duit Pharmaceuticals (US:CDT)2025-11-13 21:46Merger and Company Formation - The merger transaction between Conduit Pharmaceuticals Limited and Murphy Canyon Acquisition Corp was completed on September 22, 2023, resulting in the formation of Conduit Pharmaceuticals Inc, which will be renamed CDT Equity Inc effective August 5, 2025[170]. Financial Performance - The total operating costs and expenses for the three months ended September 30, 2025, were $7.0 million, compared to $5.8 million for the same period in 2024, resulting in an operating loss of $7.0 million[191]. - The net loss for the three months ended September 30, 2025, was $7.1 million, compared to a net loss of $6.5 million for the same period in 2024[191]. - Operating losses for the nine months ended September 30, 2025, were $17.9 million, compared to $15.4 million for the same period in 2024[202]. - Cash used in operating activities was $10.9 million for the nine months ended September 30, 2025, compared to $5.9 million for the same period in 2024[213]. Research and Development Expenses - Research and development expenses decreased by $1.6 million, or 50%, to $1.5 million for the three months ended September 30, 2025, compared to $3.1 million for the same period in 2024[192]. - The company incurred approximately $4.3 million on research and development activities during the nine months ended September 30, 2025, compared to $3.2 million for the same period in 2024[184]. - Research and development expenses increased by $1.1 million, or 33%, to $4.3 million for the nine months ended September 30, 2025, compared to $3.2 million for the same period in 2024[197]. General and Administrative Expenses - General and administrative expenses increased by $2.8 million, or 102%, to $5.5 million for the three months ended September 30, 2025, compared to $2.7 million for the same period in 2024[193]. - General and administrative expenses rose by $2.6 million, or 30%, to $11.3 million for the nine months ended September 30, 2025, compared to $8.7 million for the same period in 2024[198]. Other Income and Expenses - Other income (expense), net changed by $0.3 million or 87%, to a net expense of $44 thousand for the three months ended September 30, 2025, compared to a net expense of $341 thousand for the same period in 2024[194]. - Other income (expense), net changed by $918,000, or 31%, to $2.0 million of expense for the nine months ended September 30, 2025, compared to $3.0 million of net expense for the same period in 2024[199]. Cash Flow and Financing Activities - Net cash provided by financing activities for the nine months ended September 30, 2025, was $15.7 million, primarily from the issuance of common shares related to the ATM program totaling $18.0 million[218]. - For the nine months ended September 30, 2024, net cash provided by financing activities was $1.9 million, including $1.6 million from the issuance of a promissory note[219]. - Net cash used in investing activities was $1.4 million for the nine months ended September 30, 2025, primarily due to $1.0 million in digital asset purchases[216]. Company Outlook and Concerns - The company anticipates cash requirements for working capital over the next 12 months to be approximately $11.7 million[211]. - Management has substantial doubt regarding the company's ability to continue as a going concern for at least 12 months from the filing date of the Quarterly Report[206]. Strategic Initiatives - The company has a pipeline targeting inflammatory and autoimmune disorders, idiopathic male infertility, dermatology, and animal health, with pending patent applications for solid-form compounds[173]. - The collaboration with Sarborg utilizes AI-powered disease mapping to identify novel re-purposing opportunities, leading to two new combination patent filings[174]. - CDT Equity is exploring a cryptocurrency treasury reserve strategy to leverage potential strategic and financial benefits as part of a diversified capital management approach[178]. Debt and Valuation - Interest expense, net decreased by $261,000, or 84%, to $48,000 for the three months ended September 30, 2025, compared to $309,000 for the same period in 2024[196]. - The company utilizes Binomial Lattice Pricing Models to value convertible debt, which involves various assumptions including stock price, term of the debt, and expected volatility[222]. - Significant inputs for estimating the fair value of convertible notes include the company's stock price, risk-free interest rate, and probability of default[223]. - The convertible debt will be remeasured at fair value each reporting date until settled or converted[224]. Regulatory and Reporting Status - The company is classified as an emerging growth company under the JOBS Act, allowing it to delay adopting new accounting standards[226]. - The surviving company from the merger remains an emerging growth company until certain revenue or market value thresholds are met[227]. - CDT Equity is also classified as a smaller reporting company, which allows it to take advantage of scaled disclosures[228]. - As a smaller reporting company, the company is not required to provide disclosures regarding quantitative and qualitative market risk[229].