Item 1. Legal Proceedings
Item
1. Legal Proceedings.
The
Company is subject to certain claims and contingent liabilities that arise in the normal course of business. While we do not expect that
the ultimate resolution of any of these pending actions will have a material effect on our consolidated results of operations, financial
position or cash flows, litigation is subject to inherent uncertainties. As such, there can be no assurance that any pending legal action,
does not become material in the future. As of June 30, 2025, a contingency of $0.4 million is considered probable and reasonably estimable
in relation to the Company’s legal proceedings. As such, the Company accrued an estimated liability in the accompanying financial
statements.
In August 2023, prior to the Business Combination, our now wholly-owned
subsidiary, Conduit Pharmaceuticals Limited, received a letter from Strand Hanson Limited (“Strand”) claiming it was owed
advisory fees pursuant to a previously executed letter. CDT rejected the claim from Strand and disputed the substance of the letter in
full. Following such rejection, on September 7, 2023, Strand filed a claim in the Business and Property Courts of England and Wales claiming
it is entitled to be paid the sum of $2 million and, as a result of the completion of the Business Combination, to be issued 4,333 shares
of Common Stock. The trial in this matter remains scheduled for October 20, 2025. We intend to vigorously defend against these claims.
Regardless of its outcome, the litigation may impact our business due to, among other things, legal costs and the diversion of the attention
of our management.
In
November and December 2024, the Company received a letter from St George Street Capital and formal complaints filed with the Intellectual
Property Office claiming the Company was assigned the US Application, and was not the sole owner, of the AZD 1656 co-crystal patent.
In January 2025, CDT issued a counter statement to the Intellectual Property Office disputing the claim filed by St George Street
Capital. As of June 30, 2025, the range of possible loss cannot be estimated and is not considered probable. As such, the Company has
not accrued a loss contingency in the accompanying financial statements. We intend to vigorously defend against these claims. Regardless
of its outcome, the litigation may impact our business due to, among other things, legal costs and the diversion of the attention of
our management.
Item
1A. Risk Factors.
As
a smaller reporting company, we are not required to provide disclosure regarding material changes to our previously disclosed risk factors.
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