Conduit Pharmaceuticals Inc., a pharmaceutical company, disclosed on Thursday that it will restate its financial statements for the first two quarters of 2024 due to a misclassification of deferred commission payable. The Naples, Florida-based company, listed on the Nasdaq under the ticker CDT, identified the error during its quarterly review process.
The misclassification, which categorized the deferred commission payable as a long-term liability instead of a current liability, did not affect the company's total liabilities for the periods ending March 31 and June 30, 2024. However, the company has deemed its previous unaudited interim financial statements for these periods unreliable.
Conduit Pharmaceuticals, which operates under the industrial classification of pharmaceutical preparations, is working to amend its financial statements and notes for the affected quarters in its Quarterly Reports on Form 10-Q.
The company's management and the Audit Committee have engaged in discussions with Marcum LLP, the independent registered public accounting firm, regarding the restatement.
This correction comes as the company, formerly known as Murphy Canyon Acquisition Corp., continues its operations in the pharmaceutical sector. The company's securities, including common stock and redeemable warrants, remain traded on the Nasdaq Stock Market.
Investors and stakeholders are advised to rely on the forthcoming restated financial statements once filed. The company's commitment to rectifying the classification issue reflects its dedication to financial accuracy and transparency. This news is based on a recent SEC filing by the company.
In other recent news, Conduit Pharmaceuticals has secured $1.2 million in funding through various financial agreements, including a Bridge Loan Agreement with A.G.P./Alliance Global Partners (NYSE:GLP) and a promissory note issued to Nirland Limited. The company also plans to initiate an at-the-market offering to raise approximately $3.5 million. These actions aim to strengthen the company's financial position and generate liquidity.
In addition, Conduit Pharmaceuticals has amended its financial obligations under a convertible promissory note issued to Vrezh Isayan and Sharon Lee Isayan, extending the maturity date and issuing common stock to satisfy the obligations outlined in the amendment. The company has also entered into a financing agreement with Nirland Limited, securing $2.65 million through a Senior Secured Promissory Note.
Further, Conduit Pharmaceuticals has achieved a milestone by securing a composition of matter patent from IP Australia for its HK-4 Glucokinase Activator, AZD1656, providing up to 20 years of protection and bolstering the company's intellectual property portfolio.
However, the company has been notified by Nasdaq of non-compliance with certain listing requirements, potentially leading to the delisting of its common stock. To address this, Conduit Pharmaceuticals has been given a 180-day grace period to meet the minimum market value requirements and has formed committees to review share dispositions and investigate stockholder trading patterns.
Lastly, the company has rescheduled its 2024 Annual Meeting of Stockholders for December 18, 2024, a decision deemed necessary by the Board of Directors in the best interest of the stockholders.
InvestingPro Insights
In light of Conduit Pharmaceuticals Inc.'s (CDT) recent announcement regarding the restatement of its financial statements, InvestingPro data provides additional context for investors. The company's market capitalization stands at a modest $9.59 million, reflecting its current position in the pharmaceutical sector.
InvestingPro Tips highlight some challenges facing the company. One tip notes that CDT is "quickly burning through cash," which aligns with the need for accurate financial reporting and may explain the heightened scrutiny of its liability classifications. Another tip indicates that the company is "not profitable over the last twelve months," with an adjusted operating income of -$8.53 million for the last twelve months as of Q2 2024.
The stock's performance has been notably weak, with a year-to-date price total return of -97.91% as of the latest data. This significant decline underscores the importance of the upcoming restated financials for investor confidence.
For those seeking a more comprehensive analysis, InvestingPro offers 11 additional tips for CDT, providing a deeper understanding of the company's financial health and market position.
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