UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024

☐ TRANSITION REPORT PURSUANT T O SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-41245

CONDUIT PHARMACEUTICALS INC.

(Exact name of registrant as specified in its charter)

Delaware		87-3272543
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

4995 Murphy Canyon Road, Suite 300 San Diego, California 92123		92123
(Address of Principal Executive Offices)		(Zip Code

(760) 471-8536

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered

Common Stock, par value $0.0001 per share	CDT	The Nasdaq Stock Market LLC
Redeemable Warrants, each whole warrant exercisable for one share of Common Stock at an exercise price of $11.50	CDTTW	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

☐ Large accelerated filer	☐ Accelerated filer
☒ Non-accelerated filer	☒ Smaller reporting company
	☒ Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes ☐ No ☒

As of August 12, 2024, there were 96,004,699 shares of common stock, $0.0001 par value of the registrant issued and outstanding.

CONDUIT PHARMACEUTICALS INC.

Form 10-Q

Table of Contents

		Page
Part I-Financial Information.

Item 1.	Financial Statements.	1
	Condensed Consolidated Balance Sheets as of June 30, 2024 (unaudited) and December 31, 2023 (audited).	1
	Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and six months ended June 30, 2024 and 2023.	2
	Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Deficit for the three and six months ended June 30, 2024 and 2023.	3
	Unaudited Condensed Consolidated Statement of Cash Flows for the six months ended June 30, 2024 and 2023.	4
	Notes to Unaudited Condensed Consolidated Financial Statements.	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	31
Item 4.	Controls and Procedures.	31

Part II-Other Information.

Item 1.	Legal Proceedings.	32
Item 1A.	Risk Factors.	32
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	32
Item 3.	Defaults Upon Senior Securities.	32
Item 4.	Mine Safety Disclosures.	32
Item 5.	Other Information.	32
Item 6.	Exhibits.	33

Part III-Signatures.		34

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (this “Quarterly Report”) for the quarterly period ended June 30, 2024 contains forward-looking statements. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations, and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy, and other future conditions. This includes, without limitation, statements regarding the financial position and the plans and objectives of management for our future operations. Such statements can be identified by the fact that they do not relate strictly to historical or current facts. When used in this Quarterly Report, words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “strive,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Factors that could materially affect our business operations and financial performance and condition include, but are not limited to, those risks and uncertainties described herein under “Item 1A. Risk Factors,” those described in our Annual Report on Form 10-K for the year ended December 31, 2023, under “Item 1A. Risk Factors,” filed with the U.S. Securities and Exchange Commission (the “SEC”). You are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on the forward-looking statements. The forward-looking statements are based on information available to us as of the filing date of this Quarterly Report. Unless required by law, we do not intend to publicly update or revise any forward-looking statements to reflect new information or future events or otherwise. You should, however, review the risk factors we describe in the reports we will file from time to time with the SEC after the date of this Quarterly Report.

This Quarterly Report may also contain market data related to our business and industry. These market data include projections that are based on a number of assumptions. If these assumptions turn out to be incorrect, actual results may differ from the projections based on these assumptions. As a result, our markets may not grow at the rates projected by these data, or at all. The failure of these markets to grow at these projected rates may harm our business, results of operations, financial condition, and the market price of our common stock.

PART I-FINANCIAL INFORMATION

Item 1. Financial Statements.

CONDUIT PHARMACEUTICALS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)

	June 30, 2024			December 31, 2023
	(unaudited)			(audited)
ASSETS
Current assets
Cash and cash equivalents	$	219		$	4,228
Marketable Investments		214			-
Prepaid expenses and other current assets		1,168			1,505
Total current assets		1,601			5,733
Operating lease right-of-use assets, net		319			-
Property, plant, and equipment, net		50			-
Prepaid expenses and other long-term assets		1,335			1,491
Total assets	$	3,305		$	7,224
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities
Accounts payable	$	1,064		$	215
Accrued expenses and other current liabilities		665			601
Convertible promissory note payable		800			800
Operating lease liability, current portion		144			-
Loans payable		183			185
Total current liabilities		2,856			1,801
Derivative warrant liability		32			142
Operating lease liability, non-current portion		141			-
Deferred commission payable		5,738			5,738
Total liabilities		8,767			7,681

Stockholders’ deficit
Common stock, par value $0.0001; 250,000,000 shares authorized at June 30, 2024 and December 31, 2023, respectively, 74,000,234 and 73,829,536 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively		7			7
Preferred stock, par value $0.0001; 1,000,000 shares authorized at June 30, 2024 and December 31, 2023; no shares issued and outstanding at June 30, 2024 and December 31, 2023		-			-
Additional paid-in capital		14,378			10,424
Accumulated deficit		(20,234	)		(11,299	)
Accumulated other comprehensive income		387			411
Total stockholders’ deficit		(5,462	)		(457	)
Total liabilities and stockholders’ deficit	$	3,305		$	7,224

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

CONDUIT PHARMACEUTICALS INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(unaudited)

(in thousands, except share and per share amounts)

	2024			2023			2024			2023
	Three Months ended June 30,						Six Months ended June 30,
	2024			2023			2024			2023
Operating expenses:
Research and development expenses	$	25		$	-			153			-
General and administrative expenses		3,115			1,315			5,942			2,830
Total operating expenses		3,140			1,315			6,095			2,830
Operating loss		(3,140	)		(1,315	)		(6,095	)		(2,830
Other income (expense):
Other income (expense), net		(2,126	)		(791	)		(2,613	)		(948	)
Interest income		2			-			11
Interest expense		(119	)		-			(238	)
Total other (expense) income, net		(2,243	)		(791	)		(2,840	)		(948	)
Net loss	$	(5,383	)	$	(2,106	)		(8,935	)		(3,778	)
Basic earnings/(net loss) per share	$	(0.07	)	$	(0.03	)		(0.12	)		(0.06	)
Diluted earnings/(net loss) per share	$	(0.07	)	$	(0.03	)		(0.12	)		(0.05	)
Basic weighted-average common shares outstanding		73,851,440			64,626,430			73,840,488			64,626,430
Diluted weighted-average common shares outstanding		73,851,440			65,825,568			73,840,488			65,425,949
Comprehensive loss:
Foreign currency translation adjustment		(1	)		(383	)		(24	)		(646	)
Total comprehensive loss	$	(5,384	)	$	(2,489	)		(8,959	)		(4,424	)

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

CONDUIT PHARMACEUTICALS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

(unaudited)

(in thousands, except share amounts)

	Shares		Amount		capital		deficit			income			deficit
	Common stock				Additional paid-in		Accumulated			Accumulated other comprehensive			Total stockholders’
	Shares		Amount		capital		deficit			income			deficit

Balance at April 1, 2024		73,829,536	$	7	$	11,358	$	(14,851	)	$	388		$	(3,098	)
Issuance of Common Stock for services		96,154		-		150		-			-			150
Issuance of Common Stock upon vesting of restricted stock units		74,544		-		-		-			-			-
Issuance of Warrants		-		-		2,388		-			-			2,388
Stock-based compensation		-		-		482		-			-			482
Foreign currency translation adjustment		-		-		-		-			(1	)		(1	)
Net loss		-		-		-		(5,383	)		-			(5,383	)
Balance at June 30, 2024		74,000,234	$	7	$	14,378	$	(20,234	)	$	387		$	(5,462	)

	Common stock				Additional paid-in		Accumulated			Accumulated other comprehensive			Total stockholders’
	Shares		Amount		capital		deficit			income			deficit

Balance at January 1, 2024		73,829,536	$	7	$	10,424	$	(11,299	)	$	411		$	(457	)
Issuance of Common Stock for services		96,154		-		150		-			-			150
Issuance of Common Stock upon vesting of restricted stock units		74,544		-		-		-			-			-
Issuance of Warrants		-		-		2,890		-			-			2,890
Stock-based compensation		-		-		914		-			-			914
Foreign currency translation adjustment		-		-		-		-			(24	)		(24	)
Net loss		-		-		-		(8,935	)		-			(8,935	)
Balance at June 30, 2024		74,000,234	$	7	$	14,378	$	(20,234	)	$	387		$	(5,462	)

	Common stock				Additional paid-in		Accumulated			Accumulated other comprehensive			Total stockholders’
	Shares		Amount		capital		deficit			income			deficit

Balance at April 1, 2023		64,626,430	$	6	$	-	$	(12,442	)	$	412		$	(12,024	)
Foreign currency translation adjustment		-		-		-		-			(383	)		(383	)
Net loss		-		-		-		(2,106	)		-			(2,106	)
Balance at June 30, 2023		64,626,430	$	6	$	-	$	(14,548	)	$	29		$	(14,513	)

	Common stock				Additional paid-in			Accumulated			Accumulated other comprehensive			Total stockholders’
	Shares		Amount		capital			deficit			income			deficit

Balance at January 1, 2023		2,000	$	-	$	-		$	(10,764	)	$	675		$	(10,089	)
Retroactive application of Merger		64,624,430		6		(6	)		-			-			-
Reclassification of additional paid-in capital		-		-		6			(6	)		-			-
Adjusted Balances, beginning of period		64,626,430	$	6	$	-		$	(10,770	)	$	675		$	(10,089	)
Balance		64,626,430	$	6	$	-		$	(10,770	)	$	675		$	(10,089	)
Foreign currency translation adjustment		-		-		-			-			(646	)		(646	)
Net loss		-		-		-			(3,778	)		-			(3,778	)
Balance at June 30, 2023		64,626,430	$	6	$	-		$	(14,548	)	$	29		$	(14,513	)
Balance		64,626,430	$	6	$	-		$	(14,548	)	$	29		$	(14,513	)

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

CONDUIT PHARMACEUTICALS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(in thousands)

	2024			2023
	Six Months ended June 30,
	2024			2023
Cash flows used in operating activities:
Net loss	$	(8,935	)	$	(3,778	)
Adjustments to reconcile net loss to net cash used in operating activities:
Gain on change in fair value of Cizzle option		-			(311	)
Gain on change in fair value of Vela option		-			(77	)
Loss on issuance of Vela option		-			998
Change in reserve for related party uncollectible loan		-			332
Loss on change in fair value of convertible notes payable		-			303
Unrealized foreign exchange loss		5			-
Issuance of warrants for lock-up		2,710			-
Gain on change in fair value of derivative warrant liability		(110	)		-
Stock-based compensation expense		914			-
Non-cash interest expense		158			44
Operating lease obligations		(34	)		-
Amortization of financed Directors and Officers insurance		863			-
Issuance of common stock for services		150			-
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		(306	)		(895	)
Accounts payable		811			-
Accrued expenses and other liabilities		(96	)		986
Net cash flows used in operating activities		(3,870	)		(2,398	)
Cash flows used in investing activities:
Issuance of loan - related party		-			(332	)
Purchases of property and equipment		(10	)		-
Purchases of short term investments		(490	)
Proceeds from the sale of short-term investments		276
Proceeds from the issuance of the Vela option		-			493
Net cash flows used in investing activities		(224	)		161
Cash flows provided by financing activities:
Proceeds from issuance of convertible notes payable, carried at fair value		-			1,455
Proceeds from issuance of warrants from lock-up		113			-
Proceeds from issuance of convertible promissory note payable, carried at cost		-			776
Net cash flows provided by financing activities		113			2,231
Net change in cash and cash equivalents before effect of exchange rate changes		(3,981	)		(6	)
Effect of exchange rate changes on cash and cash equivalents		(28	)		6
Net change in cash		(4,009	)		-
Cash and cash equivalents at beginning of period		4,228			-

SEC Form 10-Q filed by Conduit Pharmaceuticals Inc.