UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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| Item 1.01 | Entry into a Material Definitive Agreement. |
On August 6, 2024, Conduit Pharmaceuticals Inc. (the “Company”) entered into a Senior Secured Promissory Note (the “Note”) and a Security Agreement (the “Security Agreement”, and collectively with the Note, the “Debt Agreements”) with Nirland Limited (the “Purchaser”), pursuant to which the Company issued and sold to the Purchaser the Note in the original principal amount of $2,650,000, inclusive of a $500,000 original issuance discount. Of the total amount of the Note, $1,675,000 was issued upon execution of the Note and the balance of $475,000 will be paid after the Closing Common Stock, defined herein, has been registered for resale, and such resale registration statement has been declared effective by the Securities and Exchange Commission. In connection with the Note, the Company has agreed to issue to the Purchaser 12,500,000 shares of the Company’s common stock (the “Closing Common Stock”).
The Note bears interest at a rate of 12% per annum, accruing daily on a 365-day basis, payable monthly in arrears as cash, or accrued at the Purchaser’s discretion. The Note matures on August 5, 2025. The Company has certain obligations to mandatorily prepay the Note, and any accrued interest, with portions of any proceeds received in connection with future financings. The Company may prepay the outstanding principal and accrued interest on the Note with no fee. Until the Note is no longer outstanding, the Purchaser has a right of first refusal to participate, in an amount up to 100%, with certain exceptions, in any future equity or debt offering of the Company.
The Note is secured by all assets of the Company and its subsidiary. The Note is guaranteed by the subsidiary of the Company, as well as personally by Dr. Andrew Regan, a member of the Company’s Board of Directors. The Note contains customary default provisions for a transaction of this nature. Upon an event of default, the interest rate of the Note will increase to 18%, until such time as the default is remedied.
The Security Agreement and form of Note are attached as Exhibits 10.1 and 4.1, respectively. The description of the terms of the Debt Agreements are not intended to be complete and are qualified in their entirety by reference to such exhibits.
| Item 2.03. | Creation of a Direct Financial Obligation or an Obligation Under an Off balance Sheet Arrangement of a Registrant. |
The disclosure contained in Item 1.01 of this Current Report on Form 8-K is incorporated by reference in this Item 2.03.
| Item 3.02 | Unregistered Sales of Equity Securities. |
The Company issued the Closing Common Stock pursuant to the exemption from the registration requirements of the Securities Act available under Section 4(a)(2). The issuance of the Closing Common Stock has not been registered under the Securities Act and such securities may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act and any applicable state securities laws. The description of the Closing Common Stock under Item 1.01 of this Form 8-K is incorporated by reference herein.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits.
| Exhibit No. | Description | ||
| 4.1 | Form of Senior Secured Promissory Note | ||
| 10.1 | Security Agreement, dated August 6, 2024, between Nirland Limited and Conduit Pharmaceuticals Inc. | ||
| 104 | Cover Page Interactive Data File (the cover page XBRL tags are embedded within the inline XBRL document). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: August 7, 2024 | CONDUIT PHARMACEUTICALS INC. | |
| By: | /s/ Dr. David Tapolczay | |
| Name: | Dr. David Tapolczay | |
| Title: | Chief Executive Officer | |