Conduit Pharmaceuticals Announces Debt Repayment and Partial Conversion of Senior Secured Note

Rhea-AI Summary

Conduit Pharmaceuticals (Nasdaq: CDT) has announced significant debt-related developments. The company has fully repaid its $600,000 promissory note to Nirland , which was issued on October 28, 2024, with a 12% annual interest rate and original maturity date of October 31, 2025.

Additionally, Nirland has converted approximately $1.7 million of the original $2.65 million principal amount under the Senior Secured Promissory Note into Conduit's common stock. This Senior Note, established on August 6, 2024, carries a 12% annual interest rate, payable monthly in arrears either in cash or as accrued at Nirland's discretion.

These actions reduce Conduit's debt obligations and align Nirland's interests with shareholders.

Positive

• Full repayment of $600,000 promissory note ahead of maturity
• Conversion of $1.7M of $2.65M Senior Note into common stock reduces debt burden
• Strengthened financial position through debt reduction

Negative

• Remaining Senior Note continues to carry high 12% annual interest rate
• Share dilution due to conversion of $1.7M debt into common stock

Insights

Financial Analyst

This strategic financial restructuring significantly strengthens Conduit Pharmaceuticals' balance sheet through two key moves. First, the early repayment of the $600,000 note, originally due October 2025, eliminates approximately $54,000 in future interest obligations (calculated at 12% APR for the remaining term). Second, the conversion of $1.7 million of the senior note into common stock leaves only $950,000 in outstanding principal from the original $2.65 million.

The debt-to-equity conversion is particularly noteworthy as it:

• Reduces annual interest expenses by approximately $204,000
• Improves the debt-to-equity ratio, potentially enhancing access to future capital
• Signals Nirland's long-term commitment by accepting equity instead of cash repayment
• Aligns the creditor's interests with shareholders, though at the cost of dilution

The timing of these moves, coming just months after the original notes were issued, suggests strong execution of Conduit's financial strategy. While the conversion does create dilution for existing shareholders, the reduction in debt burden and interest expenses should provide greater financial flexibility for operational initiatives. The remaining $950,000 senior note balance appears manageable given the company's improved capital structure.

NAPLES, Fla. and CAMBRIDGE, United Kingdom, Feb. 11, 2025 (GLOBE NEWSWIRE) -- Conduit Pharmaceuticals Inc. (Nasdaq: CDT) (“Conduit” or the “Company”), today announces the repayment of its $600,000 promissory note (the “Note”) to Nirland Limited (“Nirland”) and provided an update on the conversion of its Senior Secured Promissory Note (the “Senior Note”) with Nirland. On February 7, 2025, Conduit repaid the final balance of the Note in full, satisfying all obligations under the agreement. The Note, issued on October 28, 2024, had an original principal amount of $600,000, bore interest at a rate of 12% per annum, and was due to mature on October 31, 2025.

In addition, as of February 10, 2025, Nirland has converted approximately $1.7 million of the original $2.65 million principal amount under the Senior Note into shares of Conduit’s common stock. The Senior Note, initially entered into on August 6, 2024, and subsequently amended in October and November 2024, bears interest at a rate of 12% per annum, accruing daily and payable monthly in arrears, either in cash or as accrued at Nirland’s discretion. The conversion further reduces Conduit’s debt obligations and aligns Nirland’s interests with those of the Company’s shareholders.

Conduit remains focused on leveraging its strengthened financial position to support its strategic goals and deliver value to shareholders.

About Conduit Pharmaceuticals

Conduit is a dynamic, multi-asset clinical stage, life science company delivering an efficient model for compound development. Conduit both acquires and funds the development of Phase 2-ready assets, building an integrated and advanced platform-driven approach powered by artificial intelligence (AI) and cybernetics, and seeking an exit through third-party license deals following successful clinical trials. Led by a highly experienced team of pharmaceutical executives including Dr. David Tapolczay and Dr. Freda Lewis-Hall, this novel approach is a departure from the traditional pharma/biotech business model of taking assets through regulatory approval.

Forward-Looking Statements

This press release contains certain forward-looking statements within the meaning of the federal securities laws. All statements other than statements of historical facts contained in this press release, including statements regarding Conduit's future results of operations and financial position, Conduit's business strategy, prospective product candidates, product approvals, research and development costs, timing and likelihood of success, plans and objectives of management for future operations, future results of current and anticipated studies and business endeavors with third parties, and future results of current and anticipated product candidates, are forward-looking statements. These forward-looking statements generally are identified by the words "believe," "project," "expect," "anticipate," "estimate," "intend," "strategy," "future," "opportunity," "plan," "may," "should," "will," "would," "will be," "will continue," "will likely result," and similar expressions. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including, but not limited to; the inability to maintain the listing of Conduit's securities on Nasdaq; the ability to recognize the anticipated benefits of the business combination completed in September 2023, which may be affected by, among other things, competition; the ability of the combined company to grow and manage growth economically and hire and retain key employees; the risks that Conduit's product candidates in development fail clinical trials or are not approved by the U.S. Food and Drug Administration or other applicable authorities on a timely basis or at all; changes in applicable laws or regulations; the possibility that Conduit may be adversely affected by other economic, business, and/or competitive factors; and other risks as identified in filings made by Conduit with the U.S. Securities and Exchange Commission. Moreover, Conduit operates in a very competitive and rapidly changing environment. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified and some of which are beyond Conduit's control, you should not rely on these forward-looking statements as predictions of future events. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and except as required by law, Conduit assumes no obligation and does not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise. Conduit gives no assurance that it will achieve its expectations.

Investors
Conduit Pharmaceuticals Inc.
Info@conduitpharma.com

FAQ

How much debt did Conduit Pharmaceuticals (CDT) repay in February 2025?

Conduit Pharmaceuticals repaid a $600,000 promissory note to Nirland in full on February 7, 2025.

What is the interest rate on Conduit Pharmaceuticals' (CDT) Senior Secured Note?

The Senior Secured Note bears an interest rate of 12% per annum, accruing daily and payable monthly in arrears.

How much of Conduit Pharmaceuticals' (CDT) Senior Note was converted to common stock?

Approximately $1.7 million of the original $2.65 million Senior Note principal amount was converted into Conduit's common stock.

When was Conduit Pharmaceuticals' (CDT) Senior Secured Note originally issued?

The Senior Secured Note was initially entered into on August 6, 2024, with subsequent amendments in October and November 2024.