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UNITED

STATES

SECURITIES

AND EXCHANGE COMMISSION

WASHINGTON,

DC 20549

FORM

10-K

☒

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

For

the fiscal year ended December 31, 2024

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

For

the transition period from to

Commission

File No. 001-41245

CONDUIT

PHARMACEUTICALS INC.

(Exact

name of registrant as specified in its charter)

(Address of principal executive offices) (Zip Code)

Registrant’s

telephone number, including area code:

(646)-491-9132

Securities

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

Title of each class Trading Symbol Name of each exchange on which registered

Common Stock, par value $0.0001 per share CDT The Nasdaq Stock Market LLC

Securities

registered pursuant to Section 12(g) of the Act:

None

Indicate

by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate

by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ☐

No ☒

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 ☒

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 has filed a report on and attestation to its management’s assessment of the effectiveness

of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered

public accounting firm that prepared or issued its audit report. ☐

securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant

included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate

by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation

received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate

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

of March 28, 2025, there were 6,662,755 shares of common stock, $0.0001 par value, of the Registrant issued and outstanding. The aggregate

market value of the common stock held by non-affiliates of the registrant as of June 28, 2024, the last business day of the registrant’s

most recently completed second fiscal quarter, was $41,401,162 based upon the closing price reported for such date on The Nasdaq Global

Market.

January 25, 2025, the Registrant effected a 1-for-100 reverse stock split of its authorized shares of common stock, accompanied by a

corresponding decrease in its issued and outstanding shares of common stock. All references to numbers of shares of common stock and

per-share information in this Annual Report on Form 10-K have been adjusted retroactively, as appropriate, to reflect the reverse stock

split.

TABLE

OF CONTENTS

PART I

Item 1. Business 1

Item 1A. Risk Factors 29

Item 1B. Unresolved Staff Comments 57

Item IC. Cybersecurity 57

Item 2. Properties 57

Item 3. Legal Proceedings 57

Item 4. Mine Safety Disclosures 57

PART II

Item 6. Reserved 58

Item 7A. Quantitative and Qualitative Disclosures About Market Risk 70

Item 8. Financial Statements and Supplementary Data 70

Item 9A. Controls and Procedures 70

Item 9B. Other Information 71

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 71

PART III

Item 10. Directors, Executive Officers and Corporate Governance 72

Item 11. Executive Compensation 79

Item 14. Principal Accountant Fees and Services 89

PART IV

Item 15. Exhibits and Financial Statement Schedules 90

Signatures. 93

CAUTIONARY

NOTE REGARDING FORWARD-LOOKING STATEMENTS

This

Annual Report on Form 10-K (this “Annual Report”) and the information incorporated herein by reference contain forward-looking

statements. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only

on the Company’s 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 Annual 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. Forward-looking statements in this Annual Report

and in any document incorporated by reference in this Annual Report may include, for example, statements about:

● the risk of disruption to our current plans and operations;

● costs related to our business;

● changes in applicable laws or regulations;

● our ability to maintain existing license agreements;

These

forward-looking statements are based on information available as of the date of this Annual Report and current expectations, forecasts,

and assumptions, and involve a number of judgments, risks, and uncertainties. Accordingly, forward-looking statements should not be relied

upon as representing our views as of any subsequent date, and we do not undertake any obligation to update forward-looking statements

to reflect events or circumstances after the date they were made, whether as a result of new information, future events, or otherwise,

except as may be required under applicable securities laws.

TRADEMARKS

This

document contains references to trademarks and service marks belonging to other entities. Solely for convenience, trademarks and trade

names referred to in this Annual Report may appear without the ® or TM symbols, but such references are not intended to indicate,

in any way, that the applicable licensor will not assert, to the fullest extent under applicable law, its rights to these trademarks

and trade names. We do not intend our use or display of other companies’ trade names, trademarks, or service marks to imply a relationship

with, or endorsement or sponsorship of it by, any other companies.

SUMMARY

OF RISK FACTORS

The

following is a summary of the principal risks that could adversely affect our business, financial condition, operating results, cash

flows and/or stock price. Discussion of the risks listed below, and other risks that we face, are discussed in the section titled “Risk

Factors” in Part I, Item 1A of this Annual Report.

Risks

Related to Our Business and Industry

Risks

Related to Intellectual Property

Risks

Related to Securities Markets and Investment in Our Stock

Risks

Related to Finances and Capital Requirements

iii

PART

Item

1. Business

Overview

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. (“Conduit” or the “Company”).

Conduit

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 (“AI”) and cybernetics approaches to drug re-purposing,

intellectual property and asset selection to give Conduit a competitive advantage.

are led by highly experienced pharmaceutical 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. 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 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 assets.

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.

Outside

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 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.

AstraZeneca

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

development. 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.

Through

this relationship, there are considerable APIs that were manufactured by AstraZeneca

(prior to conducting its clinical trials) available to Conduit. 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”), Conduit intends to leverage an advanced

artificial intelligence (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 (defined and described below) 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.

Through

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 to 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 stockholders, and maintain a competitive

edge in the pharmaceutical sector.

Sarborg is considered to

be a related party of conduit, as Dr. Andrew Regan, a stockholder of Conduit and member of Conduit’s board of directors,

also sits on the board of directors of Sarborg. Refer to Note 16 to our financial statements included elsewhere in this Annual Report

for additional details on the relationship between Conduit and Sarborg.

This

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.

Furthermore,

Conduit believes that it 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.

Our

Initial Pipeline: HK-4 Glucokinase Activator Cocrystal, AZD1656, and its metabolite AZD5658 and AZD5904

wholly own the intellectual property and the rights to further develop the solid-form Cocrystals of AZD1656 (AZD1656 Cocrystal–

pending international patent applications, which, if granted should expire no earlier than 2042) that we intend to target a wide range

of autoimmune disorders.

addition, we currently have the exclusive rights to develop clinical assets, AZD1656 and AZD5658 in all human indications and AZD5904

in idiopathic male infertility which are licensed to us by AstraZeneca.

Outside

of our proprietary owned patented clinical assets, AstraZeneca granted a license to the Company of 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. The Company is required to use commercially reasonable efforts to develop and commercialize

the Licensed Products.

Due

to our relationship with AstraZeneca, we intend to leverage the data generated from these historical trials in order to investigate the

efficacy and safety to AZD1656 to potentially treat Lupus and ANCA Vasculitis patients, and the efficacy and safety of AZD5904 to treat

IMI. AZD1656 has undergone testing in a total of 20 Phase I clinical trials and five Phase II clinical trials conducted by AstraZeneca

since 2008 and 19 of which were conducted in the U.S. Additional information about those clinical trials is available at the U.S. National

Library of Medicine’s website at www.clinicaltrials.gov (however, the information contained on or otherwise accessible through

such website is not part of this annual report). AZD5904 has undergone testing in five Phase I clinical trials conducted by AstraZeneca,

one of which was conducted in the U.S. While a significant amount of clinical trial data has already been generated for both AZD1656

and AZD5904, some of this data was generated outside of the U.S. and accordingly may not be accepted by the FDA. In the event that such

data is not accepted by the FDA, additional clinical trials may be required to commercialize these assets in the United States, which

would result in additional costs and time to develop these clinical assets.

AZD1656

underwent Phase I and Phase II clinical trials consisting of 23 studies in 526 subjects, 446 of whom were dosed with AZD1656. Other

than for the intended effect of lowering glucose, there were no difference identified between the AZD1656-treated and

placebo-treated subjects relating to adverse events. All of the cases where low glucose levels were identified were managed by the

patients and resolved. Based on these clinical trials, no safety signals were identified regarding vital signs, safety laboratory

values or electrocardiogram data. No deaths occurred in any studies with healthy volunteers or patients. AZD1656 was also subject to

Phase II clinical trials consisting of two studies where AZD1656 was given to patients with Type 2 Diabetes Mellitus for four months

or longer. In total, there were 754 randomized patients, 516 of whom were exposed to AZD1656 (316 men and 200 women). There were no

clinically important differences in the adverse effects profile between the AZD1656 treatment group and the AZD1656 placebo group

and there were no deaths in either of the Phase II studies. The efficacy of AZD1656 as a potential treatment for diabetes was also

assessed during the Phase II clinical trials, including whether the efficacy was statistically significant. Clinically relevant and

statistically significant reductions in HbA1c were seen after four months; however, the initial improvement in glucose control

deteriorated over time and the change in HbA1c levels after four months were not statistically different than the placebo. This

decreasing efficacy over time was seen in both Phase II studies.

AZD5658

was subject to a randomized, single-blind, placebo-controlled, single-center, Phase I study to assess the safety, tolerability, pharmacokinetics,

pharmacodynamics and the effect of fasting after single ascending oral doses of AZD5658 in Type 2 Diabetes Mellitus patients. There were

six dose levels with eight patients in each cohort, six receiving AZD5658 and two receiving placebo. The effect of fasting on the pharmacokinetics

of AZD5658 was also studied for two dose levels. Each patient treated with metformin received a maximum of two single oral suspension

doses (one on a low dose of AZD5658/placebo and one on a high dose of AZD5658/placebo under fed conditions), except for patients participating

in the evaluation of the effect of fasting, who received a maximum of three single oral suspension doses. For each patient the study

included a pre-entry visit (Visit 1), two or three clinic-based treatment visits (Visit 2, 3, and 4) and a follow-up visit (Visit 5).

Hence, the total duration of the study for each patient was approximately two and one-half months, assuming three weeks between dose

levels. There were no deaths, serious adverse events, discontinuations due to adverse events, or adverse events of severe intensity during

the study. Overall, there were 13 (61.9%) AZD5658-treated patients with adverse events compared to 2 (28.6%) patients who received placebo.

There were no trends noted with increasing dose in the number of adverse events overall or within any preferred term. The most frequently

occurring adverse events were hypoglycemia and diarrhea, each occurring in three AZD5658-treated patients. One adverse event of ear

pain (30 mg AZD5658 fed) was assessed by the study investigator as moderate in intensity; all other adverse events were of mild intensity.

Five adverse events in AZD5658- treated patients were assessed by the investigator as causally related to investigational product, including

hypoglycemia in three patients (100 mg, 200 mg fasted, and 400 mg AZD5658), diarrhea in one patient (200 mg AZD5658 fasted), and headache

in one patient (30 mg AZD5658). No adverse events in placebo-treated patients were assessed as causally related to investigational product.

The three patients who experienced hypoglycemia adverse events were treated with intake of food or orange juice and the episodes resolved

in less than one hour.

AZD5904

was subject to five Phase I clinical studies, with a total of 1,181 subjects being exposed to AZD5904. Single doses of up to 1200 mg

and multiple doses of up to 325 mg for up to three times per day for 21 days have been administered as an oral solution in the completed

clinical studies. In addition, single doses of up to 1,400 mg and multiple doses of up to 600 mg for 10 days have been administered as

an “extended release” formulation. The data from these studies did not identify any expected adverse drug reactions for AZD5904

and no adverse effects were reported as related to AZD5904. In addition, the data revealed no clinically significant changes in blood

pressure or pulse rate related to AZD5904 and electrocardiogram data was within the physiological range for the population studied. The

effect of AZD5904 on human myeloperoxidase, which we refer to as MPO, activity was evaluated by determination in an ex vivo assay of

MPO activity in plasma. The correlation between MPO activity and plasma concentrations was assessed for single and multiple doses of

AZD5904. A relationship between plasma concentrations of AZD5904 and MPO activity was demonstrated, which indicates that AZD5904 may

be an effective inhibitor of MPO activity in humans. However, Phase I trials do not assess statistical significance so additional Phase

II trials are necessary to determine if the inhibition of MPO activity as a result of AZD5904 is statistically significant.

Asset

Development

Our

initial development plan is to conduct a Phase II clinical trial on AZD1656 in Lupus (including Lupus Nephritis) and ANCA Vasculitis

(AAV). Should we choose to develop AZD1656, AZD5658, or AZD5904, that development would be subject to the terms of the License Agreement,

described in more detail below. We anticipate developing our Initial Pipeline (which has already undergone pre-clinical and clinical

trials) through the Phase II stage and then monetizing such clinical assets through a license, royalty, or other transaction at this

stage. At this time, we do not expect that we will commercialize any clinical assets or seek marketing approval from the FDA (or similar

organizations) as we intend to enter into agreements with third parties following Phase II clinical trials for each such clinical asset

that would provide that such third party would pursue the further development, commercialization, and marketing of such assets.

enable us to monetize our clinical assets, we, in partnership with CROs and KOLs, intend to conduct additional clinical trials on our

clinical assets in order to generate clinical data to support the further development of our clinical assets beyond the Phase II stage.

In the event successful clinical trial data is generated for a clinical asset with a particular indication, at that point, we will seek

to enter into a license, royalty, or other transaction with a third party whereby the third party would continue to pursue the development

of the clinical asset in Phase III clinical trials. There is no assurance that any clinical trials on the assets owned or licensed by

us will be successful.

intend to use the income received from licensing clinical assets in our pipeline to fund the development of additional clinical assets,

which will allow us to use the existing income stream from clinical assets that have been licensed to fund our on-going operations, including

the development and commercialization of additional clinical assets, without having to rely solely on debt and/or equity financing.

Our

Development Strategy

Our

strategy is to generate value through the development of new medicines, or clinical assets, for patients where our research

indicates that there are not effective pharmaceutical treatments available or such existing pharmaceutical treatments are not

adequate due to, among other things, cost of such pharmaceuticals and side effects. We are working to develop new medicines in

disorders where competitive treatments carry a high incidence of unacceptable side effects resulting in tolerability and compliance

issues. We aim to extend and develop solid-form intellectual property on assets which are licensed from pharmaceutical companies or

generated within our facility in Cambridge, United Kingdom (the“UK”). We believe that our Cambridge facility positions us at the nexus of scientific

advancement, providing an environment to drive cutting-edge research and development initiatives.

There

is evidence that promising solid-form candidates can supersede original pharmaceutical products. We are currently in the process of developing

new solid-form intellectual property on clinical assets which we believe will serve as promising alternatives for existing products on

the market. We believe that our expertise and utilization of solid-form technology can potentially enhance the efficacy, bioavailability,

solubility and delivery of existing products on the market. Once a candidate has been identified and patented, we will fund and conduct

clinical trials through CROs.

previously indicated, our strategy also involves establishing strategic collaborations with globally recognized KOLs. We will collaborate

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

assets. This approach ensures that the selection of indications aligns with the KOLs’ insights, in addition to our internal expertise,

optimizing the development and success of Conduit’s diverse portfolio.

Our

unique relationships allow us to bypass certain traditional hurdles for the development of clinical assets. Through our relationship

with AstraZeneca, our Initial Pipeline has already undergone initial pre-clinical, and, in some instances, clinical testing conducted

by AstraZeneca, which enables us to use the safety data generated in the prior trials in order to assess which assets to continue to

develop. We regularly assess our asset portfolio to identify potential risks and take steps to mitigate those risks, such as the repurposing

of assets, which reduces development costs and timelines, as the clinical asset has already undergone safety and toxicity testing in

humans, as well as extending the remaining patent life by up to 20 years on all assets which are licensed.

The

prior preclinical and clinical studies conducted by AstraZeneca allow us to reduce the costs, expenses, and time in the development of

these assets by allowing us to continue the Phase Ib or Phase II stage, rather than the preclinical or Phase I stage, even if we are

investigating the assets for a new indication. For example, if a clinical asset was subject to a Phase I trial, such clinical asset may

be advanced to a Phase II trial even if the clinical asset is being investigated for a different indication. In addition, we have access

to API manufactured by AstraZeneca and as a result, should we use their formulation, we do not have to develop a route of manufacture

for the API, which is time consuming and expensive.

Principal

Strategic Partnerships

License

Agreement – Conduit and AstraZeneca

August 7, 2024, the Company and AstraZeneca entered into the License Agreement. Pursuant to such License Agreement, 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.

consideration for the grant of the license, the Company (i) granted AstraZeneca common stock pursuant to the Issuance Agreement (as further

set out below), (ii) paid AstraZeneca an up-front payment of $1.5 million, and (iii) is obligated to pay AstraZeneca a percentage (on

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

AstraZeneca

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

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

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

basis.

Either

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

may terminate the License Agreement for convenience (in its entirety or on a Licensed Product-by-Licensed Product basis). In addition,

AstraZeneca may terminate the License Agreement in certain circumstances, including (but not limited to) the Company ceasing development

of all Licensed Products (subject to certain exceptions for normal pauses or gaps between clinical studies).

addition, in connection with the execution of the License Agreement, the Company and AstraZeneca entered into the Issuance Agreement,

whereby the Company issued AstraZeneca 95,044 shares of the Company’s Common Stock. The Issuance Agreement provides

AstraZeneca with resale registration rights for such shares.

Services

Agreement – Conduit and Sarborg Limited

December 12, 2024, the Company entered into a Services Agreement (the “Sarborg Agreement”) with Sarborg, a Cayman

Islands company and related party of the Company. Under the terms of the Sarborg Agreement, Sarborg will provide algorithmic and cybernetic technology services to

Conduit, including the development of decision-support tools and advanced cybernetic systems tailored to enhance Conduit’s

decision-making processes and maximize the value of its pharmaceutical asset portfolio.

Sarborg

will perform the services to Conduit comprised of three phases: the Initial Phase (0-24 weeks) focuses on establishing a foundation for

collaboration and aligning Sarborg’s services with Conduit’s strategic goals; the Development Phase (24-36 weeks) involves

building technological infrastructure, including dashboards and predictive models; and the Ongoing Services Phase (36-52 weeks) ensures

the sustained functionality and relevance of Sarborg’s deliverables while supporting Conduit’s growth through iterative improvements

and updates. Sarborg will create specific deliverables, including reports, computer programs, software applications, APIs, mobile applications,

source code, written technical specifications and designs, operating and maintenance manuals, and other recorded data and information

arising from or relating to the services. Sarborg will provide all necessary resources to perform the services and deliver the deliverables

in accordance with the Sarborg Agreement.

date, Conduit has successfully completed the Initial Phase of its collaboration with Sarborg, establishing a strong foundation for integrating

AI-driven solutions into our operations. This phase focused on identifying key inputs for the algorithmic approach and ensuring alignment

between Sarborg’s services and Conduit’s strategic goals. As part of this effort, Sarborg has successfully delivered three

key milestones. First, they conducted detailed teach-in sessions with Conduit’s management team to gain a deeper understanding

of our objectives, challenges, and operational workflows, resulting in documented meeting agendas, minutes, and action plans. Second,

they finalized and validated a set of proprietary inputs essential for their cybernetic models, tailored specifically to Conduit’s

portfolio and R&D pipeline. Finally, they completed an in-depth market analysis of potential cocrystal candidates, assessing the

patent landscape, competitive positioning, and market size. The insights from this Annual Report are now informing Conduit’s ongoing

strategic decision-making. With these key milestones delivered, we are now progressing to the next phase of development.

Sarborg

has now commenced Phase II: The Development Phase, which focuses on building the technological infrastructure necessary to integrate

AI into Conduit’s operations. As part of this, Sarborg has successfully completed the first milestone, Dashboard Creation and Refinement,

delivering personalized dashboards that provide Conduit’s key personnel with real-time access to critical data related to deliverables,

clinical trials, and drug discovery. These initial dashboards, along with user interface mock-ups and a dashboard user guide, will serve

as the foundation for further refinements. Moving forward, the platform will continue to be optimized to maximize efficiency and ensure

seamless integration into Conduit’s workflows.

Master

Service Agreement – Conduit and Charles River Laboratories

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

“Charles River MSA”). Under the Charles River MSA, Charles River agreed to provide preclinical testing and research

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

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

study. To date, one SOW, dated February 11, 2025, has been entered into. Charles River will conduct the studies in compliance with

applicable laws and industry standards, and Conduit will provide necessary test articles and materials. The Charles River MSA

includes provisions for confidentiality, intellectual property ownership, indemnification, and dispute resolution. The Charles River

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

Market

Overview

Global

Biotechnology Industry

The

global biotechnology industry comprises a large range of companies engaged in diverse activities, such as biopharmaceutical development.

The industry companies also span across a wide spectrum of operational models. Some small, dedicated biotechnology companies are research

and development (“R&D”) intensive and operate primarily with venture capital, grants, initial public offerings and collaborative

agreements. Conversely, large, diversified companies hold significant in-house R&D resources and well-established production, commercialization,

and distribution processes.

Management

believes that the global biotechnology market was valued at $1.68 trillion in 2024 and is projected to grow at a compound annual growth

rate (“CAGR”) of 9.18% from 2024 to 2033.1 The market is driven by strong government support through initiatives

aimed at the modernization of regulatory framework, improvements in approval processes and reimbursement policies, as well as standardization

of clinical studies.

Global

investor confidence has fallen during the period, which served to somewhat subdue revenue growth. However, global investment in R&D

has grown strongly and consistently in recent years, with much of this funding funneled into medical biotechnology development, aimed

at providing better care for the aging global population, thus bolstering industry revenue.

Global

Pharmaceutical Industry

Over

the previous five years, pharmaceutical companies have benefited from an aging population in developed economies and a growing middle

class in emerging economies. Many companies have also tapped into regional demand for pharmaceuticals that may differ from developed

markets and have expanded their global presence to tap into regional market needs.

Patent

cliffs have continued to hamper industry revenue during the current period. When drugs lose patent exclusivity, the market is inundated

with low-cost generic drugs. As manufacturers contend with more price-based competition from generics, many operators respond by lowering

their R&D expenditures, which limits the industry’s drug pipelines. Additionally, many governments and health insurance organizations

have reduced their drug reimbursements to control healthcare costs, such as implementing incentives for patients to use generic drugs.

Moving

forward, revenue is forecast to grow an annualized 3.2% to $1.3 trillion over the next five years amid an anticipated persistence of

global demand for industry products.2

Our

Initial Pipeline: AZD1656, AZD5658 and AZD5904

wholly own the intellectual property and the rights to further develop the solid-form Cocrystals of AZD1656 (AZD1656 Cocrystal–

pending international patent applications if granted should expire no earlier than 2042) which we intend to target a wide range of autoimmune

disorders.