Actuate Therapeutics, Inc.: Form 10-Q for the period ended Sep 30, 2025

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:

*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.

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:

Research and Development Expenses

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

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:

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.

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

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

Research and Development Expenses

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

The decrease in research and development expenses of $6,827,291 for the nine 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 $6,802,734 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 CMC related costs of $588,825 in the current period primarily due to the timing of drug product manufacturing and stability studies. These amounts were offset by (i) an increase in personnel and consulting expenses of $486,268 due to an increase in non-cash stock-based compensation expense of $189,750 related to awards granted to employees and consultants of the Company, an increase in payroll and consulting expenses primarily related to increased clinical and regulatory activities, and an increase in bonus expense, and (ii) an increase in preclinical and biomarker studies in the current period of $78,000 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 nine months ended September 30, 2025 and 2024:

The increase in general and administrative expenses of $6,032,524 for the nine months ended September 30, 2025 compared to the same prior year period was primarily due to (i) an increase in personnel-related expenses of $4,337,493 mostly due to an increase in non-cash stock-based compensation expense of $3,511,030 related to awards granted to employees, non-employee members of the board of directors, and consultants of the Company combined with an increase in payroll and related expenses primarily related to the hiring of the Company’s chief financial officer in June 2024, 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 $910,820 primarily due to increased legal fees related to routine corporate activities combined with an increase in consulting fees associated with investor relations and administrative support, which amounts were offset by a decrease in board member search fees and valuation services and (iii) an increase in other expenses of $784,211 primarily due to an increase in the cost of directors and officers insurance, board fees, listing fees, and other public company expenses.

Other Income (Expense)

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

• Change in fair value of warrant liability — During the nine months ended September 30, 2024, we recognized an increase in fair value of the warrant liability of $78,903 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 nine 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 December 31, 2023 and the estimated fair value upon conversion into shares of common stock on August 14, 2024.
• Loss on issuance of related party convertible notes payable at fair value — The loss on issuance of the Related Party Convertible Notes Payable of $400,000 for the nine months ended September 30, 2024 represents the difference between the estimated fair value of the Related Party Convertible Notes Payable on the issuance date and the principal amount of the note on the issuance date based on the valuation assumptions.
• 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 $2,192,507 for the nine months ended September 30, 2024 represents the difference between the estimated fair value at issuance and the estimated fair value upon conversion into common stock on August 14, 2024.
• Interest expense — Interest expense for the nine 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 nine months ended September 30, 2025 and 2024 represents interest earned on cash and cash equivalents based on the then prevailing market rates. The increase in interest income for the nine months ended September 30, 2025 compared to the same prior year period is primarily due to a higher average cash balance on hand compared to the same prior year period.

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Liquidity and Capital Resources

Since our inception, we have not generated any revenue from product sales and have incurred significant operating losses and negative cash flows from operations. We expect to incur significant expenses and operating losses in the foreseeable future as we advance the clinical development of elraglusib and any future product candidates.

On June 27, 2025, the Company closed the June 2025 Private Placement and received aggregate net proceeds of $4,592,462 in exchange for 666,497 shares of common stock (see Note 7 to the accompanying unaudited condensed consolidated financial statements).

On September 11, 2025, the Company closed the September 2025 Public Offering and received net proceeds of $15,573,966 in exchange for the issuance of 2,464,286 shares of common stock to the Underwriter, including shares issued under the over-allotment option (see Note 7 to the accompanying unaudited condensed consolidated financial statements).

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 to the accompanying unaudited condensed consolidated financial statements).

As of September 30, 2025, we had cash and cash equivalents of $16,924,763 and working capital of $11,071,338. We expect our expenses to increase substantially in connection with our ongoing activities, particularly as we continue our development of, seek regulatory approval for, and potentially commercialize elraglusib and potentially seek to discover and develop and/or license or acquire additional product candidates, conduct our ongoing and planned clinical trials and preclinical studies, continue our research and development activities, 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. Based on our current operating plan, we estimate that our existing cash and cash equivalents as of the date of this Quarterly Report will not satisfy the Company’s operational and capital requirements beyond the second quarter of fiscal year 2026 without raising additional capital. 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.

Until such time, if ever, as we can generate substantial product revenue, we expect to finance our operations through equity offerings, debt financings, or other capital sources, including current or potential future collaborations, licenses, and other similar arrangements. As we seek additional financing in the near future, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all. Our ability to raise additional funds may be adversely impacted by business conditions, global economic conditions, disruptions to, and volatility in, the credit and financial markets in the United States and worldwide, and diminished liquidity and credit availability. To the extent we raise additional capital through the sale of equity or convertible debt securities, stockholders’ ownership interest in our common stock will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making acquisitions, engaging in acquisition, merger or collaboration transactions, selling or licensing our assets, making capital expenditures, redeeming our stock, making certain investments or declaring dividends. If we raise additional funds through collaborations or license agreements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates, or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity, debt, or other financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves, or even cease operations.

Based on the above matters, we have concluded that there is substantial doubt regarding the Company’s ability to continue as a going concern.

Material Cash Requirements for Known Contractual and Other Obligations

Research and Development Costs

We are continuing to invest in our elraglusib clinical trials and have entered into contractual obligations with each clinical trial site. Each contract shall continue until the completion of the trial at that site. Our clinical trial costs are dependent on, among other things, the size, number and length of our clinical trials.

Other Capital Requirements and Additional Royalty Obligations.

We enter into agreements in the normal course of business with various vendors, which are generally cancellable upon notice. Payments due upon cancellation typically consist only of payments for services provided or expenses incurred, including non-cancellable obligations of service providers, up to the date of cancellation.

Cash Flow Summary

The following table provides a summary of our cash flows for the nine months ended September 30, 2025 and 2024:

Cash Flows From Operating Activities

Nine Months Ended September 30, 2025 — Net cash used in operating activities for the nine months ended September 30, 2025 consisted of our net loss of $17,673,899 combined with cash used by a net change in operating assets and liabilities of $2,316,485, which amounts were offset by non-cash stock-based compensation expense of $4,504,986 and an increase in accrued interest on license payable of $15,188.

Nine Months Ended September 30, 2024 — Net cash used in operating activities for the nine months ended September 30, 2024 consisted of our net loss of $20,839,239 combined with the gain on settlement of the warrant liability of $343,240, which amounts were offset by (i) non-cash stock-based compensation expense of $804,206, (ii) a non-cash increase in the fair value of our warrant liability of $78,903, (iii) a loss on issuance of Related Party Convertible Notes Payable at fair value of $400,000, (iv) the change in estimated fair value of Related Party Convertible Notes Payable of $2,192,507, (v) an increase in accrued interest on license payable of $13,565, and (vi) cash provided by a net change in operating assets and liabilities of $623,065.

Cash Flows From Financing Activities

Nine Months Ended September 30, 2025 — During the nine months ended September 30, 2025, net cash provided by financing activities consisted of net proceeds received of (i) $15,573,966 under the September 2025 Public Offering, (ii) $4,592,462 under the June 2025 Private Placement, (iii), $3,826,336 from the sale of common stock to B. Riley under the Committed Equity Facility, and (iv) $34,115 from the exercise of stock options, which amounts were offset by the payment of deferred offering costs of $273,528.

Nine Months Ended September 30, 2024 — During the nine months ended September 30, 2024, net cash provided by financing activities primarily consisted of net proceeds received from the closing of the IPO and Overallotment Option of $22,135,023 (net of underwriting discounts and commissions and after payment of offering costs of $1,821,777) and proceeds of $5,500,000 from the issuance of the Related Party Convertible Notes Payable.

Critical Accounting Estimates

Our financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of our financial statements and related disclosures requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, costs and expenses, and the disclosure of contingent assets and liabilities in our financial statements. We base our estimates on historical experience, known trends and events, and various other factors we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions or conditions. There were no material changes to our critical accounting estimates as reported in our Annual Report on Form 10-K for the year ended December 31, 2024, which was filed with the SEC on March 13, 2025.

Emerging Growth Company Status and Smaller Reporting Company Status

We are an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). The JOBS Act permits an emerging growth company such as ours to take advantage of an extended transition period to comply with new or revised accounting standards. We have elected to avail ourselves of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, we can adopt the new or revised standard at the time private companies adopt the new or revised standard and may do so until such time that we either (i) irrevocably elect to opt out of such extended transition period or (ii) no longer qualify as an emerging growth company. We may choose to early adopt any new or revised accounting standards whenever such early adoption is permitted for private companies. We will continue to remain an emerging growth company until the earliest of the following: (1) the last day of the fiscal year following the fifth anniversary of the date of the completion of the IPO; (2) the last day of the fiscal year in which our total annual gross revenue is equal to or more than $1.235 billion; (3) the date on which we have issued more than $1.0 billion in nonconvertible debt during the previous three years; or (4) the date on which we are deemed to be a large accelerated filer under the rules of the SEC.

We are also a smaller reporting company as defined in the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We may continue to be a smaller reporting company even after we are no longer an emerging growth company. We may take advantage of certain of the scaled disclosures available to smaller reporting companies and will be able to take advantage of these scaled disclosures for so long as our voting and non-voting common stock held by non-affiliates is less than $250.0 million measured on the last business day of our second fiscal quarter, or our annual revenue is less than $100.0 million during the most recently completed fiscal year and our voting and non-voting common stock held by non-affiliates is less than $700.0 million measured on the last business day of our second fiscal quarter.

As a “smaller reporting company” as defined in Rule 12b-2 of the Exchange Act, we are not required to provide the information called for by this item.

Evaluation of Disclosure Controls and Procedures

As required by Rule 13a-15(b) under the Exchange Act, as of September 30, 2025, the end of the period to which this quarterly report relates, we have carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures. This evaluation was carried out under the supervision and with the participation of our management, including our President and Chief Executive Officer and our Chief Financial Officer.

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including the President and Chief Executive Officer and the Chief Financial Officer as appropriate, to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of September 30, 2025, our management, with the participation of our President and Chief Executive Officer and our Chief Financial Officer, concluded that, as of such date, our disclosure controls and procedures were effective at a reasonable assurance level.

Changes in Internal Control Over Financial Reporting.

There were no changes in our internal control over financial reporting that occurred during the three months ended September 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

RISK FACTORS

Investing in our common stock involves a high degree of risk. Before you decide to invest in our common stock, you should carefully consider all the information within this Quarterly Report, including the information contained in Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” as well as in our condensed consolidated financial statements and the related notes contained in Part I, Item 1 within this Quarterly Report. In addition, you should carefully consider the risks and uncertainties described in Part I, Item 1A, “Risk Factors,” of our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on March 13, 2025 (“Annual Report”), our Quarterly Reports on Form 10-Q, as well as in our other public filings with the SEC. If any of the identified risks are realized, our business, results of operations, financial condition, liquidity, and prospects could be materially and adversely affected. In that case, the trading price of our common stock may decline, and you could lose all or part of your investment. In addition, other risks of which we are currently unaware, or which we do not currently view as material, could have a material adverse effect on our business, results of operations, financial condition, and prospects.

Other than as set forth in Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” there have been no material changes to our risk factors disclosed in Part I, Item 1A, of our Annual Report or our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2025 and June 30, 2025, filed with the SEC on May 15, 2025 and August 14, 2025, respectively.