# ACTUATE THERAPEUTICS, INC. (ACTU)

Informational only - not investment advice.

CIK: 0001652935
SIC: 2834 Pharmaceutical Preparations
SIC breadcrumb: [Manufacturing](/division/D/) > [Chemicals And Allied Products](/major-group/28/) > [SIC 2834 Pharmaceutical Preparations](/industry/2834/)
Latest 10-K filed: 2026-03-26
SEC page: https://www.sec.gov/edgar/browse/?CIK=1652935
Filing source: https://www.sec.gov/Archives/edgar/data/1652935/000168316826002257/actuate_i10k-123125.htm

## Selected Fundamentals
| Metric | Value | Unit | FY | Filed |
| --- | ---: | --- | ---: | --- |
| Net income | -22227852 | USD | 2025 | 2026-03-26 |
| Assets | 14035910 | USD | 2025 | 2026-03-26 |

## Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-03-26. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001652935.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

| Metric | 2022 | 2023 | 2024 | 2025 |
| --- | ---: | ---: | ---: | ---: |
| Net income |  | -24,744,620 | -27,285,328 | -22,227,852 |
| Operating income |  | -24,973,829 | -25,160,734 | -22,495,312 |
| Diluted EPS |  | -17.24 | -3.26 | -1.06 |
| Operating cash flow |  | -21,625,167 | -21,842,648 | -19,206,253 |
| Assets |  | 2,995,566 | 9,318,448 | 14,035,910 |
| Liabilities |  | 8,443,675 | 9,214,262 | 6,111,907 |
| Stockholders' equity | -75,305,432 | -99,626,513 | 104,186 | 7,924,003 |
| Cash and cash equivalents |  |  | 8,641,622 | 13,159,423 |

### Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

| Metric | 2022 | 2023 | 2024 | 2025 |
| --- | ---: | ---: | ---: | ---: |
| Return on equity |  |  |  | -280.51% |
| Return on assets |  |  |  | -158.36% |
| Liabilities / equity |  |  | 88.44 | 0.77 |
| Current ratio |  | 0.43 | 1.05 | 2.39 |

## Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-14. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001652935.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

| Quarter | End date | Revenue | Net income | Diluted EPS | Method |
| --- | --- | ---: | ---: | ---: | --- |
| 2024-Q2 | 2024-03-31 |  | -8,296,059 |  | reported discrete quarter |
| 2024-Q2 | 2024-06-30 |  |  | -4.20 | reported discrete quarter |
| 2024-Q3 | 2024-06-30 |  | -6,572,219 |  | reported discrete quarter |
| 2024-Q3 | 2024-09-30 |  |  | -0.55 | reported discrete quarter |
| 2024-Q4 | 2024-12-31 |  | -6,446,089 |  | derived Q4 = FY annual - nine-month YTD |
| 2025-Q1 | 2025-03-31 |  | -6,317,024 | -0.32 | reported discrete quarter |
| 2025-Q2 | 2025-03-31 |  | -6,317,024 |  | reported discrete quarter |
| 2025-Q2 | 2025-06-30 |  |  | -0.30 | reported discrete quarter |
| 2025-Q3 | 2025-06-30 |  | -5,949,405 |  | reported discrete quarter |
| 2025-Q3 | 2025-09-30 |  |  | -0.25 | reported discrete quarter |
| 2025-Q4 | 2025-12-31 |  | -4,553,953 |  | derived Q4 = FY annual - nine-month YTD |
| 2026-Q1 | 2026-03-31 |  | -5,625,749 | -0.24 | reported discrete quarter |

## Macro Cross-References
- [CPIAUCSL](/indicator/CPIAUCSL/): Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
- [UNRATE](/indicator/UNRATE/): Unemployment Rate
- [FEDFUNDS](/indicator/FEDFUNDS/): Federal Funds Effective Rate
- [CES0500000003](/indicator/CES0500000003/): Average Hourly Earnings of All Employees, Total Private
- [DFEDTARU](/indicator/DFEDTARU/): Federal Funds Target Range - Upper Limit
- [DFEDTARL](/indicator/DFEDTARL/): Federal Funds Target Range - Lower Limit
- [DGS3MO](/indicator/DGS3MO/): Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
- [DGS2](/indicator/DGS2/): Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
- [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
- [DGS30](/indicator/DGS30/): Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
- [T10Y2Y](/indicator/T10Y2Y/): 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
- [CPILFESL](/indicator/CPILFESL/): Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
- [CPIUFDSL](/indicator/CPIUFDSL/): Consumer Price Index for All Urban Consumers: Food
- [CPIENGSL](/indicator/CPIENGSL/): Consumer Price Index for All Urban Consumers: Energy
- [CUSR0000SAH1](/indicator/CUSR0000SAH1/): Consumer Price Index for All Urban Consumers: Shelter
- [PCEPI](/indicator/PCEPI/): Personal Consumption Expenditures: Chain-type Price Index
- [PCEPILFE](/indicator/PCEPILFE/): Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
- [PPIACO](/indicator/PPIACO/): Producer Price Index by Commodity: All Commodities
- [T10YIE](/indicator/T10YIE/): 10-Year Breakeven Inflation Rate
- [U6RATE](/indicator/U6RATE/): Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
- [PAYEMS](/indicator/PAYEMS/): All Employees, Total Nonfarm
- [CIVPART](/indicator/CIVPART/): Labor Force Participation Rate
- [EMRATIO](/indicator/EMRATIO/): Employment-Population Ratio
- [UNEMPLOY](/indicator/UNEMPLOY/): Unemployed
- [CE16OV](/indicator/CE16OV/): Employment Level
- [ICSA](/indicator/ICSA/): Initial Claims
- [JTSJOL](/indicator/JTSJOL/): Job Openings: Total Nonfarm
- [JTSQUR](/indicator/JTSQUR/): Quits: Total Nonfarm
- [GDPC1](/indicator/GDPC1/): Real Gross Domestic Product
- [A191RL1Q225SBEA](/indicator/A191RL1Q225SBEA/): Real Gross Domestic Product: Percent Change from Preceding Period
- [INDPRO](/indicator/INDPRO/): Industrial Production: Total Index
- [TCU](/indicator/TCU/): Capacity Utilization: Total Index
- [HOUST](/indicator/HOUST/): New Privately-Owned Housing Units Started: Total Units
- [PERMIT](/indicator/PERMIT/): New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
- [RSAFS](/indicator/RSAFS/): Advance Retail Sales: Retail Trade
- [PCE](/indicator/PCE/): Personal Consumption Expenditures
- [DSPIC96](/indicator/DSPIC96/): Real Disposable Personal Income
- [PSAVERT](/indicator/PSAVERT/): Personal Saving Rate
- [M2SL](/indicator/M2SL/): M2
- [BOPGSTB](/indicator/BOPGSTB/): U.S. International Trade in Goods and Services: Balance
- [MSPUS](/indicator/MSPUS/): Median Sales Price of Houses Sold for the United States
- [HSN1F](/indicator/HSN1F/): New One Family Houses Sold: United States
- [RHORUSQ156N](/indicator/RHORUSQ156N/): Homeownership Rate in the United States
- [TTLCONS](/indicator/TTLCONS/): Total Construction Spending: Total Construction in the United States
- [RRVRUSQ156N](/indicator/RRVRUSQ156N/): Rental Vacancy Rate in the United States
- [TOTALSL](/indicator/TOTALSL/): Total Consumer Credit Owned and Securitized
- [REVOLSL](/indicator/REVOLSL/): Revolving Consumer Credit Owned and Securitized
- [DRCCLACBS](/indicator/DRCCLACBS/): Delinquency Rate on Credit Card Loans, All Commercial Banks
- [GDP](/indicator/GDP/): Gross Domestic Product
- [GPDI](/indicator/GPDI/): Gross Private Domestic Investment
- [GCE](/indicator/GCE/): Government Consumption Expenditures and Gross Investment
- [PCEC](/indicator/PCEC/): Personal Consumption Expenditures
- [NETEXP](/indicator/NETEXP/): Net Exports of Goods and Services
- [GFDEBTN](/indicator/GFDEBTN/): Federal Debt: Total Public Debt
- [GFDEGDQ188S](/indicator/GFDEGDQ188S/): Federal Debt: Total Public Debt as Percent of Gross Domestic Product
- [FYFSD](/indicator/FYFSD/): Federal Surplus or Deficit
- [FGRECPT](/indicator/FGRECPT/): Federal Government Current Receipts
- [FGEXPND](/indicator/FGEXPND/): Federal Government: Current Expenditures
- [MANEMP](/indicator/MANEMP/): All Employees, Manufacturing
- [USCONS](/indicator/USCONS/): All Employees, Construction
- [USTRADE](/indicator/USTRADE/): All Employees, Retail Trade
- [USFIRE](/indicator/USFIRE/): All Employees, Financial Activities
- [USGOVT](/indicator/USGOVT/): All Employees, Government
- [AWHAETP](/indicator/AWHAETP/): Average Weekly Hours of All Employees, Total Private
- [DGORDER](/indicator/DGORDER/): Manufacturers' New Orders: Durable Goods
- [NEWORDER](/indicator/NEWORDER/): Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
- [BUSINV](/indicator/BUSINV/): Total Business Inventories
- [EXPGS](/indicator/EXPGS/): Exports of Goods and Services
- [IMPGS](/indicator/IMPGS/): Imports of Goods and Services
- [IR](/indicator/IR/): Import Price Index (End Use): All Commodities
- [PPIFIS](/indicator/PPIFIS/): Producer Price Index by Commodity: Final Demand

## Latest quarter (10-Q)

Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/1652935/000168316826003909/actuate_i10q-033126.htm

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary.
Confidence: high
Filing date: 2026-05-14
Report date: 2026-03-31

Item 2.

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

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

17

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.

18

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 e

[Excerpt truncated for page length; source filing is linked above.]

## Latest 10-K MD&A

Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary.
Confidence: high

Item 7. Management’s Discussion and Analysis of Financial
Condition and Results of Operations.

The following discussion
and analysis of the financial condition and results of our operations should be read together with the consolidated financial statements
and related notes of Actuate Therapeutics, Inc. included in Part II Item 8 of this Annual Report on Form 10-K (“Annual Report”
or “Report”).

This discussion and analysis
contain 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. Elraglusib was originally known as 9-ING-41 but was granted the elraglusib International Nonproprietary Names
(“INN”) and United States Adopted Names (“USAN”) generic name in 2021.

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”).

68

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 trials and non-clinical
biological, cellular, and animal data. Animal tumor model data, clinical trial 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. Our most advanced
clinical indication is first-line metastatic pancreatic ductal adenocarcinoma (“mPDAC”). Our Phase 2 study in mPDAC, known
as Actuate-1801 Part 3B study, is a randomized, controlled Phase 2 trial that enrolled 286 patients with no prior systemic treatment for
metastatic disease. The primary endpoint for this study was mOS, with 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 trial 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.

In addition to treating mPDAC,
Elraglusib Injection is also being evaluated 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 trial. 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 new indications for further development of
Elraglusib Injection, further expanding the potential of elraglusib.

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, subject to future funding, we are planning a Phase 1 study to identify the maximum tolerated
dose and RP2D for Elraglusib Oral Tablet in adult patients with advanced, refractory cancers. Once we have determined a RP2D, several
Phase 2 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, refractory, metastatic melanoma and refractory, metastatic colorectal cancer,
and non-small cell lung cancer.

Components of Our Results of Operations

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

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

69

Research and Development Expenses

Research and development expenses
consist primarily of external and internal costs incurred in performing clinical and preclinical development activities. Our external
research and development costs primarily 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.

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

·

the results of our clinical trials and preclinical
studies of elraglusib and any future product candidates we may choose to pursue, including any modifications to clinical development plans
based on feedback that we may receive from regulatory authorities;

·

per patient trial costs;

·

the number of trials required for approval;

·

the number of sites included in the trials and
the number of countries in which the trials are conducted;

·

the number of patients that participate in the
trials, the drop-out or discontinuation rates of patients, and the length of time required to enroll eligible patients;

·

the number of doses that patients receive;

·

the potential additional safety monitoring requested
by regulatory agencies;

·

the duration of patient participation in the
trials and follow-up;

·

the cost and timing of manufacturing elraglusib
and any future product candidates;

·

the costs, if any, of obtaining third-party drugs
for use in our combination trials;

·

the extent of changes in government regulation
and regulatory guidance;

·

the efficacy and safety profile of elraglusib
and any future product candidates;

·

the timing, receipt, and terms of any approvals
from applicable regulatory authorities; and

·

the extent to which we establish additional collaboration,
license, or other arrangements.

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

70

General and Administrative Expenses

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

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

Other Income (Expense)

Change in Fair Value of Warrant Liability

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

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

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

Interest Expense

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

Interest Income

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

71

Results of Operations

Comparison of the Year Ended December 31, 2025 and 2024:

The following table summarizes our results of operations
for the year ended December 31, 2025 and 2024:

Year Ended December 31,

2025

2024

Change

Operating expenses:

Research and development

$

10,292,620

$

18,676,276

$

(8,383,656

)

General and administrative

12,202,692

6,484,458

5,718,234

Total operating expenses

22,495,312

25,160,734

(2,665,422

)

Loss from operations

(22,495,312

)

(25,160,734

)

2,665,422

Other income (expense):

Change in estimated fair value of warrant liability (non-cash)

–

(78,903

)

78,903

Gain on settlement of warrants (non-cash)

–

343,240

(343,240

)

Loss on issuance of related party convertible notes payable at fair value (non-cash)

–

(400,000

)

400,000

Change in estimated fair value of related party convertible notes payable (non-cash)

–

(2,192,507

)

2,192,507

Interest expense

(20,250

)

(18,717

)

(1,533

)

Interest income

287,710

222,293

65,417

Total other income (expense), net

267,460

(2,124,594

)

2,392,054

Net loss

$

(22,227,852

)

$

(27,285,328

)

$

5,057,476

Research and Development Expenses

The following table summarizes
our research and development expenses for the year ended December 31, 2025 and 2024:

Year Ended December 31,

2025

2024

Change

External clinical trial expenses

$

5,051,488

$

13,387,974

$

(8,336,486

)

Chemistry, Manufacturing & Control (“CMC”) related costs

753,713

1,707,132

(953,419

)

Preclinical and biomarker research

972,646

397,408

575,238

Personnel and consulting expenses

3,514,773

3,183,762

331,011

Total research and development expenses

$

10,292,620

$

18,676,276

$

(8,383,656

)

72

The decrease in research and
development expenses of $8,383,656 for the year ended December 31, 2025 compared to the prior year was primarily due to (i) a decrease
in external clinical trial expenses of $8,336,486 mostly related to lower patient fees and CRO costs associated with fewer patients on
study related to the randomized Phase 2 mPDAC trial (Actuate-1801 Part 3B) as the trial winds down and (ii) a decrease in CMC related
costs of $953,419 primarily due to the timing of drug product manufacturing and stability studies. These decreases were partially offset
by (i) an increase in preclinical and biomarker studies of $575,238, driven by new studies completed during 2025, and (ii) an increase
in personnel and consulting expenses of $331,011, primarily due to higher non-cash stock-based compensation expense of $314,933.

General and Administrative Expenses

The
following table summarizes our general and administrative expenses for the year ended December 31, 2025 and 2024:

Year Ended December 31,

2025

2024

Change

Personnel-related expenses

$

7,605,193

$

3,770,893

$

3,834,300

Professional and consulting fees

3,085,658

1,937,282

1,148,376

Other expenses

1,511,841

776,283

735,558

Total general and administrative expenses

$

12,202,692

$

6,484,458

$

5,718,234

The increase in general and
administrative expenses of $5,718,234 for the year ended December 31, 2025 compared to the prior year was primarily due to (i) an increase
in personnel-related expenses of $3,834,300 mostly due to an increase in non-cash stock-based compensation expense of $3,735,935 related
to awards granted to employees, non-employee members of the board of directors, and consultants of the Company combined with an increase
in payroll and related expenses primarily related to the hiring of the Company’s chief financial officer in June 2024, an increase
in base salaries for certain administrative employees, offset by a decrease in bonus expense, (ii) an increase in professional and consulting
fees of $1,148,376 primarily due to an increase in (a) investor and public relation fees, (b) consulting fees associated with increased
administrative support, and (c) legal fees related to routine corporate activities, which amounts were offset by a decrease in board member
search fees and valuation services and (iii) an increase in other expenses of $735,558 primarily due to an increase in the cost of directors
and officers insurance, board fees, listing fees, and other public company expenses.

Other Income (Expense)

Other income (expense), net,
for the year ended December 31, 2025 and 2024 is comprised of the following:

·

Change in fair value of warrant liability
—During the year ended December 31, 2024, we recognized an increase in fair value of the warrant liability of $78,903 based on the
estimated fair value of warrant liability using the Black-Scholes valuation model at August 14, 2024 (closing date of the Company’s
IPO). As of December 31, 2024, there were no Redeemable Convertible Preferred Stock Warrants outstanding and no related warrant liability.

·

Gain on settlement of warrants —
During the year ended December 31, 2024, we recognized a gain on settlement of warrants of $343,240 on the closing date of the Company’s
IPO, representing the difference between the estimated fair value at December 31, 2023 and the estimated fair value upon conversion of
the warrants into shares of common stock on August 14, 2024.

73

·

Loss on issuance of related party convertible
notes payable at fair value — The loss on issuance of the Related Party Convertible Notes Payable of $400,000 for the year ended
December 31, 2024 represents the difference between the estimated fair value of the Related Party Convertible Notes Payable on the issuance
date and the principal amount of the note on the issuance date based on the valuation assumptions.

·

Change in estimated fair value of Related
Party Convertible Notes Payable — The change in the estimated fair value of the Related Party Convertible Notes Payable of $2,192,507
for the year ended December 31, 2024 represents the difference between the estimated fair value at issuance and the estimated fair value
upon conversion into common stock on August 14, 2024.

·

Interest expense — Interest expense
for the year ended December 31, 2025 and 2024 represents interest accrued on amounts owed under a license agreement with UIC, whereby
UIC agreed to defer amounts payable to UIC under a former sublicense agreement in the amount of $404,991 in exchange for an interest-bearing
license payable.

·

Interest income — Interest income
for the year ended December 31, 2025 and 2024 represents interest earned on cash and cash equivalents based on the prevailing market rates.
The increase in interest income for the year ended December 31, 2025 compared to the prior year is primarily due to a higher average cash
balance on hand in 2025 compared to 2024.

Liquidity and Capital Resources

Sources of Liquidity

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 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 year ended December
31, 2025, we received net proceeds of $3,800,465 in exchange for 539,967 shares of common stock sold under the Committed Equity Facility.
As of December 31, 2025, we had 3,364,407 shares of common stock in remaining capacity under our Committed Equity Facility.

On June 25, 2025, we entered
into a securities purchase agreement for a private placement of common stock and warrants with certain institutional and accredited investors,
which closed on June 27, 2025 (the “June 2025 Private Placement”). Under the June 2025 Private Placement, the Company received
aggregate net proceeds of $4,592,462 in exchange for the issuance of 666,497 shares of common stock and warrants to purchase up to 666,497
shares of common stock.

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

74

On November 28, 2025, we 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 we may, from time to time, at our sole discretion, issue and sell through
the Sales Agents, up to $100 million of shares of common stock. Pursuant to the ATM Agreement, we 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. We 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 we also have provided the Sales Agents with customary indemnification rights. During the year ended
December 31, 2025, the Company did not sell any shares of common stock under the ATM Facility. As of December, we had $100 million in
remaining capacity under our ATM Facility.

 As of December 31,
2025, we had cash and cash equivalents of $13,159,423 and working capital of $7,936,503. We expect our expenses to increase substantially
in connection with our ongoing activities, particularly as we continue our development of, seek regulatory approval for, and potentially
commercialize elraglusib and potentially seek to discover and develop and/or license or acquire additional product candidates, conduct
our ongoing and planned clinical trials and preclinical studies, continue our research and development activities, utilize third parties
to manufacture elraglusib, hire additional personnel, expand and protect our intellectual property, and incur additional costs associated
with being a public company. Based on our current operating plan, we estimate that our existing cash and cash equivalents as of the date
of this Annual 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,
as we can generate substantial product revenue, we expect to finance our operations through equity offerings, debt financings, or other
capital sources, including current or potential future collaborations, licenses, and other similar arrangements. As we seek additional
financing in the near future, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable
terms or at all. Our ability to raise additional funds may be adversely impacted by business conditions, global economic conditions, disruptions
to, and volatility in, the credit and financial markets in the United States and worldwide, and diminished liquidity and credit availability.
To the extent we raise additional capital through the sale of equity or convertible debt securities, stockholders’ ownership interest
in our common stock will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect
the rights of our common stockholders. Debt financing and preferred equity financing, if available, may involve agreements that include
covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making acquisitions, engaging
in acquisition, merger or collaboration transactions, selling or licensing our assets, making capital expenditures, redeeming our stock,
making certain investments or declaring dividends. If we raise additional funds through collaborations or license agreements with third
parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates,
or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity, debt, or other
financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts
or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves, or even cease
operations.

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

Material Cash Requirements for Known Contractual and Other Obligations

Research and Development Costs

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

75

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 year ended December 31, 2025 and 2024:

Year Ended December 31,

2025

2024

Net cash used in operating activities

$

(19,206,253

)

$

(21,842,648

)

Net cash provided by financing activities

23,724,054

27,525,611

Net change in cash and cash equivalents

$

4,517,801

$

5,682,963

Cash Flows From Operating Activities

Year Ended December 31,
2025 — Net cash used in operating activities for the year ended December 31, 2025 consisted of our net loss of
$22,227,852 combined with cash used by a net change in operating assets and liabilities of $3,045,312, which amounts were offset by non-cash
stock-based compensation expense of $6,046,661 and an increase in accrued interest on license payable of $20,250

Year Ended December 31,
2024 — Net cash used in operating activities for the year ended December 31, 2024 consisted of our net loss of
$27,285,328 combined with the non-cash gain on settlement of the warrant liability of $343,240, which amounts were offset by (i) non-cash
stock-based compensation expense of $1,995,793, (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 $18,641, and (vi) cash provided
by a net change in operating assets and liabilities of $1,100,076.

Cash Flows From Financing Activities

Year Ended December 31,
2025 —During the year ended December 31, 2025, net cash provided by financing activities consisted of net proceeds received
of (i) $15,573,966 under the September 2025 Public Offering, (ii) $4,592,462 under the June 2025 Private Placement, (iii) $3,826,336 from
the sale of common stock to B. Riley under the Committed Equity Facility, and (iv) $34,115 from the exercise of stock options, which amounts
were offset by the payment of deferred offering costs of $302,825.

Year Ended December 31,
2024 — During the year ended December 31, 2024, net cash provided by financing activities primarily consisted
of net proceeds received from the closing of the IPO and Overallotment Option of $22,025,611 (net of underwriting discounts and commissions
and after payment of offering costs of $1,931,189), proceeds of $5,500,000 from the issuance of the Related Party Convertible Notes Payable,
and proceeds of $200,000 from the issuance of a related party short-term loan, which amount was offset by the payment of the related party
short-term loan of $200,000.

76

Critical Accounting Policies and Significant Judgments and 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.

While our significant accounting
policies are described in more detail in Note 2 to the accompanying 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.

Research and Development Expenses and Related Accrued Expenses

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 clinical trials, contract manufacturers, consultants and other
third parties to conduct and support our clinical trials and preclinical studies.

As part of the process of
preparing our consolidated financial statements, we are required to estimate our research and development expenses as of each balance
sheet date. This process involves reviewing open contracts, including clinical site contracts, and communicating with our personnel to
identify services that have been performed on our behalf, and estimating the level of service performed and the associated cost incurred
for the service when we have not yet been invoiced or otherwise notified of the actual cost. We make estimates of our research and development
expenses as of each balance sheet date based on facts and circumstances known to us at that time. The significant estimates in our research
and development expenses include the costs incurred for services performed by our vendors in connection with services for which we have
not yet been invoiced. We base our expenses related to research and development activities on our estimates of the services received and
efforts expended pursuant to quotes and contracts with contractors and vendors that conduct research and development on our behalf. The
financial terms of these agreements are subject to negotiation, vary from contract to contract, and may result in uneven payment flows.
Advance payments for goods and services that will be used in future research and development activities are expensed when the activity
has been performed or when the goods have been received rather than when the payment is made. Although we do not expect our estimates
to be materially different from amounts actually incurred, if our estimates of the status and timing of services performed differ from
the actual status and timing of services performed, it could result in us reporting amounts that are too high or too low in any particular
period. To date, there have been no material differences between our estimates of such expenses and the amounts actually incurred.

Stock-Based Compensation

In April 2015 and August 2024,
the Company’s Board of Directors (“Board”) adopted the 2015 Stock Incentive Plan (“2015 Plan”) and the 2024
Stock Incentive Plan (“2024 Plan”), respectively. Under the 2015 Plan and 2024 Plan, the Company periodically grants 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 records stock-based compensation expenses for awards of stock-based
payments based on their estimated fair value at the grant date.

The estimated fair value of
service-based RSAs and RSUs 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.

77

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 are 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, the Company regularly engaged a third-party valuation specialist to assist with estimates related
to the valuation of the Company’s common stock. Since the Company’s IPO, the fair value of our common stock was 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.

The Company classifies stock-based
compensation expense in the 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.

The Company recognizes forfeitures
related to stock-based compensation awards as they occur.

Off-Balance Sheet Arrangements

We did not have, during the
periods presented, and we do not currently have, any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.

Recent Accounting Pronouncements

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 in this Report.

Emerging Growth Company Status and Smaller
Reporting Company Status

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

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

78