of $1.1 million in the loss on the change in fair value of convertible notes payable.

further details refer to Note 12, “Other income (expense), net,” in the unaudited financial statements as of June 30, 2025

and June 30, 2024 included elsewhere in this document.

Three Months ended

(Dollar amounts in thousands)

Interest expense, net

expense, net decreased by $62,000, or 52%, to $57,000 for the three months ended June 30, 2025, as compared to $0.1 million for the three months ended June 30, 2024.

The change was driven by a decrease of $0.1 million of interest expense on the deferred commission payable to an advisor for fees related

to the merger, offset by an increase of $57,000 of interest expense on the A.G.P.

Convertible Note.

of the Six Months Ended June 30, 2025 and 2024

and Development Expenses

Six Months ended

(Dollar amounts in thousands)

Research and development expenses

Research and development expenses increased by $2.6 million, or 1,714%,

for the six months ended June 30, 2025, as compared to $0.2 million for the six months ended June 30, 2024.

The increase was primarily

due $2.4 million of expense recorded under the Sarborg Service Agreement and Sarborg Additional Agreement, $0.1 million of expense incurred

under Thesprogen Consulting Agreement, and $0.1 million in other research and development related activities.

and Administrative Expenses

Six Months ended

(Dollar amounts in thousands)

General and administrative expenses

and administrative expenses decreased by $0.15 million, or 3%, to $5.8 million for the six months ended June 30, 2025, as compared to

$5.9 million for the six months ended June 30, 2024.

The decrease was primarily driven by a $0.7 million decrease in salaries and stock

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

related to the amortization of prepaid directors and officers insurance, partially offset by a $0.7 million increase in legal expenses

and a $0.1 increase in travel expense.

Income (Expense), Net

Six Months ended

(Dollar amounts in thousands)

Other income (expense), net

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,

income (expense), net changed by $0.6 million, or 24%, to $2.0 million of expense for the six months ended June 30, 2025, as compared

to $2.6 million of net expense for the six months ended June 30, 2024.

The change in other income (expense) for the six months ended

June 30, 2025 is primarily related to a $2.7 million decrease related to the issuance of warrants in exchange for stockholders’

entering into lock-up agreements during the six months ended June 30, 2024, a $0.4 million decrease related to a waiver of interest on

Convertible Note, and a $0.3 million gain on debt extinguishment, partially offset by a $2.9 million loss on the change in

fair value of convertible notes payable.

further details refer to Note 12, “Other income (expense), net,” in the unaudited financial statements as of June 30, 2025

and June 30, 2024 included elsewhere in this document.

Six Months ended

(Dollar amounts in thousands)

Interest expense, net

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.

Interest expense, net increased by $5,000, or 2%, during the three months ended June 30, 2025, as compared to

the three months ended June 30, 2024.

change was immaterial for the six months ended June 30, 2025 as compared to June 30, 2024.

and Capital Resources

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To date, our primary sources of capital have

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.

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

During the six months ended

June 30, 2025 and 2024, we incurred operating losses of $8.6 million and $6.1 million, respectively.

and Uses of Liquidity

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

primary use of cash is to fund our operations as we continue to grow our business.

We will require a significant amount of cash for expenditures

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

Until such time we can generate significant revenue from the

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

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

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

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

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

affect the rights of our common stockholders.

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

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

or declaring dividends.

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

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

If we are unable to raise additional funds through equity or debt financing 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.

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Convertible Note

On November 25, 2024, the

Company issued to A.G.P.

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”) 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

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

Convertible Note accrues interest at 5.5% per annum.

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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.

March 31, 2025, April 11, 2025, April 16, 2025, June 2, 2025, June 17, 2025, and June 26, 2025, the holder of the A.G.P.

note converted $0.4 million, $0.5 million, $0.8 million, $0.1 million, $0.2 million, and $0.2 million of principal and interest into

28,667, 28,666, 71,026, 40,000, 90,000, and 100,000 shares of the Company’s Common Stock, respectively.

As of June 30, 2025, there

was approximately $3.6 million in outstanding principal and interest remaining.

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.

of June 30, 2025, we had raised $15.9 million out of the $23.9 million available to us through the Sales Agreement and expect to raise

the additional $8.0 million over the next 12 months.

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

Three Months ended

Net cash provided by (used in):

Six Months ended June 30,

Net cash (used in) provided by:

Operating Activities

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Flows Used in Operating Activities

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) 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.

Net cash used in operating activities for the six months ended June 30,

2025, was $6.5 million, resulting primarily from a net loss of $10.8 million, adjusted for non-cash items including a $0.4 million gain

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

$2.9 million change in fair value of convertible notes, $1.8 million of amortization expense, $0.4 million of stock-based compensation,

$0.2 million of non-cash interest expense, and a $0.2 million cash outflow from operating assets and liabilities.

The $0.2 million cash

outflow from operating assets and liabilities is primarily due to a $0.2 million cash outflow from accounts payable, a $0.1 million cash

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

offset by a $0.2 million cash inflow from prepaid expenses and other current assets.

cash used in operating activities for the six months ended June 30, 2024, was $3.9 million, resulting primarily from a net loss of $8.9

million and a change in the fair value of warrants of $0.1 million, adjusted for non-cash items including $0.9 million of stock-based

compensation, $0.9 million of amortization expense, $2.7 million expense on the issuance of warrants, $0.2 million interest expense of

the deferred commission payable, $0.2 million non-cash share issuance and a $0.4 million cash inflow from operating assets and liabilities.

The $0.4 million cash inflow from operating assets and liabilities is primarily due to a $0.8 million cash inflow from accounts payable,

partially offset by a $0.1 million cash outflow from accrued expenses and other current liabilities and a $0.3 million cash outflow from

prepaid expenses.

Flows Used in Investing Activities

Net cash used in investing activities for the six months ended June 30,

2025, was $0.4 million, resulting from $0.4 million in diagnostic asset purchases and purchases of property, plant and equipment.

cash used in investing activities for the six months ended June 30, 2024, resulted from net purchases of short term investments of $0.2

million and purchases of PP&E during the year.

Flows Provided by Financing Activities

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.

cash provided by financing activities for the six months ended June 30, 2025, was $9.7 million, resulting from proceeds from the issuance

of common shares related to the ATM program of $11.9 million, partially offset by repayments of notes payable of $0.2 million, repayments

of notes payable – related parties of $0.4 million, repayment of convertible notes payable – related parties of $0.9 million,

repayment of convertible notes payable of $0.7 million, and treasury stock purchases of $0.1 million.

cash provided by financing activities for the six months ended June 30, 2024, was $0.1 million, resulting from the proceeds on the issuance

of the April 2024 warrants.

Obligations and Other Commitments

We are the lessee under a

laboratory space lease.

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

The laboratory

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

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

Accounting Estimates

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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.

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

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

The Binomial Lattice Pricing Models involve the

construction of various intermediate lattices:

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

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

We computed the

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

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

(ii) the term of the

convertible debt;

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

(iv) expected volatility;

(v) risk-free interest rate;

(v) risk-free interest

(vi) the corporate bond yield;

(vii) the credit spread;

(viii) probability

(viii) probability of default;

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.

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.

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

The Company has also issued warrants to service providers

in relation to our financing offerings.

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

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

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

The significant inputs and assumptions

used to estimate the fair value include:

(i) the Company’s stock price;

(ii) the risk-free rate;

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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.

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

Any change to these

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

Contingencies

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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 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.

The Company may continue to be a smaller reporting company

even after we are no longer an emerging growth company.

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

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

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

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

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

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.

In addition, CDT is a smaller

reporting company as defined in the Securities Exchange Act of 1934 (as amended, the “Exchange Act”).

The Company may continue

to be a smaller reporting company even after we are no longer an emerging growth company.

We may take advantage of certain of the scaled

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

CDT’s voting and non-voting Common Stock held by non-affiliates is less than $250.0 million measured on the last business day of

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

and its voting and non-voting Common Stock held by non-affiliates is less than $700.0 million measured on the last business day of its

second fiscal quarter.

Quantitative and Qualitative Disclosures About Market Risk.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis