Actuate Therapeutics, Inc. 10-Q

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to _________

Commission File Number: 001-42139

Actuate Therapeutics, Inc.

(Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction of

incorporation or organization)

47-3044785

(I.R.S. Employer Identification No.)

1751 River Run, Suite 400, Fort Worth, Texas

(Address of principal executive offices)

76107

(Zip Code)

Registrant’s telephone number, including area code: (817) 887-8455

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol		Name of each exchange on which registered
Common Stock, par value $0.000001 per share		ACTU		The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ý	Smaller reporting company ý
	Emerging growth company ý

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ý

On November 12, 2025, 23,243,328 shares of common stock, $0.000001 par value per share, were outstanding.

INDEX

	Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements	4
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3. Quantitative and Qualitative Disclosures About Market Risk	32
Item 4. Controls and Procedures	33
PART II. OTHER INFORMATION
Item 1A. Risk Factors	34
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	34
Item 5. Other Information	34
Item 6. Exhibits	34

SIGNATURES	36

Unless the context requires otherwise, references in this Quarterly Report on Form 10-Q to “Actuate,” the “Company,” “we,” “us,” and “our” refer to Actuate Therapeutics, Inc.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (“Report” or Quarterly Report”) contains forward-looking statements about us and our industry. In addition, from time to time, we or our representatives have made or will make forward-looking statements. The forward-looking statements involve substantial risks and uncertainties. All statements, other than statements related to present facts or current conditions or of historical facts, contained in this Report, including statements regarding our strategy, future operations, future financial position, future revenues, and projected costs, prospects, plans and objectives of management, research and development plans, the anticipated timing, costs, design and conduct of our ongoing and planned clinical trials and preclinical studies for elraglusib and any future product candidates, the timing and likelihood of regulatory filings and approvals for elraglusib and any future product candidates, our ability to commercialize elraglusib and any future product candidates, if approved, the pricing and reimbursement of elraglusib and any future product candidates, if approved, the potential to develop future product candidates, the potential benefits of strategic collaborations and potential to enter into any future strategic arrangements, the timing and likelihood of success, plans and objectives of management for future operations, and future results of anticipated product development efforts, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “ongoing,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” “would,” or the negative of these terms or other comparable terminology are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These statements involve estimates, assumptions and uncertainties which could cause actual results to differ materially from those expressed in them. In addition, any forward-looking statements are qualified in their entirety by reference to the factors summarized under the heading “Risk Factor Summary” and discussed further under the heading “Risk Factors” in this Report.

You should assume that the information appearing in this Report is accurate as of its date only. Because the risk factors referred to above could cause actual results or outcomes to differ materially from those expressed in any forward-looking statements made by us or on our behalf, you should not place undue reliance on any forward-looking statements. Further, any forward-looking statement speaks only as of the date on which it is made. New factors emerge from time to time, and it is not possible for us to predict which factors will arise. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. All written or oral forward-looking statements in this Report are expressly qualified in their entirety by the risk factors and cautionary statements contained in this Report. Unless legally required, we do not undertake any obligation to release publicly any revisions to such forward-looking statements to reflect events or circumstances after the date of this Report or to reflect the occurrence of unanticipated events.

In addition, statements that “we believe” and similarly qualified statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and you are cautioned not to rely unduly upon them.

The discussion of the Company’s financial condition and results of operations should be read in conjunction with the Company’s unaudited condensed consolidated financial statements and the related notes thereto included in this Report.

RISK FACTOR SUMMARY

Below is a summary of material factors that make an investment in our common stock speculative or risky. Importantly, this summary does not address all of the risks and uncertainties that we face. You should understand that it is not possible to predict or identify all such factors. Consequently, you should not consider this section to be a complete discussion of all potential risks or uncertainties that may substantially impact our business. Additional discussion of the risks and uncertainties summarized in this risk factor summary, as well as other risks and uncertainties that we face, are further described in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on March 13, 2025, and our Quarterly Reports on Form 10-Q, and under the heading “Risk Factors” in these Reports.

Risks Related to Our Limited Operating History, Financial Condition and Capital Requirements

	·	We have a limited operating history, have incurred significant operating losses and expect to incur significant operating losses for the foreseeable future. We have a high risk of never generating revenue or becoming profitable or, if we achieve profitability, it may not be sustained.
	·	Our financial condition raises substantial doubt as to our ability to continue as a going concern.
	·	We require substantial additional capital in the near term to finance our operations, and a failure to obtain this necessary capital when needed on acceptable terms, or at all, could force us to delay, limit, reduce or terminate our development programs, commercialization efforts or other operations.
	·	Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to our technologies or product candidates. In addition, any capital obtained by us may be obtained on terms that are unfavorable to us, our investors, or both.
	·	Under the Committed Equity Facility (as defined below) with B. Riley Principal Capital II (“B. Riley”), it is not possible to predict the actual number of shares we will sell to B. Riley, or the actual gross proceeds resulting from those sales.

Risks Related to Clinical Development and Potential Regulatory Approval

	·	We do not have, and may never have, any approved products on the market. Our business is highly dependent upon receiving approvals from various governmental agencies and will be severely harmed if we are not granted approval to manufacture and sell our product candidates.
	·	We currently depend entirely on the success of elraglusib, which is our lead product candidate. If we are unable to advance elraglusib in clinical development, obtain regulatory approval and ultimately commercialize elraglusib in a timely manner, our business will be materially harmed.
	·	Even if we complete all planned clinical trials including a Phase 3 trial in the future, there is no guarantee that at the time of submission the U.S. Food and Drug Administration (“FDA”) will accept our New Drug Application (“NDA”).
	·	Clinical and preclinical drug development involves a lengthy and expensive process with uncertain timelines and outcomes, and results of prior preclinical studies and early clinical trials are not necessarily predictive of future results. Elraglusib or any future product candidates may not achieve favorable results or receive regulatory approval on a timely basis, if at all.
	·	We may not be successful in our efforts to advance elraglusib in additional indications. We may expend our limited resources to pursue a new product candidate or a particular indication for elraglusib and fail to capitalize on more profitable or successful alternatives.
	·	Use of elraglusib or any future product candidates could be associated with side effects, adverse events or other properties or safety risks, which could delay or preclude regulatory approval, cause us to suspend or discontinue clinical trials, abandon elraglusib or any future product candidate, limit the commercial profile of an approved label or result in other significant negative consequences that could severely harm our business, financial condition, results of operations and prospects.
	·	If we experience delays or difficulties in the enrollment of subjects to our clinical trials, our receipt of necessary regulatory approvals could be delayed or otherwise adversely affected.
	·	Interim, topline, and preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data.

Risks Related to Our Reliance on Third Parties

	·	The termination of third-party licenses could adversely affect our rights to important technologies.
	·	Our current elraglusib drug substance (“DS”) manufacturer is in China, and it is unknown how current or future geopolitical relationships with China may affect our ability to obtain DS, increase our costs, delay clinical trials and potential regulatory approval, and adversely impact our financial condition.
	·	Unfavorable tariffs could increase the cost of DS of elraglusib used in clinical trials and potential commercialization, if approved, which could adversely affect our business, financial condition or results of operations.
	·	We rely on third parties to conduct our non-clinical studies and clinical trials. If these parties do not successfully carry out their duties or meet deadlines, we may be unable to obtain regulatory approval for or commercialize our product candidates and adversely affect our financial condition.
	·	Data provided by collaborators and other parties upon which we rely have not been independently verified and could turn out to be inaccurate, misleading or incomplete.

Risks Related to Commercialization of Elraglusib and any Future Product Candidates

	·	We have a limited operating history and no products approved for commercial sale, which may make it difficult to evaluate our prospects and likelihood of success.
	·	Our business is highly dependent on the success of our sole product candidate, elraglusib and any other future product candidates that we advance into clinical development, all of which will require significant additional development before we can seek regulatory approval for and launch a product commercially.

Risks Related to Our Intellectual Property

	·	We may not be able to enforce our intellectual property rights throughout the world.
	·	If we and our third-party licensors do not obtain and preserve protection for key intellectual property rights, our competitors may be able to take advantage of our development efforts.
	·	If we fail to comply with our license, collaboration or other intellectual property-related agreements, we may incur damages and could lose rights that may be necessary for developing, commercializing and protecting our current or future technologies or drug candidates or granting sublicenses.

Risks Related to Our Business Operations and Industry

	·	If we lose key management leadership, and/or scientific personnel, and if we cannot recruit qualified employees or other significant personnel, we may experience program delays and increased compensation costs, and our business may be materially disrupted.
	·	Competition and technological change may make our product candidates less competitive or obsolete. We face significant competition from other biotechnology and pharmaceutical companies, and our operating results will suffer if we fail to compete effectively.
	·	Our anticipated operating expenses and capital expenditures are based upon our management’s estimates of possible future events. Actual amounts could differ materially from those estimated.

Risks Associated to our Common Stock

	·	Concentration of ownership by our principal stockholders limits the ability of others to influence the outcome of director elections and other transactions requiring stockholder approval, creates the potential for conflicts of interest, may negatively impact our stock price and may deter or prevent efforts by others to acquire us, preventing our stockholders from realizing a control premium.
	·	Current and new investors will experience dilution due to future sales or issuances of our common stock.
	·	The trading price of the shares of our common stock could be highly volatile regardless of our operating performance, and purchasers of our common stock could incur substantial losses.
	·	Numerous shares may now be sold into the open market upon expiry of the IPO lock-up in February 2025. Substantial sales of shares could cause the price of our common stock to decline.
	·	Sales of a substantial number of our securities in the public market by our existing stockholders under the underwritten public offering with Lucid Capital Markets, LLC on September 11, 2025, the Committed Equity Facility with B. Riley, or through the registration for resale of the shares sold or underlying warrants issued in our June 2025 Private Placement (as defined below) of common stock and warrants could cause the price of our shares of common stock to fall.

PART I - FINANCIAL INFORMATION

Item 1.

Financial Statements

Actuate Therapeutics, Inc.

Condensed Consolidated Balance Sheets


	September 30, 2025			December 31, 2024
ASSETS		(unaudited)
Current assets:
Cash and cash equivalents	$	16,924,763		$	8,641,622
Prepaid assets and other current assets		519,237			566,278
Total current assets		17,444,000			9,207,900
Deferred offering costs and other assets		269,934			110,548
Total assets	$	17,713,934		$	9,318,448

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	1,245,375		$	1,921,189
Other accrued expenses		4,259,048			5,921,908
Accrued compensation		846,283			888,449
Accrued interest, current		21,956			70,957
Total current liabilities		6,372,662			8,802,503

Long term liabilities:
Accrued interest, less current portion		–			6,768
License payable		404,991			404,991
Total long-term liabilities		404,991			411,759

Total liabilities		6,777,653			9,214,262

Commitments and contingencies (Note 5)		–			–

Stockholders’ equity:
Preferred stock, $0.000001 par value, 10,000,000 shares authorized, no shares issued or outstanding		–			–
Common stock, $0.000001 par value, 200,000,000 shares authorized, 23,243,328 and 19,531,636 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively		23			20
Additional paid-in capital		160,990,006			132,484,015
Accumulated deficit		(150,053,748	)		(132,379,849	)
Total stockholders’ equity		10,936,281			104,186
Total liabilities and stockholders’ equity	$	17,713,934		$	9,318,448

See accompanying notes to unaudited condensed consolidated financial statements.

Actuate Therapeutics, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024
Operating expenses:
Research and development	$	2,177,922		$	3,757,102		$	8,163,046		$	14,990,337
General and administrative		3,294,456			1,635,801			9,643,793			3,611,269
Total operating expenses		5,472,378			5,392,903			17,806,839			18,601,606

Loss from operations		(5,472,378	)		(5,392,903	)		(17,806,839	)		(18,601,606	)

Other income (expense):
Change in estimated fair value of warrant liability		–			193,951			–			(78,903	)
Gain on settlement of warrants		–			343,240			–			343,240
Loss on issuance of related party convertible notes payable at fair value		–			–			–			(400,000	)
Change in estimated fair value of related party convertible notes payable		–			(1,192,507	)		–			(2,192,507	)
Interest expense		(5,063	)		(3,489	)		(15,188	)		(13,641	)
Interest income		69,971			80,747			148,128			104,178
Total other income (expense), net		64,908			(578,058	)		132,940			(2,237,633	)

Net loss	$	(5,407,470	)	$	(5,970,961	)	$	(17,673,899	)	$	(20,839,239	)

Weighted-average shares of common stock outstanding, basic and diluted		21,394,965			10,772,640			20,186,706			4,647,199
Net loss per share attributable to common stockholders, basic and diluted	$	(0.25	)	$	(0.55	)	$	(0.88	)	$	(4.48	)

See accompanying notes to unaudited condensed consolidated financial statements.

Actuate Therapeutics, Inc.

Condensed Consolidated Statement of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)

(Unaudited)

For the Nine Months Ended September 30, 2025


	Redeemable Convertible								Additional						Total Stockholders’
	Preferred Stock				Common Stock				Paid-in			Accumulated			Equity
	Shares		Amount		Shares		Amount		Capital			Deficit			(Deficit)
Balances, January 1, 2025		–	$	–		19,531,636	$	20	$	132,484,015		$	(132,379,849	)	$	104,186
Stock-based compensation expense		–		–		–		–		1,125,101			–			1,125,101
Net loss		–		–		–		–		–			(6,317,024	)		(6,317,024	)
Balances, March 31, 2025		–		–		19,531,636		20		133,609,116			(138,696,873	)		(5,087,737	)

Issuance of shares under June 2025 Private Placement, net of issuance costs of $43,933		–		–		666,497		–		4,621,546			–			4,621,546
Issuance of shares under Committed Equity Facility, net of issuance costs of $343,848		–		–		256,429		–		2,148,506			–			2,148,506
Exercise of stock option awards		–		–		15,942		–		34,115			–			34,115
Stock-based compensation expense		–		–		–		–		1,579,271			–			1,579,271
Net loss		–		–		–		–		–			(5,949,405	)		(5,949,405	)
Balances, June 30, 2025		–		–		20,470,504		20		141,992,554			(144,646,278	)		(2,653,704	)

Issuance of shares under underwritten public offering, net of underwriter discounts and issuance costs of $1,676,036		–		–		2,464,286		3		15,573,963			–			15,573,966
Issuance costs under June 2025 Private Placement		–		–		–		–		(29,084	)		–			(29,084	)
Issuance of shares under Committed Equity Facility, net of issuance costs of $259,807		–		–		283,538		–		1,651,959			–			1,651,959
Issuance of vested and settled restricted stock units		–		–		25,000		–		–			–			–
Stock-based compensation expense		–		–		–		–		1,800,614			–			1,800,614
Net loss		–		–		–		–		–			(5,407,470	)		(5,407,470	)
Balances, September 30, 2025		–	$	–		23,243,328	$	23	$	160,990,006		$	(150,053,748	)	$	10,936,281

-continued-

For the Nine Months Ended September 30, 2024

	Redeemable Convertible										Additional					Total Stockholders’
	Preferred Stock						Common Stock				Paid-in		Accumulated			Equity
	Shares			Amount			Shares		Amount		Capital		Deficit			(Deficit)
Balances, January 1, 2024		24,678,355		$	94,178,404			1,690,760	$	2	$	5,468,006	$	(105,094,521	)	$	(99,626,513	)
Stock-based compensation expense		–			–			–		–		148,206		–			148,206
Net loss		–			–			–		–		–		(8,296,059	)		(8,296,059	)
Balances, March 31, 2024		24,678,355			94,178,404			1,690,760		2		5,616,212		(113,390,580	)		(107,774,366	)
Stock-based compensation expense		–			–			–		–		90,019		–			90,019
Net loss		–			–			–		–		–		(6,572,219	)		(6,572,219	)
Balances, June 30, 2024		24,678,355			94,178,404			1,690,760		2		5,706,231		(119,962,799	)		(114,256,566	)
Issuance of common stock in initial public offering, net of underwriting discounts, commissions and offering costs of $3,734,389		–			–			3,220,000		3		22,025,608		–			22,025,611
Conversion of redeemable convertible preferred stock into common stock upon closing of initial public offering		(24,678,355	)		(94,178,404	)		13,710,379		14		94,178,390		–			94,178,404
Conversion of related party convertible notes payable into common stock upon closing of initial public offering		–			–			884,427		1		8,092,506		–			8,092,507
Reclassification of warrant liability to equity upon exchange of warrants to purchase redeemable convertible preferred stock for warrants to purchase common stock upon closing of initial public offering		–			–			–		–		485,172		–			485,172
Exercise of in-the-money warrants to purchase redeemable convertible preferred stock and conversion into common stock upon closing of initial public offering		–			–			26,070		–		238,540		–			238,540
Stock-based compensation expense		–			–			–		–		565,981		–			565,981
Net loss		–			–			–		–		–		(5,970,961	)		(5,970,961	)
Balances, September 30, 2024		–		$	–			19,531,636	$	20	$	131,292,428	$	(125,933,760	)	$	5,358,688

See accompanying notes to unaudited condensed consolidated financial statements.

Actuate Therapeutics, Inc.

Condensed Consolidated Statements of Cash Flows (Unaudited)


	Nine Months Ended September 30,
	2025			2024
Operating Activities:
Net loss	$	(17,673,899	)	$	(20,839,239	)
Adjustment to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense		4,504,986			804,206
Change in estimated fair value of warrant liability		–			78,903
Gain on settlement of warrant liability		–			(343,240	)
Loss on issuance of related party convertible notes payable at fair value		–			400,000
Change in estimated fair value of related party convertible notes payable		–			2,192,507
Interest accrued on license payable		15,188			13,565
Changes in operating assets and liabilities:
Prepaid assets and other current assets		47,041			(702,425	)
Other assets		110,548			–
Accounts payable		(698,091	)		(1,197,747	)
Accrued compensation		(42,166	)		(277,500	)
Accrued interest		(70,957	)		(70,957	)
Other accrued expenses		(1,662,860	)		2,871,694
Net cash used in operating activities		(15,470,210	)		(17,070,233	)

Financing Activities:
Proceeds from issuance of shares of common stock under underwritten public offering, net of underwriting discounts and offering costs		15,573,966			–
Proceeds from issuance of shares of common stock under June 2025 Private Placement, net		4,592,462			–
Proceeds from issuance of shares of common stock under the Committed Equity Facility, net		3,826,336			–
Proceeds from initial public offering, net of underwriting discounts and commissions		–			23,956,800
Payment of offering costs related to initial public offering		–			(1,821,777	)
Proceeds from issuances of related party convertible notes payable		–			5,500,000
Proceeds from issuance of related party short-term loan		–			200,000
Payment of related party short-term loan		–			(200,000	)
Proceeds from the exercise of stock options		34,115			–
Deferred offering costs		(273,528	)		–
Net cash provided by financing activities		23,753,351			27,635,023

Net change in cash and cash equivalents		8,283,141			10,564,790
Cash and cash equivalents, beginning of period		8,641,622			2,958,659
Cash and cash equivalents, end of period	$	16,924,763		$	13,523,449

Supplemental disclosure of cash flow information:
Cash paid for interest	$	70,957		$	71,033
Cash paid for income taxes	$	800		$	800

Supplemental Schedule of Noncash Financing Activities:
Conversion of redeemable convertible preferred stock into common stock upon initial public offering	$	–		$	94,178,404
Reclassification of warrant liability to equity upon exchange of not in-the-money Series B and Series C Redeemable Convertible Preferred Stock Warrants for warrants to purchase common stock	$	–		$	485,172
Settlement of in-the-money warrants to purchase redeemable convertible preferred stock and conversion into common stock upon initial public offering	$	–		$	238,540
Conversion of related party convertible notes payable into common stock upon initial public offering	$	–		$	8,092,507
Deferred offering costs, unpaid and accrued	$	22,277		$	109,412
Deferred offering costs charged against Committed Equity Facility	$	25,871		$	–

See accompanying notes to unaudited condensed consolidated financial statements.

Actuate Therapeutics, Inc.

Notes to the Condensed Consolidated Financial Statements

For The Three and Nine Months Ended September 30, 2025 (unaudited)

1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

Actuate Therapeutics, Inc. (the “Company”) was incorporated in the State of Delaware on January 16, 2015 and is headquartered in Fort Worth, Texas. The Company is a clinical-stage biopharmaceutical company focused on developing novel therapies for the treatment of cancers through the inhibition of glycogen synthase kinase-3 (“GSK-3”). The Company’s lead investigational product, elraglusib (formerly 9-ING-41), is a small molecule that is designed to enter cancer cells and block the function of the enzyme GSK-3β, thereby causing the death of the cancer cells and the regulation of anti-tumor immunity.

The Company has a 100%-owned Irish subsidiary, Actuate Therapeutics Limited, that is currently dormant.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. These unaudited condensed consolidated financial statements include only normal and recurring adjustments that the Company believes are necessary to fairly state the Company’s financial position and the results of its operations and cash flows. Operating results for the three and nine months ended September 30, 2025 are not necessarily indicative of the results expected for the full fiscal year or any subsequent interim period. The condensed consolidated balance sheet at December 31, 2024 has been derived from the audited financial statements at that date but does not include all disclosures required by U.S. GAAP for complete financial statements. Because all of the disclosures required by U.S. GAAP for complete financial statements are not included herein, these unaudited condensed consolidated financial statements and the notes accompanying them should be read in conjunction with the audited financial statements and the notes thereto for the year ended December 31, 2024 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 13, 2025.

Any reference in these notes to applicable guidance is meant to refer to the authoritative U.S. GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”).

Going Concern and Management’s Plans

The accompanying unaudited condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern. As of September 30, 2025, the Company had cash and cash equivalents of $16,924,763 and working capital of $11,071,338. The Company has not generated any revenue and has incurred recurring operating losses since inception. The Company expects to continue to incur losses for the foreseeable future and therefore the Company’s ability to continue its operations is highly dependent on its ability to raise additional capital in the near term to fund its future operations.

On March 27, 2025, the Company entered into a common stock purchase agreement (the “Committed Equity Facility”) with B. Riley Principal Capital II (“B. Riley”) giving the Company the right, but not the obligation, to sell to B. Riley over a 36-month period up to the lesser of (i) $50 million of newly issued shares of our common stock and (ii) 3,904,374 shares of the Company’s common stock (see Note 7). The price per share of common stock sold to B. Riley is determined by reference to the volume weighted average price of the Company’s common stock as defined within the Committed Equity Facility less a 3% discount, subject to certain limitations and conditions. The total net proceeds that the Company will receive under the Committed Equity Facility will depend on the quantity, frequency and prices at which the Company sells common stock to B. Riley. During the nine months ended September 30, 2025, the Company received net proceeds of $3,800,465 in exchange for 539,967 shares of common stock sold under the Committed Equity Facility (see Note 7).

On June 25, 2025, the Company entered into a securities purchase agreement for a private placement of common stock and warrants with certain institutional and accredited investors, which closed on June 27, 2025 (the “June 2025 Private Placement”). Under the June 2025 Private Placement, the Company received aggregate net proceeds of $4,592,462 (see Note 7).

On September 10, 2025, the Company entered into an underwriting agreement (the “Underwriter Agreement”) with Lucid Capital Markets, LLC (“Underwriter”) relating to an underwritten public offering of 2,142,858 shares of common stock plus an over-allotment option to purchase up to an additional 321,428 shares of Common Stock at the public offering price of $7.00 per share, less underwriting discounts and commissions and other offering expenses (“September 2025 Public Offering”). The offering closed on September 11, 2025 and the Company issued 2,464,286 shares of common stock to the Underwriter, including shares issued under the over-allotment option, in exchange for net proceeds of $15,573,966 (see Note 7).

There can be no assurance that the Company will be able to raise sufficient proceeds in the future under the Committed Equity Facility or any additional financing will be available to the Company on acceptable terms, if at all. Moreover, the Company agreed, subject to certain exceptions, not to sell any shares of its capital stock or any securities convertible into or exercisable or exchangeable for shares of capital stock for a period of seventy-five (75) days from the closing date of the September 2025 Public Offering.

Management anticipates, based on currently proposed plans and assumptions, that our cash and cash equivalents on hand will not satisfy the Company’s operational and capital requirements beyond the second quarter of fiscal year 2026 without raising additional capital. As the Company continues to execute its business plan, it plans to seek financing for its operations through equity offerings, debt financings, or other capital sources. Our ability to raise additional capital may be adversely impacted by business conditions, global economic conditions, disruptions to, and volatility in, the financial markets in the United States and worldwide, among other matters, and we may not obtain this necessary capital when needed on acceptable terms, or at all. If events or circumstances occur such that the Company does not obtain additional funding, it may be necessary to significantly reduce our scope of operations to reduce the current rate of spending through actions such as the need to delay, limit, reduce, grant rights to develop or terminate its product development or even cease operations, which could have a material adverse effect on the Company’s business, results of operations or financial condition. Based on the above matters, we have concluded that there is substantial doubt regarding the Company’s ability to continue as a going concern.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Company’s significant accounting policies are disclosed in the audited financial statements and the notes thereto for the year ended December 31, 2024 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 13, 2025. Since the date of such audited consolidated financial statements, there have been no changes to the Company’s significant accounting policies.

Principles of Consolidation

The consolidated financial statements include the accounts of Actuate Therapeutics, Inc. and its wholly owned subsidiary, Actuate Therapeutics Limited. All material intercompany accounts and transactions have been eliminated in the consolidated financial statements.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, assumptions, and judgements that affect the reported amounts of assets, liabilities, expenses, and related disclosures in the accompanying notes. The Company bases its estimates, assumptions and judgements on historical experience when available and on various factors that it believes to be reasonable under the circumstances as of the date of the accompanying unaudited condensed consolidated financial statements including stock-based compensation expense and accrued expenses (including accrued expenses related to research and development (“R&D”) as described below), and the recoverability of the Company’s net deferred tax assets and related valuation allowance. In addition, other factors may affect estimates, including the expected business and operational changes, the sensitivity and volatility associated with the assumptions used in developing estimates, and whether historical trends are expected to be representative of future trends. The estimation process often may yield a range of potentially reasonable estimates of the ultimate future outcomes, and management must select an amount that falls within that range of reasonable estimates. Actual results could differ materially from the estimates and assumptions used in the preparation of the accompanying unaudited condensed consolidated financial statements under different assumptions or conditions.

Accrued Expenses Related to R&D Expenses

As part of the process of preparing our unaudited condensed consolidated financial statements, we are required to estimate our R&D expenses as of each balance sheet date. This process involves reviewing open contracts, including clinical site contracts, and communicating with our personnel to identify services that have been performed on our behalf, and estimating the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of the actual cost. We make estimates of our R&D expenses as of each balance sheet date based on facts and circumstances known to us at that time. The significant estimates in our R&D expenses include the costs incurred for services performed by our vendors in connection with services for which we have not yet been invoiced. We base our expenses related to R&D activities on our estimates of the services received and efforts expended pursuant to quotes and contracts with contractors and vendors that conduct R&D on our behalf. The financial terms of these agreements are subject to negotiation, vary from contract to contract, and may result in uneven payment flows. Advance payments for goods and services that will be used in future R&D activities are expensed when the activity has been performed or when the goods have been received rather than when the payment is made.

Although we do not expect our estimates to be materially different from amounts actually incurred, if our estimates of the status and timing of services performed differ from the actual status and timing of services performed, it could result in us reporting amounts that are too high or too low in any particular period. To date, there have been no material differences between our estimates of such expenses and the amounts actually incurred.

Fair Value of Financial Instruments

Authoritative guidance requires disclosure of the fair value of financial instruments. The Company applies fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. The carrying amount of certain of the Company’s financial instruments, including cash and cash equivalents, accounts payable and accrued liabilities, approximate their estimated fair values primarily due to the short-term nature of the instruments or based on information obtained from market sources and management estimates. A fair value hierarchy is used to rank the quality and reliability of the information used to determine fair values. Financial assets and liabilities carried at fair value which is not equivalent to cost will be classified and disclosed in one of the following three categories:

	·	Level 1 — Quoted prices (unadjusted) in active markets for identical assets and liabilities;
	·	Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as unadjusted quoted prices for similar assets and liabilities, unadjusted quoted prices in the markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and
	·	Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include those whose fair value measurements are determined using pricing models, discounted cash flow methodologies or similar valuation techniques and significant management judgment or estimation.

The Company reviews the fair value hierarchy classification at each reporting date. Changes in the ability to observe valuation inputs may result in a reclassification of levels for certain assets or liabilities within the fair value hierarchy. The Company did not have any transfers of assets and liabilities between the levels of the fair value measurement hierarchy during the periods presented.

Deferred Offering Costs

The Company capitalized as deferred offering costs all direct and incremental legal, professional, accounting and other third-party fees incurred in connection with the Company’s equity offerings. Deferred offering costs will be offset against offering proceeds upon the completion of an offering or during the offering period as proceeds are received on a pro rata basis. In the event that an offering is abandoned, deferred offering costs will be expensed in the period of abandonment in the unaudited condensed consolidated statement of operations.

Comprehensive Loss

There were no differences between net loss and comprehensive loss presented in the unaudited condensed consolidated statements of operations for the three and nine months ended September 30, 2025 and 2024.

Net Loss Per Share Attributable to Common Stockholders

Basic net loss per common share is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period, without consideration of potentially dilutive securities. Diluted net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock and potentially dilutive securities outstanding for the period. For purposes of the diluted net loss per share calculation, Redeemable Convertible Preferred Stock, convertible notes payable, warrants to purchase Redeemable Convertible Preferred Stock, outstanding warrants, unvested RSAs, and outstanding stock options and RSUs are considered to be potentially dilutive securities when outstanding (see Note 10). As of August 14, 2024, Redeemable Convertible Preferred Stock, convertible notes payable, warrants to purchase Redeemable Convertible Preferred Stock were no longer outstanding, and therefore were no longer considered to be potentially dilutive securities during the three and nine months ended September 30, 2025. In addition, included in the basic and diluted net loss per share calculation were RSUs awarded to an executive officer that had vested during the quarter ended September 30, 2025, but the issuance and delivery of the shares are deferred until the first quarter of 2026. The number of shares underlying vested and unsettled RSUs at September 30, 2025 was 272,055.

Basic and diluted net loss attributable to common stockholders per share is presented in conformity with the two-class method required for participating securities as the Redeemable Convertible Preferred Stock and common stock subject to repurchase are considered participating securities. The Redeemable Convertible Preferred Stock did not have a contractual obligation to share in the Company’s losses, and unvested RSAs subject to repurchase is considered an unvested stock-based compensation award for accounting purposes. As such, the net loss is attributed entirely to common stockholders. Because the Company has reported a net loss for the reporting periods presented, the diluted net loss per common share is the same as basic net loss per common share for those periods.

Recently Issued Accounting Standards Not Yet Adopted

Accounting standards not listed below were assessed and determined not to be applicable or are expected to have minimal impact on the Company’s unaudited condensed consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The guidance includes the requirement that public business entities, on an annual basis, disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5% of the amount computed by multiplying pretax income (or loss) by the applicable statutory income tax rate). It also requires that all entities disclose, on an annual basis, the amount of income taxes paid (net of refunds received) disaggregated by federal (national), state, and foreign taxes and the amount of income taxes paid (net of refunds received) disaggregated by individual jurisdictions in which income taxes paid (net of refunds received) is equal to or greater than 5% of total income taxes paid (net of refunds received) and requires that all entities disclose income (or loss) from continuing operations before income tax expense (or benefit) disaggregated between domestic and foreign and income tax expense (or benefit) from continuing operations disaggregated by federal (national), state, and foreign. Lastly, the guidance eliminates the requirement for all entities to disclose the nature and estimate of the range of the reasonably possible change in the unrecognized tax benefits balance in the next 12 months or make a statement that an estimate of the range cannot be made. For public business entities, the guidance is effective for annual periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The guidance should be applied on a prospective basis. Retrospective application is permitted. The Company is currently evaluating the impact that this guidance may have on its consolidated financial statements for the year ended December 31, 2025.

3. FAIR VALUE MEASUREMENTS

As of September 30, 2025 and December 31, 2024, there were no financial assets or liabilities carried at fair value which were not equivalent to cost.

4. OTHER ACCRUED EXPENSES

Other accrued expenses as of September 30, 2025 and December 31, 2024 consisted of the following:

Schedule of other accrued expenses
	September 30, 2025		December 31, 2024
Accrued clinical trial costs	$	3,793,554	$	5,483,846
Other accrued expenses		465,494		438,062
Total other accrued expenses	$	4,259,048	$	5,921,908

5. COMMITMENTS AND CONTINGENCIES

Operating Lease

On December 1, 2024, the Company rented office space on a month-to-month basis with no long-term commitment, representing a short-term lease. As a result, the Company has elected to apply the short-term lease exemption to its office lease and therefore has not recorded a right of use (“ROU”) asset and related lease liability in accordance with ASC 842, Leases (“ASC 842”). Rent expense recorded during the three and nine months ended September 30, 2025 was $12,900 and $38,300, respectively, which amounts were included in general and administrative expenses in the accompanying unaudited condensed consolidated statements of operations.

Legal

The Company may be involved, from time to time, in legal proceedings and claims arising in the ordinary course of its business. Such matters are subject to many uncertainties and outcomes and are not predictable with assurance. While management believes that such matters are currently insignificant, matters arising in the ordinary course of business for which the Company is or could become involved in litigation may have a material adverse effect on its business and financial condition. To the Company’s knowledge, the Company is not subject to any pending legal proceedings.

Indemnities and Guarantees

We have made certain indemnities and guarantees, under which we may be required to make payments to a guaranteed or indemnified party, in relation to certain transactions. We indemnify our officers and directors to the maximum extent permitted under the laws of the State of Delaware. The duration of these indemnities and guarantees varies and, in certain cases, is indefinite. These indemnities and guarantees do not provide for any limitation of the maximum potential future payments we could be obligated to make. Historically, we have not been obligated to make any payments for these obligations and no liabilities have been recorded for these indemnities and guarantees in the accompanying unaudited condensed consolidated balance sheets.

6. LICENSES AND AGREEMENTS

UIC License Agreement

On April 6, 2015, the Company entered into an Exclusive License Agreement with Equity (the “UIC License Agreement”) with The Board of Trustees of the University of Illinois (“UIC”), whereby, UIC granted the Company (a) an exclusive, nontransferable license, with the right to sublicense under UIC’s rights in the Patent Rights (as defined in the UIC License Agreement), and (b) a non-exclusive, non-transferable worldwide license, with the right to sublicense, to use UIC’s rights in the Technical Information (as defined in the UIC License Agreement) for all uses. In consideration of the license granted under the UIC License Agreement, the Company agreed to pay UIC (i) development milestones of up to $1.25 million, of which, up to $0.25 million is due upon the progress of clinical trials and $1.0 million is due upon the initiation of commercial sales, (ii) annual minimum royalty payments, increasing to $50,000 in year six and each year thereafter, (iii) royalty on net sales for product covered under the Patent Rights in the low single digits with a 50% reduction in royalties for products solely utilizing Technical Information, (iv) a declining percentage of sublicensing revenue based on the escalating stage of development upon a sublicensing event, and (v) the reimbursement of all patent and related expenses incurred by UIC covering the Patent Rights. For the three and nine months ended September 30, 2025, the Company incurred minimum royalty expenses and other reimbursable expenses to UIC in the aggregate amount of $0 and $58,158, respectively, which amounts were included in general and administrative expenses in the accompanying unaudited condensed consolidated statements of operations. For the three and nine months ended September 30, 2024, the Company incurred minimum royalty expenses to UIC in the aggregate amount of $0 and $50,000, respectively, which amounts were included in general and administrative expenses in the accompanying unaudited condensed consolidated statements of operations.

In addition, the Company entered into a sublicense and collaboration agreement dated August 28, 2017 with an unrelated entity that was covered under the UIC License Agreement, which sublicense agreement was later terminated on January 31, 2018. Under the UIC License Agreement, the Company owed UIC a certain percentage of amounts received under the sublicense agreement in the amount of $449,990. The Company paid UIC 10% of the sublicense fees in the amount of $44,999 and the remaining unpaid balance of $404,991 (“Deferred Amount”) was originally due and payable to UIC in two installments: 50% due and payable on the one-year anniversary from the first commercial sale and 50% due on the second-year anniversary from the first commercial sale. The Deferred Amount is treated as debt and continues to accrue interest at a rate of five percent (5%) per annum, representing the prime rate as of the date of the agreement plus 1%. On July 16, 2024, the Company and UIC entered into an amendment to the UIC License Agreement (“UIC Amendment”). Pursuant to the UIC Amendment, accrued interest is due and payable in two installments: (i) 50% was due and paid within 30 days following the closing of the Company’s initial public offering (“IPO”) on August 14, 2024; and (ii) 50% was due and paid within 30 days following the first anniversary of the closing of the IPO. Thereafter, interest will be paid annually within 30 days following the second anniversary of the closing of the IPO and annually thereafter. In addition, the UIC Amendment provides for payment of the Deferred Amount and any accrued interest thereon upon the sooner of (i) termination of the UIC License Agreement by the Company, (ii) the Company ceases development of the licensed UIC technology, (iii) the Company consummates a Change in Control (as defined in the UIC License Agreement), (iv) the Company sublicenses the licensed technology or the developed product, (v) the one-year anniversary following approval of a NDA of a licensed product, or (vii) the Company executes a partnership agreement with any entity resulting in the payment to us above a specified milestone amount or the Company secures cumulative financing equal to or exceeding $200 million. In addition, the UIC Amendment provides that to the extent the Company secures equity financing equal to or exceeding $85 million through its IPO or otherwise, 50% of the Deferred Amount is due and payable within 30 days. The remaining 50% of the Deferred Amount shall be due and payable upon the first to occur of any of the events noted above in clauses (i) through (vii). Finally, the UIC Amendment provides that for as long as the Company or a sublicensee is selling the licensed product, the Company will pay all consideration provided for in the original UIC License Agreement and described above until the last to expire market exclusivity date, the period of which for all products in a jurisdiction will not exceed a total of seven (7) years beginning with the date regulatory approval is granted for the first licensed product in the jurisdiction, and such obligation will survive termination of the UIC License Agreement.

As of September 30, 2025, interest payable to UIC was $21,956 included in the accompanying unaudited condensed consolidated balance sheet. As of December 31, 2024, interest payable to UIC was $77,725, of which, $70,957 was classified as current and $6,768 was classified as non-current, which amounts are included in the accompanying unaudited condensed consolidated balance sheet.

7. STOCKHOLDERS’ EQUITY

Authorized and Issued Capital

The Company’s authorized capital consists of 200,000,000 shares of common stock, $0.000001 par value per share, and 10,000,000 shares of preferred stock, $0.000001 par value per share. As of September 30, 2025 and December 31, 2024, there were 23,243,328 and 19,531,636 shares of common stock issued and outstanding, respectively. There were no shares of preferred stock outstanding as of September 30, 2025 or December 31, 2024.

September 2025 Public Offering

On September 10, 2025, the Company entered into an underwritten public offering of 2,142,858 shares of common stock plus an over-allotment option to purchase up to an additional 321,428 shares of Common Stock at the public offering price of $7.00 per share, less underwriting discounts and commissions and other offering expenses. Upon closing the September 2025 Public Offering on September 11, 2025 (“Closing Date”), the Company issued 2,464,286 shares of common stock to the Underwriter, including shares issued under the over-allotment option, in exchange for net proceeds of $15,573,966, after deducting underwriter discounts and commissions and other offering expenses of approximately $1,676,036. In addition, the Company agreed, subject to certain exceptions, not to sell any shares of its capital stock or any securities convertible into or exercisable or exchangeable for shares of capital stock for a period of seventy-five (75) days from the Closing Date.

June 2025 Private Placement

On June 25, 2025, the Company entered into a securities purchase agreement for a private placement of common stock and warrants with certain institutional and accredited investors, including Bios 2024 Co-Invest, LP. Dr. Aaron G.L. Fletcher, the Chairman of the Company’s Board of Directors, is a Managing Partner and co-founder of Bios Partners, of which Bios 2024 Co-Invest, LP is an affiliate entity. Upon closing of the June 2025 Private Placement on June 27, 2025, the Company issued and sold an aggregate of (i) 666,497 shares of common stock of the Company at a purchase price of $7.00 per share, and (ii) issued warrants to purchase up to an aggregate of 666,497 shares of common stock at an exercise price of $7.00 per share. The warrants are exercisable on a cash only basis at any time after the date of issuance and expire 20 days following the earliest to occur of (i) the U.S. Food and Drug Administration (“FDA”) issuing Breakthrough Therapy Designation (“BTD”) for elraglusib and (ii) the date that the FDA provides written communication available to the Company of its determination as to whether the Company may pursue registration for elraglusib using its currently available Phase 2 data or data from a Phase 3 clinical trial (“Warrant Expiry Date”). The Company received aggregate gross proceeds of $4,665,479 from the June 2025 Private Placement, before deducting fees and offering expenses of $73,017, of which we received gross proceeds of $499,996 from Bios 2024 Co-Invest, LP in exchange for 71,428 shares of common stock and warrants to purchase 71,428 shares of common stock.

The warrants issued under the June 2025 Private Placement were classified as a component of permanent stockholders’ equity within additional paid-in-capital and were recorded at the issuance date. The warrants are equity classified because they are freestanding financial instruments that are legally detachable and separately exercisable from the equity instruments, are immediately exercisable, do not embody an obligation for the Company to repurchase its shares, permit the holders to receive a fixed number of shares of common stock upon exercise, are indexed to the Company’s common stock and meet the equity classification criteria. In addition, the warrants do not provide any guarantee of value or return.

Pursuant to the securities purchase agreement, the Company entered into a registration rights agreement (“Registration Rights Agreement”) with the investors, pursuant to which the Company agreed to register for resale the shares of common stock and shares of common stock underlying the warrants. Under the Registration Rights Agreement, the Company agreed to file a registration statement with the U.S. Securities and Exchange Commission (the “SEC”), covering the resale of the shares of common stock, which was filed on July 25, 2025 prior to the filing deadline. The registration statement was declared effective by the SEC on August 4, 2025. The Company also agreed to use reasonable efforts to keep such registration statement effective until the earlier of (i) the date on which the Purchasers have resold all the Registrable Securities covered thereby or (ii) the date on which the Registrable Securities may be resold by the Purchasers without registration and without regard to any volume or manner-of-sale limitations by reason of Rule 144 (“Rule 144”) of the Securities Act of 1933, as amended (the “Securities Act”), without the requirement for the Company to be in compliance with the current public information requirement under Rule 144 under the Securities Act or any other rule of similar effect. In addition, certain liquidated damages provisions will apply to the Company in the event that the registration is not effective or its use has been suspended beyond specified grace periods, as described in the Registration Rights Agreement.

Committed Equity Facility

On March 27, 2025, the Company entered into a Committed Equity Facility with B. Riley giving the Company the right, but not the obligation, to sell to B. Riley over a 36-month period up to the lesser of (i) $50 million of newly issued shares of our common stock and (ii) 3,904,374 shares of the Company’s common stock. The price per share of common stock sold to B. Riley is determined by reference to the daily volume weighted-average price of the Company’s common stock as defined within the Committed Equity Facility less a 3% discount, subject to certain limitations and conditions, as calculated on each day the Company sells shares of its common stock under the Committed Equity Facility. The total net proceeds that the Company will receive under the Committed Equity Facility will depend on the quantity, frequency and prices at which the Company sells common stock to B. Riley.

Upon the initial satisfaction of the conditions to B. Riley’s obligation to purchase shares under the Committed Equity Facility, including that a registration statement registering the resale by B. Riley of the shares of common stock under the Securities Act of 1933, as amended (the “Securities Act”) is declared effective by the SEC and a final prospectus relating thereto is filed with the SEC (which occurred on April 16, 2025), we have the right, but not the obligation, from time to time at our sole discretion, to deliver one or more notices to direct B. Riley to purchase a specified number of shares of common stock on any trading day, not to exceed the lesser of: (i) 1,000,000 shares of common stock and (ii) up to 50.0% of the total aggregate number (or volume) of shares of our common stock traded on Nasdaq during the applicable trading day, provided the closing sale price of our common stock on Nasdaq on the trading day immediately prior to such purchase date is not less than $1.00.

In addition, we will not sell, and B. Riley will not purchase any shares pursuant to the Committed Equity Facility, which, when aggregated with all other shares of common stock then beneficially owned by B. Riley and its affiliates, would result in the beneficial ownership by B. Riley and its affiliates of more than 4.99% of our outstanding voting power or shares of common stock.

Moreover, under the applicable Nasdaq rules, in no event may we issue to B. Riley more than 3,904,374 shares of common stock (representing 19.99% of the shares of common stock outstanding immediately prior to the execution of the Committed Equity Facility) unless (i) we obtain stockholder approval in accordance with applicable Nasdaq rules, or (ii) the average price per share paid by B. Riley for all of the shares of common stock that we direct B. Riley to purchase from us pursuant to the Committed Equity Facility equals or exceeds $7.56 per share (representing the lower of (a) the official closing price of our common stock on Nasdaq immediately preceding the execution of the Committed Equity Facility and (b) the average official closing price of our Common Stock on Nasdaq for the five consecutive trading days immediately preceding the execution of the Committed Equity Facility, as adjusted to take into account the payment of the Cash Commitment Fee (as defined below) to B. Riley).

As consideration for B. Riley’s commitment to purchase shares of common stock at the Company’s direction, the Company agreed to pay B. Riley a cash commitment fee in the amount of up to $500,000 (the “Cash Commitment Fee”), which represents 1.0% of B. Riley’s $50,000,000 total aggregate purchase commitment under the Committed Equity Facility. The Cash Commitment Fee will be earned and paid by withholding cash amounts equal to 10% of the total aggregate purchase price payable by B. Riley to the Company in connection with each purchase effected under the Committed Equity Facility, until such time as B. Riley shall have earned and received from such cash withholdings a total aggregate amount in cash equal to $500,000.

In addition, the Company reimbursed B. Riley for the reasonable legal fees and disbursements of B. Riley’s legal counsel and other expenses in the amount of $125,000 and agreed to future quarterly reimbursements of $5,000 during the term of the Committed Equity Facility.

We have the right to terminate the Committed Equity Facility at any time, at no cost or penalty, upon ten (10) trading days’ prior written notice to B. Riley. In addition, there are no restrictions on future financings, rights of first refusal, participation rights, penalties or liquidated damages under the Committed Equity Facility, other than a prohibition (with certain limited exceptions) on entering into specified variable rate transactions, as defined.

During the nine months ended September 30, 2025, B. Riley purchased 539,967 and shares of common stock under the Committed Equity Facility in exchange for net proceeds to the Company of $3,800,465, after deducting the 3% discount, the earned Cash Commitment Fee, and other offering expenses in the aggregate amount of $603,655.

Reserved Shares

As of September 30, 2025, the Company reserved the following shares of common stock for issuance upon the (i) exercise of outstanding warrants, (ii) issuance of shares reserved under the Committed Equity Facility, (iii) exercise of issued and outstanding stock option awards and restricted stock unit awards, and (v) to reserve the remaining shares available for grant under the 2024 Stock Incentive Plan (“2024 Plan”):


	September 30, 2025
Shares of common stock reserved under the Committed Equity Facility		3,364,407
Shares reserved for issuance under the 2024 Plan		2,224,341
Stock option awards issued and outstanding		1,804,477
Warrants issued and outstanding to purchase common stock		922,096
Restricted stock unit awards issued and outstanding		616,611
Total		8,931,932

8. WARRANTS

On June 27, 2025, we issued warrants to purchase 666,497 shares of common stock in conjunction with the June 2025 Private Placement (see Note 7). As of September 30, 2025, the following warrants to purchase up to 922,096 shares of common stock were outstanding:

Schedule of warrant outstanding
	Warrants Outstanding	Exercise Price per Share	Expiry Date
June 2025 Private Placement Warrants	666,497	$7.00	Warrant Expiry Date (see Note 7)
Underwriter warrants issued under IPO	161,000	$10.00	August 12, 2027
Warrants originally issued in conjunction with Series B Redeemable Convertible Preferred Stock	76,376	$10.55	August 13, 2026
Warrants originally issued in conjunction with Series C Redeemable Convertible Preferred Stock	18,223	$9.42	August 13, 2026
Total	922,096

9. EQUITY COMPENSATION PLANS

Stock Incentive Plans

In connection with the Company’s IPO, our board of directors adopted and our stockholders approved our 2024 Stock Incentive Plan (the “2024 Plan”), which became effective on August 12, 2024, the effective date of the registration statement for the Company’s IPO. The purpose of the 2024 Plan is to enhance the Company’s ability to attract, retain and motivate individuals by providing these individuals with equity ownership and incentive opportunities. All of the Company’s employees, as well as all of the Company’s non-employee directors and other consultants, advisors and other persons who provide services to the Company are eligible to receive incentive awards under the 2024 Plan, including stock options grants, stock appreciation rights (“SARs”), restricted stock awards (“RSAs”), restricted stock units (“RSUs”), and other awards. Up to 3,316,444 shares of common stock were originally reserved for future issuance under the 2024 Plan. In addition, the number of shares of common stock available for issuance under the 2024 Plan is subject to an automatic annual increase on the first day of each calendar year beginning on January 1, 2025 and ending on and including January 1, 2034 equal to the lesser of (i) 5% of the aggregate number of shares of common stock outstanding on the final day of the immediately preceding calendar year and (ii) such smaller number of shares of common stock as may be determined by the Board. Effective January 1, 2025, the number of shares of common stock reserved for issuance under the 2024 Plan increased by 976,581 under clause (i). As of September 30, 2025, there were 2,224,341 shares available for grant under the 2024 Plan.

In addition, the Company had previously adopted the 2015 Stock Incentive Plan (the “2015 Plan”). As of September 30, 2025, there were 349,626 stock options outstanding and 20,142 unvested RSAs outstanding under the 2015 Plan. On the effective date of the 2024 Plan, there were no remaining shares available for grant under the 2015 Plan.

Restricted Stock Awards

At September 30, 2025, the total estimated unrecognized compensation cost related to unvested service-based RSAs and unvested performance based RSAs was approximately $16,000 and $42,000, respectively. The unrecognized cost related to service-based RSAs is expected to be recognized over the remaining weighted average vesting period of 0.43 years. The unrecognized cost related to performance-based RSAs will be recognized ratably over the performance period based upon the probable number of shares expected to vest. During the three and nine months ended September 30, 2025, there was no expense recorded for the outstanding performance-based RSAs.

The following summarizes our RSAs transaction activity for nine months ended September 30, 2025:

Schedule of RSAs transaction activity
	Restricted Common Stock Award Shares			Weighted Average Grant Date Fair Value
Unvested balance at December 31, 2024		46,463		$	2.48
Granted		–		$	–
Vested		(26,321	)	$	2.11
Forfeited		–		$	–
Unvested balance at September 30, 2025		20,142		$	2.98

Restricted Stock Units

At September 30, 2025, the total estimated unrecognized compensation cost related to unvested RSUs was approximately $2,486,000. This cost is expected to be recognized over the remaining weighted average vesting period of 0.81 years.

The following summarizes our RSUs transaction activity for the nine months ended September 30, 2025:

Schedule of RSUs transaction activity
	Restricted Common Stock Unit Shares			Weighted Average Grant Date Fair Value
Outstanding at December 31, 2024		544,111		$	9.15
Granted		297,500		$	8.44
Vested and settled		(25,000	)	$	8.36
Forfeited		(200,000	)	$	8.23
Outstanding at September 30, 2025		616,611		$	9.14
Vested at September 30, 2025		272,055		$	9.15
Unvested at September 30, 2025		344,556		$	9.13

Stock Options

The following summarizes our stock option transaction activity for the nine months ended September 30, 2025:


	Number of Stock Options			Grant Date Weighted Average Exercise Price
Outstanding at December 31, 2024		780,539		$	5.52
Options granted		1,039,880		$	7.18
Options exercised		(15,942	)	$	2.14
Options canceled and forfeited		–		$	–
Outstanding at September 30, 2025		1,804,477		$	6.50

As of September 30, 2025, total unrecognized stock-based compensation cost related to stock options was approximately $6,024,000. This cost is expected to be recognized over the weighted average remaining period of 1.52 years.

The following table provides the assumptions used in determining the estimated fair value of stock option awards granted during the nine months ended September 30, 2025:

Schedule of stock option assumptions
Weighted-average expected volatility			99.27%
Weighted-average risk-free interest rate			4.01%
Weighted-average expected dividend yield			0.00%
Weighted-average expected term (in years)			5.71

The following table summarizes the stock-based compensation expense recorded in the accompanying unaudited condensed consolidated statements of operations during the three and nine months ended September 30, 2025 and 2024:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Research and development	$	96,434	$	19,404	$	313,723	$	123,973
General and administrative		1,704,180		546,577		4,191,263		680,233
Total	$	1,800,614	$	565,981	$	4,504,986	$	804,206

The Company has not recognized and does not expect to recognize in the near future any tax benefit related to employee stock-based compensation expense as a result of the full valuation allowance related to its net deferred tax assets.

10. NET LOSS PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS

The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders during the three and nine months ended September 30, 2025 and 2024:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024
Numerator:
Net loss	$	(5,407,470	)	$	(5,970,961	)	$	(17,673,899	)	$	(20,839,239	)
Denominator:
Weighted-average shares of common stock outstanding, basic and diluted		21,394,965			10,772,640			20,186,706			4,647,199

Net loss per share attributable to common stockholders, basic and diluted	$	(0.25	)	$	(0.55	)	$	(0.88	)	$	(4.48	)

The potential dilutive effect of Redeemable Convertible Preferred Stock and Related Party Convertible Notes Payable outstanding during the three and nine months ended September 30, 2024 was calculated using the if-converted method assuming the conversion of underlying instruments as of the earliest period reported or at the date of issuance, if later, but are excluded if their effect is anti-dilutive. The potential dilutive effect of outstanding stock options, unvested RSAs, unvested RSUs, and outstanding warrants during the period are calculated in accordance with the treasury stock method, but are excluded if their effect is anti-dilutive.

The number of whole shares of common stock that were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods indicated because including them would have had an anti-dilutive effect were as follows:

Schedule of anti-dilutive shares
	September 30,
	2025		2024
Stock option awards issued and outstanding		1,804,477		763,317
Warrants issued and outstanding		922,096		255,599
Unvested restricted stock unit awards issued and outstanding		344,556		544,111
Unvested RSAs		20,142		77,105
Total		3,091,271		1,640,132

11. RELATED PARTY TRANSACTIONS

During 2018, the Company entered into a master service agreement with Pacific BioPharma Logistics, Inc. (“PBL”) to provide clinical support related to the packaging, labeling, kitting, storage, distribution and inventory of the Company’s investigational products. Mr. Richard Kenley, Vice President of Manufacturing for the Company (but not an “executive officer” of the Company, as defined under Rule 3b-7 of the Securities Exchange Act of 1934, as amended), is an unpaid advisor for PBL and his spouse is a shareholder in PBL. During the nine months ended September 30, 2025 and 2024, we incurred $450,197 and $719,489, respectively, in services provided by PBL, which amounts are included in research and development expense in the accompanying unaudited condensed consolidated statements of operations. As of September 30, 2025 and December 31, 2024, we had an outstanding balance owed to PBL of $29,776 and $51,540, respectively, which amounts are included in accounts payable in the accompanying unaudited condensed consolidated balance sheets.

12. SEGMENT REPORTING

The Company manages its operations as a single operating segment, which includes all activities related to the development and potential commercialization of novel therapies for the treatment of cancer, for the purposes of assessing performance and making operating decisions. The determination of a single business segment is consistent with the consolidated financial information regularly provided to the Company’s chief operating decision maker (“CODM”). The Company’s CODM is its President and Chief Executive Officer, who reviews and evaluates consolidated net income (loss) for purposes of assessing performance, making operating decisions, allocating resources, and planning and forecasting for future periods.

In addition to the significant expense categories included within consolidated net income (loss) presented on the Company’s unaudited condensed consolidated statements of operations, see below for disaggregated amounts that comprise research and development expenses for the three and nine months ended September 30, 2025 and 2024:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
External clinical trial expenses	$	1,041,473	$	2,615,267	$	4,397,461	$	11,200,195
Personnel and consulting expenses		929,833		646,885		2,645,072		2,158,804
Chemistry Manufacturing & Control (“CMC”) related costs		105,706		471,475		676,391		1,265,216
Preclinical and biomarker research		100,910		23,475		444,122		366,122
Total research and development expenses	$	2,177,922	$	3,757,102	$	8,163,046	$	14,990,337

In addition, the Company has a wholly-owned subsidiary, Actuate Therapeutics Limited, which is a dormant entity with no assets, liabilities or operations in any foreign countries.

13. SUBSEQUENT EVENTS

The Company has evaluated all subsequent events and transactions through the date these unaudited condensed consolidated financial statements were issued, to ensure these financial statements include appropriate disclosure of events both recognized in the financial statements and events which occurred but were not recognized in the financial statements. The Company has concluded that no subsequent event has occurred that requires disclosure.

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of the financial condition and results of our operations should be read together with the financial statements and related notes of Actuate Therapeutics, Inc. included in Part I Item 1 of this Quarterly Report on Form 10-Q (“Quarterly Report” or “Report”) and with our audited consolidated financial statements and the related notes thereto for the year ended December 31, 2024, filed with the Securities and Exchange Commission (the “SEC”) on March 13, 2025.

This discussion and analysis contains forward-looking statements reflecting our management’s current expectations that involve risks, uncertainties and assumptions. See the section entitled “Cautionary Note Regarding Forward-Looking Statements.” Our actual results and the timing of events may differ materially from those described in or implied by these forward-looking statements due to a number of factors, including those discussed below and elsewhere in this Report, particularly those set forth under “Risk Factors.”

Business Overview

We are a clinical stage biopharmaceutical company focused on developing therapies for the treatment of high impact, difficult to treat cancers through the inhibition of glycogen synthase kinase-3 (“GSK-3”). We are developing elraglusib (formerly 9-ING-41), an ATP-competitive small molecule that is designed to enter cancer cells and block the function of the enzyme glycogen synthase kinase-3 beta (“GSK-3β”), a master regulator of complex biological signaling cascades, including those mediated by oncogenes, that lead to tumor cell survival, growth, migration, and invasion. We believe that the blockade of GSK-3β signaling ultimately results in the death of the cancer cells and the regulation of anti-tumor immunity.

Since our inception in 2015, we have focused substantially all of our resources on organizing and staffing our Company, business planning, raising capital, establishing and maintaining our intellectual property portfolio, conducting research, preclinical studies, and clinical trials, establishing arrangements with third parties for the manufacture of elraglusib, and providing general and administrative support for these operations. We do not have any products approved for sale and have not generated any revenue from product sales since inception.

We have exclusively licensed a portfolio of GSK-3 inhibitors developed in a collaboration between The Board of Trustees of the University of Illinois-Chicago (“UIC”) and Northwestern University (“NU”). Elraglusib is the lead investigational product in our portfolio and is being evaluated in a Phase 2 trial in patients with metastatic pancreatic ductal adenocarcinoma (“mPDAC”), our most advanced clinical indication to date. We also advanced a Phase 1/2 clinical trial in refractory pediatric malignancies, including Ewing sarcoma (“EWS”), which we recently completed in July 2025.

Elraglusib represents a broad opportunity for us to potentially initiate and advance multiple drug development programs around our lead asset based on data emerging from completed or ongoing Phase 1/2 trials and non-clinical biological, cellular, and animal data. Animal tumor model data, Phase 1/2 clinical data and AI-based computational approaches have identified a number of areas of unmet clinical need in cancer where elraglusib may play an interventional role, including pancreatic, metastatic melanoma, lung, colon, breast, renal, and ovarian cancer, leukemias and lymphomas, as well as some pediatric cancers including Ewing sarcoma, neuroblastoma and pediatric leukemias.

Our lead clinical program, referred to as Actuate-1801, is focused on evaluating the intravenous (“IV”) injection solution of elraglusib (“Elraglusib Injection”) for the treatment of first-line mPDAC. The Actuate-1801 trial is a randomized, controlled Phase 2 trial of elraglusib in combination with gemcitabine/nab-paclitaxel (“GnP”) versus GnP alone in first-line mPDAC. The trial enrolled 286 patients with mPDAC and no prior systemic treatment for metastatic disease, who were randomized 2:1 to the elraglusib/GnP combination arm or the GnP arm. The primary endpoint for this study was median overall survival (“mOS”), with overall survival (“OS”) summarized throughout the study by estimates of 1-year survival. Secondary endpoints were overall response rates (“ORR”), median progression-free survival (“PFS”), disease control rate (“DCR”) and adverse events.

Topline data announced in May 2025 in the pre-specified safety population as of March 27, 2025 showed that the trial met its primary endpoint of improved mOS in patients in the elraglusib/GnP combination arm versus the GnP control arm. The analysis of topline data demonstrated treatment with elraglusib/GnP resulted in statistically significant increases in 1-year survival rate (p-value of 0.0005) and mOS (10.1 months vs 7.2 months, HR=0.63, log-rank p=0.01) with a 37% reduction in the risk of death versus treatment with GnP alone.

The following table provides additional topline results from the study as of March 27, 2025:

Safety Population	Elraglusib/GnP (n=155)	GnP (n=78)
Primary Endpoint: mOS (months) HR=0.63; log-rank p=0.01*	10.1	7.2
12-month OS (%) p=0.0005*	44.1	22.3
Number (%) of death events	114 (73.5)	70 (89.7)
18-month OS (%)	19.7	4.4
24-month OS (%)	13.8	0

__________________________

*statistically significant

In addition, topline data showed there were numerically improved overall response rates (“ORR”), median progression-free survival (“PFS”) and disease control rate (“DCR”) in the elraglusib/GnP combination arm versus the GnP arm as noted in the below table.

Safety Population	Elraglusib/GnP (n=155)	GnP (n=78)
ORR (%)	29.0	21.8
PFS (months)	5.6	5.1
DCR (%)	61.3	56.4

Moreover, treatment-emergent adverse events (“TEAEs”) and Serious Adverse Events (“SAEs”) in the elraglusib/GnP combination arm were similar to those observed in the GnP arm, indicating a favorable risk-benefit profile for the elraglusib/GnP combination. Treatment-related adverse events (“TRAEs”) were mostly Grade 1-2, with the most frequent TRAEs observed (in about two-thirds of patients) being transient visual disturbances that were reversible and non-progressive. Also, while Grade 3 or higher neutropenia was observed more often in the elraglusib/GnP treated patients, similar rates of febrile neutropenia and sepsis were observed in both treatment arms.

In addition, we recently amended our investigational new drug (“IND”) application with the FDA with updated topline clinical data covering our Actuate-1801 trial in addition to filing for Breakthrough Therapy Designation (“BTD”) shortly thereafter. In response to our submission, the FDA notified us that for a BTD, they will require that a new therapy demonstrate a substantial improvement in the treatment of mPDAC over all existing standard of care therapies, including irinotecan-containing regimens. Therefore, if clinical data are supportive from our ongoing or future trials in mPDAC evaluating the combination of elraglusib plus other combination agents, we will need to submit those data to the FDA to support a potential BTD. In addition, we plan to request meetings with the FDA to gain regulatory clarity on the design of a future clinical trial required to support potential product registration in the U.S. and with the European Medicines Agency (“EMA”) to discuss regulatory and clinical trial requirements for potential conditional approval in Europe (“EU”) for the treatment of first-line mPDAC.

The topline data noted herein should not be relied upon as a final analysis and is subject to change once full data analysis is complete.

In addition, Elraglusib Injection was also evaluated in a Phase 1/2 clinical trial completed in July 2025 in refractory pediatric malignancies and the data from this study (Actuate-1902) identified EWS as a potential second indication for further development of Elraglusib Injection. We plan to advance the clinical program towards a Phase 2 study in children, adolescents, and adults with relapsed/refractory EWS in 2026, subject to available funding.

We have developed several oral dosage forms of elraglusib, which we believe will allow us to expand the number of cancer indications that we are able to target and allow us to further explore more convenient dose delivery options for patients. A clinical candidate tablet (“Elraglusib Oral Tablet”) has been selected for further development, and we are planning a Phase 1 study (Actuate-2401) to identify the maximum tolerated dose (“MTD”) and recommended Phase 2 dose (“RP2D”) for Elraglusib Oral Tablet in patients with advanced, refractory adult cancers, subject to future funding.

Components of Our Results of Operations

Our operating expenses consist of (i) research and development expenses and (ii) general and administrative expenses.

Research and Development Expenses

Research and development expenses consist primarily of external and internal costs incurred in performing clinical and preclinical development activities. Our external research and development costs primarily consist of the cost incurred under agreements with hospitals to treat and monitor patients enrolled in our clinical trials, contract research organizations (“CROs”) and contract manufacturers, consultants and other third parties to conduct and support our clinical trials and preclinical studies. Our internal research and development costs primarily include research and development personnel-related expenses such as employee compensation, employer taxes, group insurance benefits, and stock-based compensation.

We expense research and development costs as incurred. We have been developing our lead investigational product candidate, elraglusib, since inception, and therefore, substantially all of our research and development costs were related to the development of elraglusib. We track research and development expenses on an aggregate basis and not on an indication-by-indication or treatment setting-by-treatment setting basis.

Although research and development activities are central to our business model, the successful development of elraglusib and any future product candidates is highly uncertain. There are numerous factors associated with the successful development of any product candidate such as elraglusib, including future trial design and various regulatory requirements, many of which cannot be determined with accuracy at this time based on our stage of development. In addition, future regulatory factors beyond our control may impact our clinical development programs. Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased number of patients and duration of later-stage clinical trials. As a result, we expect our research and development expenses will increase substantially in connection with our ongoing and planned clinical and preclinical development activities in the near term and in the future, provided we are able to raise additional capital. At this time, we cannot accurately estimate or know the nature, timing and costs of the efforts that will be necessary to complete the preclinical and clinical development of elraglusib and any future product candidates. Our future research and development expenses may vary significantly based on a wide variety of factors such as:

	·	the results of our clinical trials and preclinical studies of elraglusib and any future product candidates we may choose to pursue, including any modifications to clinical development plans based on feedback that we may receive from regulatory authorities;
	·	per patient trial costs;
	·	the number of trials required for approval;
	·	the number of sites included in the trials and the number of countries in which the trials are conducted;
	·	the number of patients that participate in the trials, the drop-out or discontinuation rates of patients, and the length of time required to enroll eligible patients;
	·	the number of doses that patients receive;
	·	the potential additional safety monitoring requested by regulatory agencies;
	·	the duration of patient participation in the trials and follow-up;
	·	the cost and timing of manufacturing elraglusib and any future product candidates;
	·	the costs, if any, of obtaining third-party drugs for use in our combination trials;
	·	the extent of changes in government regulation and regulatory guidance;
	·	the efficacy and safety profile of elraglusib and any future product candidates;
	·	the timing, receipt, and terms of any approvals from applicable regulatory authorities; and
	·	the extent to which we establish additional collaboration, license, or other arrangements.

A change in the outcome of any of these variables with respect to the development of elraglusib or any future product candidates could significantly change the costs and timing associated with the development of that product candidate. We may never succeed in obtaining regulatory approval for any product candidate.

General and Administrative Expenses

General and administrative expenses consist primarily of personnel-related expenses such as employee compensation, benefits, and stock-based compensation, for our personnel in executive and other administrative functions. General and administrative expenses also include legal fees relating to patent and corporate matters and professional fees paid for accounting, auditing, consulting and tax services, as well as other costs such as insurance costs, board of director fees, investor and public relations, and travel expenses.

We anticipate our general and administrative expenses will increase in the future as we expand our operations, including increasing our headcount to support our continued research and development activities and preparing for later-stage clinical trials and potential commercialization of elraglusib. We also anticipate we will continue to incur increased accounting, audit, legal, regulatory, compliance, director and officer insurance, and investor and public relations expenses associated with operating as a public company.

Other Income (Expense)

Change in Fair Value of Warrant Liability

We previously had outstanding warrants that required liability classification. The warrants were recorded at fair value upon issuance and were subject to remeasurement to fair value at each balance sheet date, with any changes in fair value recognized in other income (expense), net. The warrant liabilities were remeasured upon the closing of our initial public offering (“IPO”) and marked to market to its fair value before being reclassified to equity.

Loss on Issuance of Related Party Convertible Notes Payable; Change in Estimated Fair Value of Related Party Convertible Notes Payable

Upon issuance of certain notes payable, we elected to apply the fair value option in accordance with Accounting Standards Codification (“ASC”) 825, Financial Instruments. In certain circumstances, the estimated fair value at issuance may be greater than the principal amount at issuance. The fair value of these notes payable was estimated at each reporting period while outstanding. These notes payable were converted into common stock upon the closing of the IPO in August 2024.

Interest Expense

Interest expense represents interest owed to UIC under our license agreement with UIC, whereby UIC agreed to defer amounts owed to UIC under a former sublicense agreement in the amount of $404,991.

Interest Income

Interest income represents interest earned on our cash and cash equivalents at the then prevailing market rates.

Results of Operations

We have incurred significant operating losses and negative cash flows from operations since our inception. Our net losses were $27,285,328 and $24,744,620 for the years ended December 31, 2024 and 2023, respectively, and $17,673,899 and $20,839,239 for the nine months ended September 30, 2025 and 2024, respectively. As of September 30, 2025, we had an accumulated deficit of $150,053,748. Substantially all of our net losses have resulted from costs incurred in connection with our research and development programs and from general and administrative costs associated with our operations. We expect to continue to incur significant expenses and operating losses in the foreseeable future, and we anticipate these losses will increase substantially as we continue our development of, seek regulatory approval for, and potentially commercialize elraglusib, and potentially seek to discover, acquire and develop additional product candidates, utilize third parties to manufacture elraglusib, hire additional personnel, expand and protect our intellectual property, and incur additional costs associated with being a public company. If we obtain regulatory approval for elraglusib, we expect to incur significant expenses related to developing our commercialization capability to support product sales, marketing and distribution.

Comparison of the Three Months Ended September 30, 2025 and 2024:

The following table summarizes our results of operations for the three months ended September 30, 2025 and 2024:

	Three Months Ended September 30,
	2025			2024			Change
Operating expenses:
Research and development	$	2,177,922		$	3,757,102		$	(1,579,180	)
General and administrative		3,294,456			1,635,801			1,658,655
Total operating expenses		5,472,378			5,392,903			79,475
Loss from operations		(5,472,378	)		(5,392,903	)		(79,475	)
Other income (expense):
Change in estimated fair value of warrant liability		–			193,951			(193,951	)
Gain on settlement of warrants (non-cash)		–			343,240			(343,240	)
Change in estimated fair value of related party convertible notes payable		–			(1,192,507	)		1,192,507
Interest expense		(5,063	)		(3,489	)		(1,574	)
Interest income		69,971			80,747			(10,776	)
Total other income (expense), net		64,908			(578,058	)		642,966
Net loss	$	(5,407,470	)	$	(5,970,961	)	$	563,491

Research and Development Expenses

The following table summarizes our research and development expenses for the three months ended September 30, 2025 and 2024:

	Three Months Ended September 30,
	2025		2024		Change
External clinical trial expenses	$	1,041,473	$	2,615,267	$	(1,573,794	)
CMC related costs		105,706		471,475		(365,769	)
Personnel and consulting expenses		929,833		646,885		282,948
Preclinical and biomarker research		100,910		23,475		77,435
Total research and development expenses	$	2,177,922	$	3,757,102	$	(1,579,180	)

The decrease in research and development expenses of $1,579,180 for the three months ended September 30, 2025 compared to the same prior year period was primarily due to a (i) decrease in external clinical trial expenses of $1,573,794 mostly related to lower patient fees and CRO costs associated with fewer patients on study during the current period related to the randomized Phase 2 mPDAC trial (Actuate-1801 Part 3B) and (ii) a decrease in Chemistry Manufacturing & Control (“CMC”) related costs of $365,769 primarily due to the timing of drug product manufacturing and stability studies to support ongoing trials. These amounts were offset by a current period (i) increase in personnel and consulting expenses of $282,948 primarily due to an increase in consulting expenses associated with the Company’s regulatory and clinical operations related to the Actuate-1801 Part 3B trial, an increase in non-cash stock-based compensation expense of $77,030 related to awards granted to employees and consultants of the Company, and an increase in bonus expense, and (ii) an increase in preclinical and biomarker studies in the current period of $77,435 primarily due to new studies completed in the current period.

General and Administrative Expenses

The following table summarizes our general and administrative expenses for the three months ended September 30, 2025 and 2024:

	Three Months Ended September 30,
	2025		2024		Change
Personnel-related expenses	$	2,297,140	$	909,075	$	1,388,065
Professional and consulting fees		651,669		464,503		187,166
Other expenses		345,647		262,223		83,424
Total general and administrative expenses	$	3,294,456	$	1,635,801	$	1,658,655

The increase in general and administrative expenses of $1,658,655 for the three months ended September 30, 2025 compared to the same prior year period was primarily due to (i) an increase in personnel-related expenses of $1,388,065 mostly due to an increase in non-cash stock-based compensation expense of $1,157,603 related to awards granted to employees, non-employee members of the board of directors, and consultants of the Company combined with a current period increase in base salaries for certain administrative employees and an increase in bonus expense, (ii) an increase in professional and consulting fees of $187,166 primarily due to an increase in consulting fees associated with investor relations and administrative support, and (iii) an increase in other expenses of $83,424 primarily due to an increase in the cost of directors and officers insurance, board fees, and other public company expenses.

Other Income (Expense)

Other income (expense), net, for the three months ended September 30, 2025 and 2024 is comprised of the following:

	·	Change in fair value of warrant liability — During the three months ended September 30, 2024, we recognized a decrease in fair value of the warrant liability of $193,951 based on the estimated fair value of warrant liability using the Black-Scholes valuation model at August 14, 2024 (closing date of the IPO), which amount is included in other income (expense) in the accompanying unaudited condensed consolidated financial statements. As of December 31, 2024, there were no Redeemable Convertible Preferred Stock Warrants outstanding and no related warrant liability.

	·	Gain on settlement of warrants — During the three months ended September 30, 2024, we recognized a gain on settlement of warrants of $343,240 on the closing date of the IPO, representing the difference between the estimated fair value at June 30, 2024 and the estimated fair value upon conversion into shares of common stock on August 14, 2024.

	·	Change in estimated fair value of Related Party Convertible Notes Payable — The change in the estimated fair value of the Related Party Convertible Notes Payable of $1,192,507 for the three months ended September 30, 2024 represents the difference between the estimated fair value at June 30, 2024 and the estimated fair value upon conversion into shares of common stock on August 14, 2024.

	·	Interest expense — Interest expense for the three months ended September 30, 2025 and 2024 represents interest accrued on amounts owed under a license agreement with UIC, whereby UIC agreed to defer amounts payable to UIC under a former sublicense agreement in the amount of $404,991 in exchange for an interest-bearing license payable.

	·	Interest income — Interest income for the three months ended September 30, 2025 and 2024 represents interest earned on cash and cash equivalents based on the then prevailing market rates. The decrease in interest income for the three months ended September 30, 2025 compared to the same prior year period is primarily due to a lower average cash balance on hand compared to the same prior year period.