This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (596/2014/EU) as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018.

20 April 2023

Vela Technologies plc

("Vela" or "the Company")

Put Option for potential sale of Economic Interest in AZD1656

The Board of Vela (AIM: VELA), an AIM-quoted investing company focused on early-stage and pre-IPO disruptive technology investments, is pleased to announce that the Company has today entered into a put option agreement ("the Option Agreement") to give the Company the right, but not the obligation ("the Option"), to sell its economic interest in the commercialisation of the Covid-19 application of AZD1656 for a total consideration of £4.0 million. The Option is being granted by Conduit Pharmaceuticals Limited ("Conduit") and its prospective parent company, Murphy Canyon Acquisition Corp ("Murphy"), a Company listed on NASDAQ. Should the Option be exercised by Vela the consideration that would be payable to Vela will be satisfied through the issuance of new shares of authorised common stock of par value $0.001 of Murphy ("the Consideration Shares"). The Option is exercisable solely at the discretion of Vela and Vela will pay Conduit £400,000 in cash as the premium for the Option, with the consideration to be settled shortly from Vela's existing cash resources.

The Option is exercisable in whole at any time from the completion of Conduit's proposed merger with Murphy ("the Merger") until the earlier of the date that is six months from the Merger and 7 February 2024. The Option may be exercised only if the Merger concludes and the new shares in Murphy issued as a consequence of the Merger are listed and publicly traded on the NASDAQ stock exchange in the United States. Should Vela exercise the Option, the Company will hold shares in Murphy (to be re-named Conduit Pharmaceuticals Inc.) as a publicly traded company on NASDAQ. 

Vela entering into the Option does not change the book value of the Economic Interest (as defined below) which remains held at £2.35 million in line with the Company's most recent published unaudited interim results as at 30 September 2022.

On 20 October 2020, Vela acquired an 8 per cent. economic interest in the commercialisation of the Covid-19 application of AZD1656 from St George Street Capital ("SGSC"), a UK-based medical charity. Under the terms of the agreement, SGSC agreed to pay Vela 8 per cent. of any proceeds received by SGSC in excess of £19.2 million and after the deduction of sums payable to the original major pharmaceutical company developer and to certain other funders and after provision for taxation ("the Economic Interest"). Consideration for the acquisition of the Economic Interest was £2.35 million, satisfied by cash of £1.25 million and the issuance of 1,100,000,000 consideration shares in Vela at a price of 0.1 pence per share. SGSC is a party to, and has consented to, the Option Agreement.

Conduit announced on 9 November 2022 that it is being acquired by Murphy for a total consideration of US$650 million. Completion of this business combination transaction is expected to occur in 2023. A copy of Murphy's announcement can be found at:

Conduit Pharmaceuticals to Become a Publicly Traded Company via Merger with Murphy Canyon Acquisition Corp. (accesswire.com)

It is estimated that in the event that the Option is exercised, the Consideration Shares will represent approximately 0.66% of the enlarged share capital of Murphy (assuming no redemptions in Murphy). It is the intention of Vela, subject to the necessary regulatory requirements of NASDAQ, then to sell the Consideration Shares in order to augment its cash reserves. The Consideration Shares will not be subject to any lock-in restrictions.

The Board of Vela is mindful that there can be no guarantee that Vela will be able to exercise the Option, since exercise is dependent on the successful completion of the Merger and the combined entity being listed on the NASDAQ stock exchange.

James Normand, Executive Director of Vela, commented: "Vela is pleased to have gained, through this transaction with Conduit Pharmaceuticals, the potential to convert an illiquid asset into shares in a publicly listed vehicle. Should the merger between Conduit and Murphy conclude and the Option be exercised, Vela will then be in a position to monetise its investment in SGSC, following which it would intend to redeploy such cash proceeds in accordance with its investing policy."

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About Vela Technologies

Vela Technologies plc (AIM: VELA) is an investing company focused on early stage and pre-IPO long term disruptive technology investments.  Vela's investee companies have either developed ways of utilising technology or are developing technology with a view to disrupting the businesses or sector in which they operate. Vela Technologies will also invest in already-listed companies where valuations offer additional opportunities.

About Conduit Pharmaceuticals Limited

Led by highly experienced pharma executives, Conduit is a clinical stage specialty biopharmaceutical company, addressing unmet medical needs in the areas of autoimmune disease and idiopathic male infertility. The development pipeline includes a glucokinase inhibitor in a number of Phase 2 ready autoimmune diseases including uveitis, Hashimoto's Thyroiditis, pre-term labour and renal transplant. Conduit's development pipeline also includes a potent, irreversible inhibitor of human Myeloperoxidase (MPO) that has the potential to treat idiopathic male infertility.

For the year ended 31 December 2021 Conduit had no revenue and incurred a net loss of $3.66m. As at 31 December 2021 Conduit's net liabilities totalled $5.94m.