ACTUATE THERAPEUTICS, INC.
For the period ended Mar 31, 2025. Filed May 15, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 15, 2025
ACTU$0.33+0.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-13.
0001683168-24-007971
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-15.
0001683168-25-003705
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 115 previous paragraphs and 87 current paragraphs.
52 unchanged; 25 reworded; 8 added; 34 removed; 4 previous and 2 current paragraphs rearranged.
Tables are not compared: 15 previous and 21 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (8)
Current report
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 are also advancing a Phase 1/2 clinical trial in refractory pediatric malignancies, including Ewing sarcoma (“EWS”).
Current report
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.
Current report
Committed Equity Facility
Current report
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 8 to the accompanying unaudited consolidated financial statements). 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 frequency and prices at which the Company sells common stock to B. Riley. However, there can be no assurance that the Company will be able to raise sufficient proceeds under the Committed Equity Facility or any additional financing will be available to the Company on acceptable terms, if at all.
Current report
On March 27, 2025, we entered into a Committed Equity Facility with B. Riley giving us 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 to the accompanying unaudited condensed consolidated financial statements). 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 we will receive under the Committed Equity Facility will depend on the frequency and prices at which the Company sells common stock to B. Riley. However, there can be no assurance that we will be able to raise sufficient proceeds under the Committed Equity Facility or any additional financing will be available to us on acceptable terms, if at all. In addition, our ability to raise additional capital may be adversely impacted by global economic conditions, disruptions to, and volatility in, the financial markets in the United States and worldwide. If events or circumstances occur such that the Company does not obtain additional funding, it may be necessary to significantly reduce its scope of operations to reduce the current rate of spending through actions such as the need to delay, limit, reduce or terminate its product development, which could have a material adverse effect on the Company’s business, results of operations or financial condition.
Current report
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.
Current report
Three Months Ended March 31, 2024 — During the three months ended March 31, 2024, net cash provided by financing activities consisted of net proceeds received from the issuance of the Related Party Convertible Notes Payable of $4,500,000, which amount was offset by deferred offering costs paid during the period in the amount of $142,770 associated with this offering. The deferred offering costs were offset against the proceeds upon the consummation of this offering.
Current report
In accordance with authoritative guidance, the Company charges research and development costs to operations as incurred. Research and development expenses consist primarily of personnel and related costs, external costs of outside vendors engaged in clinical trial activities, contract manufacturers, consultants and other third parties to conduct and support our clinical trials and preclinical studies.
Removed paragraphs (34)
Previous report
IPO
Previous report
On August 14, 2024, the Company completed the closing of its IPO of 2,800,000 shares of common stock at an initial offering price to the public of $8.00 per share, before the underwriters discount of $0.56 per share. Additionally, the underwriters exercised their option (“Overallotment Option”) to purchase an additional 420,000 shares at the same price of $8.00 per share less the underwriters discount on September 12, 2024. The Company’s common shares began trading on the Nasdaq Global Market on August 13, 2024, under the symbol “ACTU”. The Company received net proceeds of approximately $22 million, after deducting discounts and commissions and other offering expenses of approximately $3.7 million for the issuance of 3,220,000 shares of common stock of the Company, including shares issued under the Overallotment Option.
Previous report
Upon the closing of IPO and Overallotment Option, we issued the Underwriters Warrants to purchase up to 161,000 shares of common stock, representing 5% of the shares of common stock issued under the IPO and Overallotment Option, at an exercise price of $10.00 per share, representing 125% of the initial offering price. The Underwriter Warrants are not exercisable prior to February 8, 2025 (or 180-days from the effective date of the registration statement), and expire on August 12, 2027. The Underwriter Warrants can only be exercised on a cash basis through November 11, 2025 and only on a cashless basis on November 12, 2025 and thereafter.
Previous report
In addition, the Company’s Redeemable Convertible Preferred Stock, Related Party Convertible Notes Payable and in-the-money warrants to purchase the Company’s Redeemable Convertible Preferred Stock converted into or were automatically exercised for, as applicable, common stock immediately prior to the closing of the IPO.
Previous report
Authorized Capital
Previous report
Effective upon the closing of the Company’s IPO, the Company’s authorized capital consisted 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.
Previous report
On June 30, 2023, in connection with the issuance of the Series C Redeemable Convertible Preferred Stock, we issued the placement agent warrants to purchase up to 18,223 shares of Series C Redeemable Convertible Preferred Stock (after giving effect to the conversion of such shares into common stock) at an exercise price equivalent to $9.42 per share of common stock. The initial estimated fair value of these warrants of $93,863 was calculated using the Black-Scholes valuation model and recorded as a reduction to Redeemable Convertible Preferred Stock and a corresponding increase in the warrant liability.
Previous report
In 2018, in connection with convertible promissory note payable agreements, we issued the noteholders warrants to purchase shares of Series B-1 Redeemable Convertible Preferred Stock, of which, warrants to purchase up to 76,376 shares of Series B Redeemable Convertible Preferred Stock (after giving effect to the conversion of such shares into common stock) were issued at an exercise price equivalent to $5.27 per share of common stock and warrants to purchase up to 76,376 shares of Series B Redeemable Convertible Preferred Stock (after giving effect to the conversion of such shares into common stock) were issued at an exercise price equivalent to $10.55 per share of common stock.
Previous report
Prior to the closing of the Company’s IPO, the fair value of the Related Party Convertible Notes Payable was estimated at each reporting period using a scenario-weighted binomial lattice model to calculate equity values at different points in time leading up to a conversion event. Assumptions in the model included but were not limited to the following: equity value, conversion price, accrued interest, volatility, risk-free interest rate, dividend yield, time to a conversion event, and scenario weightings. Accrued interest on the Related Party Convertible Notes Payable was included in the determination of the estimated fair value.
Previous report
In connection with the closing of the Company’s IPO on August 14, 2024, the Company issued Bios Clinical Opportunity Fund, LP 884,427 shares of its common stock upon the conversion of the Related Party Convertible Notes Payable, including accrued interest thereon, at a conversion price of $6.40 per share, representing 80% of the IPO price of $8.00 per share. The Related Party Convertible Notes Payable was marked to market to its fair value on the conversion date before being reclassified to equity. The aggregate fair value at the time of conversion was calculated by multiplying the number of shares of common stock issued upon conversion by the fair value per share on the conversion date, which was the closing price of the Company’s common stock on the Nasdaq Global Market on the closing date of the IPO.
Previous report
Comparison of the Nine Months Ended September 30, 2024 and 2023:
Previous report
Research and Development Expenses
Previous report
The decrease in research and development expenses of approximately $0.1 million for the nine months ended September 30, 2024 compared to the same prior year period was primarily due to (i) a decrease in personnel and consulting fees of approximately $0.8 million primarily due to a decrease in consulting fees in the current period as certain consultants transitioned to full-time employment at an overall lower cost to the Company, (ii) a decrease in preclinical and biomarker studies in the current period of approximately $0.8 million due to few contracted studies in the current period, and (iii) a decrease of approximately $0.6 million in CMC related costs due to a decrease in manufacturing costs of elraglusib in the current period due to the timing of drug substance manufacturing to support the randomized Phase 2 mPDAC trial (Actuate-1801 Part 3B), which amounts were partially offset by an increase in external clinical trial expenses of approximately $2.2 million mostly related to increased patient enrollment and the number of patients on study in the randomized Phase 2 mPDAC trial (Actuate-1801 Part 3B) during the current period.
Previous report
General and Administrative Expenses
Previous report
The increase in general and administrative expenses of approximately $1.3 million for the nine months ended September 30, 2024 compared to the same prior year period was primarily due to (i) an increase in professional and consulting fees of approximately $0.7 million primarily related to an increase in search firm related fees to identify and add three new board members to the Company’s Board of Directors to comply with Nasdaq listing requirements, an increase in valuation services to support the estimated fair market value of the Company’s common stock and other financial instruments, including the fair value of the Related Party Convertible Notes Payable, an increase in legal fees related to additional corporate matters and intellectual property costs, and an increase in audit and audit related fees associated with the annual and quarterly review of the Company’s financial statements, (ii) an increase in personnel-related expenses of approximately $0.4 million primarily due to an increase in non-cash stock-based compensation expense of $0.4 million related to awards granted to the president and chief executive officer, the chief financial officer, and the members of the board of directors in connection with the IPO, and (iii) an increase in other expenses of approximately $0.1 million primarily due to an increase in the cost of directors and officer insurance during the current period, combined with an increase in board fees and other public company expenses.
Previous report
Other Income (Expense)
Previous report
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.
Previous report
Nine Months Ended September 30, 2023 — During the nine months ended September 30, 2023, net cash provided by financing activities consisted of net proceeds of $4,134,516 related to the issuance of Series C Redeemable Convertible Preferred Stock.
Previous report
Determination of Fair Value of Our Common Stock
Previous report
Prior to the closing of the Company’s IPO, there was no public market for our common stock. Therefore, the estimated fair value of our common stock prior to the date of the Company’s IPO has been determined by our board of directors as of the date of grant of each award, with input from management, considering our most recently available third-party valuations of common stock and our board of directors’ assessment of additional objective and subjective factors that it believed were relevant and which may have changed from the date of the most recent valuation through the date of the grant. These third-party valuations were performed in accordance with the guidance outlined in the American Institute of Certified Public Accountants’ Accounting and Valuation Guide, Valuation of Privately-Held-Company Equity Securities Issued as Compensation. Our common stock valuations were prepared using either an option pricing method (OPM) or a hybrid method, both of which used market approaches to estimate our enterprise value. The OPM treats common stock and preferred stock as call options on the total equity value of a company, with exercise prices based on the value thresholds at which the allocation among the various holders of a company’s securities changes. Under this method, the common stock has value only if the funds available for distribution to stockholders exceed the value of the preferred stock liquidation preferences at the time of the liquidity event, such as a strategic sale or a merger. The hybrid method is a probability-weighted expected return method (PWERM) where the equity value in one or more of the scenarios is calculated using an OPM. The PWERM is a scenario-based methodology that estimates the fair value of common stock based upon an analysis of future values for us, assuming various outcomes. In addition to considering the results of these third-party valuations, our board of directors considered various objective and subjective factors to determine the fair value of our common stock as of each grant date, including:
Previous report
The assumptions underlying these valuations represented management’s best estimate, which involved inherent uncertainties and the application of management’s judgment. As a result, if we had used significantly different assumptions or estimates, the fair value of our common stock and our stock-based compensation expense could have been materially different.
Previous report
There are significant judgments and estimates inherent in the determination of the fair value of our common stock. Historically, these judgments and estimates included assumptions regarding our future operating performance, the time to complete an IPO or other liquidity event, and the determination of the appropriate valuation methods.
Previous report
Based on our early stage of development, the difficulty in predicting the range of specific outcomes (and their likelihood), and other relevant factors, the market approach was considered most appropriate for valuations prior to December 2023. The recent transactions method was utilized to determine the value of the equity and the OPM allocated the equity value to the respective share classes. In determining the estimated fair value of our common stock, our board of directors also considered the fact that our stockholders could not freely trade our common stock in the public markets prior to the closing of the Company’s IPO. Accordingly, we applied discounts to reflect the lack of marketability of our common stock based on the weighted-average expected time to liquidity.
Previous report
Once a public trading market for our common stock became established in connection with the completion of the Company’s IPO, it is no longer necessary for our board of directors to estimate the fair value of our common stock in connection with our accounting for granted equity-based awards or for any other such awards we may grant, as the fair value of our common stock is determined based on the closing price of our common stock as reported on the date of grant on the primary stock exchange on which our common stock is traded.
Previous report
Fair Value of Financial Instruments
Previous report
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. The Related Party Convertible Notes Payable and the Redeemable Convertible Preferred Stock Warrant Liability were carried at fair value until the closing of the IPO based on unobservable market inputs. The Company measures the fair value of certain of its financial liabilities on a recurring basis. 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:
Previous report
Redeemable Convertible Preferred Stock Warrants
Previous report
The Company’s Redeemable Convertible Preferred Stock Warrants required liability classification and accounting as the underlying Redeemable Convertible Preferred Stock was considered contingently redeemable and could have obligated the Company to transfer assets to the holders at a future date upon occurrence of a deemed liquidation event. The warrants were recorded at their estimated fair value upon issuance and were subject to remeasurement to estimated fair value at each balance sheet date, with changes in the estimated fair value recognized as a component of other income (expense) in the accompanying unaudited condensed consolidated statements of operations. The Company adjusted the warrant liability for changes in estimated fair value until the earlier of the exercise, conversion, or expiration of the Redeemable Convertible Preferred Stock Warrants. In July 2024, the Redeemable Convertible Preferred Stock Warrants were amended to provide that if underlying Redeemable Convertible Preferred Stock Warrants were out-of-the-money based on the initial public offering price in the IPO, the out-of-the-money Redeemable Convertible Preferred Stock Warrants would convert into warrants to purchase common stock with an exercise price per share that reflected the Conversion Ratio then in effect for the underlying Redeemable Convertible Preferred Stock. Accordingly, the Redeemable Convertible Preferred Stock Warrants were remeasured upon the closing of the IPO and marked to market to its fair value before being reclassified to equity.
Previous report
The Redeemable Convertible Preferred Stock Warrant Liability was valued using the Black-Scholes valuation model, which requires the use of highly subjective assumptions to determine the appropriate fair value of each warrant, including:
Previous report
Fair Value Option of Accounting for Related Party Convertible Notes Payable
Previous report
When financial instruments contain various embedded derivatives which may require bifurcation and separate accounting of those derivatives apart from the entire host instrument, if eligible, ASC 825,Financial Instruments (“ASC 825”) allows issuers to elect the fair value option (“FVO”) of accounting for those instruments. The FVO may be elected on an instrument-by-instrument basis and is irrevocable unless a new election date occurs. The FVO allows the issuer to account for the entire financial instrument at fair value with subsequent remeasurements of that fair value recorded through the statements of operations at each reporting period until the conversion or payment of the Related Party Convertible Notes Payable balance. A financial instrument is generally eligible for the FVO if, amongst other factors, no part of the convertible, or contingently convertible, instrument is classified in stockholders’ equity.
Previous report
Based on the eligibility assessment discussed above, the Company concluded that its Related Party Convertible Notes Payable were eligible for the FVO and accordingly elected to apply the FVO to its Related Party Convertible Notes Payable in accordance with ASC 825. Accordingly, the Related Party Convertible Notes Payable were measured at fair value on their issuance dates and remeasured at estimated fair value at the end of each reporting period with changes in fair value recognized as a component of other income (expense) in the unaudited condensed consolidated statements of operations. The primary reason for electing the fair value option was to address simplification and cost-benefit considerations that result from accounting for hybrid financial instruments at fair value in their entirety versus bifurcation of the embedded derivatives from the debt hosts.
Previous report
The estimated fair values of the Related Party Convertible Notes Payable were determined using valuation models that incorporate assumptions and estimates. The Company assessed these assumptions and estimates at each financial reporting period as additional information impacting the assumptions was obtained. Assumptions in the models included but were not limited to equity value, volatility, time to a conversion event, risk-free rate and scenario weightings. The fair value measurements of the Related Party Convertible Notes Payable were based on significant inputs that were not observable in the market and represented a Level 3 measurement. The change in fair value related to accrued interest was also included within the single line of change in fair value of Related Party Convertible Notes Payable in the unaudited condensed consolidated statements of operations.
Previous report
In addition, in certain circumstances, the estimated fair value at issuance may be greater than the face value at issuance. The loss on issuance of the Related Party Convertibles Notes Payable of $400,000 recorded during the nine months ended September 30, 2024 represented the difference between the estimated fair value of the Related Party Convertible Notes Payable and the gross proceeds received on the issuance date based on the assumptions, including the proximity in time to the anticipated IPO, the discount on conversion of the Related Party Convertible Notes Payable, and the increased probability-weighted IPO scenario.
Reworded paragraphs (25)
Previous wording
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 (“Report”) and with our audited consolidated financial statements and the related notes thereto for the year ended December 31, 2023, included in our final prospectus filed with the SEC on August 13, 2024 pursuant to Rule 424(b)(4) under the Securities Act.
Current wording
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.
Previous wording
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), a small molecule that is designed to enter cancer cells and block the function of the enzyme 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. Our lead clinical program is an intravenous injection solution of elraglusib (“Elraglusib Injection”) that we are evaluating for the treatment of metastatic pancreatic ductal adenocarcinoma (“mPDAC”) referred to as Actuate-1801. Elraglusib Injection has also been evaluated in pediatric cancer patients with recurrent/refractory solid cancers and the data from this study (Actuate-1902), also identified Ewing sarcoma as a potential second indication for further development of Elraglusib Injection. We are currently advancing a Phase 2 clinical trial for the treatment of mPDAC and a Phase 1/2 clinical trial in refractory pediatric malignancies, including Ewing sarcoma.
Current wording
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.
Previous wording
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 optimal dosing. 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 does (“MTD”) and recommended Phase 2 dose (“RP2D”) for Elraglusib Oral Tablet in patients with advanced, refractory adult cancers subject to future funding. Subject to additional funding, several Phase 2 studies have been identified for further clinical development of Elraglusib Oral Tablet based on data from the Actuate-1801 study in indications, including but not limited to, refractory, metastatic melanoma and refractory, metastatic colorectal cancer.
Current wording
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, the 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.
Previous wording
We have incurred significant operating losses and negative cash flows from operations since our inception. Our net losses were approximately $24.7 million and $20.2 million for the years ended December 31, 2023 and 2022, respectively, and $20.8 million and $17.1 million for the nine months ended September 30, 2024 and 2023, respectively. As of September 30, 2024, we had an accumulated deficit of approximately $125.9 million. Substantially all of our net losses have resulted from costs incurred in connection with our research and development programs and, to a lesser extent, 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 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.
Current wording
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 $6,317,024 and $8,296,059 for the three months ended March 31, 2025 and 2024, respectively. As of March 31, 2025, we had an accumulated deficit of $138,696,873. 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 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.
Previous wording
As of September 30, 2024, we had cash and cash equivalents of approximately $13.5 million. 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 through twelve months from the issuance date of these unaudited condensed consolidated financial statements.
Current wording
As of March 31, 2025, we had cash and cash equivalents of $3,889,405. 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 the second quarter of fiscal year 2025.
Previous wording
Also, we will not generate revenue from product sales unless and until we successfully complete clinical development and obtain regulatory approval for elraglusib or any future product candidates, which we expect will take a number of years and may never occur. As a result, we will need substantial additional funding to support our continuing operations and pursue our business strategy. Until such time we can generate significant revenue from product sales, if ever, we expect to finance our operations through equity offerings, debt financings, or other capital sources, including potential future collaborations, licenses, and other similar arrangements and non-dilutive arrangements to the extent available through licensing partner funding, foundations and grants. We intend to seek additional financing in the near term; however, we may be unable to raise additional funds or enter into such other agreements or arrangements when needed on favorable terms, or at all. If we fail to raise capital or enter into such agreements or arrangements as, and when needed, we may 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.
Current wording
Also, we will not generate revenue from product sales unless and until we successfully complete clinical development and obtain regulatory approval for elraglusib or any future product candidates, which we expect will take a number of years and may never occur. As a result, we need substantial additional funding to support our continuing operations and pursue our business strategy. Until such time we can generate significant revenue from product sales, if ever, we expect to finance our operations through equity offerings, debt financings, or other capital sources, including potential future collaborations, licenses, and other similar arrangements. As we seek additional financing in the near term, we may be unable to raise additional funds or enter into such other agreements or arrangements when needed on favorable terms, or at all. If we fail to raise capital or enter into such agreements or arrangements as, and when needed, we may 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.
Previous wording
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 consists of the cost incurred under agreements with hospitals to treat and monitor patients enrolled in our clinical trials, contract research organizations 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.
Current wording
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 consists of the cost incurred under agreements with hospitals to treat and monitor patients enrolled in our clinical trials, contract research organizations (“CRO”) 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.
Previous wording
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, investor and public relations, and travel expenses.
Current wording
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.
Previous wording
We anticipate our general and administrative expenses will increase substantially 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.
Current wording
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.
Previous wording
The Redeemable Convertible Preferred Stock Warrants required liability classification as the underlying Redeemable Convertible Preferred Stock was considered contingently redeemable and could have obligated us to transfer assets to the holders at a future date upon occurrence of a deemed liquidation event. 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. We adjusted the warrant liability for changes in fair value until the earlier of the exercise, conversion, or expiration of the Redeemable Convertible Preferred Stock Warrants. In July 2024, the Redeemable Convertible Preferred Stock Warrants were amended to provide that if underlying Redeemable Convertible Preferred Stock Warrants were out-of-the-money based on the initial public offering price in the IPO, the out-of-the-money Redeemable Convertible Preferred Stock Warrants would convert into warrants to purchase common stock. Accordingly, the Redeemable Convertible Preferred Stock Warrants were remeasured upon the closing of the IPO and marked to market to its fair value before being reclassified to equity.
Current wording
The Company 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 the Company’s initial public offering (“IPO”) and marked to market to its fair value before being reclassified to equity.
Previous wording
The Related Party Convertible Notes Payable were measured at fair value on their issuance date and remeasured at estimated fair value at the end of each reporting period with changes in fair value recognized as a component of other income (expense). Upon issuance of the Related Party Convertible Notes Payable, we elected to apply the fair value option to the Related Party Convertible Notes Payable in accordance with ASC 825,Financial Instruments. In certain circumstances, the estimated fair value at issuance may be greater than the principal amount at issuance. The loss on issuance of the Related Party Convertible Notes Payable represented the difference between the estimated fair value of the Related Party Convertible Notes Payable on the issuance date and the gross proceeds received on the issuance date based on the valuation assumptions, including but not limited to, the proximity in time to the IPO, the discount on conversion of the Related Party Convertible Notes Payable upon a financing or IPO, and the increased probability weighted IPO scenario on the issuance date.
Current wording
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.
Previous wording
The decrease in research and development expenses of approximately $2.0 million for the three months ended September 30, 2024 compared to the same prior year period was primarily due to (i) a decrease in preclinical and biomarker studies in the current period of approximately $0.8 million due to few contracted studies in the current period, (ii) a decrease in external clinical trial expenses of approximately $0.8 million mostly related to fewer patients on treatment in the randomized Phase 2 mPDAC trial (Actuate-1801 Part 3B) during the current period, and (iii) a decrease in personnel and consulting fees of approximately $0.4 million primarily due to a decrease in consulting fees in the current period as certain consultants transitioned to full-time employment at an overall lower cost to the Company.
Current wording
The decrease in research and development expenses of $3,640,111 for the three months ended March 31, 2025 compared to the same prior year period was primarily due to (i) a decrease in external clinical trial expenses of $3,263,791 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), (ii) a decrease in preclinical and biomarker studies in the current period of $212,387 due to fewer contracted studies in the current period, and (iii) a decrease of $151,652 in Chemistry Manufacturing & Control (“CMC”) related costs primarily due to the timing of drug product manufacturing to support ongoing and planned clinical trials.
Previous wording
The increase in general and administrative expenses of approximately $0.9 million for the three months ended September 30, 2024 compared to the same prior year period was primarily due to (i) an increase in personnel-related expenses of approximately $0.5 million mostly due to an increase in non-cash stock-based compensation expense of $0.4 million related to awards granted to the president and chief executive officer, the chief financial officer, and the members of the board of directors in connection with the IPO combined with an increase in compensation expense of approximately $0.1 million related to hiring the Company’s chief financial officer in June 2024, (ii) an increase in professional and consulting fees of approximately $0.2 million primarily related to increased investor relations fees, increased accounting fees, and increased general corporate legal fees associated with operating as a public company during the current quarter combined with an increase in intellectual property fees and tax preparation fees, and (iii) an increase in other expenses of approximately $0.2 million primarily due to an increase in the cost of directors and officer insurance combined with an increase in board fees and other public company expenses.
Current wording
The increase in general and administrative expenses of $2,232,441 for the three months ended March 31, 2025 compared to the same prior year period was primarily due to (i) an increase in personnel-related expenses of $1,227,031 mostly due to an increase in non-cash stock-based compensation expense of $920,917 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 of $306,114 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 other expenses of $583,438 primarily due to an increase in the cost of directors and officer insurance, board fees, investor relation fees, and other public company expenses, and (iii) an increase in professional and consulting fees of $421,972 primarily related to increased general corporate legal fees associated with operating as a public company during the current quarter combined with an increase in consulting fees associated with finance and accounting support.
Previous wording
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. As of September 30, 2024, we had cash and cash equivalents of approximately $13.5 million.
Current wording
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. As of March 31, 2025, we had cash and cash equivalents of $3,889,405.
Previous wording
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 through twelve months from the issuance date of these unaudited condensed consolidated financial statements.
Current wording
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 2025.
Previous wording
We have no other committed sources of capital. 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. We intend to seek additional financing in the near future; however, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all. 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.
Current wording
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. 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.
Previous wording
The following table provides a summary of our cash flows for the nine months ended September 30, 2024 and 2023:
Current wording
The following table provides a summary of our cash flows for the three months ended March 31, 2025 and 2024:
Previous wording
Nine Months Ended September 30, 2023 — Net cash used in operating activities for the nine months ended September 30, 2023 consisted of our net loss of $17,132,466, which amount was offset by (i) non-cash stock-based compensation expense of $301,489, (ii) a non-cash increase in the fair value of our warrant liability of $28,224, (iii) an increase in accrued interest on license payable of $38,579, and (vi) cash provided by a net change in operating assets and liabilities of $650,851.
Current wording
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.
Previous wording
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.
Current wording
Three Months Ended March 31, 2024 — Net cash used in operating activities for the three months ended March 31, 2024 consisted of our net loss of $8,296,059, which amount was offset by (i) non-cash stock-based compensation expense of $148,206, (ii) a non-cash increase in the fair value of our warrant liability of $32,515, (iii) a loss on issuance of related party convertible notes payable at fair value of $200,000, (iv) the change in estimated fair value of related party convertible notes payable of $300,000 at March 31, 2024, (v) an increase in accrued interest on license payable of $5,076, and (vi) cash provided by a net change in operating assets and liabilities of $2,362,680.
Previous wording
Our financial statements are prepared in accordance with 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.
Current wording
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.
Previous wording
While our significant accounting policies are described in more detail in Note 2 to the accompanying unaudited condensed consolidated financial statements included elsewhere in this Report, we believe the following accounting policies are those most critical to the judgments and estimates used in the preparation of our financial statements.
Current wording
While our significant accounting policies are described in more detail in Note 2 to the accompanying unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report, we believe the following accounting policies are those most critical to the judgments and estimates used in the preparation of our financial statements.
Previous wording
We periodically grant equity-based awards in the form of RSAs, restricted stock units (“RSUs”) and stock options to purchase common stock, to employees, directors and non-employees and record stock-based compensation expense for awards of stock-based payments based on their estimated fair value at the grant date. We recognize stock-based compensation expense for all equity-based payments. The fair value of service-based RSAs and RSUs is measured at the grant date based on the fair market value of our common stock on the date of grant (see the subsection titled “— Determination of Fair Value of Our Common Stock” below) and is recognized as expense over the requisite service period, which is generally the awards’ vesting period. The fair value of performance-based RSAs is measured at the grant date, based on the fair value of shares expected to be earned at the end of the performance period, and is recognized as expense ratably over the performance period based upon the probable number of shares expected to vest. RSAs are subject to forfeiture if the requisite service period is not completed or the performance obligation is not achieved and are recognized as a reduction of stock-based compensation expense as they occur.
Current wording
The estimated fair value of service-based RSAs and RSAs are measured at the grant date based on the estimated fair market value of the Company’s common stock on the date of grant and is recognized as expense over the requisite service period, which is generally the awards’ vesting period. The estimated fair value of performance-based RSAs is measured at the grant date based on the estimated fair value of shares expected to be earned at the end of the performance period and is recognized as expense ratably over the performance period based upon the probable number of shares expected to vest.
Previous wording
The Company accounts for the grant of stock options based on the estimated fair value of the underlying option using the Black-Scholes valuation model on the date of grant and expense is recognized on a straight-line basis over the requisite service period, which is the vesting period. The Black-Scholes valuation model requires the input of subjective assumptions, including expected volatility, expected dividend yield, expected term, risk-free rate of return and the estimated fair value of the underlying common stock on the date of grant. Forfeitures are recognized as a reduction of stock-based compensation expense as they occur.
Current wording
We account for the grant of stock options based on the estimated fair value of the underlying option using the Black-Scholes valuation model on the date of grant and recognized as expense in the consolidated statement of operations on a straight-line basis over the requisite service period, which is the vesting period. The Black-Scholes valuation model requires the input of subjective assumptions, including expected volatility, expected dividend yield, expected term, risk-free rate of return and the estimated fair value of the underlying common stock on the date of grant. Prior to the IPO, we regularly engaged a third-party valuation specialist to assist with estimates related to the valuation of the Company’s common stock. Post IPO, the fair value of our common stock is determined based on the closing price of our common stock as reported on the date of grant on the primary stock exchange on which our common stock is traded.
Previous wording
We classify stock-based compensation expense in the consolidated statements of operations in the same manner in which the recipient’s services are classified. We expect to continue to grant equity-based awards in the future, and to the extent that we do, our stock-based compensation expense recognized in future periods will likely increase.
Current wording
We classify stock-based compensation expense in the unaudited condensed consolidated statements of operations in the same manner in which the award recipients’ payroll costs are classified or in which the award recipients’ service payments are classified. We recognize forfeitures related to stock-based compensation awards as they occur. We expect to continue to grant equity-based awards in the future, and to the extent that we do, our stock-based compensation expense recognized in future periods will likely increase.
Previous wording
A description of recently issued accounting standards that may potentially impact our financial position, results of operations, and cash flows is included in Note 2 to our consolidated financial statements for the year ended December 31, 2023 included in our final prospectus filed with the SEC on August 13, 2024 pursuant to Rule 424(b)(4) under the Securities Act, and in Note 2 to our unaudited condensed consolidated financial statements for the three and nine months ended September 30, 2024, included elsewhere in this Report.
Current wording
A description of recently issued accounting standards that may potentially impact our financial position, results of operations, and cash flows is included in Note 2 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024 as filed with the SEC on March 13, 2025, and in Note 2 to our unaudited condensed consolidated financial statements for the three months ended March 31, 2025, included elsewhere in this Quarterly Report.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
Our lead clinical program, referred to as Actuate-1801, is an intravenous (“IV”) injection solution of elraglusib (“Elraglusib Injection”) that we are evaluating for the treatment of first-line mPDAC. In addition, Elraglusib Injection is also being evaluated in a Phase 1/2 clinical trial in refractory pediatric malignancies and the data from this study (Actuate-1902) identified Ewing sarcoma as a potential second indication for further development of Elraglusib Injection.
Current report — wording carried from elsewhere
We periodically grant equity-based payment awards in the form of restricted common stock awards (“RSAs”), restricted stock units (“RSUs”), and stock options to employees, directors, consultants and non-employees and record stock-based compensation expense for awards of stock-based payments based on their estimated fair value at the grant date.
Rearranged previous paragraphs (4)
Previous report — wording carried elsewhere
The following table summarizes our results of operations for the nine months ended September 30, 2024 and 2023:
Previous report — wording carried elsewhere
The following table summarizes our research and development expenses for the nine months ended September 30, 2024 and 2023:
Previous report — wording carried elsewhere
The following table summarizes our general and administrative expenses for the nine months ended September 30, 2024 and 2023:
Previous report — wording carried elsewhere
Other income (expense), net, for the nine months ended September 30, 2024 and 2023 is comprised of the following: