UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A
Proxy
Statement Pursuant to Section 14(a) of the
Securities
Exchange Act of 1934
Filed
by the Registrant ☒
Filed
by a Party other than the Registrant ☐
Check
the appropriate box:
☒ |
Preliminary
Proxy Statement |
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☐ |
Confidential,
For Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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☐ |
Definitive
Proxy Statement |
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☐ |
Definitive
Additional Materials |
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Soliciting
Material Pursuant to §240.14a-12 |
CONDUIT
PHARMACEUTICALS INC.
(Name
of Registrant as Specified in its Charter)
N/A
(Name
of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment
of Filing Fee (Check all boxes that apply):
☒ |
No
fee required. |
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☐ |
Fee
paid previously with preliminary materials. |
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Fee
computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11. |
PRELIMINARY
PROXY STATEMENT, SUBJECT TO COMPLETION, DATED NOVEMBER 26, 2024
4581
Tamiami Trail North, Suite 200
Naples,
Florida 34103
(646)
491-9132
NOTICE
OF VIRTUAL SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON THURSDAY, JANUARY 9, 2025
To
our stockholders:
The
2025 virtual special meeting of stockholders (the “Special Meeting”) of Conduit Pharmaceuticals Inc., a Delaware corporation,
will be held on Thursday, January 9, 2025, at 10:00 a.m., Eastern Time, for the following purposes:
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1. |
to
approve the issuance of up to an aggregate of 2,862,596 shares of the Company’s common stock, par value $0.0001 per share (the
“Common Stock”) issuable upon the exercise of certain warrants to purchase the Company’s Common Stock, in accordance
with Nasdaq Listing Rule 5635(d) (Proposal No. 1); |
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2. |
to
approve the issuance of up to an aggregate of 75,000,000 shares of the Company’s Common Stock issuable upon the conversion
of the Senior Secured Promissory Note, as amended, entered into by the Company and Nirland Limited (“Nirland”) on August
6, 2024 (the “August 2024 Senior Secured Promissory Note”) in accordance with Nasdaq Listing Rule 5635(d) (Proposal No.
2); |
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3. |
to
approve the issuance of up to an aggregate of 58,000,000 shares of the Company’s Common Stock issuable upon the conversion
of the convertible promissory note entered into by the Company and A.G.P./Alliance Global Partners (“A.G.P.”) on November
25, 2024 (the “November Convertible Note”), in accordance with Nasdaq Listing Rule 5635(d) (Proposal No. 3); |
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4. |
to
adopt and approve an amendment to our Second Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”)
to increase the number of shares of our capital stock from 251,000,000 shares to 601,000,000 and the number of authorized shares
of our Common Stock from 250,000,000 to 600,000,000 (Proposal No. 4); and |
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5. |
to
transact such other matters as may properly come before the Special Meeting or any adjournment postponement thereof. |
Only
holders of record of our Common Stock as of the close of business on December 4, 2024, the record date, are entitled to notice of and
to vote at the Special Meeting.
The
Special Meeting will be a completely “virtual” meeting of stockholders. You will be able to listen and participate in the
virtual special meeting as well as vote and submit your questions during the live webcast of the meeting by registering in advance of
the Special Meeting at https://meeting.vstocktransfer.com/CONDUITJAN25. A Zoom account is required to register. If your shares are held
by a bank, broker or other agent, please follow the instructions from your bank, broker or other agent to have your shares voted.
Whether
or not you plan to participate virtually in the Special Meeting, your vote is important. To assure your representation at the meeting,
please vote by following the instructions on the document that has been mailed to you, or, if you received a paper copy of the proxy
materials, signing and dating the enclosed proxy card and returning it promptly in the enclosed postage-paid envelope. Sending in your
proxy or submitting voting instructions via the Internet will not prevent you from voting during the Special Meeting. If you vote during
the Special Meeting pursuant to the voting instructions below, that vote will revoke any prior proxy or voting instructions that you
have submitted.
By
Order of the Board of Directors,
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Dr.
David Tapolczay |
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Chief
Executive Officer |
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Naples,
Florida |
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__________,
2024 |
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Important
Notice Regarding the Availability of Proxy Materials for the Special Meeting of Stockholders to be Held on January 9, 2025: Pursuant
to the rules of the Securities and Exchange Commission, with respect to the Special Meeting, we have elected to utilize the “full
set delivery” option of providing paper copies of all of our proxy materials by mail.
Whether
or not you expect to attend the meeting electronically, please submit a proxy to vote your shares promptly. Even if
you have submitted a proxy, you may still vote electronically if you attend the virtual meeting, in which case only your vote cast at
the virtual meeting will be counted. Please note, however, that if your shares are held of record by a broker, bank, or other nominee
and you wish to vote at the meeting, you must obtain a proxy issued in your name from that record holder.
PRELIMINARY
PROXY STATEMENT, SUBJECT TO COMPLETION, DATED NOVEMBER 26, 2024
4581
Tamiami Trail North, Suite 200
Naples,
Florida 34103
(646) 491-9132
PROXY
STATEMENT
Conduit
Pharmaceuticals Inc. is furnishing this proxy statement to our stockholders of record as of the close of business on December 4, 2024
(the “Record Date”) in connection with our solicitation of proxies for use at the virtual special meeting of stockholders
to be held on Thursday, January 9, 2025 at 10:00 a.m., Eastern Time and any adjournment(s), postponement(s) or other delays thereof (the
“Special Meeting”).
The
Special Meeting will be a completely “virtual” meeting of stockholders. You will be able to listen and participate in the
virtual special meeting as well as vote and submit your questions during the live webcast of the meeting by registering in advance of
the Special Meeting at https://meeting.vstocktransfer.com/CONDUITJAN25. A Zoom account is required to register. If your shares are held
by a bank, broker or other agent, please follow the instructions from your bank, broker or other agent to have your shares voted.
References
in this proxy statement to the “Company,” “we,” “us,” “our” and similar terms mean Conduit
Pharmaceuticals Inc.
The
accompanying proxy is solicited by our Board of Directors (our “Board”) and is revocable by you at any time before it is
voted at the Special Meeting, as described below.
Our
principal executive offices are located at 4581 Tamiami Trail North, Suite 200, Naples, Florida, 34103, and our telephone number is (646)
491-9132.
Who
May Vote
Only
holders of our common stock, par value $0.0001 (the “Common Stock”), outstanding as of the close of business on the Record
Date are entitled to receive notice of, and to vote at, the Special Meeting. As of the Record Date, there were [116,797,274] shares
of Common Stock outstanding and entitled to vote at the Special Meeting and there were no other classes of securities outstanding that
will be entitled to vote at the Special Meeting. Each share of Common Stock is entitled to one vote on all matters. There are no cumulative
voting rights.
Voting
Requirements and Quorum
At
least one-third of the voting power of all outstanding shares of capital stock of the Company entitled to vote at the Special Meeting,
present virtually at the meeting or by proxy, constitutes a quorum for action at the meeting. Broker non-votes and abstentions are counted
for purposes of determining whether a quorum is present. A “broker non-vote” occurs when a bank, broker or other nominee
holding shares for a beneficial owner exercises its discretionary authority on one or more “routine matters” but does not
vote on a given “non-routine” proposal because, with respect to such proposal, such nominee does not have discretionary voting
power and has not received instructions from the beneficial owner. The “broker non-votes” occur with respect to the “non-routine”
matters for which the broker lacks discretionary authority to vote such uninstructed shares.
The
vote requirement for each proposal is as follows:
| ● | Proposal
No. 1 (Approval of the issuance of up to an aggregate of 2,862,596 shares of the Company’s
Common Stock issuable upon the exercise of certain warrants to purchase the Company’s
Common Stock, in accordance with Nasdaq Listing Rule 5635(d)) – The approval
of the issuance of up to an aggregate of 2,862,596 shares of the Company’s Common Stock
issuable upon the exercise of certain warrants to purchase the Company’s Common Stock
requires the approval by a majority of the votes cast by the holders of shares of Common
Stock present virtually or represented by proxy at the Special Meeting and entitled to vote
thereon. Abstentions and broker non-votes, if any, are not treated as votes cast, and, therefore,
will have no effect on the outcome of this proposal. |
| ● | Proposal
No. 2 (Approval of the issuance of up to an aggregate of 75,000,000 shares of the Company’s
Common Stock issuable upon the conversion of the August 2024 Senior Secured Promissory Note
into the Company’s Common Stock, in accordance with Nasdaq Listing Rule 5635(d)) – The
approval of the issuance of up to an aggregate of 75,000,000 shares of the Company’s
Common Stock issuable upon the conversion of the August 2024 Senior Secured Promissory Note
requires the approval by a majority of the votes cast by the holders of shares of Common
Stock present virtually or represented by proxy at the Special Meeting and entitled to vote
thereon. Abstentions and broker non-votes, if any, are not treated as votes cast, and, therefore,
will have no effect on the outcome of this proposal. |
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| ● | Proposal
No. 3 (Approval of the issuance of up to an aggregate of 58,000,000 shares of the Company’s
Common Stock issuable upon the conversion of the November Convertible Note into the Company’s
Common Stock, in accordance with Nasdaq Listing Rule 5635(d)) – The approval
of the issuance of up to an aggregate of 58,000,000 shares of the Company’s Common
Stock issuable upon the conversion of the November Convertible Note requires the approval by
a majority of the votes cast by the holders of shares of Common Stock present virtually or
represented by proxy at the Special Meeting and entitled to vote thereon. Abstentions and
broker non-votes, if any, are not treated as votes cast, and, therefore, will have no effect
on the outcome of this proposal. |
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| ● | Proposal
No. 4 (Approval of an amendment to the Company’s Second Amended and Restated Certificate
of Incorporation (the “Certificate of Incorporation”) to increase the number
of shares of our capital stock from 251,000,000 shares to 601,000,000 shares and the number
of authorized shares of our Common Stock from 250,000,000 shares to 600,000,000 shares) – The
approval of the amendment to the Company’s Certificate of Incorporation requires the
approval by a majority of the votes cast by the holders of shares of Common Stock present
virtually or represented by proxy at the Special Meeting and entitled to vote thereon. Abstentions
and broker non-votes, if any, are not treated as votes cast, and, therefore, will have no
effect on the outcome of this proposal. |
Broker
Non-Votes
If
you are a beneficial owner whose shares are held in the name of a bank, broker or other nominee (i.e., your shares are held in “street
name”), and you do not provide your bank, broker or other nominee with voting instructions, such nominee has the authority to vote
your shares for or against certain “routine” matters. The proposal to approve an amendment to the Company’s Certificate
of Incorporation to increase the number of shares of our capital stock form 251,000,000 shares to 601,000,000 shares and the number of
authorized shares of our Common Stock from 250,000,000 shares to 600,000,000 shares (Proposal No. 4) is the only routine matter being
considered at the Special Meeting. Accordingly, your banker, broker or other nominee may vote your shares on Proposal No. 4 even in the
absence of your instruction.
Our
Board’s Voting Recommendations
Our
Board recommends that you vote your shares “FOR” the approval of the issuance of up to an aggregate of 2,862,596 shares of
the Company’s Common Stock issuable upon the exercise of certain warrants to purchase the Company’s Common Stock, in accordance
with Nasdaq Listing Rule 5635(d) (Proposal No. 1), “FOR” the approval of the issuance of up to an aggregate of 75,000,000
shares of the Company’s Common Stock issuable upon the conversion of the August 2024 Senior Secured Promissory Note into the Company’s
Common Stock, in accordance with Nasdaq Listing Rule 5635(d) (Proposal No. 2), “FOR” the approval of the issuance of up to
an aggregate of 58,000,000 shares of the Company’s Common Stock issuable upon the conversion of the November Convertible Note into
the Company’s Common Stock, in accordance with Nasdaq Listing Rule 5635(d) (Proposal No. 3) and “FOR” the approval
of an amendment to the Company’s Certificate of Incorporation to increase the number of shares of our capital stock from 251,000,000
shares to 601,000,000 shares and the number of authorized shares of our Common Stock from 250,000,000 shares to 600,000,000 shares (Proposal
No. 4).
General
Information
We
have designed our virtual format to enhance stockholder access, participation and communication. Our Board has made these materials available
to you over the Internet, or has delivered printed versions of these materials to you by mail, in connection with our Board’s solicitation
of proxies for use at the virtual-only Special Meeting. The Special Meeting is scheduled to be held on Thursday, January 9, 2025 at 10:00
a.m., Eastern Time, registering in advance of the Special Meeting at https://meeting.vstocktransfer.com/CONDUITJAN25. A Zoom account
is required to register. This solicitation is for proxies for use at the Special Meeting or at any reconvened meeting after an adjournment
or postponement of the Special Meeting.
Giving
us your proxy means you authorize our Board’s designated proxy holders (who are identified on the proxy card) to vote your shares
at the Special Meeting in the manner that you have indicated and in their discretion on such other matters as may properly come before
the Special Meeting. If you sign and return the enclosed proxy card but do not indicate your vote, the designated proxy holders will
vote your shares “FOR” the approval of the issuance of up to an aggregate of 2,862,596 shares of the Company’s Common
Stock issuable upon the exercise of certain warrants to purchase the Company’s Common Stock, in accordance with Nasdaq Listing
Rule 5635(d) (Proposal No. 1), “FOR” the approval of the issuance of up to an aggregate of 75,000,000 shares of the Company’s
Common Stock issuable upon the conversion of the August 2024 Senior Secured Promissory Note into the Company’s Common Stock, in
accordance with Nasdaq Listing Rule 5635(d) (Proposal No. 2), “FOR” the approval of the issuance of up to an aggregate of
58,000,000 shares of the Company’s Common Stock issuable upon the conversion of the November Convertible Note into the Company’s
Common Stock, in accordance with Nasdaq Listing Rule 5635(d) (Proposal No. 3), and “FOR” the approval of an amendment to
the Company’s Certificate of Incorporation to increase the number of shares of our capital stock from 251,000,000 shares to 601,000,000
shares and the number of authorized shares of our Common Stock from 250,000,000 shares to 600,000,000 shares (Proposal No. 4).
Voting
at the Special Meeting
The
Special Meeting will be held entirely online, and you will not be able to physically attend the virtual meeting. Stockholders may attend
and participate in the Special Meeting by registering in advance of the Special Meeting at https://meeting.vstocktransfer.com/CONDUITJAN25.
A Zoom account is required to register.
Shares
held in your name as the stockholder of record may be voted electronically during the Special Meeting. Shares held in street name, for
which you are the beneficial owner but not the stockholder of record, also may be voted electronically during the Special Meeting so
long as you obtain a legal proxy from your bank, broker or other nominee and follow the procedures described below.
If
on the Record Date your shares were held, not in your name, but rather in an account at a brokerage firm, bank, dealer or other similar
organization, then you are the beneficial owner of shares held in “street name” and the proxy materials are being forwarded
to you by that organization. The organization holding your account is considered to be the stockholder of record for purposes of voting
at the Special Meeting. As a beneficial owner, you have the right to direct your broker or other agent regarding how to vote the shares
in your account. You are also invited to attend the Special Meeting. However, if you are a beneficial owner of shares registered in the
name of your broker, bank or other agent, in order to vote in person at the virtual Special Meeting, you must, in addition to registering
in advance at https://meeting.vstocktransfer.com/CONDUITJAN25 obtain a valid legal proxy from your broker, bank or other agent and then
register to vote at the Special Meeting. After obtaining a valid legal proxy and completing the proxy card indicating your voting instructions,
you must submit proof of your legal proxy, along with your proxy card, as attachments via email to vote@vstocktransfer.com in order to
vote during the Special Meeting.
Even
if you plan to participate in the Special Meeting, we recommend that you submit a proxy to vote your shares in advance, so that your
vote will be counted if you later decide not to participate in the Special Meeting.
Voting
Without Participating in the Special Meeting
To
submit a proxy to vote your shares without participating in the Special Meeting, please follow the instructions provided with your proxy
materials. If you request printed copies of the proxy materials by mail, you may also submit a proxy to vote by signing and submitting
your proxy card and returning it by mail, if you are the stockholder of record, or by signing the voter instruction form provided by
your bank or broker and returning it by mail, if you are the beneficial owner but not the stockholder of record. This way your shares
will be represented whether or not you are able to participate in the Special Meeting.
How
to Participate in the Special Meeting
You
are entitled to participate in the Special Meeting only if you were a stockholder of record as of the Record Date or you hold a valid
proxy for the Special Meeting.
If
you do not comply with the procedures outlined above under “Voting at the Special Meeting”, you will not be admitted to the
Special Meeting. We recommend that you log in at least 15 minutes before the Special Meeting to ensure you are logged in when the meeting
starts. If you encounter any difficulties accessing the Special Meeting during the check-in or meeting time, please call (888) 799-9666.
If
we experience technical difficulties during the meeting (such as a temporary or prolonged power outage), we will determine whether the
meeting can be promptly reconvened (if the technical difficulty is temporary) or whether the meeting will need to be reconvened on a
later day (if the technical difficulty is more prolonged). In any such situation, we will promptly notify stockholders of the decision
via the meeting website.
Revoking
a Proxy
You
may revoke your proxy or voting instructions by (i) submitting a new proxy with a later date via the Internet before 11:59 p.m., Eastern
Time, on January 8, 2025, or by mail that is received by us prior to the Special Meeting or (ii) notifying our Secretary before the Special
Meeting by mail at the address shown on page 1. If you participate in the virtual-only Special Meeting and vote during the meeting in
the virtual platform, any previously submitted proxy or voting instructions will be revoked.
If
your shares are held by your broker or bank as a nominee or agent, you should follow the instructions provided by your broker or bank.
How
We Solicit Proxies
We
will solicit proxies and will bear the entire cost of our solicitation, including the preparation, assembly, printing and mailing of
this proxy statement and any additional materials furnished to our stockholders. The initial solicitation of proxies by mail may be supplemented
by telephone, fax, e-mail, Internet and personal solicitation by our directors or officers. No additional compensation for soliciting
proxies will be paid to our directors or officers for their proxy solicitation efforts. We expect to reimburse banks, brokers and other
persons for their reasonable out-of-pocket expenses in handling proxy materials for beneficial owners of Common Stock.
If
You Receive More Than One Proxy Card
If
you hold your shares of Common Stock in more than one account, you will receive a proxy card for each account. To ensure that all of
your shares of Common Stock are voted, please follow the directions on the document that has been mailed to you, for each account. You
should vote all of your shares of Common Stock.
Delivery
of Documents to Stockholders Sharing an Address
A
number of brokers with account holders who are stockholders of the Company will be “householding” our proxy materials. A
single set of the proxy materials will be delivered to multiple stockholders sharing an address unless contrary instructions have been
received from the affected stockholders. Once you have received notice from your broker that they will be “householding”
communications to your address, “householding” will continue until you are notified otherwise or until you revoke your consent.
If, at any time, you no longer wish to participate in “householding” and would prefer to receive separate proxy materials,
please notify your broker or direct a written request to Conduit Pharmaceuticals Inc., 4581 Tamiami Trail North, Suite 200, Naples, Florida,
34103, attention: Corporate Secretary. Stockholders who currently receive multiple copies of the proxy materials at their address and
would like to request “householding” of their communications should contact their broker.
For
Assistance with Technical Difficulties at the Special Meeting
If
you encounter any difficulties accessing the virtual meeting during the check-in or meeting time, please call (888) 799-9666.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table sets forth beneficial ownership of the Company’s Common Stock as of December 4, 2024 by:
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each
person known to be the beneficial owner of more than 5% of the outstanding Common Stock of the Company; |
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each
of the Company’s executive officers and directors; and |
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all
of the Company’s current executive officers and directors as a group. |
Beneficial
ownership is determined according to the rules of the SEC, which generally provide that a person has beneficial ownership of a security
if he, she or it possesses sole or shared voting or investment power over that security. Under those rules, beneficial ownership includes
securities that the individual or entity has the right to acquire, such as through the exercise of warrants or stock options or the vesting
of restricted stock units, within 60 days of December 4, 2024. Shares subject to warrants or options that are currently exercisable or
exercisable within 60 days of December 4, 2024 or subject to restricted stock units that vest within 60 days of December 4, 2024 are
considered outstanding and beneficially owned by the person holding such warrants, options, or restricted stock units for the purpose
of computing the percentage ownership of that person but are not treated as outstanding for the purpose of computing the percentage ownership
of any other person.
Except
as noted by footnote, and subject to community property laws where applicable, based on the information provided to the Company, the
persons and entities named in the table below have sole voting and investment power with respect to all shares shown as beneficially
owned by them. Unless otherwise indicated, the business address of each beneficial owner listed in the table below is c/o Conduit Pharmaceuticals
Inc., 4581 Tamiami Trail North, Suite 200, Naples, Florida 34103.
The
beneficial ownership of our Common Stock is based on [116,797,274] shares of Common Stock issued and outstanding as of December 4, 2024,
which number excludes the shares of Common Stock issuable upon exercise of the warrants. Unless otherwise indicated, we believe that
all persons named in the table have sole voting and investment power with respect to all of the shares shown to be beneficially owned
by them.
Name
and Address of Beneficial Owner(1) |
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Number
of
shares
of
Common
Stock |
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%
of
Common
Stock Beneficially Owned |
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Directors
and named executive officers |
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James Bligh |
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1,038,181 |
(2) |
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* |
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Faith L. Charles |
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363,261 |
(3) |
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* |
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Chele Chiavacci Farley |
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388,177 |
(4) |
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* |
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Freda Lewis-Hall |
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2,979,954 |
(5) |
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2.55 |
% |
Andrew Regan |
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30,292,731 |
(6) |
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25.93 |
% |
David Tapolczay |
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2,497,869 |
(7) |
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2.13 |
% |
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All
directors and executive officers as a group (6 individuals) |
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37,560,173 |
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31.73 |
% |
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Other
5% beneficial owners |
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Corvus Capital Limited |
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30,292,731 |
(6) |
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25.93 |
% |
AstraZeneca AB (PUBL) |
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9,504,465 |
(8) |
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8.13 |
% |
* |
Indicates
beneficial ownership of less than 1%. |
(1) |
The
table does not include Adam Sragovicz, the Company’s former Chief Financial Officer, who resigned effective May 15, 2024, and
following such resignation, to the Company’s knowledge, did not beneficially own any securities of the Company. |
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(2) |
Consists
of (i) 37,272, shares of Common Stock and (ii) options to purchase 1,000,909 shares Common Stock that are currently exercisable. Excludes
1,112,725 unvested options to purchase shares of Common Stock that are not exercisable within 60 days. |
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(3) |
Consists of (i) 341,594 shares of Common Stock and (ii)
options to purchase 21,667 shares of Common Stock that are currently exercisable. Excludes 43,333 unvested options to purchase shares of
Common Stock that are not exercisable within 60 days. |
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(4) |
Consists
of (i) 351,510 shares of Common Stock, (ii) warrants to purchase 15,000 shares of Common Stock and (iii) options to purchase 21,667
shares of Common Stock that are currently exercisable. Excludes 43,333 unvested options to purchase shares of Common Stock
and 203,332 warrants to purchase shares of Common Stock, all of which are not exercisable within 60 days. |
|
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(5) |
Consists
of 2,979,954 shares of Common Stock of which (i) 437, 976 are held directly by Dr. Lewis-Hall, (ii) 2,003,324 were issued to
Intelmed LLC, of which Dr. Lewis-Hall is the Managing Director, (iii) 516,987 shares of Common Stock were received by Mr. Emerson
Hall, Jr., Dr. Lewis-Hall’s spouse, (iv) 21,667 are underlying options that are currently exercisable and are held directly by
Dr. Lewis-Hall. By virtue of this relationship with both Intelmed LLC and her spouse, Dr. Lewis-Hall may be deemed to share
beneficial ownership of the securities held of record by Intelmed LLC and Mr. Emerson Hall, Jr. Dr. Lewis-Hall disclaims any such
beneficial ownership except to the extent of her pecuniary interest therein. Excludes 43,333 unvested options to purchase shares of
Common Stock and 504,061 warrants to purchase shares of Common Stock, all of which are not exercisable within 60 days. The business
address of Intelmed LLC is 11421 Golden Eagle Court Naples, Florida 34120. |
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(6) |
Consists
of (i) 66,650 shares of Common Stock held directly by Dr. Regan, (ii) 30,048,454 shares of Common Stock held by Corvus Capital Limited,
and (iii) 177,627 shares of Common Stock held by Algo Holdings, Inc. Dr. Regan is the Chief Executive Officer of Corvus Capital Limited
and Algo Holdings, Inc. is a wholly owned subsidiary of Corvus Capital Limited. By virtue of this relationship, Dr. Regan may be
deemed to share beneficial ownership of the securities held of record by Corvus Capital Limited and Algo Holdings, Inc. Dr. Regan
disclaims any such beneficial ownership except to the extent of his pecuniary interest therein. Pursuant to a participation and inducement
agreement with Nirland Limited, the 30,048,454 shares of Common Stock held by Corvus Capital Limited may, in certain circumstances,
be subject to transfer to Nirland Limited and all such shares of Common Stock are subject to a pledge agreement with respect to such
arrangement. The business address of Corvus Capital Limited is Floor 2, Willow House, Cricket Square PO Box 709 Grand Cayman KY1-1107,
Cayman Islands. |
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(7) |
Consists of
(i) 2,003,324 shares received pursuant to the Agreement and Plan of Merger, dated as of November 8, 2022 and as amended on January
27, 2023 and May 11, 2023, by and among the Company, Conduit and the Merger Sub and (ii) options to purchase 494,545 shares of Common
Stock that are currently exercisable. Excludes 643,634 options to purchase shares of Common Stock and 600,996 warrants to purchase
shares of Common Stock, all of which are not exercisable within 60 days. |
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(8)
|
Consists of
9,504,465 shares of Common Stock as reflected in a Schedule 13G filed with the SEC on October 11, 2024. The address of AstraZeneca
AB (PUBL) is SE-151 85 Södertälje, Sweden. |
PROPOSAL
NO. 1 – APPROVAL OF THE ISSUANCE OF UP TO AN AGGREGATE OF 2,862,596 SHARES OF THE COMPANY’S COMMON STOCK ISSUABLE UPON
THE EXERCISE OF CERTAIN WARRANTS TO PURCHASE THE COMPANY’S COMMON STOCK, IN ACCORDANCE WITH NASDAQ LISTING RULE
5635(d).
Warrant
Issuance
On
October 29, 2024, the Company entered into a Bridge Loan Agreement (the “A.G.P. Bridge Agreement”), with A.G.P. pursuant
to which A.G.P. made an advance (the “Advance”) to the Company in an amount not to exceed $600,000 (the “Commitment”).
As partial consideration for the Advance, the Company issued A.G.P. warrants (the “A.G.P. Warrants”) to purchase up to 2,862,596
shares of the Company’s Common Stock, which is equal to 50% of the sum of the Commitment divided by the closing price of the Company’s
Common Stock on October 29, 2024, at an exercise price of $0.1048 per share.
The
exercise of the A.G.P. Warrants and the issuance of the shares of Common Stock underlying the A.G.P. Warrants is subject to stockholder
approval under applicable rules and regulations of The Nasdaq Stock Market LLC, to the extent required by such rules and regulations.
The Company has agreed to convene a meeting of stockholders on or before the 90th day following the issuance of the A.G.P. Warrants to
approve the issuance of Common Stock upon exercise of the A.G.P. Warrants, if required.
In
connection with the Advance, the Company issued a promissory note (the “A.G.P. Bridge Note”) to A.G.P. in the original principal
amount of $600,000. The A.G.P. Bridge Note bears interest at a rate of 4.21% per annum and is due and payable on December 31, 2024.
Pursuant
to the A.G.P. Bridge Agreement, the Company and A.G.P. also agreed to amend a fee letter agreement entered into between the Company and
A.G.P., effective September 22, 2023, suspending the provision that the Company was required to pay A.G.P. 25% of all net proceeds received
from certain transactions described therein, for the repayment of an outstanding amount owed to A.G.P., until such time as the A.G.P.
Bridge Note is repaid in full.
In
addition to providing funding pursuant to the A.G.P. Bridge Loan Agreement, as discussed herein, A.G.P. is currently engaged as the sales
agent in connection with the Company’s recently filed prospectus supplement relating to the Company’s at the
market offering of up to approximately $3.5 million it is currently undertaking. The initial proceeds received by the Company
from its at the market offering will be first used to repay the Bridge Note, which has been substantially repaid.
The
summary of the terms of the A.G.P. Bridge Agreement, A.G.P. Bridge Note, and A.G.P. Warrants above is qualified in its entirety by reference
to the copies of the A.G.P. Bridge Agreement, the A.G.P. Bridge Note, and the A.G.P. Warrant which are included herewith as Annex
A-1, Annex A-2, and Annex A-3, respectively, and are incorporated herein by reference. You should read this summary together with
such documents.
Stockholder
Approval
As
described above, pursuant to the A.G.P. Bridge Agreement, we agreed to hold a meeting of stockholders on or before the 90th day following
the following the issuance of the A.G.P. Warrants to obtain stockholder approval. The recommendation of our Board is that such proposal
be approved, and we are soliciting proxies from our stockholders in connection therewith. If we do not obtain stockholder approval at
this Special Meeting, we are required to call a meeting of stockholders every 90 days thereafter to seek stockholder approval until the
date that stockholder approval is obtained. As discussed above, one of the purposes of the Special Meeting is to satisfy the above requirement
of the A.G.P. Bridge Agreement.
A
vote in favor of this Proposal No. 1 is a vote “FOR” approval of the issuance of the shares upon exercise of the A.G.P. Warrants
issued under the terms of the A.G.P. Bridge Agreement. The exercise of the A.G.P. Warrants, in their entirety, in addition to the issuance of shares upon conversion of the November Convertible Note held by A.G.P., as discussed
in Proposal 3, could result in the issuance
of 20% or more of our Common Stock outstanding as of October 29, 2024, which is the date that we issued the A.G.P. Warrants.
Nasdaq
Listing Rule 5635(d) requires stockholder approval in connection with a transaction other than a public offering involving the sale,
issuance, or potential issuance by the Company of common stock (or securities convertible into or exercisable for common stock) equal
to 20% or more of the common stock or 20% or more of the voting power outstanding before the issuance for a price that is less than the
lower of (i) the Company’s Nasdaq Official Closing Price (as reflected on Nasdaq.com) immediately preceding the signing of the
binding agreement, or (ii) the average of the Company’s Nasdaq Official Closing Price (as reflected on Nasdaq.com) for the five
trading days immediately preceding the signing of the binding agreement.
The
A.G.P. Warrants were issued pursuant to the terms of the A.G.P. Bridge Agreement (as further described above) but were not and are
not exercisable at all prior to stockholder approval. Accordingly, because the shares issuable upon exercise of the A.G.P. Warrants,
in addition to the issuance of shares upon conversion of the November Convertible Note held by A.G.P., as discussed in Proposal 3,
total more than 19.99% of our outstanding shares of Common Stock on the date the A.G.P. Warrants were issued, and because the A.G.P.
Warrants further have anti-dilutive rights, we are seeking stockholder approval of this proposal in respect of the issuance of all
of the shares of Common Stock upon the full exercise of the A.G.P. Warrants pursuant to Nasdaq Listing Rule 5635(d).
Potential
Adverse Effects - Dilution and Impact on Existing Stockholders
The
issuance of shares of Common Stock upon exercise of the A.G.P. Warrants will have a dilutive effect on current stockholders in that the
percentage ownership of the Company held by such current stockholders will decline as a result of the issuance of the shares issuable
upon the exercise of the A.G.P. Warrants. This means also that our current stockholders will own a smaller interest in us as a result
of the exercise of the A.G.P. Warrants and therefore have less ability to influence significant corporate decisions requiring stockholder
approval. Issuance of the shares underlying the A.G.P. Warrants could also have a dilutive effect on the book value per share and any
future earnings per share. Dilution of equity interests could also cause prevailing market prices for our Common Stock to decline.
If
the A.G.P. Warrants are exercised in full for cash, a total of 2,862,596 shares of Common Stock will be issuable to the holder of the
A.G.P. Warrants and this dilutive effect may be material to current stockholders of the Company.
Risks
Related to the A.G.P. Warrants
Provisions
of the A.G.P. Warrants could discourage an acquisition of us by a third party.
Certain
provisions of the A.G.P. Warrants could make it more difficult or expensive for a third party to acquire us. Further, the A.G.P. Warrants
provide that, in the event of certain transactions constituting “fundamental transactions,” with some exceptions, holders
of such warrants will have the right, at their option, to receive from us or a successor entity the same type or form of consideration
(and in the same proportion) that is being offered and paid to the holders of our Common Stock in the fundamental transaction in the
amount of the Black Scholes value (as described in such warrants) of the unexercised portion of the applicable A.G.P. Warrants on the
date of the consummation of the fundamental transaction. These and other provisions of the A.G.P. Warrants could prevent or deter a third
party from acquiring us even where the acquisition could be beneficial to the holders of our Common Stock.
The
A.G.P. Warrants may be accounted for as liabilities and the changes in value of such A.G.P. Warrants may have a material effect on our
financial results.
We
are currently evaluating the terms of the A.G.P. Warrants. It is possible that we and/or our auditors will conclude that, because of
the terms of such A.G.P. Warrants, such A.G.P. Warrants should be accounted for as liability instruments. As a result, we would be required
to classify the A.G.P. Warrants as liabilities. Under the liability accounting treatment, we would be required to measure the fair value
of these instruments at the end of each reporting period and recognize changes in the fair value from the prior period in our operating
results for the current period. As a result of the recurring fair value measurement, our financial statements and results of operations
may fluctuate quarterly based on factors that are outside our control. In the event the A.G.P. Warrants are required to be accounted
for under liability accounting treatment, we will recognize noncash gains or losses due to the quarterly fair valuation of these warrants,
which could be material. The impact of changes in fair value on our financial results may have an adverse effect on the market price
of our Common Stock and/or our stockholders’ equity, which may make it harder for us to, or prevent us from, meeting the continued
listing standards of Nasdaq.
Vote
Required
Proposal
No. 1 requires the approval by the affirmative vote of a majority of the votes cast by the holders of shares of Common Stock present
virtually or represented by proxy at the Special Meeting and entitled to vote thereon.
THE
BOARD RECOMMENDS A VOTE “FOR” PROPOSAL NO. 1 TO AUTHORIZE
THE
ISSUANCE OF THE 2,862,596 SHARES UPON EXERCISE OF THE A.G.P. WARRANTS ISSUED UNDER THE TERMS OF THE A.G.P. BRIDGE AGREEMENT AND
PURSUANT TO NASDAQ LISTING
RULE
5635(d).
PROPOSAL
NO. 2 – APPROVAL OF THE ISSUANCE OF UP TO AN AGGREGATE OF 75,000,000 SHARES OF THE COMPANY’S COMMON STOCK ISSUABLE UPON THE
CONVERSION OF THE AUGUST 2024 SENIOR SECURED PROMISSORY NOTE IN ACCORDANCE WITH NASDAQ LISTING RULE 5635(d).
Nirland
Debt Agreements
On
August 6, 2024, the Company entered into the August 2024 Senior Secured Promissory Note and a Security Agreement (the “Security
Agreement”, and together with the August 2024 Senior Secured Promissory Note, the “Nirland Debt Agreements”) with Nirland,
pursuant to which the Company issued and sold to Nirland the August 2024 Senior Secured Promissory Note in the original principal amount
of $2,650,000, inclusive of a $500,000 original issuance discount.
On
October 31, 2024, the Company and Nirland amended the Nirland Debt Agreements (the “Debt Amendment”), whereby the Nirland
Debt Agreements were amended to (i) provide for the conversion of the August 2024 Senior Secured Promissory Note into shares of Common
Stock, at Nirland’s discretion, in a multiple of any unpaid amounts, if not otherwise previously paid, pursuant to the conversion
rate contained therein, (ii) remove Nirland’s mandatory prepayment right, and (iii) remove Nirland’s right of first refusal
to participate in any future equity or debt offerings of the Company.
On
November 22, 2024, the Company and Nirland entered into a Second Amendment to the August 2024 Senior Secured Promissory Note (the “Second
Amendment”). Pursuant to the Second Amendment, the August 2024 Senior Secured Promissory Note may not be converted (other than
partial conversions that may be permitted pursuant to the rules and regulations of The Nasdaq Stock Market (or any successor entity))
prior to receipt of stockholder approval to provide for such conversion of the August 2024 Senior Secured Promissory Note, and subsequent
issuance of the Company’s Common Stock, pursuant to the stockholder approval rules under the rules and regulations of The Nasdaq
Stock Market. If the Company has not held a special meeting of the stockholders to approve the full conversion of the August 2024 Senior
Secured Promissory Note on or before January 9, 2025, then the Company shall be obligated to pay Nirland a penalty of $100,000 per day
until the special meeting is held. In addition, the existing conversion rate was amended to be two and one half times the sum of (x)
the portion of the principal to be converted, redeemed or otherwise with respect to which this determination is being made and (y) all
accrued and unpaid interest (including default interest) with respect to such portion of the principal amount, if any divided by $0.10
(or following any reverse splits that may occur in a ratio greater than 10 to 1, the lower of such reverse split price and the market
price per share at the time of the conversion date, but in no event less than $1.00), subject to adjustment as provided therein and to
take into account any future share splits or reverse splits.
The
summary of the terms of the August 2024 Senior Secured Promissory Note, the Security Agreement, the Debt Amendment, and the Second Amendment
above are qualified in its entirety by reference to the copies of the August 2024 Senior Secured Promissory Note, the Security Agreement,
the Debt Amendment, and the Second Amendment which are included herewith as Annex B-1, Annex B-2, Annex B-3, and Annex
B-4, respectively, and are incorporated herein by reference. You should read this summary together with such documents.
Stockholder
Approval
A
vote in favor of this Proposal No. 2 is a vote “FOR” approval of the issuance of the shares upon conversion of the August
2024 Senior Secured Promissory Note. The conversion of the August 2024 Senior Secured Promissory Note, in its entirety, could result
in the issuance of 20% or more of our Common Stock outstanding as of August 6, 2024, which is the date that we issued the August 2024
Senior Secured Promissory Note.
Nasdaq
Listing Rule 5635(d) requires stockholder approval in connection with a transaction other than a public offering involving the sale,
issuance, or potential issuance by the Company of common stock (or securities convertible into or exercisable for common stock) equal
to 20% or more of the common stock or 20% or more of the voting power outstanding before the issuance for a price that is less than the
lower of (i) the Company’s Nasdaq Official Closing Price (as reflected on Nasdaq.com) immediately preceding the signing of the
binding agreement, or (ii) the average of the Company’s Nasdaq Official Closing Price (as reflected on Nasdaq.com) for the five
trading days immediately preceding the signing of the binding agreement.
Because
the shares issuable upon conversion of the August 2024 Senior Secured Promissory Note total more than 19.99% of our outstanding shares
of Common Stock on the date the August 2024 Senior Secured Promissory Note was issued, we are seeking stockholder approval of this proposal
in respect of the issuance of the shares of Common Stock upon the conversion of the August 2024 Senior Secured Promissory Note pursuant
to Nasdaq Listing Rule 5635(d).
Potential
Adverse Effects - Dilution and Impact on Existing Stockholders
The
issuance of shares of Common Stock upon conversion of the August 2024 Senior Secured Promissory Note will have a dilutive effect on current
stockholders in that the percentage ownership of the Company held by such current stockholders will decline as a result of the issuance
of the shares issuable upon the conversion of the August 2024 Senior Secured Promissory Note. This also means that our current stockholders
will own a smaller interest in us as a result of the conversion of the August 2024 Senior Secured Promissory Note and therefore have
less ability to influence significant corporate decisions requiring stockholder approval. Issuance of the shares underlying the August
2024 Senior Secured Promissory Note could also have a dilutive effect on the book value per share and any future earnings per share.
Dilution of equity interests could also cause prevailing market prices for our Common Stock to decline.
Vote
Required
Proposal
No. 2 requires the approval by the affirmative vote of a majority of the votes cast by the holders of shares of Common Stock present
virtually or represented by proxy at the Special Meeting and entitled to vote thereon.
THE
BOARD RECOMMENDS A VOTE “FOR” PROPOSAL NO. 2 TO AUTHORIZE
THE
ISSUANCE OF 75,000,000 SHARES UPON CONVERSION OF THE AUGUST 2024 SENIOR SECURED PROMISSORY NOTE AND PURSUANT TO NASDAQ LISTING RULE 5635(d).
PROPOSAL
NO. 3 – APPROVAL FOR THE ISSUANCE OF UP TO AN AGGREGATE OF 58,000,000 SHARES OF THE COMPANY’S COMMON STOCK ISSUABLE UPON
THE CONVERSION OF THE NOVEMBER CONVERTIBLE NOTE, IN ACCORDANCE WITH NASDAQ LISTING RULE 5635(d).
Convertible
Promissory Note with A.G.P./Alliance Global Partners
On
November 25, 2024, the Company issued to A.G.P. the November Convertible Note in the principal amount of $5,737,500 to evidence the Holder’s
currently owed deferred commission. Unless earlier converted as specified in the November Convertible Note, the principal amount plus all
accrued but unpaid interest is due on November 25, 2025 (the “Maturity Date”). The November Convertible Note accrues interest
at 5.5% per annum.
At
any time prior to the full payment of the November Convertible Note, provided that the Holder has given at least three business days written
notice to the Company, the Holder, in its sole discretion, may elect to have all or any portion of the outstanding principal amount and
all interest accrued converted into shares of the Company’s Common Stock at a fixed price of $0.10 (or following any reverse splits
that may occur in a ratio greater than 10 to 1, the lower of such reverse split price and the market price per share at the time of the
conversion date, but in no event less than $1.00), subject to adjustment as provided therein and to take into account any future share
splits or reverse splits. However, the conversion of the November Convertible Note may not occur prior to the Company having sufficiently
authorized shares of Common Stock to permit the entire conversion of the November Convertible Note. In addition, the conversion of the
November Convertible Note may also not occur prior to receipt of stockholder approval to provide for such conversion of the November Convertible
Note, and subsequent issuance of the Company’s Common Stock, pursuant to the stockholder approval rules under the rules and regulations
of The Nasdaq Stock Market. Further, following its ability to convert the November Convertible Note, if at all, A.G.P. will not be
entitled to receive the Company’s Common Stock upon conversion, if such conversion would result in A.G.P. owning greater than
9.99% of the Company’s then currently outstanding Common Stock. A.G.P. is also entitled to resale registration rights as identified
in the November Convertible Note.
The
Company may prepay the November Convertible Note in whole or in part. The November Convertible Note contains customary default provisions
for a transaction of this nature. In the event of certain Events of Default (as defined in the November Convertible Note), all outstanding
principal and accrued interest under the November Convertible Note will become, or may become at A.G.P.’s election, immediately
due and payable to A.G.P.
The
summary of the terms of the November Convertible Note above is qualified in its entirety by reference to the copy of the November
Convertible Note which is included herewith as Annex C and is incorporated herein by reference. You should read this summary together
with such documents.
Stockholder
Approval
A
vote in favor of this Proposal No. 3 is a vote “FOR” approval of the issuance of the shares upon conversion of the November
Convertible Note. The conversion of the November Convertible Note, in its entirety, could result in the issuance of 20% or more of our
Common Stock outstanding as of November 25, 2024, which is the date that we issued the November Convertible Note.
Nasdaq
Listing Rule 5635(d) requires stockholder approval in connection with a transaction other than a public offering involving the sale,
issuance, or potential issuance by the Company of common stock (or securities convertible into or exercisable for common stock) equal
to 20% or more of the common stock or 20% or more of the voting power outstanding before the issuance for a price that is less than the
lower of (i) the Company’s Nasdaq Official Closing Price (as reflected on Nasdaq.com) immediately preceding the signing of the
binding agreement, or (ii) the average of the Company’s Nasdaq Official Closing Price (as reflected on Nasdaq.com) for the five
trading days immediately preceding the signing of the binding agreement.
Because
the shares issuable upon conversion of the November Convertible Note total more than 19.99% of our outstanding shares of Common Stock on
the date the November Convertible Note was issued, we are seeking stockholder approval of this proposal in respect of the issuance of the
shares of Common Stock upon the conversion of the November Convertible Note pursuant to Nasdaq Listing Rule 5635(d).
Potential
Adverse Effects - Dilution and Impact on Existing Stockholders
The
issuance of shares of Common Stock upon conversion of the November Convertible Note will have a dilutive effect on current stockholders
in that the percentage ownership of the Company held by such current stockholders will decline as a result of the issuance of the shares
issuable upon the conversion of the November Convertible Note. This also means that our current stockholders will own a smaller interest
in us as a result of the conversion of the November Convertible Note and therefore have less ability to influence significant corporate
decisions requiring stockholder approval. Issuance of the shares underlying the November Convertible Note could also have a dilutive effect
on the book value per share and any future earnings per share. Dilution of equity interests could also cause prevailing market prices
for our Common Stock to decline.
Vote
Required
Proposal
No. 3 requires the approval by the affirmative vote of a majority of the votes cast by the holders of shares of Common Stock present
virtually or represented by proxy at the Special Meeting and entitled to vote thereon.
THE
BOARD RECOMMENDS A VOTE “FOR” PROPOSAL NO. 3 TO AUTHORIZE
THE
ISSUANCE OF THE SHARES UPON THE CONVERSION OF THE NOVEMBER CONVERTIBLE NOTE AND PURSUANT TO NASDAQ LISTING RULE
5635(d).
PROPOSAL
NO. 4 ADOPTION AND APPROVAL OF AN AMENDMENT TO THE COMPANY’S CERTIFICATE OF INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED
SHARES OF COMMON STOCK
General
On
November 22, 2024, the Board unanimously voted to approve, and to recommend to our stockholders that they approve at the Special
Meeting, an amendment to our Certificate of Incorporation to increase our authorized number of shares of Common Stock from 250,000,000
shares to 600,000,000 shares (the “Authorized Shares Increase”) by filing a Certificate of Amendment to our Certificate of
Incorporation in the form attached to this proxy statement as Annex D (the “Certificate of Amendment”) with the Secretary
of State of the State of Delaware.
Background
and Purpose of the Authorized Shares Increase
The
Board has determined that we do not currently have enough authorized shares of Common Stock to accommodate our forecasted capital raising
needs, based on the current outstanding shares of Common Stock and shares of Common Stock reserved for issuance upon exercise of outstanding
stock options, warrants and other arrangements. As of December 4, 2024, we had [116,797,274] shares of Common Stock outstanding. In addition,
the Board has reserved shares as of December 4, 2024:
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● |
4,996,719
shares issuable upon the exercise of outstanding
stock options with a weighted-average exercise price of $1.184 per share under all equity incentive plans, including the
2023 Stock Incentive Plan; |
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|
|
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● |
20,603,596
shares issuable upon the exercise of outstanding
warrants with a weighted-average exercise price of $9.21 per share; and |
|
|
|
|
● |
75,918,750
shares issuable on the potential conversion
of outstanding notes |
The
Board believes it is in our best interest to increase the number of authorized shares of Common Stock to give us greater flexibility
in considering and planning for current and future corporate needs, including, but not limited to: raising additional capital,
providing for sufficient shares of Common Stock in the event of full conversion of all currently outstanding convertible notes; and other general
corporate purposes. The Board believes that additional authorized shares of Common Stock will enable us to take timely advantage of
market conditions and favorable financing and acquisition opportunities that may become available to us without the delay and
expense associated with convening an additional special meeting of our stockholders. The Board has determined that we do not
currently have enough shares to accommodate these needs.
Except
as discussed above and in Proposal Nos. 1, 2, and 3, and as previously disclosed in its public filings, the Board has no other plans to issue any additional shares of Common Stock at this
time; however, it desires to have shares available to provide flexibility to issue for business and financial purposes in the future,
and believes that 600,000,000 shares of Common Stock is adequate for the foreseeable future.
Impact
of the Authorized Shares Increase if Implemented
The
adoption of the Authorized Shares Increase would not affect the rights, powers or preferences of the shares of Common Stock currently
outstanding, although it could allow, in the future, further dilution of the outstanding shares of Common Stock.
Procedure
for Effecting the Authorized Shares Increase
If
the stockholders approve Proposal No. 4 and the Board decides to implement the Authorized Shares Increase, the Authorized Shares Increase
will become effective either upon the filing of the Certificate of Amendment with the Secretary of State of the State of Delaware or
at such other date and time as is specified therein. Although the Board intends to file the Certificate of Amendment as soon as practicable
after the Special Meeting if Proposal No. 4 is approved, the Board may determine in its discretion not to effect the Authorized Shares
Increase at any time prior to the effectiveness of the Certificate of Amendment.
Vote
Required
Proposal
No. 4 requires the approval by the affirmative vote of a majority of the votes cast by the holders of shares of Common Stock present
virtually or represented by proxy at the Special Meeting and entitled to vote thereon.
THE
BOARD RECOMMENDS A VOTE “FOR” PROPOSAL NO. 4 TO APPROVE THE AUTHORIZED SHARE INCREASE.
OTHER
MATTERS
Our
Board is not aware of any other matters that are to be presented for action at the Special Meeting. However, if any other matters properly
come before the Special Meeting, your shares of Common Stock will be voted in accordance with the discretion of the designated proxy
holders (who are identified on the enclosed proxy card).
It
is important that your shares of Common Stock be represented at the Special Meeting, regardless of the number of shares that you hold.
You are, therefore, urged to vote by using the Internet as instructed on the Notice of Internet Availability of Proxy Materials or enclosed
proxy card or by executing and returning, at your earliest convenience, the enclosed proxy card in the envelope that has also been provided.
By
Order of the Board of Directors, |
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Dr.
David Tapolczay |
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Chief
Executive Officer and Director |
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Naples,
Florida |
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__________,
2024 |
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ANNEX
A-1
A.G.P.
BRIDGE LOAN AGREEMENT
Dated
as of October 29, 2024
Conduit
Pharmaceuticals Inc., a Delaware corporation (the “Borrower”), and A.G.P./Alliance Global Partners (the “Lender”)
agree as follows:
Article
I
AMOUNTS
AND TERMS OF THE ADVANCES
Section
1.01. The Advances.
The
Lender agrees, on the terms and conditions hereinafter set forth, to make an advance (the “Advance”) to the
Borrower, into the account of the Borrower at the Lender, on the date hereof in an amount not to exceed $600,000.00 (the “Commitment”).
Section
1.02. Making the Advance.
(a) The
Advance shall be made on the date hereof, subject to the conditions below, upon receipt by the Lender of written notice (the “Advance
Notice”), given by the Borrower to the Lender on the date hereof. Not later than 11:00 A.M. (New York City time) on the
date hereof and upon fulfillment of the applicable conditions set forth in Article II, the Lender will make such Advance available to
the Borrower in same day funds in the account of the Borrower at the Lender.
(b) The
Advance Notice shall be irrevocable and binding on the Borrower. The Borrower shall indemnify the Lender against any loss or reasonable
and documented out of pocket cost or expense incurred by the Lender as a result of any failure to fulfill on or before the date specified
in the Advance Notice for the Advance, the applicable conditions set forth in Article II, including, without limitation, any loss, cost
or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by the Lender to fund the Advance
when the Advance, as a result of such failure, is not made on such date.
Section
1.03. Warrant. As
partial consideration for the Advance, the Company agrees to issue the Lender a warrant to purchase shares of the Borrower’s common
stock in an amount equal to 50% of the sum of the Commitment divided by the closing price of the Borrower’s common stock as of
the date of this Bridge Loan Agreement, in the form annexed hereto as Exhibit B (the “Warrant”).
Section
1.04. Repayment.
The
Borrower shall repay the aggregate unpaid principal amount of the Advance in accordance with a promissory note of the Borrower, in substantially
the form of Exhibit A hereto (the “Note”), evidencing the indebtedness resulting from the Advance and delivered
to the Lender pursuant to Article II.
Section
1.05. Interest.
The
Borrower shall pay interest on the unpaid principal amount of the Advance from the date of such Advance until such principal amount shall
be paid in full, at a rate equal at all times to 4.21% per annum.
Section
1.06. Prepayments.
The
Borrower shall have the right prior to the Maturity Date to prepay, plus any accrued but unpaid interest thereon, any principal amount
of the Advance.
Section
1.07. Certain Definitions.
(a)
“Business Day” means a day of the year on which banks are not required or authorized to close in New York City.
(b)
“Maturity Date” means December 31, 2024.
Section
1.08. Payments and Computations.
(a) The
Borrower shall repay all of the outstanding balance of the Advance hereunder and under the Note, as well as any accrued and unpaid interest
and fees not later than 11:00 A.M. (New York City time) on the Maturity Date in U.S. dollars to the Lender at its address referred to
in Section 6.03 in same day funds.
(b) The
Borrower hereby authorizes the Lender, if and to the extent payment is not made when due hereunder or under the Note, to charge from
time to time against any or all of the Borrower’s accounts with the Lender any amount so due.
(c) All
computations of interest shall be made by the Lender on the basis of a year of 360 days.
Article
II
CONDITIONS
OF LENDING
Section
2.01. Condition Precedent to Initial Advance.
The
obligation of the Lender to make the Advance is subject to the condition precedent that the Lender shall have received on or before the
day of such Advance the following, each dated such day, in form and substance reasonably satisfactory to the Lender:
(a)
The Note.
(b) Certified
copies of the resolutions of the Board of Directors of the Borrower approving this Agreement and the Note, and of all documents evidencing
other necessary corporate action and governmental approvals, if any, with respect to this Agreement and the Note.
(c) A
certificate of the Chief Executive Officer of the Borrower certifying (1) that each of the representations and warranties contained in
Section 3.01 hereof are true in all material respects (without duplication of materiality) and shall be true in all material respects
(without duplication of materiality) on the date of the Advance (or such earlier date, if so specified); (2) that no event has occurred
and is continuing, or would result from such Advance or from the application of the proceeds therefrom, which constitutes an Event of
Default (as defined in Section 5.01 hereof) or would constitute an Event of Default but for the requirement that notice be given or time
elapse or both; and (3) the names and true signatures of the officers of the Borrower authorized to sign this Agreement and the Note
and the other documents to be delivered hereunder.
(d) An
opinion of Thompson Hine LLP, counsel for the Borrower, in form and substance reasonably satisfactory to the Lender with respect to such
customary matters as the Lender may reasonably request.
(e) The
Advance Notice.
(f) Receipt
of such other approvals or documents as the Lender may reasonably request.
(e) A
duly executed Warrant.
Article
III
REPRESENTATIONS
AND WARRANTIES
Section
3.01. Representations and Warranties of
the Borrower.
The
Borrower represents and warrants as follows:
(a) The
Borrower is a corporation duly incorporated, validly existing and in good standing under the laws of the jurisdiction indicated at the
beginning of this Agreement.
(b) The
execution, delivery and performance by the Borrower of this Agreement and the Note are within the Borrower’s corporate powers,
have been duly authorized by all necessary corporate action, and do not contravene (i) the Borrower’s certificate of incorporation
or by-laws or (ii) law or any contractual restriction binding on or affecting the Borrower, except, in the case of this clause (ii),
to the extent it could not reasonably be expected to have a material adverse change on the Borrower.
(c) No
authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body is required
for the due execution, delivery and performance by the Borrower of this Agreement or the Note, except for those that have otherwise been
obtained or made on or prior to the date hereof and which remain in full force and effect on the date that the Borrower receives the
initial Advance.
(d) This
Agreement is, and the Note when delivered hereunder will be, legal, valid and binding obligations of the Borrower enforceable against
the Borrower in accordance with their respective terms, subject to bankruptcy, insolvency or other laws of general application relating
to the enforcement of creditors’ rights.
(e) The
consolidated financial statements of the Borrower included or incorporated by reference in the Company’s Registration Statement
on Form S-3 (the “Registration Statement”) filed with the Securities and Exchange Commission (the “SEC”)
on October 24, 2024 and the Prospectus included therein (the “Prospectus”), together with the related notes
and schedules, present fairly, in all material respects, the consolidated financial position of the Borrower and its subsidiaries as
of the dates indicated and the consolidated statement of operations, consolidated statement of cash flows and consolidated statement
of stockholders’ equity (deficit) of the Borrower for the periods specified, except that such unaudited financial statements are
subject to normal year-end adjustments and lack footnotes required by GAAP, and have been prepared in compliance in all material respects
with the requirements of the Securities Act of 1933, as amended, and Exchange Act of 1934, as amended, as applicable, and in conformity
with generally accepted accounting principles (“GAAP”) in the United States as in effect as of the time of
filing applied on a consistent basis (except for such adjustments to accounting standards and practices as are noted therein) during
the periods involved.
(f) There
is no pending or, to the knowledge of the Borrower, threatened action or proceeding affecting the Borrower or any of its subsidiaries
before any court, governmental agency or arbitrator, which may materially adversely affect the financial condition or operations of the
Borrower or any subsidiary or which purports to affect the legality, validity or enforceability of this Agreement or the Note.
(g) The
Borrower is not engaged in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning
of Regulation U issued by the Board of Governors of the Federal Reserve System), and no proceeds of any Advance will be used to purchase
or carry any margin stock or to extend credit to others for the purpose of purchasing or carrying any margin stock.
Article
IV
COVENANTS
OF THE BORROWER
Section
4.01. Affirmative Covenants.
So
long as the Note shall remain unpaid or the Lender shall have any Commitment hereunder, the Borrower will, unless the Lender shall otherwise
consent in writing:
(a) Use
of Proceeds. Only use the proceeds from the Advance for working capital and general corporate purposes.
(b) Compliance
with Laws, Etc. Comply, and cause each of its subsidiaries to comply, in all material respects with all applicable laws, rules, regulations
and orders, such compliance to include, without limitation, paying before the same become delinquent all taxes, assessments and governmental
charges imposed upon it or upon its property except to the extent contested in good faith.
(c) Reporting
Requirements. Furnish to the Lender such information respecting the condition or operations, financial or otherwise, of the Borrower
or any of its subsidiaries as the Lender may from time to time reasonably request.
(d) Stockholder
Approval. The Borrower shall hold an annual or special meeting of stockholders on or prior to the date that is ninety (90) days following
the issuance date of the Warrant for the purpose of obtaining the approval of the Borrower’s stockholders as may be required under
Nasdaq rules to permit the exercise of the Warrant (the “Stockholder Approval”), with the recommendation of
the Borrower’s Board of Directors that such proposals are approved, and the Borrower shall solicit proxies from its stockholders
in connection therewith in the same manner as all other management proposals in such proxy statement and all management-appointed proxyholders
shall vote their proxies in favor of such proposals. If the Borrower does not obtain Stockholder Approval at the first meeting, the Borrower
shall call a meeting every ninety (90) days thereafter to seek Stockholder Approval until the Stockholder Approval is obtained.
(e) Sales
Agreement Use of Proceeds. The Borrower covenants and agrees that any and all proceeds generated from the sale if its securities
pursuant to the terms of the Sales Agreement with the Lender dated October 23, 2024 (the “Sales Agreement”),
shall be used to repay the Commitment, plus all accrued and unpaid interest, until such amounts are repaid in full.
(f) Waiver
of Side Letter Condition. Reference is made to that certain side letter executed by and between the Lender and the Borrower, dated
September 22, 2023 (the “Side Letter”). Pursuant to the terms of the Side Letter, the Lender and Borrower agreed
that 25% of the net proceeds of any Capital Raise (as defined in the Side Letter) would be paid to the Lender until the full Deferred
Amount (as defined in the Side Letter) has been paid (the “Capital Repayment Condition”). The Lender and Borrower
hereby covenant and agree to waive the Capital Repayment Condition until such time as the Commitment, plus all accrued and unpaid interest,
are repaid to the Lender in full. After such repayment, the Capital Repayment Condition shall continue to remain in effect until the
Deferred Amount (as defined in the Side Letter) is repaid in full, however the Capital Repayment Condition shall not be paid from proceeds
raised from the Sales Agreement.
Section
4.02. Negative Covenants.
So
long as the Note shall remain unpaid or the Lender shall have any Commitment hereunder, the Borrower will not, without the written consent
of the Lender:
(a) Liens,
Etc. Create or suffer to exist, or permit any of its subsidiaries to create or suffer to exist, any lien, security interest or other
charge or encumbrance, or any other type of preferential arrangement, upon or with respect to any of its properties, whether now owned
or hereafter acquired, or assign, or permit any of its subsidiaries to assign, any right to receive income, in each case to secure or
provide for the payment of any Debt, except for Permitted Liens. “Permitted Liens” means (i) liens for taxes
not yet due and payable, for less than $100,000 in the aggregate, or which are being contested in good faith by appropriate proceedings
diligently pursued, provided that provision for the payment of all such taxes has been made on the books of such person as may be required
by GAAP, consistently applied; (ii) mechanics’, materialmen’s, banker’s, carriers’, warehousemen’s and
similar liens and encumbrances arising in the ordinary course of business and securing obligations of such person that are not overdue
for a period of more than 60 days, for less than $100,000 in the aggregate, or are being contested in good faith by appropriate proceedings
diligently pursued, provided that in the case of any such contest (1) any proceedings commenced for the enforcement of such liens and
encumbrances shall have been duly suspended; and (2) such provision for the payment of such liens and encumbrances has been made on the
books of such person as may be required by GAAP, consistently applied; (iii) liens arising in connection with worker’s compensation,
unemployment insurance, old age pensions and social security benefits and similar statutory obligations which are not overdue, for less
than $100,000 in the aggregate, or are being contested in good faith by appropriate proceedings diligently pursued, provided that in
the case of any such contest (1) any proceedings commenced for the enforcement of such liens shall have been duly suspended; and (2)
such provision for the payment of such liens has been made on the books of such person as may be required by GAAP, consistently applied;
(iv) liens incurred in the ordinary course of business to secure the performance of statutory obligations arising in connection with
progress payments or advance payments due under contracts with the United States government or any agency thereof entered into in the
ordinary course of business; (v) liens incurred or deposits made in the ordinary course of business to secure the performance of statutory
obligations, bids, leases, fee and expense arrangements with trustees and fiscal agents and other similar obligations (exclusive of obligations
incurred in connection with the borrowing of money, any lease-purchase arrangements or the payment of the deferred purchase price of
property), provided that full provision for the payment of all such obligations set forth in clauses (iv) and (v) has been made on the
books of such person as may be required by GAAP, consistently applied; (vi) (1) liens arising in connection with capital leases (and
attaching only to the property being leased and the proceeds thereof), (2) liens that constitute purchase money security interests on
any property securing debt incurred for the purpose of financing all or any part of the cost of acquiring such property, provided that
any such lien attaches to such property within ninety (90) days of the acquisition thereof and attaches solely to the property so acquired
and the proceeds thereof, and (3) any lien existing on any property or asset prior to the acquisition thereof by the Borrower or any
subsidiary of the Borrower or existing on any property or asset of any person that becomes a subsidiary of the Borrower after the date
of this Agreement prior to the time such person becomes a subsidiary of the Borrower, provided that such lien is not created in contemplation
of or in connection with such acquisition or such person becoming a subsidiary of the Borrower, as the case may be, and extensions, renewals
and replacements thereof that do not increase the outstanding principal amount thereof except by the amount of any interest, premiums
or penalties required to be paid plus fees and expenses associated therewith; (vii) attachments, appeal bonds, judgments and other similar
liens arising in connection with court or legal proceedings, which do not result in an Event of Default, provided the execution or other
enforcement of such liens is effectively stayed and the claims secured thereby are being actively contested in good faith and by appropriate
proceedings; (viii) survey exceptions, easements, zoning and other statutory restrictions, rights of way, restrictions, land use or similar
laws and regulations affecting real property, minor defects or irregularities in title and other similar liens not interfering in any
material respect with the ordinary conduct of the business of the Borrower; (ix) deposits to secure the performance of bids, trade contracts,
leases and other obligations of a like nature, in each case, in the ordinary course of business; (x) customary rights of set-off, revocation,
refund or chargeback under deposit agreements or under the Uniform Commercial Code or common law of banks or other financial institutions
where the Borrower or any of its subsidiaries maintains deposits in the ordinary course of business; (xi) any interest or title of a
lessor, sublessor, licensor or sublicensor under any lease or license permitted hereunder and any leases, subleases, licenses or sublicenses
granted by the Borrower or any of its subsidiaries to third parties in the ordinary course of business and not interfering in any material
respect with the business of the Borrower or such subsidiary; (xii) purported liens evidenced by the filing of precautionary UCC financing
statements relating solely to operating leases of personal property entered into in the ordinary course of business; (xiii) other liens;
provided that aggregate amount of all obligations of the Borrower and its subsidiaries secured by such liens does not exceed $100,000
at any time outstanding and so long as such liens do not attach to accounts receivable or inventory of the Borrower; and (xiv) liens
incurred in connection with the restructuring or refinancing of any Debt as described in the Registration Statement and the Prospectus.
(b) Debt.
Create or suffer to exist, or permit any of its subsidiaries to create or suffer to exist, any Debt other than as described in the Registration
Statement and the Prospectus, including any filings with the SEC made by Borrower that are incorporated by reference therein, prior to
the date hereof and other Permitted Debt; provided that the Borrower shall be permitted to restructure or refinance any Debt described
in the Registration Statement and the Prospectus (provided that such restructured or refinanced Debt (A) is not for a greater principal
amount than the existing Debt, (B) does not purport to restrict the repayment of indebtedness under this Agreement and the Note, and
(C) no Event of Default shall have occurred and be continuing hereunder). “Debt” means (i) indebtedness for
borrowed money, (ii) obligations evidenced by bonds, debentures, notes or other similar instruments, (iii) obligations to pay the deferred
purchase price of property or services, (iv) obligations as lessee under leases which shall have been or should be, in accordance with
generally accepted accounting principles, recorded as capital leases, (v) obligations under direct or indirect guaranties in respect
of, and obligations (contingent or otherwise) to purchase or otherwise acquire, or otherwise to assure a creditor against loss in respect
of, indebtedness or obligations of others of the kinds referred to in clause (i) through (iv) above, and (vi) liabilities in respect
of unfunded vested benefits under plans covered by Title IV of ERISA. “Permitted Debt” means (i) indebtedness
arising hereunder; (ii) current unsecured trade payables and accrued liabilities arising in the ordinary course of the Borrower’s
business (including, without limitation, obligations under operating leases); (iii) purchase money indebtedness and capital leases incurred
in connection with the acquisition of fixed assets in an aggregate amount not exceeding $50,000 at any one time outstanding; (iv) indebtedness
of a subsidiary acquired after the date of this Agreement or an entity merged into or consolidated with the Borrower or any subsidiary
of the Borrower after the date of this Agreement and indebtedness assumed in connection with the acquisition of assets, which indebtedness,
in each case, exists at the time of such acquisition, merger or consolidation and is not created in contemplation of such event and where
such acquisition, merger or consolidation is permitted by this Agreement; (v) indebtedness in respect of netting services, overdraft
protection and otherwise in connection with deposit accounts or similar accounts incurred in the ordinary course of business, provided
such debt is extinguished within five (5) days of its incurrence; (vi) indebtedness incurred in the ordinary course of business in connection
with the financing of insurance premiums of the Borrower or any of its subsidiaries; (vii) indebtedness arising from agreements of the
Borrower providing for indemnification, adjustment of purchase price or acquisition price or similar obligations (including earn-outs),
in each case, incurred or assumed in connection with the acquisition contemplated on the date hereof; and (viii) other indebtedness of
Borrower in an aggregate amount not in excess of $50,000 in the aggregate at any time outstanding.
(c) Dividends,
Etc. Declare or make any dividend payment or other distribution of assets, properties, cash, rights, obligations or securities on
account of any shares of any class of capital stock of the Borrower, or purchase, redeem or otherwise acquire for value (or permit any
of its subsidiaries to do so) any shares of any class of capital stock of the Borrower or any warrants, rights or options to acquire
any such shares, now or hereafter outstanding, except that the Borrower may (i) declare and make any dividend payment or other distribution
payable in common stock of the Borrower, and (ii) purchase, redeem or otherwise acquire shares of its common stock or warrants, rights
or options to acquire any such shares with the proceeds received from the substantially concurrent issue of new shares of its common
stock, provided, that, immediately after giving effect to such proposed action, no Event of Default or event which, with the giving
of notice or lapse of time, or both, would constitute an Event of Default would exist.
(d) Mergers,
Etc. Merge or consolidate with or into, or convey, transfer, lease or otherwise dispose of (whether in one transaction or in a series
of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to any person or entity, or permit
any of its subsidiaries to do so, except for Permitted Dispositions. “Permitted Dispositions” means (i) sales
of inventory in the ordinary course of its business, (ii) disposition of (1) surplus, obsolete, worn out, replaced, no longer used or
useful, unmerchantable, or unsalable equipment in the ordinary course of business and (2) assets of Borrower to the extent the market
value of the property so disposed of does not exceed $100,000 during any single fiscal year, (iii) abandonment, lapse or other dispositions
of intellectual property that is, in the reasonable good faith judgment of the Borrower or its subsidiary, either no longer economically
practicable or commercially desirable to maintain or no longer necessary for the conduct of the business of the Borrower or any of its
subsidiaries, (iv) dispositions of cash or cash equivalents, in each case, in a manner not prohibited by the other terms of this Agreement,
(v) sales, transfers and other dispositions of accounts receivable (or notes accepted to evidence same) in connection with the compromise,
settlement or collection thereof in the ordinary course of business, (vi) the lease, assignment, license or sub-license or sub-lease
of any real or personal property in the ordinary course of business to the extent the same does not materially interfere with the business
of the Borrower, (vii) the license or sublicense of intellectual property, (viii) the granting of Permitted Liens, (ix) any involuntary
loss, damage or destruction of property; and (x) any involuntary condemnation, seizure or taking, by exercise of the power of eminent
domain or otherwise, or confiscation or requisition of use of property.
Article
V
EVENTS
OF DEFAULT
Section
5.01. Events of Default.
If
any of the following events (“Events of Default”) shall occur and be continuing:
(a) The
Borrower shall fail to pay any principal of, or interest on, the Note when the same becomes due and payable; or
(b) Any
representation or warranty made by the Borrower herein or by the Borrower (or any of its officers) in connection with this Agreement
shall prove to have been incorrect in any material respect when made; or
(c) The
Borrower shall fail to perform or observe any term, covenant or agreement contained in this Agreement if such failure shall remain unremedied
for five (5) Business Days after written notice thereof shall have been given to the Borrower by the Lender; or
(d) The
Borrower or any of its subsidiaries shall generally not pay its debts as such debts become due, or shall admit in writing its inability
to pay its debts generally, or shall make a general assignment for the benefit of creditors; or any proceeding shall be instituted by
or against the Borrower or any of its subsidiaries seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding
up, reorganization, arrangement, adjustment, protection, relief, or composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee,
custodian or other similar official for it or for any substantial part of its property and, in the case of any such proceeding instituted
against it (but not instituted by it), either such proceeding shall remain undismissed or unstayed for a period of 30 days, or any of
the actions sought in such proceeding (including, without limitation, the entry of an order for relief against, or the appointment of
a receiver, trustee, custodian or other similar official for, it or for any substantial part of its property) shall occur; or the Borrower
or any of its subsidiaries shall take any corporate action to authorize any of the actions set forth above in this subsection (d); then,
and in any such event, the Lender (i) may, by notice to the Borrower, declare its obligation to make the Advance to be terminated, whereupon
the same shall forthwith terminate, and (ii) may, by notice to the Borrower, declare the Note, all interest thereon and all other amounts
payable under this Agreement to be forthwith due and payable, whereupon the Note, all such interest and all such amounts shall become
and be forthwith due and payable, without presentment, demand, protest, or further notice of any kind, all of which are hereby expressly
waived by the Borrower; provided, however, that in the event of an actual or deemed entry of an order for relief with respect
to the Borrower or any of its subsidiaries under the Federal Bankruptcy Code, (a) the obligation of the Lender to make Advances shall
automatically be terminated and (b) the Advances, the Note, all such interest and all such amounts shall automatically become and be
due and payable, without presentment, demand, protest or any notice of any kind, all of which are hereby expressly waived by the Borrower.
Article
VI
MISCELLANEOUS
Section
6.01. Termination of Certain Payment Obligations.
The
Fee Letter Agreement, effective September 22, 2023, between the Borrower and the Lender (the “Letter Agreement”) provides
that the Borrower must pay to the Lender 25% of all net proceeds received in any Capital Raise, as defined in the Letter Agreement (the
“Payment Obligation”). The Payment Obligation is terminated immediately.
Section
6.02. Amendments, Etc.
No
amendment or waiver of any provision of this Agreement or the Note, nor consent to any departure by the Borrower therefrom, shall in
any event be effective unless the same shall be in writing and signed by the Lender, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given.
Section
6.03. Notices, Etc.
All
notices and other communications required or permitted to be given by any party to any other party pursuant to the terms of this Agreement
shall be in writing, unless otherwise specified, and shall be delivered: if to the Borrower, at its address at 4995 Murphy Canyon Road,
Suite 300, San Diego, CA 92123, Attention: David Tapolczay; and if to the Lender, at its address at 590 Madison Avenue, 28th Floor, New
York, NY 10022, Attention: Thomas J Higgins, Managing Director (thiggins@allianceg.com); or, as to each party, at such other address
as shall be designated by such party in a written notice to the other party. Each such notice or other communication shall be deemed
given (i) when delivered personally, by email or by verifiable facsimile transmission (with an original to follow) on or before 4:30
p.m., New York City time, on a Business Day or, if such day is not a Business Day, on the next succeeding Business Day, (ii) on the next
Business Day after timely delivery to a nationally-recognized overnight courier and (iii) on the Business Day actually received if deposited
in the U.S. mail (certified or registered mail, return receipt requested, postage prepaid).
Section
6.04. No Waiver; Remedies.
No
failure on the part of the Lender to exercise, and no delay in exercising, any right hereunder or under the Note shall operate as a waiver
thereof; nor shall any single or partial exercise of any such right preclude any other or further exercise thereof or the exercise of
any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law.
Section
6.05. Costs, Expenses and Taxes.
The
Borrower agrees to pay promptly after demand all reasonable and documented costs and expenses in connection with the preparation, execution,
delivery, administration, modification and amendment of this Agreement, the Note and the other documents to be delivered hereunder, including,
without limitation, plus disbursements for searches, recordings and similar expenses for counsel for the Lender with respect to the negotiation
and delivery of this Agreement and the Note, in all cases in an amount not to exceed $25,000. The Borrower further agrees to pay promptly
after demand all reasonable and documented costs and expenses, if any (including reasonable outside counsel fees and expenses), in connection
with the enforcement (whether through negotiations, legal proceedings or otherwise) of this Agreement, the Note and the other documents
to be delivered hereunder, including, without limitation, reasonable outside counsel fees and expenses in connection with the enforcement
of rights under this Section 6.05. In addition, the Borrower shall pay any and all stamp and other taxes payable or determined to be
payable in connection with the execution and delivery of this Agreement, the Note and the other documents to be delivered hereunder,
and agrees to save the Lender harmless from and against any and all liabilities with respect to or resulting from any delay in paying
or omission to pay such taxes.
Section
6.06. Right of Set-off.
Upon
the occurrence and during the continuance of any Event of Default the Lender is hereby authorized at any time and from time to time,
to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or
final, but excluding balances held or assets in respect of payroll accounts, employee benefit accounts, trust accounts, withholding accounts
and other similar fiduciary accounts to the extent such funds are necessary to pay payroll, employee benefits and other similar payments
accrued and/or payable in the ordinary course of business) at any time held and other indebtedness at any time owing by the Lender to
or for the credit or the account of the Borrower against any and all of the obligations of the Borrower now or hereafter existing under
this Agreement and the Note, whether or not the Lender shall have made any demand under this Agreement or the Note and although such
obligations may be unmatured. The Lender agrees promptly to notify the Borrower after any such set-off and application, provided
that the failure to give such notice shall not affect the validity of such set-off and application. The rights of the Lender under this
Section are in addition to other rights and remedies (including, without limitation, other rights of set-off) which the Lender may have.
Section
6.07. Binding Effect.
This
Agreement shall be binding upon and inure to the benefit of the Borrower and the Lender and their respective successors and assigns,
except that the Borrower shall not have the right to assign its rights hereunder or any interest herein without the prior written consent
of the Lender. This Agreement and the Note may not be assigned or transferred by the Lender to any person other than (a) an affiliate
of the Lender or (b) so long as no Event of Default is then continuing, any other person (other than a natural person) in the business
of making loans and other extensions of credit with the prior written consent of the Borrower. The Lender may pledge this Agreement and
the Note and grant security interests herein and therein to any financing source of the Lender.
Section
6.08. Governing Law.
This
Agreement and the Note shall be governed by, and construed in accordance with, the laws of the State of New York.
[Signature
Page Follows]
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
|
CONDUIT
PHARMACEUTICALS INC. |
|
|
|
|
By: |
/s/
James Bligh |
|
Name: |
James Bligh |
|
Title: |
Interim Chief Financial Officer |
|
|
|
|
A.G.P./ALLIANCE
GLOBAL PARTNERS |
|
|
|
|
By: |
/s/
Thomas J. Higgins |
|
Name: |
Thomas J. Higgins |
|
Title: |
Managing Director |
ANNEX
A-2
A.G.P.
BRIDGE NOTE
$600,000 |
Dated:
October 29, 2024 |
FOR
VALUE RECEIVED, the undersigned, CONDUIT PHARMACEUTICALS INC., a Delaware corporation (the “Borrower”), HEREBY
PROMISES TO PAY to A.G.P./Alliance Global Partners (the “Lender”)
the principal amount of SIX HUNDRED THOUSAND DOLLARS ($600,000) or, if less, the aggregate principal amount of the Advance made by the
Lender to the Borrower pursuant to the Loan Agreement (as hereinafter defined) outstanding on the Maturity Date (as defined in the Loan
Agreement).
The
Borrower promises to pay interest on the principal amount of the Advance from the date of such Advance until such principal amount is
paid in full, at such interest rates, and payable at such times, as are specified in the Loan Agreement referred to below.
Principal,
interest fees and expenses hereunder and under the Loan Agreement are payable in lawful money of the United States of America to the
Lender at 590 Madison Avenue, 28th Floor, New York, NY 10022, in same day funds.
This
Promissory Note is the Note referred to in, and is entitled to the benefits of, the Bridge Loan Agreement dated as of October 29, 2024
(as may be amended or restated from time to time, the “Loan Agreement”), between the Borrower and the Lender.
The Loan Agreement, among other things, (i) provides for the making of an advance (the “Advance”) by the Lender
to the Borrower in an aggregate principal amount not to exceed at any time outstanding the U.S. dollar amount first above mentioned,
the indebtedness of the Borrower resulting from such Advance being evidenced by this Promissory Note, and (ii) contains provisions for
acceleration of the maturity hereof upon the happening of certain stated events and also for prepayments on account of principal hereof
prior to the maturity hereof upon the terms and conditions therein specified.
|
CONDUIT
PHARMACEUTICALS INC. |
|
|
|
|
By: |
/s/
James Bligh |
|
Name: |
James Bligh |
|
Title: |
Interim Chief Financial Officer |
ANNEX
A-3
A.G.P.
WARRANT
NEITHER
THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE
OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.
COMMON
STOCK PURCHASE WARRANT
CONDUIT
PHARMACEUTICALS INC.
Warrant
Shares: _______ |
Original
Issuance Date: |
|
|
Initial
Exercise Date: |
Stockholder
Approval Date |
THIS
COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, _____________ or its assigns (the
“Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set
forth, at any time on or after the Stockholder Approval Date (the “Initial Exercise Date”) and on or prior to 5:00
p.m. (New York City time) on the date that is the five (5) year anniversary of the Initial Exercise Date, provided that, if such date
is not a Trading Day, the date that is the immediately following Trading Day (the “Termination Date”) but not thereafter,
to subscribe for and purchase from Conduit Pharmaceuticals Inc., a Delaware corporation (the “Company”), up to ______
shares (as subject to adjustment hereunder, the “Warrant Shares”) of the Company’s Common Stock. The purchase
price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b). This Common Stock
Purchase Warrant is issued pursuant to the Note Agreement (as defined below).
Section
1. Definitions. In addition to the terms defined elsewhere in this Warrant, the following terms have the meanings indicated in
this Section 1:
“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control
with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.
“Board
of Directors” means the board of directors of the Company.
“Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized or required
by law to remain closed due to “stay at home”, “shelter-in-place”, “non-essential employee” or any
other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority so
long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York generally are
open for use by customers on such day.
“Commission”
means the United States Securities and Exchange Commission.
“Common
Stock” means the common stock of the Company, par value $0.0001 per share, and any other class of securities into which such
securities may hereafter be reclassified or changed.
“Common
Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire
at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is
at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Exempt
Issuance” means the issuance of (a) shares of Common Stock, restricted stock units, options or other equity awards to employees,
consultants, contractors, advisors, officers, or directors of the Company pursuant to any stock or option plan in existence as of the
date hereof, provided that such issuances to consultants, contractors or advisors are issued as “restricted securities” (as
defined in Rule 144) and carry no registration rights, (b) shares of Common Stock upon the exercise or exchange of or conversion of any
Securities issued hereunder or securities exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding
on the date of this Warrant, provided that such securities have not been amended since the date of this Warrant to increase the number
of such securities or to decrease the exercise price, exchange price or conversion price of such securities (other than in connection
with stock splits or combinations) or to extend the term of such securities, (c) securities issued pursuant to acquisitions or strategic
transactions approved by a majority of the disinterested directors of the Company, provided that such securities are issued as “restricted
securities” (as defined in Rule 144), and provided that any such issuance shall only be to a Person (or to the equity holders of
a Person) which is, itself or through its subsidiaries, an operating company or an owner of an asset in a business synergistic with the
business of the Company and shall provide to the Company additional benefits in addition to the investment of funds, but shall not include
a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business
is investing in securities, (d) shares of Common Stock issued to consultants or vendors of the Company, provided that such securities
are issued as “restricted securities” (as defined in Rule 144) and carry no registration rights, and (e) shares of Common
Stock issued to existing holders of the Company’s securities in compliance with the terms of agreements entered into with, or instruments
issued to, such holders, provided that such agreements regarding such securities have not been amended since the date of this Warrant
to increase the number of such securities or to decrease the exercise price, exchange price or conversion price of such securities (other
than in connection with stock splits or combinations) or to extend the term of such securities, and provided further that such securities
are issued as “restricted securities” (as defined in Rule 144) and carry no registration rights.
“Note
Agreement” means that certain Bridge Loan Agreement between the Holder hereof and the Company, dated as of October [*], 2024,
pursuant to which the Holder agreed to issue a note in the principal aggregate amount of $600,000 to the Company.
“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Rule
144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted
from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect
as such Rule.
“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Stockholder
Approval” means such approval as may be required by the applicable rules and regulations of the Nasdaq Capital Market (or any
successor entity) from the stockholders of the Company with respect to the issuance of all of the Warrants and the Warrant Shares upon
the exercise thereof.
“Stockholder
Approval Date” means the date on which Stockholder Approval is received and deemed effective under Delaware law.
“Subsidiary”
means any subsidiary of the Company required to be listed pursuant to Item 601(b)(21) of Regulation S-K.
“Trading
Day” means a day on which the principal Trading Market is open for trading.
“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date
in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market or the New York
Stock Exchange (or any successors to any of the foregoing).
“Transfer
Agent” means Vstock Transfer, LLC, with an address of 18 Lafayette Place, Woodmere, NY 11598, and any successor transfer agent
of the Company.
“Variable
Rate Transaction” means a transaction in which the Company (i) issues or sells any debt or equity securities that are convertible
into, exchangeable or exercisable for, or include the right to receive additional shares of Common Stock either (A) at a conversion price,
exercise price or exchange rate or other price that is based upon and/or varies with the trading prices of or quotations for the Common
Stock at any time after the initial issuance of such debt or equity securities, or (B) with a conversion, exercise or exchange price
that is subject to being reset at some future date after the initial issuance of such debt or equity security or upon the occurrence
of specified or contingent events directly or indirectly related to the business of the Company or the market for shares of Common Stock
or (ii) enters into, or effects a transaction under, any agreement, including, but not limited to, an equity line of credit, whereby
the Company may issue securities at a future determined price.
Section
2. Exercise.
(a)
Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time
or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed PDF
copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”).
If the Holder exercises any portion of this Warrant by cashless exercise pursuant to Section 2(c), then the Notice of Exercise shall
include the VWAP and Bid Price (each as defined below) used by the Holder in calculating the Warrant Shares to be issued pursuant to
Section 2(c) so that the Company may independently confirm the Holder’s calculations. Within the earlier of (i) two (2) Trading
Days and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined in Section 2(d)(i) herein) following the
date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the Warrant Shares specified in the applicable
Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank unless the cashless exercise procedure specified
in Section 2(c) below is specified in the applicable Notice of Exercise. No ink-original Notice of Exercise shall be required, nor shall
any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required. Notwithstanding anything
herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased
all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this
Warrant to the Company for cancellation as soon as reasonably practicable following the date on which the final Notice of Exercise is
delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares
available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal
to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing the number of Warrant
Shares purchased and the date of such purchases. The Company may object to any Notice of Exercise that the Company reasonably determines
does not comply with the requirements set forth herein, provided that the Company must deliver any such objections within one (1) Business
Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of
the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available
for purchase hereunder at any given time may be less than the amount stated on the face hereof.
(b)
Exercise Price. The exercise price per share of Common Stock under this Warrant shall be $[*]1, subject to adjustment
hereunder (the “Exercise Price”).
(c)
Cashless Exercise. If at the time of exercise hereof there is no effective registration statement registering the resale of the
Warrant Shares, or the prospectus contained therein is not available for the resale of the Warrant Shares by the Holder, then this Warrant
may also be exercised, in whole or in part, at such time by means of a “cashless exercise” in which the Holder shall be entitled
to receive a number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:
| (A)
= | as
applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable
Notice of Exercise if such Notice of Exercise is (1) both executed and delivered pursuant
to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed and delivered
pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading
hours” (as defined in Rule 600(b) of Regulation NMS promulgated under the federal securities
laws) on such Trading Day, or (ii) the Bid Price of the Common Stock on the principal Trading
Market as reported by Bloomberg L.P. (“Bloomberg”) as of the time of the
Holder’s execution of the applicable Notice of Exercise if such Notice of Exercise
is executed during “regular trading hours” on a Trading Day and is delivered
within two (2) hours thereafter (including until two (2) hours after the close of “regular
trading hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii) the VWAP
on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is
a Trading Day and such Notice of Exercise is both executed and delivered pursuant to Section
2(a) hereof after the close of “regular trading hours” on such Trading Day; |
| (B)
= | the
Exercise Price of this Warrant, as adjusted hereunder; and |
| (X)
= | the
number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance
with the terms of this Warrant if such exercise were by means of a cash exercise rather than
a cashless exercise. |
“Bid
Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock
is then listed or quoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m.
(New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB Venture Market (“OTCQB”) or the OTCQX Best Market
(“OTCQX”) is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest
preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and
if prices for the Common Stock are then reported on the Pink Open Market (“Pink Market”) operated by the OTC Markets,
Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the
Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent
appraiser selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonably acceptable
to the Company, the fees and expenses of which shall be paid by the Company.
“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed
or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m.
(New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price
of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then
listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on the Pink Market operated by the
OTC Markets, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per
share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an
independent appraiser selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonably
acceptable to the Company, the fees and expenses of which shall be paid by the Company.
If
Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the
Securities Act, the holding period of the Warrant Shares being issued may be tacked on to the holding period of this Warrant. The Company
agrees not to take any position contrary to this Section 2(c).
1
Equal to the Nasdaq “minimum price” as of the date of the execution of the Note Agreement.
(d)
Mechanics of Exercise.
(i)
Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by
the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository
Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant
in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale
of the Warrant Shares by the Holder or (B) the Warrant Shares are eligible for resale by the Holder without volume or manner-of-sale
limitations pursuant to Rule 144 (assuming cashless exercise of the Warrants), and otherwise by physical delivery of a certificate or
a book-entry certificate, registered in the Company’s share register in the name of the Holder or its designee, for the number
of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise
by the date that is the earliest of (i) two (2) Trading Days after the delivery to the Company of the Notice of Exercise, (ii) one (1)
Trading Day after delivery of the aggregate Exercise Price to the Company and (iii) the number of Trading Days comprising the Standard
Settlement Period after the delivery to the Company of the Notice of Exercise (such date, the “Warrant Share Delivery Date”).
Upon delivery of the Notice of Exercise, the Holder shall be deemed for all corporate purposes to have become the holder of record of
the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of the Warrant Shares,
provided that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received by the Warrant Share
Delivery Date. If the Company fails for any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the
Warrant Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000
of Warrant Shares subject to such exercise (based on the VWAP of the Common Stock on the date of the applicable Notice of Exercise),
$10 per Trading Day (increasing to $20 per Trading Day on the third (3rd) Trading Day after the Warrant Share Delivery Date) for each
Trading Day after such Warrant Share Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise. The Company
agrees to maintain a transfer agent that is a participant in the FAST program so long as this Warrant remains outstanding and exercisable.
As used herein, “Standard Settlement Period” means the standard settlement period, expressed in a number of Trading
Days, on the Company’s primary Trading Market with respect to the Common Stock as in effect on the date of delivery of the Notice
of Exercise.
(ii)
Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of
a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant
evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in
all other respects be identical with this Warrant.
(iii)
Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section
2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.
(iv)
Compensation for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to
the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions
of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date (other than any such failure that is solely
due to any action or inaction by the Holder with respect to such exercise), and if after such date the Holder is required by its broker
to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, shares of Common Stock
to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a
“Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder’s
total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained
by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise
at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the
Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored (in
which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would have been
issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases Common
Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common Stock with
an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the
Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable
to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit
a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree
of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver shares of Common Stock
upon exercise of the Warrant as required pursuant to the terms hereof.
(v)
No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise
of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company
shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied
by the Exercise Price or round up to the next whole share.
(vi)
Charges, Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax
or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the Company,
and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided,
however, that in the event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when
surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and the Company may
require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. The Company
shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise and all fees to the Depository Trust Company
(or another established clearing corporation performing similar functions) required for same-day electronic delivery of the Warrant Shares.
(vii)
Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise
of this Warrant, pursuant to the terms hereof.
(e)
Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the
right to exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance
after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other
Persons acting as a group together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution Parties”)),
would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the
number of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Parties shall include the number
of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude
the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant
beneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or
nonconverted portion of any other securities of the Company (including, without limitation, any other contained herein beneficially owned
by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in the preceding sentence, for purposes of this Section
2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated
thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance
with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith.
To the extent that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (in
relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant
is exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s
determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates
and Attribution Parties) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation,
and the Company shall have no obligation to verify or confirm the accuracy of such determination and shall have no liability for exercises
of this Warrant that are not in compliance with the Beneficial Ownership Limitation, provided this limitation of liability shall not
apply if the Holder has detrimentally relied on outstanding share information provided by the Company or the Transfer Agent. In addition,
a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act
and the rules and regulations promulgated thereunder, and the Company shall have no obligation to verify or confirm the accuracy of such
determination and shall have no liability for exercises of the Warrant that are not in compliance with the Beneficial Ownership Limitation,
except to the extent the Holder relies on the number of outstanding shares of Common Stock that was provided by the Company. For purposes
of this Section 2(e), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding
shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the
case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Transfer
Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of a Holder, the Company shall
within one (1) Trading Day confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding. In any
case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities
of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number
of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 9.99% of the number
of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise
of this Warrant. The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this
Section 2(e), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the Common Stock
outstanding immediately after giving effect to the issuance of shares of Common Stock upon exercise of this Warrant held by the Holder
and the provisions of this Section 2(e) shall continue to apply. Any increase in the Beneficial Ownership Limitation will not be effective
until the 61st day after such notice is delivered to the Company. The provisions of this paragraph shall be construed and
implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portion
hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes
or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply
to a successor holder of this Warrant.
Section
3. Certain Adjustments.
(a)
Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise
makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares
of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this
Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse
stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification of shares of the
Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which
the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event
and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event, and the number of
shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant
shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for
the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the
effective date in the case of a subdivision, combination or re-classification.
(b)
Subsequent Equity Sales. If the Company or any Subsidiary thereof, as applicable, at any time while this Warrant is outstanding,
shall sell or grant any option to purchase, or sell or grant any right to reprice, or otherwise dispose of or issue (or announce any
offer, sale, grant, or any option to purchase or other disposition) any Common Stock or Common Stock Equivalents, at an effective price
per share less than the Exercise Price then in effect (such lower price, the “Base Share Price”; and such issuances,
collectively, a “Dilutive Issuance”) (it being understood and agreed that if the holder of the Common Stock or Common
Stock Equivalents so issued shall at any time, whether by operation of purchase price adjustments, reset provisions, floating conversion,
exercise or exchange prices, or otherwise, or due to warrants, options, or rights per share that are issued in connection with such issuance,
be entitled to receive shares of Common Stock at an effective price per share that is less than the then-Exercise Price, such issuance
shall be deemed to have occurred for less than the Exercise Price on such date of the Dilutive Issuance at such effective price), then,
simultaneously with the consummation (or, if earlier, the announcement) of each Dilutive Issuance, the Exercise Price shall be reduced
and only reduced to equal the Base Share Price (subject to adjustment for reverse and forward stock splits, recapitalizations, and similar
transactions). Notwithstanding the foregoing, no adjustments shall be made, paid, or issued under this Section 3(b) in respect of an
Exempt Issuance. The Company shall notify the Holder, in writing, no later than the Trading Day following the issuance or deemed issuance
of any Common Stock or Common Stock Equivalents subject to this Section 3(b), indicating therein the applicable issuance price, or applicable
reset price, exchange price, conversion price, and other pricing terms (such notice, the “Dilutive Issuance Notice”).
If the Company enters into a Variable Rate Transaction, the Company shall be deemed to have issued Common Stock or Common Stock Equivalents
at the lowest possible conversion or exercise price at which such securities may be converted or exercised.
(c)
Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants,
issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record
holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire,
upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had
held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise
hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for
the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares
of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that to the
extent that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership
Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such
shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance
for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).
(d)
Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or
other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital
or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend,
spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”),
at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution
to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable
upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial
Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the
date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided,
however, that to the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding
the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in
the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution
shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder
exceeding the Beneficial Ownership Limitation).
(e)
Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or
more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company (or any Subsidiary),
directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially
all of the Company’s assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer
or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to
sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of greater than 50%
of the outstanding Common Stock and greater than 50% of the voting power of the common equity of the Company, (iv) the Company, directly
or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock
or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities,
cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase
agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off, merger or scheme
of arrangement) with another Person or group of Persons whereby such other Person or group acquires greater than 50% of the outstanding
shares of Common Stock and greater than 50% of the voting power of the common equity of the Company (each a “Fundamental Transaction”),
then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have
been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without
regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of shares of Common Stock of the successor or acquiring
corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”)
receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is
exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this
Warrant). For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such
Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental
Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the
relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the
securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate
Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction. Notwithstanding anything to the contrary,
in the event of a Fundamental Transaction, the Company or any Successor Entity (as defined below) shall, at the Holder’s option,
exercisable at any time concurrently with, or within 30 days after, the consummation of the Fundamental Transaction (or, if later, the
date of the public announcement of the applicable Fundamental Transaction), purchase this Warrant from the Holder by paying to the Holder
an amount of cash equal to the Black Scholes Value (as defined below) of the remaining unexercised portion of this Warrant on the date
of the consummation of such Fundamental Transaction; provided, however, that, if the Fundamental Transaction is not within the Company’s
control, including not approved by the Company’s Board of Directors, the Holder shall not have the option to require the Company
to purchase this Warrant. “Black Scholes Value” means the value of this Warrant based on the Black Scholes Option
Pricing Model obtained from the “OV” function on Bloomberg determined as of the day of consummation of the applicable Fundamental
Transaction for pricing purposes and reflecting (A) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal
to the time between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date,
(B) an expected volatility equal to the 100 day volatility obtained from the HVT function on Bloomberg (determined utilizing a 365 day
annualization factor) as of the Trading Day immediately following the public announcement of the applicable contemplated Fundamental
Transaction, (C) the underlying price per share used in such calculation shall be the sum of the price per share being offered in cash,
if any, plus the value of any non-cash consideration, if any, being offered in such Fundamental Transaction and (D) a remaining option
time equal to the time between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination
Date and (E) a zero cost of borrow. The payment of the Black Scholes Value will be made by wire transfer of immediately available funds
(or such other consideration) within the later of (i) five Trading Days of the Holder’s election and (ii) the date of consummation
of the Fundamental Transaction. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not
the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under this Warrant
and the other Transaction Documents in accordance with the provisions of this Section 3(e) pursuant to written agreements in form and
substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction
and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced
by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of
shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable
upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction,
and with an exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account the relative
value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number
of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately
prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder.
Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from
and after the occurrence or consummation of such Fundamental Transaction, each and every provision of this Warrant and the other Transaction
Documents referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power
of the Company and shall assume all of the obligations of the Company under this Warrant and the other Transaction Documents with the
same effect as if such Successor Entity had been named as the Company herein. For the avoidance of doubt, the Holder shall be entitled
to the benefits of the provisions of this Section 3(d) regardless of (i) whether the Company has sufficient authorized shares of Common
Stock for the issuance of Warrant Shares and/or (ii) whether a Fundamental Transaction occurs prior to the Initial Exercise Date.
(f)
Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the
case may be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date
shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.
(g)
Notice to Holder.
(i)
Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company
shall promptly deliver to the Holder by email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment
to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.
(ii)
Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on
the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the
Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of
capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with
any reclassification of the Common Stock, any consolidation or merger to which the Company (or any of its Subsidiaries) is a party, any
sale or transfer of all or substantially all of its assets, or any compulsory share exchange whereby the Common Stock is converted into
other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding
up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by email to the Holder at its last email
address as it shall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective
date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution,
redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to
be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification,
consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected
that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other
property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to
deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to
be specified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, non-public information
regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a
Current Report on Form 8-K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such
notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.
Section
4. Transfer of Warrant.
(a)
Transferability. Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d) hereof
and to the provisions of the Note Agreement, this Warrant and all rights hereunder (including, without limitation, any registration rights)
are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent,
together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent
or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required,
such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable,
and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing
the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary,
the Holder shall not be required to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full,
in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of the date on which the Holder delivers
an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordance herewith, may be exercised
by a new holder for the purchase of Warrant Shares without having a new Warrant issued.
(b)
New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of
the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by
the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division
or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided
or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the initial issuance date of
this Warrant and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.
(c)
Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the
“Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the
registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder,
and for all other purposes, absent actual notice to the contrary.
(d)
Transfer Restrictions. If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer
of this Warrant shall not be either (i) registered pursuant to an effective registration statement under the Securities Act and under
applicable state securities or blue sky laws or (ii) eligible for resale without volume or manner-of-sale restrictions or current public
information requirements pursuant to Rule 144, the Company may require, as a condition of allowing such transfer, that the Holder or
transferee of this Warrant, as the case may be, comply with the provisions of the Note Agreement.
(e)
Representation by the Holder. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant
and, upon any exercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to
or for distributing or reselling such Warrant Shares or any part thereof in violation of the Securities Act or any applicable state securities
law, except pursuant to sales registered or exempted under the Securities Act.
(f)
Voluntary Adjustment By Company. On or after the Stockholder Approval Date, the Company may at any time during the term of this
Warrant reduce the then current Exercise Price to any amount and for any period of time deemed appropriate by the board of directors
of the Company, with the consent of the Holder.
Section
5. Miscellaneous.
(a)
No Rights as Stockholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights,
dividends or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly
set forth in Section 3. Without limiting any rights of a Holder to receive Warrant Shares on a “cashless exercise” pursuant
to Section 2(c) or to receive cash payments pursuant to Section 2(d)(i) and Section 2(d)(iv) herein, in no event shall the Company be
required to net cash settle an exercise of this Warrant.
(b)
Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares,
and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant,
shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the
Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant
or stock certificate.
(c)
Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required
or granted herein shall not be a Trading Day, then such action may be taken or such right may be exercised on the next succeeding Trading
Day.
(d)
Authorized Shares.
The
Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock a
sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant.
The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with
the duty of issuing the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all
such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any
applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed. The Company covenants
that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise
of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly
issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof
(other than taxes in respect of any transfer occurring contemporaneously with such issue).
Except
and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending
its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale
of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant,
but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary
or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the
foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise
immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company
may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially
reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof,
as may be, necessary to enable the Company to perform its obligations under this Warrant.
Before
taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the
Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from
any public regulatory body or bodies having jurisdiction thereof.
(e)
Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined
in accordance with the provisions of the Note Agreement.
(f)
Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, and
the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.
(g)
Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall
operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies, notwithstanding the fact that
the right to exercise this Warrant terminates on the Termination Date. Without limiting any other provision of this Warrant or the Note
Agreement, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages
to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including, but
not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Holder in collecting any
amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.
(h)
Notices. Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall
be delivered in accordance with the notice provisions of the Note Agreement.
(i)
Limitation of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant
to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of
the Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company
or by creditors of the Company.
(j)
Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will
be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to
assert the defense in any action for specific performance that a remedy at law would be adequate.
(k)
Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall
inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns
of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall
be enforceable by the Holder or holder of Warrant Shares.
(l)
Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company, on
the one hand, and the Holder of this Warrant, on the other hand.
(m)
Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall
be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining
provisions of this Warrant.
(n)
Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed
a part of this Warrant.
********************
(Signature
Page Follows)
IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above
indicated.
|
CONDUIT
PHARMACEUTICALS INC. |
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By: |
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Name: |
James
Bligh |
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Title: |
Interim
Chief Financial Officer |
EXHIBIT
A
NOTICE
OF EXERCISE
TO:
CONDUIT PHARMACEUTICALS INC.
(1)
The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only
if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.
(2)
Payment shall take the form of (check applicable box):
[ ]
in lawful money of the United States; or
[ ]
if permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection
2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure
set forth in subsection 2(c). If this box is checked, provide the following information used by the Holder to calculate the Warrant Shares
to be issued:
(3)
Please issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:
The
Warrant Shares shall be delivered to the following DWAC Account Number:
(4)
Accredited Investor. The undersigned is an “accredited investor” as defined in Regulation D promulgated under the
Securities Act of 1933, as amended.
[SIGNATURE
OF HOLDER]
Name
of Investing Entity: |
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Signature
of Authorized Signatory of Investing Entity: |
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Name
of Authorized Signatory: |
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Title
of Authorized Signatory: |
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Date: |
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EXHIBIT
B
ASSIGNMENT
FORM
(To
assign the foregoing Warrant, execute this form and supply required information. Do not use this form to exercise the Warrant to purchase
shares.)
FOR
VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to
Name: |
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(Please
Print) |
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Address: |
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(Please
Print) |
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Phone
Number: |
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Email
Address: |
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Dated:
, |
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Holder’s
Signature: |
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Holder’s
Address: |
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ANNEX
B-1
AUGUST
2024 SENIOR SECURED PROMISSORY NOTE
THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER ANY APPLICABLE STATE
SECURITIES LAWS. THEY MAY NOT BE SOLD, PLEDGED, TRANSFERRED, ASSIGNED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
AN EXEMPTION THEREFROM UNDER THE PROVISIONS OF THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
Up
to $2,650,000 |
August
__, 2024 |
SENIOR
SECURED PROMISSORY NOTE
For
value received, Conduit Pharmaceuticals Inc., a Delaware corporation (the “Company”), and each subsidiary of the Company
listed on the signature page hereto (together with the Company, the “Makers” and each a “Maker”),
jointly and severally, promise to pay to Nirland Limited, a company organized under the laws of Guernsey (the “Holder”),
the principal sum of up to Two Million Six Hundred Fifty Thousand Dollars ($2,650,000) (the “Maximum Principal Amount”),
inclusive of the OID (defined in Section 2 below), as may be outstanding from time to time pursuant to the terms of this Senior
Secured Promissory Note (this “Note”), together with all accrued and unpaid interest thereon as set forth below, on
August __, 2025 (the “Maturity Date”).
1.
Interest; Payments; Voluntary Prepayment. Interest on the unpaid principal balance of this Note shall accrue at the rate of twelve
percent (12%) per annum, computed based on a calendar year and actual days elapsed, and shall be payable, at the option of the Holder,
(a) monthly in arrears or (b) in a single installment at maturity. The entire unpaid principal amount then outstanding and all accrued
and unpaid interest thereon shall be due and payable on the Maturity Date. Payment of principal and interest hereunder shall be made
by wire transfer in United States Dollars to an account designated in writing by the Holder for that purpose. The Company may prepay
all or any portion of this Note without penalty or fee at any time upon ten (10) business days’ prior written notice to the Holder.
All payments of principal and interest shall be in lawful money of the United States of America. All payments shall be applied first
to accrued and unpaid interest, and thereafter to principal.
2.
Purchase Schedule; Original Issue Discount. The Holder shall purchase this Note from the Company as follows:
2.1.
Original Issue Discount. This Note includes an original issue discount of $500,000 (the “OID”).
2.2. Initial
Purchase. On the date hereof (the “Closing Date”), the Holder shall pay the Company in immediately available
United States Dollars a payment of $1,675,000 (the “Initial Purchase”) by wire transfer to an account designated
in writing by the Company; provided that such Initial Purchase may be reduced by the unpaid portion, if any, of the legal and
due diligence fee owed by the Company to the Holder in an amount not to exceed $25,000.
2.3.
Final Payment. Within two (2) business days of the date when the Resale Registration Statement (defined in Section 8 below)
becomes effective, the Holder shall pay the Company in immediately available United States Dollars a payment of $475,000 by wire transfer
to an account designated in writing by the Company.
3.
Security Interest; Seniority; Guaranty. The Makers have executed a Security Agreement (the “Security Agreement”)
in favor of the Holder on even date herewith. The obligations of the Makers to the Holder under this Note are senior to all other obligations
of the Makers and are secured by a perfected first-priority security interest in the Collateral (as defined in the Security Agreement)
in favor of the Maker pursuant to the terms set forth in the Security Agreement.
4.
Use of Proceeds. The proceeds received by the Company pursuant to the issuance of this Note shall be used for working capital
and other general corporate purposes.
5. Representations and Warranties.
Each Maker hereby represents and warrants to the Holder on the date hereof as follows:
5.1.
Existence. Each Maker is a duly formed, validly
existing and in good standing under the laws of its jurisdiction of organization.
5.2.
Power and Authority. Each Maker has the requisite power and
authority, and the legal right, to execute and deliver this Note and the Security Agreement and to perform its obligations hereunder
and thereunder.
5.3.
Authorization; Execution and Delivery. The execution and delivery of this Note and the Security Agreement by each Maker and the
performance of its obligations hereunder and thereunder have been duly authorized by all necessary corporate action in accordance with
all applicable laws. Each Maker has duly executed and delivered this Note and the Security Agreement.
5.4.
Enforceability. This Note and the Security Agreement are valid,
legal, and binding obligations of each Maker, enforceable against each Maker in accordance with its terms, except as enforceability may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting the enforcement of creditors’
rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law).
5.5.
No Approvals. No consent or authorization of, filing with, notice to, or other act by, or in respect of, any governmental authority
or any other person is required in order for each Maker to execute, deliver, or perform any of its obligations under this Note or the
Security Agreement.
5.6.
No Violations. The execution and delivery of this Note and the Security Agreement and the consummation by each Maker of the transactions
contemplated hereby and thereby do not and will not (a) violate any law applicable to such Maker or by which any of its properties or
assets may be bound; or (b) constitute a default under any material agreement or contract by which such Maker may be bound.
6.
Mandatory Prepayments. In the event a Maker completes any public or private equity or debt financing, including without limitation,
any variable rate transactions, at-the-market offerings, equity lines of credit, preferred equity, convertible debt and other loans or
any type of securities offerings (each an “Offering”), then the Company shall be required to mandatorily prepay, any
amounts that may be then outstanding under this Note, within two (2) business days following the closing of such Offering, in an amount
of no less than 75% of the net proceeds received from such Offering (excluding any proceeds funded by the Holder or any affiliate of
the Holder pursuant to the exercise of its participation right under Section 7 or otherwise).
7.
Right of First Refusal. The Company hereby grants the Holder a right of first refusal for so long as this Note is outstanding
to participate and provide the proceeds to be received by the Company from any proposed Offering, excluding any proposed Offering that
is marketed as a “public offering” pursuant to the rules and regulations of The Nasdaq Stock Market LLC. The Company shall
submit a fully executed term sheet setting forth the terms, conditions and pricing of any such proposed Offering. The Holder shall have
the right, but not the obligation, to participate in such proposed Offering in an amount up to 100% of such proposed Offering on the
same terms, conditions and pricing set forth in term sheet. The Holder shall have seven (7) business days following receipt of such term
sheet to exercise its right of first refusal by committing to such participation in a writing setting forth the amount and terms of its
participation, which terms must be at least as favorable as those set forth in the term sheet. If the Holder does not deliver an executed
commitment to the Company in accordance with the preceding sentence within seven (7) business days of receiving the term sheet for the
proposed Offering, the Holder shall be deemed to have declined its right to participate in the proposed Offering.
8.
Closing Fee; Resale Registration. In connection with the issuance of this Note, the Company shall pay the Holder a one-time nonrefundable
closing fee through the issuance of 12,500,000 shares (the “Shares”) of the Company’s common stock, par value
$0.0001 per share (“Common Stock”). The Company shall use its commercially reasonable efforts to register for resale
the Shares as follows:
8.1.
Defined Terms. For purposes of this Section 8, the following capitalized terms are defined as follows:
(a)
the term “Resale Registration Statement” shall mean a registration statement on Form S-3 (or,
if Form S-3 is not then available to the Company, on such other form as is then available
to the Company) to register for resale the Registrable Shares required to be filed
by Section 8.1(b) below, and shall include any preliminary prospectus, final prospectus, exhibit or amendment included in or relating
to such registration statements;
(b)
the term “Registrable Shares” means the Shares; provided, however, that the Shares shall cease to be a Registrable
Share upon the earliest to occur of the following: (i) a Resale Registration Statement registering such security under the Securities
Act of 1933 (the “Securities Act”) has been declared or becomes effective and such security has been sold or otherwise
transferred by the Holder pursuant to and in a manner contemplated by such effective Resale Registration Statement; (ii) such security
is sold pursuant to Rule 144 under circumstances in which any legend borne by such security relating to restrictions on transferability
thereof, under the Securities Act or otherwise, is removed by the Company; (iii) the first date such security is eligible to be sold
pursuant to Rule 144 without any limitation as to volume of sales, holding period and without Holder complying with any method of sale
requirements or notice requirements under Rule 144; or (iv) such security shall cease to be outstanding following its issuance; and
(c)
the term “Effectiveness Deadline” means the 60th day following the Closing Date (or, in the event the United
States Securities and Exchange Commission (the “SEC”) reviews or has written or verbal comments to the Resale Registration
Statement, the 90th day following the Closing Date); provided, however, that in the event the Company is notified
by the SEC that the Resale Registration Statement will not be reviewed or is no longer subject to further review and comments, the Effectiveness
Deadline shall be no later than the fifth (5th) business day following the date of such notification.
8.2.
Registration Procedures. Provided that the Company is qualified for the use of a Resale Registration Statement, the Company
shall file promptly (and, in any event, within 30 days of the Closing Date (the “Filing Deadline”)) a Resale Registration
Statement providing for the registration of, and the sale on a continuous or delayed basis of, all Registrable Shares then held by the
Holder pursuant to Rule 415 under the Securities Act. Upon filing the Resale Registration Statement, the Company shall use its best efforts
to cause such Resale Registration Statement to be declared effective by the Effectiveness Deadline, keep such Resale Registration Statement
effective with the SEC at all times, re-file such Resale Registration Statement upon its expiration, and cooperate in any amendment or
supplementation of the prospectus related to the Resale Registration Statement as may be reasonably requested by the Company or as otherwise
required, until such time as all Registrable Shares that could be sold under the Resale Registration Statement have been sold or are
no longer outstanding.
8.3.
Rule 415; Cutback. If the SEC prevents the Company from including any or all of the Registrable Shares in a Resale Registration
Statement due to limitations on the use of Rule 415 under the Securities Act or requires the Holder to be named as an “underwriter,”
the Company shall use its commercially reasonable efforts to persuade, consistent with applicable law, the SEC that the offering contemplated
by the Resale Registration Statement is a valid secondary offering and not an offering “by or on behalf of the registrant”
as described in Rule 415 and that the Holder is not an “underwriter.” In the event that, despite the Company’s commercially
reasonable efforts and compliance with the terms of this Section 8.3, the SEC refuses to alter its position, the Company shall
(i) remove from the Resale Registration Statement only such portion of the Registrable Shares (the “Cut Back Shares”)
and/or (ii) agree to such restrictions and limitations on the registration and resale of the Registrable Shares, in each of (i) and (ii),
as the SEC requires to assure the Company’s compliance with the requirements of Rule 415 (collectively, the “SEC Restrictions”);
provided, however, that the Company shall not agree to name the Holder as an “underwriter” in such Resale Registration
Statement without the prior written consent of the Holder. The Holder acknowledges that it shall not have suffered any losses as to any
Cut Back Shares until the date that is five (5) trading days following the date that the Company is eligible to bring effective the registration
of such Cut Back Shares in accordance with any SEC Restrictions (such date, the “Restriction Termination Date” of
such Cut Back Shares). From and after the Restriction Termination Date applicable to any Cut Back Shares, all of the provisions of this
Section 8 shall again be applicable to such Cut Back Shares; provided, however, that the Filing Deadline for the Resale
Registration Statement including such Cut Back Shares shall be ten (10) trading days after such Restriction Termination Date, and the
Company shall use its commercially reasonable efforts to cause such Resale Registration Statement to become effective as promptly as
practicable, but in any event, by the Effectiveness Deadline (provided, however, that for purposes of a Resale Registration Statement
registering such Cut Back Shares, references to the “Closing Date” contained in the definition of “Effectiveness Deadline”
shall instead be to the “Restriction Termination Date”). Any failure by the Company to file a Resale Registration Statement
by the Filing Deadline or to cause such Resale Registration Statement to become effective by the Effectiveness Deadline shall not otherwise
relieve the Company of its obligations to file or cause to become effective the Resale Registration Statements as set forth in this Section
8.
8.4.
Prospectus Suspension. The Holder acknowledges that there may be times when the Company must suspend the use of the prospectus
forming a part of the Resale Registration Statement until such time as an amendment to the Resale Registration Statement has been filed
by the Company and declared effective by the SEC, or until such time as the Company has filed an appropriate report with the SEC pursuant
to the Securities Exchange Act of 1934 (the “Exchange Act”). The Holder hereby covenants that it will not sell any
Registrable Shares pursuant to said prospectus during the period commencing at the time at which the Company gives the Holder notice
of the suspension of the use of said prospectus and ending at the time the Company gives the Holder notice that the Holder may thereafter
effect sales pursuant to said prospectus; provided, (i) that such suspension periods shall in no event exceed (A) on more than
two occasions, a period of more than thirty (30) consecutive trading days or (B) more than an aggregate total of sixty (60) trading days,
in each case in any 12 (twelve) month period, and (ii) the Company’s board of directors has reasonably determined that, in order
for such Resale Registration Statement not to contain a material misstatement or omission, an amendment thereto would be needed to include
information that would at that time not otherwise be required in a current, quarterly or annual report under the Exchange Act.
9.
Other Covenants. For so long as the amount outstanding under this Note exceeds 25% of the Maximum Principal Amount, the Makers
covenant as follows:
9.1.
Without the prior written consent of the Holder, the Company shall not enter into any Variable Rate Transaction unless this Note is paid
in full in connection with such Variable Rate Transaction. For purposes of this Section 9.1, “Variable Rate Transaction”
means a transaction in which a Maker issues or sells any equity or debt securities that are convertible into, exchangeable or exercisable
for, or include the right to receive additional shares of Common Stock at a conversion price, exercise price, exchange rate or other
price that is based upon and/or varies with the trading prices of or quotations for the Company’s shares of Common Stock at any
time after the initial issuance of such equity or debt securities.
9.2.
The Company will not issue any shares of capital stock to their officers, directors, employees or any other related parties except (a)
as part of a bona fide equity financing to which the Holder has consented or (b) pursuant to an equity incentive plan or similar plan
approved by the Company’s board of directors.
10.
Events of Default. The term “Event of Default,” whenever used herein, shall mean any of the following:
10.1.
The Makers fail to make any payment to the Holder when due and payable hereunder and such nonpayment continues for five (5) business
days;
10.2.
Any Maker is in violation of any covenant, representation or warranty contained herein (other than the covenant to pay when due any amounts
due hereunder) or under the Security Agreement, and such violation continues for thirty (30) days after notice from the Holder of such
violation;
10.3.
Any Maker enters into an assignment for the benefit of creditors generally, applies for the appointment of a trustee or receiver for
all or part of its assets or properties or commences any proceedings under any bankruptcy, reorganization, arrangement, insolvency, dissolution
or other liquidation law of any jurisdiction (or the Company’s board of directors approves any of the foregoing actions); or any
such application is filed, or any such proceedings are commenced, against any Maker, and such Maker indicates its approval, consent or
acquiescence thereto; or an order is entered appointing such trustee or receiver, or adjudicating such Maker bankrupt or insolvent, or
approving the petition in any such proceedings, and such order remains in effect for sixty (60) days.
11.
Remedies.
11.1.
If an Event of Default described in Section 10.1 or 10.2 above occurs, the Holder may declare the entire unpaid principal
amount then outstanding and all accrued and unpaid interest thereon to be immediately due and payable, and such principal and interest
shall thereupon immediately become due and payable without presentment, notice, protest or demand of any kind (all of which are expressly
waived by the Makers), and the Holder may take any and all actions available to it, at law or in equity, to collect and otherwise enforce
this Note.
11.2.
If an Event of Default described in Section 10.3 above occurs, the entire unpaid principal amount then outstanding and all accrued
and unpaid interest thereon shall immediately become due and payable with no action on the part of the Holder or any other party, and
such principal and interest shall thereupon immediately become due and payable without presentment, notice, protest or demand of any
kind (all of which are expressly waived by the Makers), and the Holder may take any and all actions available to it, at law or in equity,
to collect and otherwise enforce this Note.
11.3.
Following an Event of Default and during the continuance thereof, the interest rate shall be increased to eighteen percent (18%) or to
the maximum extent permitted by applicable law.
12.
Severability. If any one or more of the provisions of this Note shall for any reason be held to be invalid, illegal or unenforceable
in any respect, in whole or in part, or if any one or more of the provisions of this Note operate or would prospectively operate to invalidate
this Note, then in either of those events, such provision or provisions only shall be deemed null and void and shall not affect any other
provision of this Note, and the remaining provisions of this Note shall remain operative and in full force and effect and shall in no
way be affected, prejudiced or disturbed thereby.
13.
Waiver of Notice. Each Maker hereby waives presentment, demand, notice of demand, protest, notice of protest and notice of nonpayment
and any other notice required to be given under the law to such Maker, in connection with the delivery, acceptance, performance, default
or enforcement of this Note.
14.
Amendments and Waivers. This Note may not be amended or superseded except through a written document signed by the Holder and
each Maker. The observance of any term of this Note may be waived only upon the written consent of the party entitled to the benefit
of the provision proposed to be waived. Each Maker agrees that any failure to act or failure to exercise any right or remedy on the part
of the Holder shall not in any way affect or impair the obligations of the Makers or be construed as a waiver by the Holder of, or otherwise
affect, any of the Holder’s rights under this Note.
15.
Headings. The headings of the various sections and subsections
herein are for reference only and shall not define, modify, expand, or limit any of the terms or provisions hereof.
16.
Governing Law; WAIVER OF JURY TRIAL. This Note shall be governed by and construed in accordance with the laws of the State of
Delaware without regard to principles of choice of law or conflict of law. EACH PARTY HERETO WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS NOTE.
17.
Notices. All notices, requests, demands, and other communications to be delivered hereunder shall be in writing and shall be delivered
by hand or mailed, by recognized overnight mail services or registered or certified mail, postage prepaid, to the address specified for
such party on the signature page hereto.
[signature
page follows]
IN
WITNESS WHEREOF, the parties have executed this Note as of the date first above written.
CONDUIT PHARMACEUTICALS INC. |
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as the Company |
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By: |
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Name: |
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Title: |
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CONDUIT UK MANAGEMENT LTD. |
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as a subsidiary of the Company |
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By: |
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Name: |
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Title: |
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AGREED AND ACKNOWLEDGED |
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FOR PURPOSES OF SECTION 8: |
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NIRLAND LIMITED |
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as the Holder |
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By: |
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Name: |
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Title: |
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[Signature
Page to Senior Secured Promissory Note]
ANNEX
B-2
SECURITY
AGREEMENT
This
Security Agreement (this “Agreement”) is dated as of August 6, 2024, by Conduit Pharmaceuticals Inc., a Delaware
corporation (the “Grantor”) in favor of Nirland Limited, a company organized under the laws of Guernsey (the “Secured
Party”).
W
I T N E S S E T H:
WHEREAS,
concurrently with the execution of this Agreement, the Grantor issued and delivered to the Secured Party that certain Senior Secured
Promissory Notes of even date herewith (the “Secured Promissory Note”);
WHEREAS,
it is a condition precedent to the obligation of the Secured Party to purchase the Secured Promissory Note that the Grantor shall have
executed and delivered this Agreement to the Secured Party;
NOW,
THEREFORE, in consideration of the premises and to induce the Secured Party to enter into the Secured Promissory Note, the Grantor hereby
agrees with the Secured Party as follows:
Article
I - Defined Terms
Section
1.1 Definitions.
(a)
Capitalized terms used herein without definition are used as defined in the Secured Promissory Note.
(b)
Terms used herein without definition that are defined in the UCC have the meanings given to them in the UCC.
(c)
The following terms shall have the following meanings:
“Collateral”
has the meaning specified in Section 2.1.
“Excluded
Account” shall mean any deposit account, investment account, disbursement account or lockbox account which is (a) an account
used solely and exclusively for payroll, payroll taxes, pension funds, 401(k) and other employee wage and benefits payments, (b) an account
used solely and exclusively for withheld income taxes and federal, state or local employment taxes, (c) a segregated deposit account
constituting, and used exclusively as, a tax account, fiduciary account or trust account, or (d) zero balance disbursement accounts.
“Excluded
Collateral” shall mean, collectively, (a) assets in which pledges or security interests in favor of the Secured Party are prohibited
by applicable law, rule or regulation (including any requirement to obtain the consent of any governmental authority or third person,
unless such consent has been obtained) (in each case after giving effect to the applicable anti-assignment provisions of the UCC or other
applicable law or principles of equity); (b) any license or agreement or any property subject to such license or agreement, in each,
to the extent that a grant of a security interest therein would violate or invalidate such license or agreement or create a right of
termination in favor of any other party thereto or otherwise require consent thereunder from a third party (in each case after giving
effect to the applicable anti-assignment provisions of the UCC or other applicable law or principles of equity); (c) any intent-to-use
trademark application prior to the filing of a “Statement of Use” or “Amendment to Allege Use” with respect thereto,
to the extent, if any, that, and solely during the period, if any, in which, the grant of a security interest therein, or the assignment
thereof, would impair the validity or enforceability of such intent-to-use trademark application under applicable federal law; and (d)
Excluded Accounts; provided, however, that “Excluded Collateral” shall not include any proceeds, products, substitutions
or replacements of Excluded Collateral (unless such proceeds, products, substitutions or replacements would otherwise constitute Excluded
Collateral).
“Secured
Obligations” means the obligations and liabilities of the Grantor hereunder and under the Secured Promissory Note and any other
present or future indebtedness, obligations or liabilities of the Grantor to the Secured Party, whether direct or indirect, absolute
or contingent, joint or several, secured or unsecured, matured or unmatured, liquidated or unliquidated, arising under or in connection
with any agreement, instrument, document or transaction between the Grantor and the Secured Party, and any amendments, modifications,
extensions, renewals, refinancings, replacements or substitutions thereof.
“UCC”
means the Uniform Commercial Code as from time to time in effect in the State of Delaware.
Article
II - GRANT OF SECURITY INTEREST
Section
2.1 Collateral. For the purposes of this Agreement, all of the following property now owned or at any time hereafter
acquired by the Grantor or in which the Grantor now has or at any time in the future may acquire any right, title or interests is collectively
referred to as the “Collateral”:
(a)
all accounts receivable of the Grantor;
(b)
all deposit accounts of the Grantor;
(c)
all intellectual property of the Grantor;
(d)
all books and records pertaining to foregoing; and
(e)
to the extent not otherwise included, all proceeds, products, substitutions or replacements of the foregoing;
provided,
however that, notwithstanding the foregoing, no lien or security interest is hereby granted on any Excluded Collateral; provided,
further, that if and when any property shall cease to be Excluded Collateral, a lien on and security interest in such property shall
automatically be deemed granted therein.
Section
2.2 Grant of Security Interest in Collateral. The Grantor, as collateral security for the prompt and complete payment and performance
when due of the Secured Obligations, hereby pledges to the Secured Party, and grants to the Secured Party, a lien on and security interest
in, all of its right, title and interest in, to and under the Collateral.
Article
III - Representations and Warranties
To
induce the Secured Party to enter into the Secured Promissory Note, the Grantor represents and warrants the following to the Secured
Party:
Section
3.1 Title; No Other Liens; Perfection and Priority. Except for the lien granted to the Secured Party pursuant to this Agreement,
the Grantor owns each item of the Collateral (other than Excluded Collateral) free and clear of any and all liens or claims of others
and has rights in or the power to transfer the Collateral. The security interest granted pursuant to this Agreement constitutes a valid
and continuing perfected security interest in favor of the Secured Party in all Collateral (solely to the extent perfection may be achieved
under the UCC by the filing of a UCC-1 financing statement with the Secretary of State of the State of Delaware).
Article
IV – COVENANTS
The
Grantor agrees with the Secured Party as follows:
Section
4.1 Maintenance of Perfected Security Interest. The Grantor shall (i) not use or permit any Collateral to be used in violation of
any law or any policy of insurance covering the Collateral and (ii) not enter into any agreement restricting the right or ability of
the Grantor or the Secured Party to sell, assign, convey or transfer any Collateral. Grantor shall not create, incur, assume or suffer
to exist any lien, security interest, charge, encumbrance or other adverse claim on or with respect to any Collateral, except for the
lien granted to the Secured Party pursuant to this Agreement and any other liens expressly permitted by the Secured Party in writing.
The Grantor shall maintain the security interest created by this Agreement as a perfected security interest (solely to the extent perfection
may be achieved under the UCC by the filing of a UCC-1 financing statement with the Secretary of State of the State of Delaware), and
shall to take any and all actions necessary or requested by the Secured Party to perfect, protect, preserve and enforce the security
interest in the Collateral, including delivering any instruments, certificates, documents or notices, executing any agreements or amendments,
obtaining any consents or waivers, and paying any fees or taxes. Notwithstanding any other provision herein to the contrary, the Grantor
shall not be required to take any actions to perfect the security interest in any Collateral granted hereunder except filing (or authorizing
the filing of) a UCC-1 financing statement with the Secretary of State of the State of Delaware.
Article
V - Remedial Provisions
Section
5.1 UCC Remedies. During the continuance of an Event of Default (as defined in the Secured Promissory Note), the Secured Party may
exercise, in addition to all other rights and remedies granted to it in this Agreement, all rights and remedies of a secured party under
the UCC or any other applicable law. Secured Party may exercise its rights and remedies under this Agreement or any other agreement,
instrument or document between the Grantor and the Secured Party without prior notice or demand to the Grantor, except as required by
applicable law, and that the Grantor waives any right to notice or hearing prior to the Secured Party’s taking possession or control
of, or selling or otherwise disposing of, any Collateral, to the fullest extent permitted by applicable law.
Section
5.2 Accounts and Payments.
(a)
If required by the Secured Party at any time during the continuance of an Event of Default, any payment of accounts, when collected by
the Grantor, shall be promptly delivered to the Secured Party in the exact form received, duly indorsed by the Grantor to the Secured
Party. Until so turned over, such payment shall be held by the Grantor in trust for the Secured Party.
(b)
Anything herein to the contrary notwithstanding, the Grantor shall remain liable under each account. The Secured Party shall not have
any obligation or liability under any agreement giving rise to an account by reason of or arising out of this Agreement or the receipt
by the Secured Party of any payment relating thereto, and the Secured Party shall not be obligated in any manner to perform any obligation
of the Grantor under or pursuant to any agreement giving rise to an account, to make any payment, to make any inquiry as to the nature
or the sufficiency of any payment received by it or as to the sufficiency of any performance by any party thereunder, to present or file
any claim, to take any action to enforce any performance or to collect the payment of any amounts that may have been assigned to it or
to which it may be entitled at any time or times.
Section
5.3 Proceeds to be Turned over to and Held by Secured Party. After the occurrence and during the continuance of an Event of Default,
promptly upon receipt by the Grantor, all proceeds of any Collateral received by the Grantor hereunder in cash or cash equivalents be
turned over to the Secured Party in the exact form received (with any necessary endorsement).
Section
5.4 Deficiency. The Grantor shall remain liable for any deficiency if the proceeds of any sale or other disposition of any Collateral
are insufficient to pay the Secured Obligations.
Article
VI - The SECURED PARTY
Section
6.1 Authorization to File Financing Statements. The Grantor authorizes the Secured Party and its counsel and representatives, at
any time and from time to time, to file or record financing statements and amendments thereto.
Section
6.2 Duty; Obligations and Liabilities. The Secured Party’s sole duty with respect to the custody, safekeeping and physical
preservation of the Collateral in its possession shall be to deal with it in the same manner as the Secured Party deals with similar
property for its own account. The powers conferred on the Secured Party hereunder are solely to protect the Secured Party’s interest
in the Collateral and shall not impose any duty upon the Secured Party to exercise any such powers. The Secured Party shall not be liable
for failure to demand, collect or realize upon any Collateral or for any delay in doing so or shall be under any obligation to sell or
otherwise dispose of any Collateral upon the request of the Grantor or any other person or to take any other action whatsoever with regard
to any Collateral. The Secured Party shall be accountable only for amounts that it receives as a result of the exercise of such powers,
and shall not be responsible to the Grantor for any act or failure to act hereunder, except for its own gross negligence or willful misconduct
as finally determined by a court of competent jurisdiction. At any time while the Secured Promissory Note remains outstanding, the Secured
Party shall have the right to appoint a collateral agent, to act on its behalf with respect to this Agreement and any other rights or
duties the Secured Party may have, and that any such appointed collateral agent shall have all powers, rights, duties and obligations
as though they were an original party to this Agreement and acting in such capacity, and on behalf of the Secured Party.
Article
VII – Miscellaneous
Section
7.1 No Waiver by Course of Conduct. The Secured Party shall not by any act, delay, indulgence, omission or otherwise be deemed to
have waived any right or remedy hereunder or to have acquiesced in any Event of Default. No failure to exercise, nor any delay in exercising,
on the part of the Secured Party, any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise
of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power
or privilege. A waiver by the Secured Party of any right or remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy that such Secured Party would otherwise have on any future occasion.
Section
7.2 Amendments in Writing. None of the terms or provisions of this Agreement may be waived, amended, supplemented or otherwise modified
except in a writing duly executed by the Secured Party and the Grantor.
Section
7.3 Notices. All notices, requests, demands and other communications (each of which shall be in writing) shall be delivered to the
parties hereto, as applicable, at the addresses and in the manner set forth in the Secured Promissory Note and to the notice information
included on the signature page hereto.
Section
7.4 Successors and Assigns. This Agreement shall be binding upon the successors and assigns of the Grantor and shall inure to the
benefit of the Secured Party and its successors and assigns; provided, however, that the Grantor may not assign, transfer or delegate
any of its rights or obligations under this Agreement without the prior written consent of the Secured Party.
Section
7.5 Counterparts. This Agreement may be executed in any number of counterparts and by different parties in separate counterparts,
each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.
Signature pages may be detached from multiple separate counterparts and attached to a single counterpart. Delivery of an executed signature
page of this Agreement by facsimile transmission or by electronic transmission shall be as effective as delivery of a manually executed
counterpart hereof.
Section
7.6 Severability. Any provision of this Agreement being held illegal, invalid or unenforceable in any jurisdiction shall not affect
any part of such provision not held illegal, invalid or unenforceable, any other provision of this Agreement or any part of such provision
in any other jurisdiction.
Section
7.7 Governing Law. The laws of the State of Delaware shall govern all matters arising out of, in connection with or relating to this
Agreement, including, without limitation, its validity, interpretation, construction, performance and enforcement.
IN
WITNESS WHEREOF, the undersigned has caused this Security Agreement to be duly executed and delivered as of the date first above written.
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CONDUIT
PHARMACEUTICALS INC., as the Grantor |
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By: |
/s/
David Tapolczay |
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Name: |
David
Tapolczay |
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Title: |
CEO
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NIRLAND
LIMITED, as the Secured Party |
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By:
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/s/
Stefano Grace |
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Name: |
Stefano
Grace |
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Title: |
Authorized
Representative
Address
for Notices:
sgrace@pelhammgt.com
ssimargool@eventfort.com
Nirland
Limited
The
Old Stables, Rue A L’Or
St
Peter Port, Guernsey GY1 1Qg
Channel
Islands, British Isles |
[Signature
Page to Security Agreement]
ANNEX
B-3
DEBT
AMENDMENT
CONDUIT
PHARMACEUTICALS INC.
AMENDMENT
TO SENIOR SECURED PROMISSORY NOTE AND SECURITY AGREEMENT
This
Amendment to the Secured Promissory Note and Security Agreement (this “Amendment”), dated as of October 31, 2024 (the
“Amendment Effective Date”), hereby amends each of (i) the Senior Secured Promissory Note (the “Note”)
issued by Conduit Pharmaceutical Inc. (“Company”), and each subsidiary of the Company listed on the signature page
hereto (together with the Company, the “Makers” and each a “Maker”) to Nirland Limited (the “Holder”)
in the maximum aggregate principal amount of $2,650,000 dated as of August 6, 2024, and (ii) the Security Agreement (the “Security
Agreement”), dated as of August 6, 2024, by the Company in favor of the Maker. Capitalized terms not otherwise defined herein
have the meanings ascribed them in the Note.
By
signing below, the Makers and the Holder agree as follows:
Section
1 of the Note is hereby amended in its entirety as follows:
| 1. | Interest;
Payments; Voluntary Prepayment. Interest on the unpaid principal balance of this Note
shall accrue at the rate of twelve percent (12%) per annum, computed based on a calendar
year and actual days elapsed, and shall be payable, at the option of the Holder, (a) monthly
in arrears or (b) in a single installment at maturity. The entire unpaid principal amount
then outstanding and all accrued interest hereunder shall be due and payable on the Maturity
Date. Payment of principal and interest hereunder shall be made by wire transfer in United
States Dollars to an account designated in writing by the Holder for that purpose. The Company
may prepay all or any portion of this Note without penalty or fee at any time upon ten (10)
business days’ prior written notice to the Holder. All payments of principal and interest
shall be in lawful money of the United States of America or, at the request of the Holder,
in shares of the Company’s Common Stock pursuant to Section 18. All payments
shall be applied first to accrued and unpaid interest, and thereafter to principal. |
Sections
6 and 7 of the Note are each hereby deleted.
Section
18 of the Note is hereby added to the Note as follows:
| 18. | Conversion
of Note. At any time after the Amendment Effective Date, this Note shall be convertible
into validly issued, fully paid and non-assessable shares of Common Stock (the “Underlying
Securities”), on the terms and conditions set forth in this Section 18. |
| 18.1. | Conversion
Right. Subject to the provisions of Section 18.4, at any time or times on or after
the date hereof, the Holder shall be entitled to convert any portion of the outstanding and
unpaid Conversion Amount (as defined below) into validly issued, fully paid and non-assessable
shares of Common Stock in accordance with Section 18.3, at the Conversion Rate (as
defined below). The Makers shall not issue any fraction of a share of Common Stock upon any
conversion. If the issuance would result in the issuance of a fraction of a share of Common
Stock, the Makers shall round such fraction of a share of Common Stock up to the nearest
whole share. The Makers shall pay any and all transfer, stamp, issuance and similar taxes,
costs and expenses (including, without limitation, fees and expenses of the Transfer Agent
(as defined below)) that may be payable with respect to the issuance and delivery of Common
Stock upon conversion of any Conversion Amount. |
| 18.2. | Conversion
Rate. The number of shares of Common Stock issuable upon conversion of any Conversion
Amount pursuant to Section 18.1 shall be determined by dividing (x) such Conversion
Amount by (y) the Conversion Price (the “Conversion Rate”). |
| (i) | “Conversion
Amount” means the two and one quarter times the sum of (x) portion of the principal
to be converted, redeemed or otherwise with respect to which this determination is being
made and (y) all accrued and unpaid interest with respect to such portion of the principal
amount, if any. |
| | |
| (ii) | “Conversion
Price” means, as of any Conversion Date or other date of determination, $0.10,
subject to adjustment as provided herein. |
| 18.3. | Mechanics
of Conversion. To convert any Conversion Amount into shares of Common Stock on any date
(a “Conversion Date”), the Holder shall deliver (whether via facsimile,
electronic mail or otherwise), for receipt on or prior to 11:59 p.m., New York time, on such
date, a copy of an executed notice of conversion in the form attached hereto as Exhibit
I (the “Conversion Notice”) to the Company. Within two (2) trading
days following a conversion of this Note as aforesaid, the Holder shall surrender this Note
to a nationally recognized overnight delivery service for delivery to the Company. On or
before the first (1st) trading day following the date of receipt of a Conversion Notice,
the Makers shall transmit by facsimile or electronic mail an acknowledgment of confirmation
and representation as to whether such shares of Common Stock may then be resold pursuant
to Rule 144 or an effective and available registration statement, of receipt of such Conversion
Notice to the Holder and the Makers’ transfer agent (the “Transfer Agent”)
which confirmation shall constitute an instruction to the Transfer Agent to process such
Conversion Notice in accordance with the terms herein. On or before the second (2nd) trading
day following the date on which the Makers have received a Conversion Notice (or such earlier
date as required pursuant to the Exchange Act or other applicable law, rule or regulation
for the settlement of a trade initiated on the applicable Conversion Date of such shares
of Common Stock issuable pursuant to such Conversion Notice) (the “Share Delivery
Deadline”), the Maker shall (1) provided that the Transfer Agent is participating
in The Depository Trust Company’s (“DTC”) Fast Automated Securities
Transfer Program, credit such aggregate number of shares of Common Stock to which the Holder
shall be entitled pursuant to such conversion to the Holder’s or its designee’s
balance account with DTC through its Deposit/Withdrawal at Custodian system or (2) if the
Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program,
upon the request of the Holder, issue and deliver (via reputable overnight courier) to the
address as specified in the Conversion Notice, a certificate, registered in the name of the
Holder or its designee, for the number of shares of Common Stock to which the Holder shall
be entitled pursuant to such conversion. If this Note is physically surrendered for conversion
and the outstanding Principal of this Note is greater than the Principal portion of the Conversion
Amount being converted, then the Maker shall as soon as practicable and in no event later
than two (2) business days after receipt of this Note and at its own expense, issue and deliver
to the Holder (or its designee) a new Note representing the outstanding Principal Amount
not converted. The Person (as defined below) or Persons entitled to receive the shares of
Common Stock issuable upon a conversion of this Note shall be treated for all purposes as
the record holder or holders of such shares of Common Stock on the Conversion Date. |
| 18.4. | Limitations
on Conversions. The Makers shall not effect the conversion of any portion of this Note,
and the Holder shall not have the right to convert any portion of this Note pursuant to the
terms and conditions of this Note and any such conversion shall be null and void and treated
as if never made, to the extent that after giving effect to such conversion, the Holder together
with the other Attribution Parties collectively would beneficially own in excess of 9.99%
(the “Maximum Percentage”) of the shares of Common Stock outstanding immediately
after giving effect to such conversion. For purposes of the foregoing sentence, the aggregate
number of shares of Common Stock beneficially owned by the Holder and the other Attribution
Parties shall include the number of shares of Common Stock held by the Holder and all other
Attribution Parties plus the number of shares of Common Stock issuable upon conversion
of this Note with respect to which the determination of such sentence is being made, but
shall exclude shares of Common Stock which would be issuable upon (A) conversion of the remaining,
nonconverted portion of this Note beneficially owned by the Holder or any of the other Attribution
Parties and (B) exercise or conversion of the unexercised or nonconverted portion of any
other securities of the Maker (including, without limitation, any convertible notes or convertible
preferred stock or warrants) beneficially owned by the Holder or any other Attribution Party
subject to a limitation on conversion or exercise analogous to the limitation contained in
this Section 18.4. For purposes of this Section 18.4, beneficial ownership
shall be calculated in accordance with Section 13(d) of the Exchange Act. For purposes of
determining the number of outstanding shares of Common Stock the Holder may acquire upon
the conversion of this Note without exceeding the Maximum Percentage, the Holder may rely
on the number of outstanding shares of Common Stock as reflected in (x) the Company’s
most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on
Form 8-K or other public filing with the SEC, as the case may be, (y) a more recent public
announcement by the Company or (z) any other written notice by the Company or the Transfer
Agent, if any, setting forth the number of shares of Common Stock outstanding (the “Reported
Outstanding Share Number”). If the Makers receive a Conversion Notice from the
Holder at a time when the actual number of outstanding shares of Common Stock is less than
the Reported Outstanding Share Number, the Company shall notify the Holder in writing of
the number of shares of Common Stock then outstanding and, to the extent that such Conversion
Notice would otherwise cause the Holder’s beneficial ownership, as determined pursuant
to this Section 18.4, to exceed the Maximum Percentage, the Holder must notify the
Makers of a reduced number of shares of Common Stock to be purchased pursuant to such Conversion
Notice. For any reason at any time, upon the written or oral request of the Holder, the Company
shall within one (1) business day confirm orally and in writing or by electronic mail to
the Holder the number of shares of Common Stock then outstanding. In any case, the number
of outstanding shares of Common Stock shall be determined after giving effect to the conversion
or exercise of securities of the Maker, including this Note, by the Holder and any other
Attribution Party since the date as of which the Reported Outstanding Share Number was reported.
In the event that the issuance of shares of Common Stock to the Holder upon conversion of
this Note results in the Holder and the other Attribution Parties being deemed to beneficially
own, in the aggregate, more than the Maximum Percentage of the number of outstanding shares
of Common Stock (as determined under Section 13(d) of the Exchange Act), the number of shares
so issued by which the Holder’s and the other Attribution Parties’ aggregate
beneficial ownership exceeds the Maximum Percentage (the “Excess Shares”)
shall be deemed null and void and shall be cancelled ab initio, and the Holder shall
not have the power to vote or to transfer the Excess Shares. Upon delivery of a written notice
to the Maker, the Holder may from time to time increase (with such increase not effective
until the 61st day after delivery of such notice) or decrease the Maximum Percentage to any
other percentage not in excess of 9.99% as specified in such notice; provided that (i) any
such increase in the Maximum Percentage will not be effective until the 61st day after such
notice is delivered to the Makers and (ii) any such increase or decrease will apply only
to the Holder and the other Attribution Parties. For purposes of clarity, the shares of Common
Stock issuable pursuant to the terms of this Note in excess of the Maximum Percentage shall
not be deemed to be beneficially owned by the Holder for any purpose including for purposes
of Section 13(d) or Rule 16a-1(a)(1) of the Exchange Act. No prior inability to convert this
Note pursuant to this paragraph shall have any effect on the applicability of the provisions
of this paragraph with respect to any subsequent determination of convertibility. The provisions
of this paragraph shall be construed and implemented in a manner otherwise than in strict
conformity with the terms of this Section 18.4 to the extent necessary to correct
this paragraph (or any portion of this paragraph) which may be defective or inconsistent
with the intended beneficial ownership limitation contained in this 18.4 or to make changes
or supplements necessary or desirable to properly give effect to such limitation. The limitation
contained in this paragraph may not be waived and shall apply to a successor holder of this
Note. |
For
purposes of the Note and this Amendment:
“Affiliate”
means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common control
with, such Person, it being understood for purposes of this definition that “control” of a Person means the power directly
or indirectly either to vote 10% or more of the stock having ordinary voting power for the election of directors of such Person or direct
or cause the direction of the management and policies of such Person whether by contract or otherwise.
“Attribution
Parties” means, collectively, the following Persons and entities: (i) any investment vehicle, including, any funds, feeder
funds or managed accounts, currently, or from time to time after the date of the issuance of the Note or the Amendment Effective Date,
directly or indirectly managed or advised by the Holder’s investment manager or any of its Affiliates or principals, (ii) any direct
or indirect Affiliates of the Holder or any of the foregoing, (iii) any Person or entity acting or who could be deemed to be acting as
a Group together with the Holder or any of the foregoing and (iv) any other Persons or entities whose beneficial ownership of the Company’s
Common Stock would or could be aggregated with the Holder’s and the other Attribution Parties for purposes of Section 13(d) of
the Exchange Act. For clarity, the purpose of the foregoing definition is to subject collectively the Holder and all other Attribution
Parties to the Maximum Percentage.
“Group”
means a “group” as that term is used in Section 13(d) of the Exchange Act and as defined in Rule 13d-5 thereunder.
“Person”
means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization,
any other entity or a government or any department or agency thereof.
Section
19 of the Note is hereby added to the Note as follows:
| 19. | New
Resale Registration Rights. As expeditiously as possible, and in no event later than
7 days, after the Amendment Effective Date, the Company shall file a registration statement
on Form S-3 (or, in the event that the Company is not eligible to file a registration statement
on Form S-3, a registration statement on Form S-1) (the “New Resale Registration
Statement”) covering the resale by the Holder of the Underlying Securities on a
delayed or continuous basis and shall use its commercially reasonable efforts to have such
New Resale Registration Statement declared effective as soon as practicable after the filing
thereof. The Company shall maintain the effectiveness of the New Resale Registration Statement
or a replacement registration statement, including filing any amendments, supplements or
new registration statements as may be necessary to allow the Holder to sell the Underlying
Securities until the Holder is able to sell such shares without registration under Rule 144
(or any successor provision or rule) under the Securities Act of 1933, as amended (the “Securities
Act”) (but with no volume or other restrictions or limitations, including as to
manner or timing of sale). |
Section
20 of the Note is hereby added to the Note as follows:
| 20. | Representations
and Warranties of Holder. The Holder hereby represents and warrants to the Maker as of
the Amendment Effective Date and as of each Conversion Date as follows: |
| 20.1. | Power
and Authority. The Holder has the full power, authority and/or capacity to enter into
this Amendment and its agreement to be bound by the provisions hereof constitutes its valid
and legally binding obligation, enforceable in accordance with its terms. |
| | |
| 20.2. | Purchase
Entirely for Own Account. This Note has, and the Underlying Securities issued upon a
conversion of this Note have, been purchased by the Holder for its own account, not as a
nominee or agent and not with a view to the resale or distribution of any part thereof. The
Holder has no present intention of selling, granting any participation in, or otherwise distributing
the same. The Holder does not have any contract, undertaking, agreement or arrangement with
any party to sell, transfer or grant participation to any party with respect to the Underlying
Securities. |
| | |
| 20.3. | Disclosure
of Information. The Holder received all of the information it requested in connection
with its purchase of the Underlying Securities. The Holder has had an opportunity to ask
questions of, and receive answers from, the Company and to consult its own legal, tax, and
other advisors, regarding the information provided and the terms and conditions of the offering
of the Underlying Securities. |
| | |
| 20.4. | Investment
Experience. The Holder can bear the economic risk of its investment and has the knowledge
and experience in financial or business matters to, and is capable of, evaluating the merits
and risks of the investment in the Underlying Securities. |
| 20.5. | Restricted
Securities. The Holder understands that the Underlying Securities are characterized as
“restricted securities” under the federal securities laws inasmuch as they are
being acquired from the Company in a transaction not involving a public offering, and that
under such laws and applicable regulations such securities may be resold without registration
under the Securities Act, only in certain limited circumstances. |
| | |
| 20.6. | Accredited
Investor. The Holder is an accredited investor as such term is defined in the rules promulgated
pursuant to the Securities Act. The Holder has been advised that this Note and the Underlying
Securities have not been registered under the Securities Act, or any state securities laws
and, therefore, cannot be resold unless they are registered under the Securities Act and
applicable state securities laws or unless an exemption from such registration requirements
is available. The Holder is purchasing this Note and the securities to be acquired by the
Holder hereunder for its own account for investment, not as a nominee or agent, and not with
a view to, or for resale in connection with, the distribution thereof, and the Holder has
no present intention of selling, granting any participation in, or otherwise distributing
the same. The Holder has such knowledge and experience in financial and business matters
that the Holder is capable of evaluating the merits and risks of such investment, is able
to incur a complete loss of such investment without impairing the Holder’s financial
condition and is able to bear the economic risk of such investment for an indefinite period
of time. |
| | |
| 20.7. | No
General Solicitation. Neither the Holder, nor any of its officers, directors, employees,
agents, stockholders, or partners has either directly or indirectly, including through a
broker or finder (1) engaged in any general solicitation of the Note, this Amendment, or
the Underlying Securities, or (2) published any advertisement in connection with the offer
and sale of the Note, this Amendment, or the Underlying Securities. |
The
Security Agreement shall be terminated in its entirety upon full repayment of the Note and all other Secured Obligations (as defined
in the Note).
This
Amendment is limited precisely as written and shall not (a) constitute a consent under or waiver or modification of any other term or
condition of the Note, or (b) prejudice or otherwise affect any right or privilege which Holder now has or may have in the future under
the Note. Except as expressly amended and modified hereby, the Note shall continue in full force and effect in accordance with its terms.
This
Amendment shall be governed by and construed in accordance with the laws of the State of Delaware without regard to principles of choice
of law or conflict of law. EACH PARTY HERETO WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING
OUT OF THIS AMENDMENT OR THE NOTE.
[Signature
Page Follows]
IN
WITNESS WHEREOF, the undersigned have executed this Amendment as of the date first written above.
CONDUIT
PHARMACEUTICALS INC.
as
the Company
By: |
/s/
James Bligh |
|
Name: |
James Bligh |
|
Title: |
Interim CFO |
|
CONDUIT
UK MANAGEMENT LTD.
as
a subsidiary of the Company
By: |
/s/
James Bligh |
|
Name: |
James Bligh |
|
Title: |
Director |
|
AGREED
AND ACKNOWLEDGED:
NIRLAND
LIMITED
as
the Holder
By: |
/s/
Stefano Grace |
|
Name: |
Stefano
Grace |
|
Title: |
Authorized Representative |
|
[Signature
Page to Amendment to Senior Secured Promissory Note of Conduit Pharmaceuticals Inc.]
Exhibit
I
CONVERSION
NOTICE
Reference
is made to the Senior Secured Promissory Note (as amended, the “Note”) issued by Conduit Pharmaceutical Inc. (“Company”),
and each subsidiary of the Company listed on the signature page thereto (together with the Company, the “Makers” and
each a “Maker”) to Nirland Limited (the “Holder”) in the maximum aggregate principal amount of
$2,650,000 dated as of August 6, 2024. In accordance with and pursuant to the Note, the undersigned hereby elects to convert the Conversion
Amount (as defined in the Note) of the Note indicated below into shares of Common Stock, $0.0001 par value per share (the “Common
Stock”), of the Company, as of the date specified below. Capitalized terms not defined herein shall have the meaning as set
forth in the Note.
Aggregate
principal to be converted: |
|
Aggregate
accrued and unpaid with respect to such portion of the aggregate principal and such aggregate interest to be converted: |
|
AGGREGATE
CONVERSION AMOUNT
TO BE CONVERTED: |
|
Please
confirm the following information: |
Number
of shares of Common Stock to be issued: |
|
Please
issue the Common Stock into which the Note is being converted to Holder, or for its benefit, as follows:
[_] Check
here if requesting delivery as a certificate to the following name and to the following address:
[_] Check
here if requesting delivery by Deposit/Withdrawal at Custodian as follows:
DTC
Participant: |
|
DTC
Number: |
|
Account
Number: |
|
Date:
_____________ __, ____
____________________
Name
of Registered Holder
Tax
ID:__________________
Facsimile:________________
E-mail
Address: _____________________________
ANNEX
B-4
CONDUIT
PHARMACEUTICALS INC.
SECOND
AMENDMENT TO AUGUST 2024 SENIOR SECURED PROMISSORY NOTE
This
Second Amendment to the Secured Promissory Note (this “Amendment”), dated as of November 22, 2024 (the “Amendment
Effective Date”), hereby further amends the Senior Secured Promissory Note (the “Note”) issued by Conduit
Pharmaceutical Inc. (“Company”), and each subsidiary of the Company listed on the signature page hereto (together
with the Company, the “Makers” and each a “Maker”) to Nirland Limited (the “Holder”)
in the maximum aggregate principal amount of $2,650,000 dated as of August 6, 2024, and amended on October 31, 2024. Capitalized terms
not otherwise defined herein have the meanings ascribed them in the Note.
By
signing below, the Makers and the Holder agree as follows:
Section
18 of the Note is hereby amended by amending Section 18.2 and adding the new Sections 18.5 and 18.6 as follows:
| 18.2 | Conversion
Rate. The number of shares of Common Stock issuable upon conversion of any Conversion Amount
pursuant to Section 18.1 shall be determined by dividing (x) such Conversion Amount by (y)
the Conversion Price (the “Conversion Rate”). |
(i) “Conversion
Amount” means the two and one half times the sum of (x) portion of the principal to be converted, redeemed or otherwise with
respect to which this determination is being made and (y) all accrued and unpaid interest (including default interest) with respect to
such portion of the principal amount, if any.
(ii) “Conversion
Price” means, as of any Conversion Date or other date of determination, $0.10 (or following any reverse splits that may occur
in a ratio greater than 10 to 1, the lower of such reverse split price and the market price per share at the time of the Conversion Date,
but in no event less than $1.00), subject to adjustment as provided herein and to take into account any future share splits or reverse
splits to maintain the economic equivalence of the conversion rights as at the Amendment Effective Date.
| 18.5 | Stockholder
Approval. Notwithstanding any other provision contained in this Note, other than partial
conversions that may be permitted pursuant to the rules and regulations of the Nasdaq Market
(or any successor entity), the conversion of this Note may not occur prior to receipt of
stockholder approval to provide for such conversion of this Note, and subsequent issuance
of Common Stock, pursuant to the stockholder approval rules of the Nasdaq Market. |
| 18.6 | Delay.
If the Company fails for any reason to hold a special meeting of stockholders, that includes
a proposal to allow for the full conversion of the Note, on or before January 9, 2025, then
the Company shall immediately be liable towards and pay to the Holder a contractual penalty
in the amount of $100,000 for each calendar day of delay on holding such meeting. |
This
Amendment is limited precisely as written and shall not (a) constitute a consent under or waiver or modification of any other term or
condition of the Note, or (b) prejudice or otherwise affect any right or privilege which Holder now has or may have in the future under
the Note. Except as expressly amended and modified hereby, the Note shall continue in full force and effect in accordance with its terms.
This
Amendment shall be governed by and construed in accordance with the laws of the State of Delaware without regard to principles of choice
of law or conflict of law. EACH PARTY HERETO WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING
OUT OF THIS AMENDMENT OR THE NOTE.
[Signature
Page Follows]
IN
WITNESS WHEREOF, the undersigned have executed this Amendment as of the date first written above.
CONDUIT PHARMACEUTICALS INC. |
|
as the Company |
|
|
|
|
By: |
/s/ James
Bligh |
|
Name: |
James Bligh |
|
Title: |
Interim CFO |
|
CONDUIT UK MANAGEMENT LTD. |
|
as a subsidiary of the Company |
|
|
|
|
By: |
/s/ James
Bligh |
|
Name: |
James Bligh |
|
Title: |
Director |
|
AGREED AND ACKNOWLEDGED: |
|
|
|
|
NIRLAND LIMITED |
|
as the Holder |
|
|
|
|
By: |
/s/ Stefano
Grace |
|
Name: |
Stefano Grace |
|
Title: |
Authorized Representative |
|
[Signature
Page to Second Amendment to Senior Secured Promissory Note of Conduit Pharmaceuticals Inc.]
ANNEX
C
NOVEMBER
CONVERTIBLE NOTE
NEITHER
THIS CONVERTIBLE PROMISSORY NOTE NOR THE SECURITIES THAT MAY BE ACQUIRED PURSUANT TO THIS CONVERTIBLE PROMISSORY NOTE HAVE BEEN REGISTERED
WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION
NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.
CONDUIT
PHARMACEUTICALS INC.
CONVERTIBLE
PROMISSORY NOTE
Dated:
November 25, 2024 (the “Issuance Date”)
FOR
VALUE RECEIVED, Conduit Pharmaceuticals Inc., a company organized under the laws of the State of Delaware (“Maker”
or the “Company”), promises to pay to A.G.P./Alliance Global Partners (“Holder”),
or its registered assigns, in lawful money of the United States of America (i) the sum of five million, seven hundred and thirty seven
thousand and five hundred dollars ($5,737,500) (the “Principal Amount”); and (ii) interest accrued on the unpaid
Principal Amount in accordance with Section 2. All Obligations (as defined below) under this convertible promissory note (the
“Note”) shall be due and payable on (a) the Maturity Date (as defined below) of this Note; or (b) when, upon
or after the occurrence and during the continuance of an Event of Default (as defined below), such amounts are declared due and payable
by Holder or made automatically due and payable in accordance with the terms hereof. Notwithstanding anything else to the contrary in
the Note, the Principal Amount shall be reduced on a dollar for dollar basis based on all net cash proceeds actually received by the
Holder based on the Holder’s sale of the Company’s common stock. Maker and Holder may be individually referred to herein
as a “Party” or collectively as the “Parties”.
1. Definitions.
| (a) | Preamble
and Recitals: The terms defined above are incorporated herein. |
| (b) | For
purposes of this Note, the following terms shall have the following meanings (with terms
defined in the singular having comparable meanings when used in the plural and vice versa): |
| i. | “Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls
or is controlled by or is under common control with a Person as such terms are used in and
construed under Rule 405 under the Securities Act. |
| ii. | “Business
Day” means any day other than Saturday, Sunday or a day on which banking institutions
in the State of New York are permitted or obligated by applicable law to remain closed. |
| iii. | “Common
Stock” means the Company’s Common Stock, par value $0.0001 per share. |
| iv. | “Conversion
Price” means as of the date a conversion notice is delivered pursuant to Section
8(a) or other date of determination, $0.10 (or following any reverse splits that may occur
in a ratio greater than 10 to 1, the lower of such reverse split price and the market price
per share as of the date immediately preceding the delivery of such conversion notice, but
in no event less than $1.00), subject to adjustment as provided herein and to take into account
any future share splits or reverse splits to maintain the economic equivalence of the conversion
rights as of the date of this Note. |
| v. | “Event
of Default” shall have the meaning set forth in Section 5. |
| vi. | “Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended. |
| vii. | “Holder
Optional Conversion Amount” shall have the meaning set forth in Section
8(a). |
| viii. | “Maturity
Date” means November 25, 2025. |
| ix. | “Note
Obligations” means, as of the date of measurement, the Company’s obligation
to pay the aggregate sum of (i) the outstanding unpaid Principal Amount of this Note; (ii)
all accrued and unpaid interest thereon calculated in accordance with Section 2; and
(iii) any other amounts payable hereunder with respect to this Note. |
| x. | “Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association,
joint venture, limited liability company, joint stock company, government (or an agency or
subdivision thereof) or other entity of any kind. |
| xi. | “Principal
Market” means the Nasdaq Global Market, or such other principal exchange as
the Company’s shares of Common Stock may trade. |
| xii. | “Securities”
means this Note and, as applicable, the shares of Common Stock issuable upon conversion of
the Note. |
| xiii. | “Securities
Act” means the U.S. Securities Act of 1933, as amended. |
| xiv. | “Trading
Day” means a day on which the Principal Market is open for trading. |
2. Interest.
Interest on the outstanding portion of the Principal Amount shall accrue at a rate equal to 5.5% per annum.
3. Payment.
Unless otherwise earlier converted pursuant to Section 8, the Principal Amount plus all accrued but unpaid interest shall be due and
payable to Holder on the Maturity Date.
4. Prepayment.
Upon notice to Holder, Maker may prepay this Note in whole or in part, provided that any such prepayment will be applied first
to the payment of costs and expenses due under this Note, second to interest accrued on this Note and third, if the amount of prepayment
exceeds the amount of all such costs, expenses and accrued interest, to the payment of the Principal Amount of this Note.
5. Events
of Default. The occurrence of any of the following shall constitute an “Event of Default” under this Note:
| (a) | Failure
to Pay. Maker shall fail to pay when due any principal or interest payment on the due
date hereunder or any other amount payable hereunder when due, whether at maturity or otherwise;
or |
| | |
| (b) | Voluntary
Bankruptcy or Insolvency Proceedings. Maker shall (i) apply for or consent to the appointment
of a receiver, trustee, liquidator or custodian of itself or of all or a substantial part
of its property; (ii) admit in writing its inability, to pay its debts generally as they
mature; (iii) make a general assignment for the benefit of its or any of its creditors; (iv)
be dissolved or liquidated; or (v) commence a voluntary case or other proceeding seeking
liquidation, reorganization or other relief with respect to itself or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect or consent to any
such relief or to the appointment of or taking possession of its property by any official
in an involuntary case or other proceeding commenced against it; or |
| | |
| (c) | Involuntary
Bankruptcy or Insolvency Proceedings. Proceedings for the appointment of a receiver,
trustee, liquidator or custodian of Maker or of all or a substantial part of the property
thereof, or an involuntary case or other proceedings seeking liquidation, reorganization
or other relief with respect to Maker or the debts thereof under any bankruptcy, insolvency
or other similar law now or hereafter in effect shall be commenced and an order for relief
entered or such proceeding shall not be dismissed or discharged within 60 days of commencement;
or |
| | |
| (d) | Agreements.
Maker shall fail to perform or observe in all material respects any of its covenants or agreements
in this Note or the other documents entered into between Maker and Holder and such failure
shall continue for five (5) days after Maker obtaining knowledge of such failure or receipt
by Maker from Holder of a written notice of such failure; or |
| | |
| (e) | Cross-Default.
An event of default (or any other event which with the passage of time or the giving or notice
or both would become an event of default) occurs under any other indebtedness of Maker; or |
| (f) | Repudiation
of Note. Maker shall provide at any time notice to the Holder, including by way of public
announcement, of the Maker’s intention to not honor any provision of this Note (including
requests for conversions of this Note in accordance with the terms hereof); or |
| | |
| (g) | Corporate
Authorization. Maker or any subsidiary thereof, by any act or failure to act, expressly
indicates its consent to, approval of or acquiescence in any of the actions described in
any of the clauses above or takes any corporate or other action to authorize or otherwise
for the purpose of effecting any such action; or |
| | |
| (h) | Judgment.
Any monetary judgment, writ or similar final process shall be entered or filed against the
Maker or any of its subsidiaries or any of their assets and such judgment, writ or similar
final process shall remain unvacated, unbonded or unstayed for a period of forty-five (45)
calendar days; or |
| | |
| (i) | Levy
or Lien. The occurrence of any levy upon or seizure or attachment of or lien upon any
asset of any Maker or any subsidiary thereof and any such levy, seizure or attachment shall
not be set aside, bonded or discharged within thirty (30) days after the date; or |
| | |
| (j) | Breach
of Representations or Covenants. The Maker shall have breached any representation or
warranty contained in this Note or shall fail to perform or observe any other material term,
covenant or agreement contained herein on its part to be performed or observed. |
6.
Rights of Holder upon Default. Upon the occurrence or existence of any Event of Default (other than an Event of Default described
in Sections 5(b) or 5(c)) and at any time thereafter during the continuance of such Event of Default, all outstanding Note Obligations
payable by Maker hereunder shall become immediately due and payable upon election of the Holder without presentment, demand, protest
or any other notice of any kind, all of which are hereby expressly waived. Upon the occurrence or existence of any Event of Default described
in Sections 5(b) and 5(c), immediately and without notice, all outstanding Note Obligations payable by Maker hereunder shall automatically
become immediately due and payable, without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly
waived. In addition to the foregoing remedies, upon the occurrence or existence of any Event of Default, Holder may exercise any other
right power or remedy granted to it by this Note or otherwise permitted to it by applicable law, either by suit in equity or by action
at law, or both.
7.
Payment.
| (a) | Payment.
The Maker shall pay to the Holder the Outstanding Principal Amount, plus all accrued but
unpaid interest thereon, on the Maturity Dates |
| (b) | Ownership
Cap. Notwithstanding anything to the contrary contained herein, the Holder shall not
be entitled to receive shares of Common Stock upon conversion of this Note to the extent
(but only to the extent) that such exercise or receipt would cause the Holder Group (as defined
below) to become, directly or indirectly, a “beneficial owner” (within the meaning
of Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder)
of a number of a number of shares of Common Stock which exceeds the Maximum Percentage (as
defined below) of the shares of Common Stock that are outstanding at such time. Any purported
delivery of shares of Common Stock in connection with the conversion of this Note prior to
the termination of this restriction in accordance herewith shall be void and have no effect
to the extent (but only to the extent) that such delivery would result in the Holder Group
becoming the beneficial owner of more than the Maximum Percentage of shares of Common Stock
that are outstanding at such time. If any delivery of Common Stock owed to the Holder following
conversion of this Note is not made, in whole or in part, as a result of this limitation,
the Company’s obligation to make such delivery shall not be extinguished and the Company
shall deliver shares of Common Stock as promptly as practicable after the Holder gives notice
to the Company that such delivery would not result in such limitation being triggered or
upon termination of the restriction in accordance with the terms hereof. To the extent limitations
contained in this Section 7(c) apply, the determination of whether this Note is convertible
and of which portion of this Note is convertible shall be the sole responsibility and in
the sole determination of the Holder, and the submission of a notice of conversion shall
be deemed to constitute the Holder’s determination that the issuance of the full number
of Conversion Shares requested in the notice of conversion is permitted hereunder, and the
Company shall be entitled to rely on the representations and other information set forth
in any Conversion Notice and shall not have any obligation to verify or confirm the accuracy
of such determination. For purposes of this Section 7(b), (i) the term “Maximum
Percentage” shall mean 4.99%; provided, that if at any time after the date
hereof the Holder Group beneficially owns in excess of 4.99% of the outstanding shares of
Common Stock, then the Maximum Percentage shall automatically increase to 9.99% so long as
the Holder Group owns in excess of 4.99% of the outstanding shares of Common Stock (and shall,
for the avoidance of doubt, automatically decrease to 4.99% upon the Holder Group ceasing
to own in excess of 4.99% of the outstanding shares of Common Stock); and (ii) the term “Holder
Group” shall mean the Holder plus any other Person with which the Holder is
considered to be part of a group under Section 13 of the Exchange Act or with which the Holder
otherwise files reports under Sections 13 and/or 16 of the Exchange Act. In determining the
number of shares of Common Stock outstanding at any point in time, the Holder may rely on
the number of outstanding shares of Common Stock as reflected in (x) the Company’s
most recent annual or quarterly reports filed with the Securities and Exchange Commission,
as the case may be, (y) a more recent public announcement by the Company or (z) a more recent
notice by the Company or its transfer agent to the Holder setting forth the number of shares
of Common Stock then outstanding. For any reason at any time, upon written or oral request
of the Holder, the Company shall, within one (1) Business Day of such request, confirm orally
and in writing to the Holder the number of shares of Common Stock then outstanding. The provisions
of this Section 7(b) shall be construed, corrected and implemented in a manner so as to effectuate
the intended beneficial ownership limitation herein contained. |
8. Conversion.
| (a) | Holder’s
Optional Conversion. At any time following the date there are a sufficient number of
shares of Common Stock reserved for issuance to provide for the maximum number of shares
of Common Stock issuable upon conversion of this Note and prior to the payment of the Note
Obligations in full, Holder, in its sole discretion and upon no less than three (3) business
days written notice to Maker, may elect to have all or any portion of the outstanding Principal
Amount and all interest accrued with respect to such outstanding portion of the Principal
Amount through the date that the Holder notifies in writing Maker of its intent to convert
pursuant to this Section 8(a) (such Principal Amount and accrued interest, the “Holder
Optional Conversion Amount”) converted into that number of shares of Common
Stock equal to the quotient of (a) the Holder Optional Conversion Amount divided by (b) the
Conversion Price (the “Holder’s Conversion Rights”). Notwithstanding
the foregoing, upon written notice by Holder of the intent to convert, Maker may instead
elect to pay all of the Note Obligations in full. |
| | |
| (b) | Surrender
of Note. Promptly after a conversion of all amounts due under this Note pursuant to this
Section 8, but in no event more than five (5) Business Days thereafter, Holder shall
deliver the original of this Note (or a notice to the effect that the original Note has been
lost, stolen or destroyed and an agreement acceptable to Maker whereby the Holder agrees
to indemnify Maker from any loss incurred by it in connection with this Note arising out
of any claims that the Original Note was not lost, stolen or destroyed); provided, however,
that upon Maker’s issuance of all amounts and/or shares of Common Stock required under
Section 8(a), this Note shall be deemed converted and of no further force and effect,
whether or not it is delivered for cancellation as set forth in this Section 8(c). |
| | |
| (c) | Reservation
of Common Stock. Maker covenants that all of the shares of Common Stock that shall be
so issued shall be at the time of such conversion and issuance, duly authorized, validly
issued, fully paid, and non-assessable by Maker, not subject to any preemptive rights, and
free from any taxes, liens, and charges with respect to the issue thereof. Maker has not
reserved for issuance from its duly authorized capital stock the maximum number of shares
of Common Stock issuable upon conversion of this Note. Maker shall, as soon as practicable,
undertake such actions as may be necessary to have a sufficient number of shares of Common
Stock reserved for issuance to provide for the maximum number of shares of Common Stock issuable
upon conversion of this Note. Maker shall take all such action as may be necessary to ensure
that all such shares of Common Stock may be so issued without violation of any applicable
law or regulation. |
| (d) | Fractional
Securities. No fractional shares of Common Stock shall be issued upon conversion of this
Note. In lieu of Maker issuing any fractional shares of Common Stock to Holder upon the conversion
of this Note, Maker shall round up to the nearest whole share. |
| | |
| (e) | Issuance
Taxes. The issuance of shares of Common Stock upon conversion of all or any portion of
the outstanding Note Obligations in accordance with this Section 8 shall be made without
charge to Holder for any issuance tax in respect thereof. |
| | |
| (f) | Conversion
Limitation. Notwithstanding any other provision contained in this Note, the conversion
of this Note may not occur prior to receipt of stockholder approval to provide for such conversion
of this Note, and subsequent issuance of Common Stock, pursuant to the stockholder approval
rules of the rules and regulations of the Nasdaq Stock Market. Holder. |
9. Representations
and Warranties. The Maker hereby represents and warrants as of the date of this Note, as follows:
9.1
Existence. The Maker is a company organized, validly existing and in good standing under the laws of the State of Delaware.
9.2
Power and Authority. The Maker has the power and authority, and the legal right, to execute and deliver this Note and to perform
its obligations hereunder.
9.3
Authorization; Execution; and Delivery. The execution and delivery of this Note by the Maker and the performance of its obligations
hereunder and thereunder have been duly authorized by all necessary corporate action in accordance with all applicable laws. The Maker
has duly executed and delivered this Note.
9.4
Enforceability. The Note is a valid, legal, and binding obligation of the Maker, enforceable against the Maker in accordance with
its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditors’ rights generally and by general equitable principles (whether enforcement is sought by proceedings
in equity or at law).
9.5
No Approvals. No consent or authorization of, filing with, notice to or other act by, or in respect of, any governmental authority
or any other person is required in order for the Maker to execute, deliver, or perform any of its obligations under this Note.
9.6
No Violations. The execution and delivery of this Note and the consummation by the Maker of the transactions contemplated hereby
and thereby do not and will not (a) violate any provision of the Maker’s organizational documents; (b) violate any law or order
applicable to the Maker or by which any of its properties or assets may be bound; or (c) constitute a default under any material agreement
or contract by which the Maker may be bound.
10. Registration
Rights. All shares of Common Stock issuable upon a conversion pursuant to Section 8(a) shall have the benefit of registration
rights on the terms set forth as follows:
10.1
Defined Terms. For purposes of this Section 10, the following capitalized terms are defined as follows:
(a)
the term “Resale Registration Statement” shall mean a registration statement on Form S-3 (or,
if Form S-3 is not then available to the Maker, on such other form as is then available
to the Maker) to register for resale the Registrable Shares required to be filed
by Section 10.1(b) below, and shall include any preliminary prospectus, final prospectus, exhibit or amendment included in or
relating to such registration statements;
(b)
the term “Registrable Shares” means the Shares; provided, however, that the Shares shall cease to be a Registrable
Share upon the earliest to occur of the following: (i) a Resale Registration Statement registering such security under the Securities
Act has been declared or becomes effective and such security has been sold or otherwise transferred by the Holder pursuant to and in
a manner contemplated by such effective Resale Registration Statement; (ii) such security is sold pursuant to Rule 144 under circumstances
in which any legend borne by such security relating to restrictions on transferability thereof, under the Securities Act or otherwise,
is removed by the Maker; (iii) the first date such security is eligible to be sold pursuant to Rule 144 without any limitation as to
volume of sales, holding period and without Holder complying with any method of sale requirements or notice requirements under Rule 144;
or (iv) such security shall cease to be outstanding following its issuance; and
(c)
the term “Effectiveness Deadline” means the 30th day following the Filing Date (or, in the event the United
States Securities and Exchange Commission (the “SEC”) reviews or has written or verbal comments to the Resale Registration
Statement, the 60th day following the Filing Date); provided, however, that in the event the Company is notified
by the SEC that the Resale Registration Statement will not be reviewed or is no longer subject to further review and comments, the Effectiveness
Deadline shall be no later than the fifth (5th) business day following the date of such notification.
10.2.
Registration Procedures. Provided that the Company is qualified for the use of a Resale Registration Statement, the Maker
shall file within 15 days of the date that there are sufficient authorized shares to permit the full conversion of this Note (the “Filing
Deadline”)) a Resale Registration Statement providing for the registration of, and the sale on a continuous or delayed basis
of, all Registrable Shares then held by the Holder pursuant to Rule 415 under the Securities Act. Upon filing the Resale Registration
Statement, the Maker shall use its best efforts to cause such Resale Registration Statement to be declared effective by the Effectiveness
Deadline, keep such Resale Registration Statement effective with the SEC at all times, re-file such Resale Registration Statement upon
its expiration, and cooperate in any amendment or supplementation of the prospectus related to the Resale Registration Statement as may
be reasonably requested by the Maker or as otherwise required, until such time as all Registrable Shares that could be sold under the
Resale Registration Statement have been sold or are no longer outstanding.
10.3.
Rule 415; Cutback. If the SEC prevents the Maker from including any or all of the Registrable Shares in a Resale Registration
Statement due to limitations on the use of Rule 415 under the Securities Act or requires the Holder to be named as an “underwriter,”
the Maker shall use its commercially reasonable efforts to persuade, consistent with applicable law, the SEC that the offering contemplated
by the Resale Registration Statement is a valid secondary offering and not an offering “by or on behalf of the registrant”
as described in Rule 415 and that the Holder is not an “underwriter.” In the event that, despite the Maker’s commercially
reasonable efforts and compliance with the terms of this Section 10.3, the SEC refuses to alter its position, the Maker shall
(i) remove from the Resale Registration Statement only such portion of the Registrable Shares (the “Cut Back Shares”)
and/or (ii) agree to such restrictions and limitations on the registration and resale of the Registrable Shares, in each of (i) and (ii),
as the SEC requires to assure the Maker’s compliance with the requirements of Rule 415 (collectively, the “SEC Restrictions”);
provided, however, that the Maker shall not agree to name the Holder as an “underwriter” in such Resale Registration
Statement without the prior written consent of the Holder. The Holder acknowledges that it shall not have suffered any losses as to any
Cut Back Shares until the date that is five (5) trading days following the date that the Maker is eligible to bring effective the registration
of such Cut Back Shares in accordance with any SEC Restrictions (such date, the “Restriction Termination Date” of
such Cut Back Shares). From and after the Restriction Termination Date applicable to any Cut Back Shares, all of the provisions of this
Section 10 shall again be applicable to such Cut Back Shares; provided, however, that the Filing Deadline for the Resale
Registration Statement including such Cut Back Shares shall be ten (10) trading days after such Restriction Termination Date, and the
Maker shall use its commercially reasonable efforts to cause such Resale Registration Statement to become effective as promptly as practicable,
but in any event, by the Effectiveness Deadline (provided, however, that for purposes of a Resale Registration Statement registering
such Cut Back Shares, references to the “Filing Date” contained in the definition of “Effectiveness Deadline”
shall instead be to the “Restriction Termination Date”). Any failure by the Maker to file a Resale Registration Statement
by the Filing Deadline or to cause such Resale Registration Statement to become effective by the Effectiveness Deadline shall not otherwise
relieve the Maker of its obligations to file or cause to become effective the Resale Registration Statements as set forth in this Section
10.
10.4.
Prospectus Suspension. The Holder acknowledges that there may be times when the Maker must suspend the use of the prospectus forming
a part of the Resale Registration Statement until such time as an amendment to the Resale Registration Statement has been filed by the
Maker and declared effective by the SEC, or until such time as the Maker has filed an appropriate report with the SEC pursuant to the
Exchange Act. The Holder hereby covenants that it will not sell any Registrable Shares pursuant to said prospectus during the period
commencing at the time at which the Maker gives the Holder notice of the suspension of the use of said prospectus and ending at the time
the Maker gives the Holder notice that the Holder may thereafter effect sales pursuant to said prospectus; provided, (i) that
such suspension periods shall in no event exceed (A) on more than two occasions, a period of more than thirty (30) consecutive trading
days or (B) more than an aggregate total of sixty (60) trading days, in each case in any 12 (twelve) month period, and (ii) the Maker’s
board of directors has reasonably determined that, in order for such Resale Registration Statement not to contain a material misstatement
or omission, an amendment thereto would be needed to include information that would at that time not otherwise be required in a current,
quarterly or annual report under the Exchange Act.
11. Assignment.
Neither this Note nor any of the rights, interests or obligations hereunder may be assigned by either Party, whether by operation of
law or otherwise, without the other Party’s prior written consent (other than by merger), unless such transfer complies with applicable
securities laws. Any purported attempt by a Party to assign this Note or any of the rights, interests or obligations hereunder in violation
of this Section 11 shall be null and void. For the avoidance of doubt, the Holder shall not in any event transfer this Note or
any of the rights, interests or obligation hereunder to any party without the Maker’s prior written consent.
12. Unsecured
Obligation. This Note is an unsecured obligation of the Company.
13. Notices.
All notices, requests, demands, consents, instructions or other communications required or permitted hereunder shall be in writing and
emailed, mailed or delivered to each party as follows:
(i)
if to the Maker, at the following address or email address (or at such other address or email address as the Maker shall have furnished
to Holder in writing):
CONDUIT
PHARMACEUTICALS INC.
Attention:
James Bligh
4581
Tamiami Trail North, Suite 200
Naples,
Florida 34103
Email:
jb@conduitpharma.com
with
a copy (which will not constitute notice) to:
Thompson
Hine LLP
Attention:
Todd Mason
300
Madison Avenue, 27th Floor
New
York, NY 10017
Email:
Todd.Mason@thompsonhine.com
(ii)
if to Holder, at the following address or email address (or at such other address or email address as Holder shall have furnished to
the Maker in writing):
A.G.P./Alliance
Global Partners
590 Madison Ave., 28th Floor
New York, NY 10022
Attention:
Email:
thiggins@allianceg.com
All
such notices and communications will be deemed effectively given the earlier of (i) when received; (ii) when delivered personally; (iii)
when emailed (with receipt of appropriate confirmation); (iv) one Business Day after being deposited with an overnight courier service
of recognized standing; or (v) four days after being deposited in the U.S. mail, first class with postage prepaid.
14. Miscellaneous.
| (a) | Survival.
The representations, warranties, covenants and agreements made herein shall survive the execution
and delivery of this Note. |
| | |
| (b) | Severability.
If any provision of this Note shall be judicially determined to be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions shall not in any way
be affected or impaired thereby. |
| | |
| (c) | Waivers.
Maker hereby waives notice of default, presentment or demand for payment, protest or notice
of nonpayment or dishonor and all other notices or demands relative to this instrument. |
| | |
| (d) | Costs.
Each of the Parties hereto shall pay its own fees, costs and expenses (including the fees
of any attorneys, accountants or others engaged by such Party) in connection with this Note
and the transactions contemplated hereby whether or not the transactions contemplated hereby
are consummated. If Maker shall default on the payment of any of the Note Obligations, the
Maker shall reimburse Holder on demand for its reasonable, documented out-of-pocket costs
of collection, including reasonable attorney’s fees and disbursements. |
| | |
| (e) | No
Drafting Presumption. The language used in this Note shall be deemed to be the language
chosen by the Parties to express their mutual intent, and no rule of strict construction
shall be applied against any Party. |
| | |
| (f) | Reservation
of Rights. No failure on the part of Holder to exercise, and no delay in exercising,
any right, power, privilege or remedy hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise thereof by Holder preclude any other or further exercise thereof
or the exercise of any other right, power, privilege or remedy of Holder. |
| | |
| (g) | CHOICE
OF LAW. THIS NOTE AND ALL ACTIONS, CAUSES OF ACTION OR CLAIMS OF ANY KIND (WHETHER AT
LAW, IN EQUITY, IN CONTRACT, IN TORT OR OTHERWISE) THAT MAY BE BASED UPON, ARISE OUT OF OR
RELATE TO THIS NOTE, OR THE NEGOTIATION, EXECUTION OR PERFORMANCE OF THIS NOTE SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING WITHOUT
LIMITATION NEW YORK LAWS RELATING TO APPLICABLE STATUTES OF LIMITATION AND BURDENS OF PROOF,
AVAILABLE REMEDIES AND APPLICABLE EVIDENTIARY PRIVILEGES. |
| | |
| (h) | Exclusive
Jurisdiction. The courts of the State of New York, in the County of New York shall have
exclusive jurisdiction in relation to all matters which may arise out of or in connection
with this Note. |
| | |
| (i) | Amendments
and Waivers. Any term of this Note may be amended, modified or waived upon the written
consent of the Maker and the Holder. No such waiver or consent in any one instance shall
be construed to be a continuing waiver or a waiver in any other instance unless it expressly
so provides. |
| | |
| (j) | Counterparts.
This Note be manually or electronically executed in one or more counterparts (delivery
of which may occur via facsimile or electronic transmission, including as an attachment to
an electronic mail message in “pdf” or similar format), each of which shall be
deemed an original, but all of which shall together constitute one and the same instrument.
The words “execution,” “signed,” “signature,” and words
of like import in this Note shall be deemed to include electronic signatures or electronic
records, each of which shall be of the same legal effect, validity or enforceability as a
manually executed signature or the use of a paper-based recordkeeping system, as the case
may be, to the extent and as provided for in any applicable law, including the Federal Electronic
Signatures in Global and National Commerce Act or any other similar state laws based on the
Uniform Electronic Transactions Act. |
[Signature
Page Follows.]
IN WITNESS WHEREOF, the undersigned have executed this Note as of the Issuance
Date. |
CONDUIT PHARMACEUTICALS INC. |
|
|
|
|
By: |
/s/ James Bligh |
|
Name: |
James Bligh |
|
Title: |
Interim Chief Financial Officer |
|
|
|
|
A.G.P./ALLIANCE
GLOBAL PARTNERS |
|
|
|
By:
|
/s/ Thomas J. Higgins |
|
Name: |
Thomas J. Higgins |
|
Title: |
Managing Director |
[Signature
Page to AGP Convertible Note]
ANNEX
D
CERTIFICATE
OF AMENDMENT OF
Second
amended and RESTATED CERTIFICATE OF INCORPORATION Of
CONDUIT
PHARMACEUTICALS INC.
Conduit
Pharmaceuticals Inc., a corporation organized and existing under the General Corporation Law of the State of Delaware (the “Corporation”),
DOES
HEREBY CERTIFY:
FIRST:
The name of the Corporation is Conduit Pharmaceuticals Inc.
SECOND:
The Board of Directors of the Corporation, acting in accordance with the provisions of Sections 141 and 242 of the General Corporation
Law of the State of Delaware, adopted resolutions amending its Second Amended and Restated Certificate of Incorporation, as amended,
as follows:
The
first sentence in Article IV, Section 4.1 shall be deleted and the following shall be inserted in lieu thereof:
“The
total number of shares of all classes of capital stock, each with a par value of $0.0001 per share, which the Corporation is authorized
to issue is 601,000,000 shares, consisting of (a) 600,000,000 shares of common stock (the “Common Stock”), and (b) 1,000,000
shares of preferred stock (the “Preferred Stock”).”
THIRD:
Thereafter, pursuant to a resolution of the Board of Directors, this Certificate of Amendment was submitted to the stockholders of the
Corporation for their approval, and was duly adopted in accordance with the provisions of Section 242 of the General Corporation Law
of the State of Delaware.
[Remainder
of the Page Intentionally Left Blank]
IN
WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to be signed by its Chief Executive Officer this ____ day of
__________, 2025.
|
CONDUIT PHARMACEUTICALS INC. |
|
|
|
|
By:
|
|
|
Name: |
David Tapolczay |
|
Title: |
Chief Executive Officer and Director |
PRELIMINARY
PROXY STATEMENT, SUBJECT TO COMPLETION, DATED NOVEMBER 26, 2024
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