Actuate Therapeutics, Inc.: Form 10-Q for the period ended Mar 31, 2026

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, 2025, filed with the Securities and Exchange Commission (the “SEC”) on March 26, 2026.

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, 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. There are no approved high-affinity inhibitors of GSK-3β, and we believe elraglusib is one of the most advanced GSK-3β inhibitors in clinical development.

We have exclusively licensed elraglusib, a proprietary and patent protected GSK-3 inhibitor developed in a collaboration between The Board of Trustees of the University of Illinois-Chicago (“UIC”) and Northwestern University (“NU”).

We believe elraglusib represents a “pipeline in a molecule” with a broad opportunity for us to potentially initiate and advance multiple drug development programs around our lead asset based on its multimodal mechanisms of action, data emerging from completed or ongoing clinical studies and nonclinical biological, cellular, and animal data. Animal tumor model data, clinical study data and AI-based computational approaches have identified a number of areas of unmet clinical need in cancer treatment 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.

To date, we have treated over 500 patients with elraglusib as an IV injection (“Elraglusib Injection”) in Phase 1 and Phase 2 studies. We have also developed an oral formulation of elraglusib (“Elraglusib Oral Tablet”), which we believe will allow us to pursue a number of cancer indications with a more convenient dose delivery option for patients with the ability to dose patients on a daily basis. We filed an Investigational New Drug (“IND”) application with the FDA in April 2026 to advance the Elraglusib Oral Tablet into a Phase 1/2 clinical study to identify the maximum tolerated dose and Recommended Phase 2 Dose (“RP2D”) in adult patients with advanced, refractory cancers and we recently received FDA clearance to proceed with the Phase 1/2 clinical study. Once we have determined a RP2D, several Phase 2 or registrational studies have been identified for further clinical development of Elraglusib Oral Tablet, subject to additional funding, based on data from previous studies, including but not limited to, first-line metastatic pancreatic ductal adenocarcinoma (“mPDAC”), refractory, metastatic melanoma, refractory, metastatic colorectal cancer, and non-small cell lung cancer.

In addition, we have generated promising results with a once weekly IV infusion of elraglusib in first-line treatment of patients with mPDAC. Our Phase 2 study in mPDAC, known as Actuate-1801 Part 3B study, is a randomized, controlled Phase 2 study that enrolled 286 patients with no prior systemic treatment for metastatic disease. 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. Updated data results presented at the American Society of Clinical Oncology (“ASCO”) Genitourinary Cancers Symposium (“ASCO GI”) in January 2026 utilizing a data cutoff as of November 22, 2025 showed that the study met its primary endpoint, demonstrating a statistically significant improvement in mOS with elraglusib plus gemcitabine/nab-paclitaxel (“GnP”) versus GnP alone. Data presented at ASCO GI included:

• Statistically significant benefit in mOS in the elraglusib/GnP arm vs GnP control arm (mOS 10.1 months vs. 7.2 months, p=0.02, HR=0.62);
• Near doubling of the 12-month survival rate, from 22.3% in the GnP arm to 44.4% in the elraglusib/GnP arm; and
• Almost fivefold increase in 24-month survival rate, from 2.6% in the GnP control arm to 12.9% in the elraglusib/GnP arm, emphasizing the potential for long-term clinical benefit.

While these data are impressive with once weekly dosing, we believe we can further improve the outcome of patients using the Elraglusib Oral Tablet at the RP2D, including a more frequent dosing regimen to be identified in the Phase 1 study. We believe this strategy will further align with other new approaches to treating mPDAC with investigational products that are delivered orally to patients. In addition, the safety profile of elraglusib in over 500 patients to date shows the product is well tolerated as a monotherapy and in combination with chemotherapy. We believe this will allow the Elraglusib Oral Tablet to be combined with other investigational products, including but not limited to RAS and MEK inhibitors, where possible additive or synergistic mechanisms of action may potentiate better outcomes for patients treated with combination therapy including elraglusib.

In addition to our development plans for the Elraglusib Oral Tablet, we have advanced the Elraglusib Injection in pediatric cancer patients with recurrent/refractory solid cancers. This study, Actuate-1902, is a Phase 1/2 study that evaluated escalating doses of elraglusib as a single agent as well as in combination with irinotecan or cyclophosphamide/topotecan in the Phase 1 portion of the study. Patients in this Actuate-1902 study also experienced a number of objective responses in the combination chemotherapy arms, and based on this data, we identified Ewing sarcoma and neuroblastoma as possible new indications for further development of Elraglusib Injection, pending additional funding primarily focused on non-dilutive sources or capital, further expanding the potential use and positive therapeutic impact of elraglusib.

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

We expense research and development costs as incurred. We currently only have one product candidate, elraglusib. Therefore, since our inception, 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 study 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 studies. As a result, we expect our research and development expenses to increase substantially in connection with our ongoing and planned clinical and nonclinical 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 nonclinical 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 studies and nonclinical 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 clinical study costs;
• the number of clinical studies required for approval;
• the number of sites included in the clinical study and the number of countries in which the studies are conducted;
• the number of patients that participate in the clinical studies, 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 clinical studies 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 clinical studies;
• 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 studies 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)

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 $22,227,852 and $27,285,328 for the years ended December 31, 2025 and 2024, respectively, and $5,625,749 and $6,317,024 for the three months ended March 31, 2026 and 2025, respectively. As of March 31, 2026, we had an accumulated deficit of $160,233,450. Substantially all of our net losses have resulted from costs incurred in connection with our research and development programs and 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 March 31, 2026 and 2025:

The following table summarizes our results of operations for the three months ended March 31, 2026 and 2025:

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Research and Development Expenses

The following table summarizes our research and development expenses for the three months ended March 31, 2026 and 2025:

The decrease in research and development expenses of $655,075 for the three months ended March 31, 2026 compared to the same prior year period was primarily due to a decrease in external clinical study expenses of $1,253,182 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 study (Actuate-1801 Part 3B) combined with a decrease of $200,087 in CMC related costs due to the timing of drug product manufacturing to support ongoing and planned clinical studies. These decreases in expenses in the current period were offset by increases in nonclinical and biomarker studies in the amount of $445,676 due to greater nonclinical studies conducted in the current period to support advancing elraglusib combined with an increase in personnel and consulting expenses of $352,518 primarily due to increased headcount combined with an increase in medical and regulatory consulting associated with ongoing regulatory filings.

General and Administrative Expenses

The following table summarizes our general and administrative expenses for the three months ended March 31, 2026 and 2025:

The decrease in general and administrative expenses of $4,553 for the three months ended March 31, 2026 compared to the same prior year period was primarily due a (i) decrease in professional and consulting fees of $167,917 mostly due to lower legal fees in the current period which was partially offset by an increase in investor and public relation fees and a (ii) decrease in other expenses of $3,962 primarily due to lower insurance costs. These amounts were offset by an increase in personnel-related expenses of $167,326 mostly due to an increase in non-cash stock-based compensation expense of $203,544 related to awards granted to employees, non-employee members of the board of directors, and consultants of the Company.

Other Income (Expense)

Other income (expense), net, for the three months ended March 31, 2026 and 2025 is comprised of the following:

• Interest expense — Interest expense for the three months ended March 31, 2026 and 2025 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 March 31, 2026 and 2025 represents interest earned on cash and cash equivalents based on the then prevailing market rates. The increase in interest income for the three months ended March 31, 2026 compared to the same prior year period was primarily due to a higher average cash balance on hand compared to the same prior year period.

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 November 28, 2025, the Company entered into an At Market Issuance Sales Agreement (the “ATM Agreement”) with B. Riley Securities, Inc. and Craig-Hallum Capital Group LLC (each a “Sales Agent” and collectively the “Sales Agents”) with respect to an “at the market” offering program (the “ATM Facility”), under which the Company may, from time to time, at its sole discretion, issue and sell through the Sales Agents, up to $100 million of shares of common stock. Pursuant to the ATM Agreement, the Company may sell the shares through the Sales Agents by any method permitted that is deemed an “at the market” offering as defined in Rule 415 under the Securities Act. The Sales Agents will use commercially reasonable efforts consistent with their normal trading and sales practices to sell the shares from time to time, based upon instructions from us, including any price or size limits or other customary parameters or conditions we may impose. The Company will pay the Sales Agents a commission of up to 3.0% of the gross sales proceeds of any common stock sold through the Sales Agents under the ATM Agreement and also has provided the Sales Agents with customary indemnification rights. During the three months ended March 31, 2026, the Company sold 198,793 shares of common stock at a weighted-average price of $2.68 per share for net proceeds of $519,624 under the ATM Facility. As of March 31, 2026, the Company had approximately $99.5 million in remaining capacity under its ATM Facility.

On March 27, 2025, we 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. During the three months ended March 31, 2026, the Company did not issue any shares of common stock under the Committed Equity Facility. As of March 31, 2026, we had 3,364,407 shares of common stock in remaining capacity under our Committed Equity Facility.

As of March 31, 2026, we had cash and cash equivalents of $8,134,004 and working capital of $3,797,551. 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 studies and nonclinical 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 Report will not satisfy the Company’s operational and capital requirements beyond July 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 ATM Facility or Committed Equity Facility or any additional financing will be available to the Company on acceptable terms, if at all.

Until such time, if ever, that 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 studies and have entered into contractual obligations with each clinical study site. Each contract shall continue until the completion of the study at that site. Our clinical study costs are dependent on, among other things, the size, number and length of each clinical study.

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 three months ended March 31, 2026 and 2025:

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Cash Flows From Operating Activities

Three Months Ended March 31, 2026 — Net cash used in operating activities for the three months ended March 31, 2026 consisted of our net loss of $5,625,749 combined with cash used by a net change in operating assets and liabilities of $891,529, which amounts were offset by non-cash stock-based compensation expense of $1,356,389, non-cash stock issued for services of $138,500, and an increase in accrued interest on license payable of $5,062.

Three Months Ended March 31, 2025 — Net cash used in operating activities for the three months ended March 31, 2025 consisted of our net loss of $6,317,024, which amount was offset by (i) non-cash stock-based compensation expense of $1,125,101, (ii) an increase in accrued interest on license payable of $5,063, and (iii) cash provided by a net change in operating assets and liabilities of $568,120.

Cash Flows From Financing Activities

Three Months Ended March 31, 2026 — During the three months ended March 31, 2026, net cash used in financing activities consisted of the payment of taxes from withholding of common stock on settlement of restricted stock units of $527,716, which amount was partially offset by net proceeds received of $519,624 from the sale of shares of common stock under the At-the-Market Facility.

Three Months Ended March 31, 2025 — During the three months ended March 31, 2025, net cash used in financing activities consisted of deferred offering costs paid during the current period related to the Company’s Committed Equity Facility entered into on March 27, 2025.

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, 2025, which was filed with the SEC on March 26, 2026.

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 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.

Evaluation of Disclosure Controls and Procedures

As required by Rule 13a-15(b) under the Exchange Act, as of March 31, 2026, 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 March 31, 2026, 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 March 31, 2026 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, 2025 filed with the SEC on March 26, 2026 (“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.