Merger and Company Structure - Conduit Pharmaceuticals Limited completed its merger with Murphy Canyon Acquisition Corp. on September 22, 2023, changing its name to Conduit Pharmaceuticals Inc. [123] - The company is classified as an emerging growth company under the JOBS Act, allowing it to delay adopting new accounting standards [203]. - The surviving company from the merger will remain an emerging growth company until it meets certain criteria, including total annual gross revenue of at least $1.235 billion [204]. - Conduit is also identified as a smaller reporting company, which allows it to utilize scaled disclosures as long as its voting and non-voting common stock held by non-affiliates is less than $250 million [205]. - The company can continue to be a smaller reporting company if its annual revenue is less than $100 million and its common stock held by non-affiliates is below $700 million [205]. Financial Performance - For the nine months ended September 30, 2023, Conduit reported a net loss of $2.3 million, compared to a net loss of $1.8 million for the same period in 2022, reflecting an increase in losses of approximately 28% [132]. - As of September 30, 2023, the company had an accumulated deficit of $13.1 million [132]. - Total operating costs and expenses for the nine months ended September 30, 2023, were $4.4 million, compared to $1.5 million for the same period in 2022 [149]. - The company incurred net losses of $2.3 million and $1.8 million for the nine months ended September 30, 2023 and 2022, respectively [167]. Expenses - General and administrative expenses increased by $0.3 million, or 38%, to $1.1 million for the three months ended September 30, 2023, compared to $0.8 million for the same period in 2022 [151]. - General and administrative expenses increased by $3.1 million, or 229%, to $4.4 million for the nine months ended September 30, 2023, compared to $1.3 million for the same period in 2022 [160]. - Research and development expenses decreased by $38 thousand, or 100%, to nil for the three months ended September 30, 2023, due to the absence of expenses related to COVID-19 treatment [150]. - Research and development expenses decreased by $38 thousand, or 100%, to nil for the nine months ended September 30, 2023, compared to $38 thousand for the same period in 2022 [159][162]. - Interest expense, net, for the nine months ended September 30, 2023, was $92 thousand, with no interest expense recorded for the same period in 2022 [149]. - Interest expense increased by $47 thousand to $47 thousand for the three months ended September 30, 2023, compared to nil for the same period in 2022 [157][158]. Income and Cash Flow - Other income for the three months ended September 30, 2023, was $3.1 million, compared to an expense of $23 thousand for the same period in 2022 [149]. - Other income increased by $3.1 million, or 13,587%, to $3.1 million for the three months ended September 30, 2023, compared to a net expense of $23 thousand for the same period in 2022 [154][155]. - Other income (expense), net changed by $2.4 million, or 750%, to other income of $2.1 million for the nine months ended September 30, 2023, compared to other expense of $0.3 million for the same period in 2022 [163]. - Net cash used in operating activities was $2.9 million for the nine months ended September 30, 2023, compared to $1.4 million for the same period in 2022 [175][176]. - Net cash provided by financing activities for the nine months ended September 30, 2023 was $11.3 million, primarily from merger proceeds and PIPE financing, net of transaction costs of $8.5 million [179]. - Net cash provided by investing activities for the nine months ended September 30, 2023 was $0.2 million, resulting from $0.6 million in proceeds from repayment on a related party loan [178]. - As of September 30, 2023, the company had $8.6 million in cash on the balance sheet, with primary exposure to interest rate sensitivity [200]. Future Outlook and Funding - Conduit anticipates that general and administrative expenses will increase substantially as it operates as a public company and advances clinical assets [144]. - The company plans to use income from licensing clinical assets to fund the development of additional clinical assets, aiming to address unmet medical needs [131]. - The company anticipates cash requirements for capital expenditures of approximately $9.7 million over the next 12 months [174]. - The company expects to finance cash needs through public or private equity or debt financings or other capital sources [168]. Risk Factors - The company does not believe that foreign currency risk had a material effect on its financial condition or results of operations during the periods presented [201]. - The company does not believe that inflation had a significant impact on its results of operations for any periods presented [202]. Valuation and Commitments - The fair value of the option liability was estimated using the Monte Carlo Simulation Model, reflecting significant judgment in inputs such as expected volatility and underlying asset price [192]. - The fair value of convertible notes was determined using a probability-weighted income approach, considering various settlement outcomes [196]. - The company had no non-cancellable commitments for the purchase of clinical materials or contract manufacturing as of September 30, 2023 [182]. - The company did not hold any available for sale or trading securities as of September 30, 2023 [188].
MURPHY CANYON AC(MURF) - 2023 Q3 - Quarterly Report