duit Pharmaceuticals (CDT) - 2024 Q1 - Quarterly Report

PART I—FINANCIAL INFORMATION This section presents Conduit Pharmaceuticals Inc.'s unaudited condensed consolidated financial statements and management's discussion for Q1 2024 Item 1. Financial Statements. This section details Conduit Pharmaceuticals Inc.'s unaudited condensed consolidated financial statements for Q1 2024, covering balance sheets, operations, cash flows, and comprehensive notes Condensed Consolidated Balance Sheets As of March 31, 2024, the company reported total assets of $4.9 million and total liabilities of $8.0 million, resulting in a total stockholders' deficit of $3.1 million | Metric | March 31, 2024 (in thousands) | December 31, 2023 (in thousands) | | :----- | :---------------------------- | :------------------------------- | | Total Assets | $4,917 | $7,224 | | Total Liabilities | $8,016 | $7,681 | | Total Stockholders' Deficit | $(3,099) | $(457) | Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss For the three months ended March 31, 2024, the company reported a net loss of $3.55 million, an increase from $1.67 million in the prior-year period | Metric | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | Change (YoY) | | :----- | :----------------------------------------------- | :----------------------------------------------- | :----------- | | Research and development expenses | $128 | $0 | +$128 | | General and administrative expenses | $2,827 | $1,515 | +$1,312 | | Total operating expenses | $2,955 | $1,515 | +$1,440 | | Operating loss | $(2,955) | $(1,515) | $(1,440) | | Net loss | $(3,552) | $(1,672) | $(1,880) | | Basic and diluted earnings/(net loss) per share | $(0.05) | $(0.03) | $(0.02) | | Total comprehensive loss | $(3,575) | $(1,935) | $(1,640) | Unaudited Condensed Consolidated Statements of Changes in Stockholders' Deficit The company's total stockholders' deficit increased significantly from $(457) thousand at January 1, 2024, to $(3,099) thousand at March 31, 2024 | Metric | Balance at January 1, 2024 (in thousands) | Balance at March 31, 2024 (in thousands) | | :----- | :---------------------------------------- | :--------------------------------------- | | Common Shares | 73,829,536 | 73,829,536 | | Additional paid-in capital | $10,424 | $11,357 | | Accumulated deficit | $(11,299) | $(14,851) | | Accumulated other comprehensive income | $411 | $388 | | Total stockholders' deficit | $(457) | $(3,099) | Unaudited Condensed Consolidated Statement of Cash Flows For Q1 2024, net cash used in operating activities was $2.36 million, with no cash flow from investing or financing activities | Cash Flow Activity | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | | :----------------- | :----------------------------------------------- | :----------------------------------------------- | | Net cash used in operating activities | $(2,357) | $(1,970) | | Net cash used in investing activities | $0 | $(243) | | Net cash provided by financing activities | $0 | $2,220 | | Effect of exchange rate changes on cash and cash equivalents | $(27) | $1 | | Net change in cash and cash equivalents | $(2,384) | $8 | | Cash and cash equivalents at end of period | $1,844 | $8 | Notes to Unaudited Condensed Consolidated Financial Statements. The notes provide detailed information on Conduit Pharmaceuticals Inc.'s business, accounting policies, merger details, fair value measurements, and other financial commitments - Conduit Pharmaceuticals Inc. is a clinical-stage specialty biopharmaceutical company that develops and commercializes clinical assets by acting as a "conduit" to bring assets from pharmaceutical companies and extend their intellectual property through solid-form technology[11][324] - The company has a unique business model focused on developing clinical assets through Phase II trials efficiently using CROs and third-party service providers, and then seeking licensing opportunities with large biotech or pharmaceutical companies for milestone payments and royalty income[86][325] - The company has generated significant losses and negative operating cash flows, with an accumulated deficit of $14.9 million as of March 31, 2024, raising substantial doubt about its ability to continue as a going concern for the next 12 months[43][14][278] 1. Nature of the Business, Basis of Presentation and Summary of Significant Accounting Policies Conduit Pharmaceuticals Inc. is a clinical-stage biopharmaceutical company facing liquidity challenges, with financial statements prepared under U.S. GAAP Company Overview Conduit Pharmaceuticals Inc. is a clinical-stage specialty biopharmaceutical company focused on developing and commercializing clinical assets - Conduit Pharmaceuticals Inc. is a clinical-stage specialty biopharmaceutical company focused on developing and commercializing clinical assets, utilizing a unique business model to bring assets from pharmaceutical companies and extend intellectual property through solid-form technology[11][324] Merger Agreement Conduit Pharmaceuticals Limited completed a reverse recapitalization merger with Murphy Canyon Acquisition Corp. on September 22, 2023 - The merger between Conduit Pharmaceuticals Limited and Murphy Canyon Acquisition Corp. (MURF) was completed on September 22, 2023, with MURF renamed Conduit Pharmaceuticals Inc[233][276] - The merger was accounted for as a reverse recapitalization, treating MURF as the acquired company, with Old Conduit stockholders holding the majority voting power and management[276] Basis of Presentation The unaudited condensed consolidated financial statements include Conduit Pharmaceuticals Inc. and its wholly-owned subsidiaries, prepared in accordance with U.S. GAAP and SEC rules - The financial statements consolidate Conduit Pharmaceuticals Inc. and its wholly-owned subsidiaries, Conduit UK Management Ltd. and Conduit Pharmaceuticals, Ltd., eliminating all intercompany balances and transactions[13] - The statements are prepared in accordance with U.S. GAAP and SEC rules, containing normal recurring adjustments for fair statement[234][244] Liquidity and Going Concern The company has incurred significant losses and negative operating cash flows, raising substantial doubt about its ability to continue as a going concern - The company has an accumulated deficit of $14.9 million as of March 31, 2024, and reported net losses of $3.6 million and $1.7 million for the three months ended March 31, 2024 and 2023, respectively[43] - Management plans to seek additional cash resources through public or private equity or debt financings to alleviate substantial doubt about its ability to continue as a going concern[14][278] Other Risks and Uncertainties The company faces typical pharmaceutical industry risks, including commercialization uncertainties, regulatory approvals, and dependence on third parties - The company is exposed to typical pharmaceutical industry risks such as commercialization uncertainties, regulatory approvals, dependence on key products/customers/suppliers, and intellectual property protection[279] - Developing clinical assets requires substantial additional R&D, capital, personnel, infrastructure, and compliance, with no assurance of significant revenue from royalties or product sales[279] - The company relies on agreements with related parties and third parties for developing and licensing clinical assets, and termination of these agreements could materially adversely affect its business[247] Summary of Significant Accounting Policies The preparation of financial statements requires management to make estimates and assumptions affecting reported amounts, which are reviewed periodically - Financial statements require management estimates and assumptions, which are periodically reviewed and based on available facts, historical experience, and economic conditions[46] [Use of Estimates](index=11&type=section