Research and Development Expense	3 Months Ended
Mar. 31, 2025
Research And Development Expense
Research and Development Expense	7. Research and Development Expense *August 2024 License Agreement* On August 7, 2024, the Company and AstraZeneca AB (PUBL) (“AstraZeneca”) entered into a License Agreement, dated August 7, 2024 (the “August 2024 License Agreement”). Pursuant to the August 2024 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 August 2024 License Agreement. As consideration for the grant of the license, the Company (i) granted AstraZeneca Common Stock pursuant to a stock issuance agreement (the “Issuance Agreement”), (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). The Issuance Agreement called for the Company to issue AstraZeneca 95,044 shares of the Company’s Common Stock. The Issuance Agreement provides AstraZeneca with resale registration rights for such shares. 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 will negotiate in good faith for an agreed period of time on an exclusive basis. Either party may terminate the August 2024 License Agreement for material breach (subject to a cure period) or insolvency of the other party. The Company may terminate the August 2024 License Agreement for convenience (in its entirety or on a Licensed Product-by-Licensed Product basis). In addition, AstraZeneca may terminate the August 2024 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). As a result of the above, the Company is no longer funding the development of AZD1656 or AZD5904 under the terms of the Exclusive Funding Agreement, dated March 26, 2021 with St George Street Capital (the “Funding Agreement”). In this regard, the Company previously entered into a deed of amendment amending such Funding Agreement. The parties agreed that the project funding provisions of such Funding Agreement whereby the Company had the right to fund a project or refer other parties to St George Street Capital, were amended to provide that St George Street Capital must still include the Company in any project funding opportunities and requests but may now seek other third-parties to fund projects in addition to the Company. In November and December 2024, the Company received a letter from St George Street Capital and formal complaints filed with the Intellectual Property Office claiming the Company was not the sole owner of the AZD 1656 co-crystal patent. See Note 15 for additional details on the claim. *SARBORG Service Agreement* On December 12, 2024, the Company entered into a Services Agreement (the “Sarborg Service Agreement”) with SARBORG Limited (“Sarborg”), a Cayman Islands company and related party of the Company. See Note 12 for further reference to the relationship between the Company and Sarborg. Under the terms of the Sarborg Service 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 Service Agreement. The Sarborg Service Agreement has an initial term of 12 months, which commenced in December 2024, and may be renewed or extended upon mutual written agreement of the parties. Either party may terminate the Sarborg Service Agreement for any reason upon 90 days’ written notice or immediately upon written notice if the other party breaches any material term of the Sarborg Service Agreement and fails to cure such breach within thirty days or becomes insolvent, files for bankruptcy, or is placed under the control of a receiver, trustee, or similar authority. The Sarborg Service Agreement includes provisions for the ownership and use of intellectual property. Sarborg will own its pre-existing intellectual property rights, including proprietary tools and methodologies used in the performance of the services. Conduit will own all deliverables resulting from the services performed by Sarborg under the Sarborg Service Agreement. The Sarborg Service Agreement provides Sarborg with registration rights for any Common Stock of Conduit that Sarborg receives as consideration under the Sarborg Service Agreement. In such event, Conduit will use commercially reasonable efforts to (i) file a registration statement covering the resale of the Common Stock within 60 days after the issuance; and (ii) ensure that such registration statement becomes effective within 90 days after filing. This Agreement also includes confidentiality obligations, representations and warranties, indemnification, limitation of liability, and insurance requirements. In consideration of the services, Conduit agreed to pay Sarborg an initial cash payment of $0.2 million and $0.2 million payable through the issuance of 22,727 shares of common stock, determined by the closing price on the day preceding the execution of the Sarborg Service Agreement. The initial cash payment of $0.2 million was made on December 20, 2024, and the 22,727 shares of common stock were issued on January 17, 2025. Further milestone payments payable in conjunction with the achievement of certain milestones over the term of the Sarborg Service Agreement, totaling up to $1.8 million, are payable in cash or shares, at the discretion of Conduit. Sarborg will be reimbursed for pre-approved, necessary, and reasonable out-of-pocket expenses directly incurred in connection with the performance of the services. Management determined that the cost incurred under the Sarborg Service Agreement should be recorded to research and development expense in the condensed consolidated statement of operations and comprehensive income loss, as the Sarborg Service Agreement is designed to provide the Company with software/dashboard to aid in research and development activities. The initial cash payment of $0.2 million and issuance of 22,727 shares of Common Stock were recorded to prepaid expense and will be amortized over the initial term of the Sarborg Service Agreement to research and development expense. For the three months ended March 31, 2025, the Company recorded amortization expense of $0.1 million with research and development expense in the condensed consolidated statement of operations and comprehensive income loss. During the three months ended March 31, 2025, Sarborg was paid $1.1 million for completed milestones under the Sarborg Service Agreement. The Company recorded the $1.1 million in expense within research and development expense in the condensed consolidated statement of operations and comprehensive income loss for the three months ended March 31, 2025. *Master Service Agreement – Conduit and Charles River Laboratories* On February 7, 2025, the Company 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 with a total commitment of $0.2 million. 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. For the three months ended March 31, 2025, the Company recognized $0.1 million in research and development expense in the condensed consolidated statement of operations and comprehensive loss related to the Charles River MSA. *SARBORG Additional Agreement* Effective March 31, 2025, the Company entered into an additional license and use agreement (the “Sarborg Additional Agreement”) with Sarborg, a related party, covering certain additional deliverables and incorporating a new scope of work focused on analysis of the Company’s acquired AstraZeneca assets. The term of the Sarborg Additional Agreement is for six months and provides for the payment, in aggregate, of $2.0 million, which includes an up-front license fee for the term of such agreement, in cash or stock at the Company’s election at the closing price on the day preceding the effective date of such agreement. On March 31, 2025, the Company prepaid $1.65 million of the Sarborg Additional Agreement through the issuance of 1,853,933 fully vested unregistered shares of Common Stock. The Company recorded the shares issued under the Sarborg Additional Agreement at their fair value, as determined by the closing price of the Company’s Common Stock on March 30, 2025, $0.89, and adjusted for an 7% discount for lack of marketability, as determined by a third-party valuation expert. The Company recorded the fair value of $1.5 million as a prepaid within the condensed consolidated balance sheets, as no services had been provided as of March 31, 2025. *Consulting Agreement* Effective March 25, 2025, the Company entered into a Consulting Agreement (the “Consulting Agreement”) with Thesprogen PC (“Thesprogen”), an expert in advising clients on strategies for pharmaceutical and biotech development. Total fees under the Consulting Agreement total to $0.3 million and was settled through the issuance of 337,079 fully vested unregistered shares of Common Stock on March 31, 2025. The Company recorded the shares issued under the Consulting Agreement at their fair value, as determined by the closing price of the Company’s Common Stock on March 30, 2025, $0.89, and adjusted for a 7% discount for lack of marketability, as determined by a third-party valuation expert. The Company recorded the fair value of $0.3 million as a prepaid within the condensed consolidated balance sheets, as no services had been provided as of March 31, 2025.

Research and Development Expense

3 Months Ended

Mar. 31, 2025

7. Research and Development Expense

August 2024 License Agreement

On August 7, 2024, the Company and AstraZeneca AB (PUBL) (“AstraZeneca”) entered into a License Agreement, dated August 7, 2024 (the “August 2024 License Agreement”). Pursuant to the August 2024 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 August 2024 License Agreement.

As consideration for the grant of the license, the Company (i) granted AstraZeneca Common Stock pursuant to a stock issuance agreement (the “Issuance Agreement”), (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). The Issuance Agreement called for the Company to issue AstraZeneca 95,044 shares of the Company’s Common Stock. The Issuance Agreement provides AstraZeneca with resale registration rights for such shares.

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 will negotiate in good faith for an agreed period of time on an exclusive basis.

Either party may terminate the August 2024 License Agreement for material breach (subject to a cure period) or insolvency of the other party. The Company may terminate the August 2024 License Agreement for convenience (in its entirety or on a Licensed Product-by-Licensed Product basis). In addition, AstraZeneca may terminate the August 2024 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).

As a result of the above, the Company is no longer funding the development of AZD1656 or AZD5904 under the terms of the Exclusive Funding Agreement, dated March 26, 2021 with St George Street Capital (the “Funding Agreement”). In this regard, the Company previously entered into a deed of amendment amending such Funding Agreement. The parties agreed that the project funding provisions of such Funding Agreement whereby the Company had the right to fund a project or refer other parties to St George Street Capital, were amended to provide that St George Street Capital must still include the Company in any project funding opportunities and requests but may now seek other third-parties to fund projects in addition to the Company. In November and December 2024, the Company received a letter from St George Street Capital and formal complaints filed with the Intellectual Property Office claiming the Company was not the sole owner of the AZD 1656 co-crystal patent. See Note 15 for additional details on the claim.

SARBORG Service Agreement

On December 12, 2024, the Company entered into a Services Agreement (the “Sarborg Service Agreement”) with SARBORG Limited (“Sarborg”), a Cayman Islands company and related party of the Company. See Note 12 for further reference to the relationship between the Company and Sarborg. Under the terms of the Sarborg Service 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 Service Agreement.

The Sarborg Service Agreement has an initial term of 12 months, which commenced in December 2024, and may be renewed or extended upon mutual written agreement of the parties. Either party may terminate the Sarborg Service Agreement for any reason upon 90 days’ written notice or immediately upon written notice if the other party breaches any material term of the Sarborg Service Agreement and fails to cure such breach within thirty days or becomes insolvent, files for bankruptcy, or is placed under the control of a receiver, trustee, or similar authority.

The Sarborg Service Agreement includes provisions for the ownership and use of intellectual property. Sarborg will own its pre-existing intellectual property rights, including proprietary tools and methodologies used in the performance of the services. Conduit will own all deliverables resulting from the services performed by Sarborg under the Sarborg Service Agreement.

The Sarborg Service Agreement provides Sarborg with registration rights for any Common Stock of Conduit that Sarborg receives as consideration under the Sarborg Service Agreement. In such event, Conduit will use commercially reasonable efforts to (i) file a registration statement covering the resale of the Common Stock within 60 days after the issuance; and (ii) ensure that such registration statement becomes effective within 90 days after filing. This Agreement also includes confidentiality obligations, representations and warranties, indemnification, limitation of liability, and insurance requirements.

In consideration of the services, Conduit agreed to pay Sarborg an initial cash payment of $0.2 million and $0.2 million payable through the issuance of 22,727 shares of common stock, determined by the closing price on the day preceding the execution of the Sarborg Service Agreement. The initial cash payment of $0.2 million was made on December 20, 2024, and the 22,727 shares of common stock were issued on January 17, 2025. Further milestone payments payable in conjunction with the achievement of certain milestones over the term of the Sarborg Service Agreement, totaling up to $1.8 million, are payable in cash or shares, at the discretion of Conduit. Sarborg will be reimbursed for pre-approved, necessary, and reasonable out-of-pocket expenses directly incurred in connection with the performance of the services.

Management determined that the cost incurred under the Sarborg Service Agreement should be recorded to research and development expense in the condensed consolidated statement of operations and comprehensive income loss, as the Sarborg Service Agreement is designed to provide the Company with software/dashboard to aid in research and development activities. The initial cash payment of $0.2 million and issuance of 22,727 shares of Common Stock were recorded to prepaid expense and will be amortized over the initial term of the Sarborg Service Agreement to research and development expense. For the three months ended March 31, 2025, the Company recorded amortization expense of $0.1 million with research and development expense in the condensed consolidated statement of operations and comprehensive income loss.

During the three months ended March 31, 2025, Sarborg was paid $1.1 million for completed milestones under the Sarborg Service Agreement. The Company recorded the $1.1 million in expense within research and development expense in the condensed consolidated statement of operations and comprehensive income loss for the three months ended March 31, 2025.

Master Service Agreement – Conduit and Charles River Laboratories

On February 7, 2025, the Company 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 with a total commitment of $0.2 million. 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. For the three months ended March 31, 2025, the Company recognized $0.1 million in research and development expense in the condensed consolidated statement of operations and comprehensive loss related to the Charles River MSA.

SARBORG Additional Agreement

Effective March 31, 2025, the Company entered into an additional license and use agreement (the “Sarborg Additional Agreement”) with Sarborg, a related party, covering certain additional deliverables and incorporating a new scope of work focused on analysis of the Company’s acquired AstraZeneca assets. The term of the Sarborg Additional Agreement is for six months and provides for the payment, in aggregate, of $2.0 million, which includes an up-front license fee for the term of such agreement, in cash or stock at the Company’s election at the closing price on the day preceding the effective date of such agreement. On March 31, 2025, the Company prepaid $1.65 million of the Sarborg Additional Agreement through the issuance of 1,853,933 fully vested unregistered shares of Common Stock. The Company recorded the shares issued under the Sarborg Additional Agreement at their fair value, as determined by the closing price of the Company’s Common Stock on March 30, 2025, $0.89, and adjusted for an 7% discount for lack of marketability, as determined by a third-party valuation expert. The Company recorded the fair value of $1.5 million as a prepaid within the condensed consolidated balance sheets, as no services had been provided as of March 31, 2025.

Consulting Agreement

Effective March 25, 2025, the Company entered into a Consulting Agreement (the “Consulting Agreement”) with Thesprogen PC (“Thesprogen”), an expert in advising clients on strategies for pharmaceutical and biotech development. Total fees under the Consulting Agreement total to $0.3 million and was settled through the issuance of 337,079 fully vested unregistered shares of Common Stock on March 31, 2025. The Company recorded the shares issued under the Consulting Agreement at their fair value, as determined by the closing price of the Company’s Common Stock on March 30, 2025, $0.89, and adjusted for a 7% discount for lack of marketability, as determined by a third-party valuation expert. The Company recorded the fair value of $0.3 million as a prepaid within the condensed consolidated balance sheets, as no services had been provided as of March 31, 2025.