What changed in this filing

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Item 9A. Controls and Procedures

2026-03-26 compared with 2025-03-13 · 783 added, 1807 removed, 743 unchanged (78% of the section changed)

4 unchanged sentences

growth companies.”

Evaluation of Disclosure Controls and Procedures

As required by Rule 13a-15(b) under

the Exchange Act, as of December 31, 2024, the end of the period to which this annual report relates, we have carried out an evaluation

of the effectiveness of the design and operation of our disclosure controls and procedures.

This evaluation was carried out under the

supervision and with the participation of our management, including our President and Chief Executive Officer and our Chief Financial

Disclosure controls and procedures

are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted

under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange

Commission’s rules and forms.

Disclosure controls and procedures include, without limitation, controls and procedures designed to

ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management,

including the President and Chief Executive Officer and the Chief Financial Officer as appropriate, to allow timely decisions regarding

required disclosure.

Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only

reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship

of possible controls and procedures.

Based on the evaluation of our disclosure controls and procedures as of December 31, 2024, our management,

with the participation of our President and Chief Executive Officer and our Chief Financial Officer, concluded that, as of such date,

our disclosure controls and procedures were effective at a reasonable assurance level.

Material Weakness in Internal Control over Financial

While management was not required

to conduct an assessment regarding internal control over financial reporting, we previously identified a material weakness as of December

31, 2023 as a result of an inadequate review and accrual of clinical trial related expenses that resulted in improper accrual of expenses.

A material weakness is a deficiency or combination of deficiencies in internal control over financial reporting such that there is a reasonable

possibility that a material misstatement of our consolidated financial statements would not be prevented or detected on a timely basis.

Changes in Internal Control over Financial Reporting

The Company has implemented remediation

procedures to address the material weakness in our internal control over financial reporting identified above, including the implementation

of additional processes and controls to properly review and monitor the accrual of clinical trial expenses at the end of each period during

the year ended December 31, 2024.

The material weakness was remediated as of December 31, 2024.

Conclusion Regarding the Effectiveness of Disclosure

Controls and Procedures

We maintain disclosure controls

and procedures that are designed to ensure that information required to be disclosed in our periodic and current reports that we file

with the SEC is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and

that such information is accumulated and communicated to our management, including our principal executive officer and principal financial

officer, as appropriate, to allow timely decisions regarding required disclosure.

In designing and evaluating the disclosure controls

and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable

and not absolute assurance of achieving the desired control objectives.

In reaching a reasonable level of assurance, management necessarily

was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

In addition, the design

of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance

that any design will succeed in achieving its stated goals under all potential future conditions;

over time, controls may become inadequate

because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate.

Because of the inherent limitations

in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Our management, with the participation

of our principal executive officer and our principal financial officer, has evaluated our disclosure controls and procedures as defined

in Rules 13a-15(e) and 15d-15(e) under the Exchange Act as of December 31, 2025.

Based on such evaluation, our principal executive officer

and our principal financial officer have concluded that as of such date, our disclosure controls and procedures were effective at the

reasonable assurance level.

Management’s Annual Report on Internal

Control Over Financial Reporting

Management is responsible

for establishing and maintaining adequate internal control over financial reporting, as defined in Exchange Act Rules 13a-15(f) and 15d-15(f).

We maintain internal control over financial reporting designed to provide reasonable assurance regarding the reliability of financial

reporting and the preparation of consolidated financial statements for external purposes in accordance with GAAP.

The effectiveness of any system

of internal control over financial reporting, including ours, is subject to inherent limitations, including the exercise of judgment in

designing, implementing, operating, and evaluating the controls and procedures, and the inability to eliminate misconduct completely.

Accordingly, in designing and evaluating the disclosure controls and procedures, management recognizes that any system of internal control

over financial reporting, including ours, no matter how well designed and operated, can only provide reasonable, not absolute assurance

of achieving the desired control objectives.

In addition, the design of disclosure controls and procedures must reflect the fact that

there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and

procedures relative to their costs.

Moreover, projections of any evaluation of effectiveness to future periods are subject to the risk

that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures

may deteriorate.

We intend to continue to monitor and upgrade our internal controls as necessary or appropriate for our business, but

cannot assure you that such improvements will be sufficient to provide us with effective internal control over financial reporting.

As of December 31, 2025, our

management conducted an evaluation of the effectiveness of our internal control over financial reporting using the criteria set forth

by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control - Integrated Framework (2013).

assessment included an evaluation of the design of our internal control over financial reporting and testing of the operational effectiveness

of our internal control over financial reporting.

Based on management’s assessment, management has concluded that, as of December

31, 2025, our internal control over financial reporting was effective.

Changes in Internal Control over Financial

There have been no changes

in our internal control over financial reporting during the quarter ended December 31, 2025, that have materially affected, or are reasonably

likely to materially affect, our internal control over financial reporting.

Other Information.

Executive Compensation

On March 10, 2025, the Compensation

Committee of the Board recommended and the Board approved updates to executive officer compensation for 2025.

The Compensation Committee

and the Board considered, among other factors, the compensation practices, trends and data from comparable companies and input from its

independent compensation consultant, with the adjustment resulting in compensation levels at approximately the 25th percentile of

the comparable company peer group.

Effective January 1, 2025,

the following updates to cash compensation amounts were approved, subject to the Company receiving at least $25 million in additional

funding from one or more financings and will only payable after receipt of at least $25 million in aggregate funding:

(1) an increase

Schmitt’s annual base salary to $570,000;

and (2) an increase in Mr.

Lytle’s annual base salary to $435,363.

In addition, the executive

officers will receive, with a grant date of April 1, 2025 and at an exercise price equal to the closing price of the Company’s common

stock as of such date, stock option grants consisting of (1) one-time grants to reflect a catch-up of salary that would have been paid

if such salary increases had taken effect on August 14, 2024, representing the IPO closing date, in the following amounts:

4,285 stock options;

Lytle, 1,900 stock options (the “Base Pay True Up Grants”);

(2) one-time grants to reflect a

catch-up grant, since no annual grants were made in 2024, in the following amounts:

Schmitt, 200,000 stock options;

Lytle, 39,999

stock options;

Mazar, 110,346 stock options (the “Equity True Up Grants,” and together with the Base Pay True Up Grants,

the “Special Option Grants”);

and (3) annual grants in the following amounts:

Schmitt, 66,503 stock options;

49,394 stock options;

Mazar, 51,046 stock options (the “Annual Option Grants”).

The Special Option Grants will vest

as to 25% on August 14, 2025 with the remaining 75% vesting in equal monthly installments during the 36 months thereafter and the Annual

Grants will vest as to 25% on the first anniversary of the grant date with the remaining 75% vesting in equal monthly installments during

the 36 months following the first anniversary of the grant date.

The Board also approved (1)

an amendment to the employment agreement with Dr.

Mazar to provide that the deadline by which the Company would need to complete a Sale

Transaction (as defined in the agreement) for him to receive an additional equity award be extended from March 31, 2024 to December 31,

2026 (to align with a similar provision in Mr.

Schmitt’s agreement), and (2) an amendment to the employment agreement with Mr.

to provide for the issuance of an equity award in the event of a Sale Transaction (as defined in the agreement) completed on or before

December 31, 2026 (to align with similar provisions in each of Mr.

Schmitt’s and Dr.

Mazar’s agreements).

Executive Compensation – Employment Agreements” for additional information.

Rule 10b5-1 Trading Plans

2 unchanged sentences

as each term is defined in Item 408(a) of Regulation S-K.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Disclosure Regarding Foreign Jurisdictions that Prevent

Not applicable.

information required by Part III is omitted from this Report because we will file a definitive proxy statement within 120 days after the

end of our 2025 fiscal year pursuant to Regulation 14A for our 2026 Annual Meeting of Stockholders, or the 2026 Proxy Statement, and the

information to be included in the 2026 Proxy Statement is incorporated herein by reference.

Directors, Executive Officers and Corporate Governance.

Executive Officers and Directors

The table below lists the name,

age and position of each of our executive officers and director as February 28, 2025.

Executive Officers:

President, Chief Executive Officer and Director

Chief Operating Officer

Chief Financial Officer

Non-Employee Directors:

Fletcher, Ph.D.

Chairperson and Director (1)

Amy Ronneberg

Director (2)(3)

Roger Sawhney

Director (2)(3)

Dan Zabrowski, Ph.D.

Director (1)(2)

(1) Member of the nominating

and corporate governance committee.

(2) Member of the compensation

(3) Member of the audit committee.

Background of Executive Officers and Directors

Schmitt has served as our Chief Executive Officer and President since March 2015 and our director since April 2015.

He previously served

as Chief Operating Officer of Genus Oncology LLC, a clinical stage company, from 2009 to 2014.

Prior to that, he served as Senior Vice

President, Licensing and Commercial Development of Immtech Pharmaceuticals, Inc., a pharmaceutical company, from 2004 to 2009;

Manager, Academic and Government Institution Markets of First Genetic Trust, a genomic technology company, from 2001 to 2004;

and previously

held positions with G.D.

Searle Inc., a pharmaceutical company, ILEX Oncology, Inc., a pharmaceutical company, Fujisawa USA, Inc., a pharmaceutical

company, and Burroughs Wellcome Co., a pharmaceutical company.

Schmitt has also held research positions affiliated with the National

Foundation for Cancer Research in 1984 and the University of North Carolina School of Medicine from 1987 to 1988.

He also served as an

Entrepreneur-In-Residence at Northwestern University in 2014 and as an external expert consultant for both the University of Chicago and

the University of Illinois — Chicago from 2011 to 2014.

Schmitt is also a founding member of Chicago Innovation Mentors.

earned his MBA and a BS in Chemistry with a concentration in Theoretical Mathematics from West Virginia University.

Schmitt is well

qualified to serve as a director due to his pharmaceutical and biotechnology experience, including his experience in operations management,

new product development and business development.

Mazar has served as our Chief Operating Officer since June 2022, and prior to joining the Company, he served as an independent consultant

from January 2022 to June 2022.

Previously, Dr.

Mazar was the Co-Founder, Chief Scientific Officer and a director of Monopar Therapeutics,

Inc., a public clinical-stage biopharmaceutical company, from September 2016 to April 2022.

Mazar is also a founder and managing member

of Tactic Pharma, LLC, where he developed WTX-101/ALXN1840, a drug he co-invented for the treatment of Wilson’s disease.

WTX-101/ALXN1840

was acquired by Alexion Pharmaceuticals for more than $800 million in 2018.

Prior to Monopar, Dr.

Mazar was a Professor of Pharmacology

at the Feinberg School of Medicine at Northwestern University, where he also served as the Director of the Center for Developmental Therapeutics

and Entrepreneur-in-Residence from September 2009 to September 2016.

During his tenure at Northwestern University, Dr, Mazar served as

the Co-chair of the Animal Model Working Group for the NCI Nanotechnology Alliance;

was a charter member of the Developmental Therapeutics

(DT) study section at the NIH Center for Scientific review;

and was a member of the editorial board of Clinical Cancer Research where

he continues to serve.

Prior to that, Dr.

Mazar served as the Chief Scientific Officer at Attenuon, LLC, a private clinical-stage biopharmaceutical

company, from February 2000 to July 2009.

Mazar earned his BS in Chemistry from the University of Wisconsin, Parkside and his Ph.D.

in Biochemistry from the University of Illinois College of Medicine, Chicago, Illinois.

Lytle has served as our Interim Chief Financial Officer since February 2024, and has served as our Chief Financial Officer since June

Lytle is the Co-Founder of Thendor Therapeutics, LLC, a private biopharmaceutical company, and he has served as its Chief Financial

Officer since September 2023.

Lytle is also the Co-Founder of Mosaic ImmunoEngineering, Inc., a public development-stage biotechnology

company, and he has served on its board of directors and as its Executive Vice President, Chief Financial Officer since August 2020.

Lytle served as Executive Vice President, Chief Financial Officer of Breathe Technologies, Inc., a private medical device company

acquired by Hillrom Holdings, Inc.

in August 2019, from September 2018 to December 2019.

Prior to that, Mr.

Lytle served as Chief Financial

Officer of Avid Bioservices, Inc., a biologics development company initially focused on developing immunotherapies for the treatment of

cancer while building a biologics contract development and manufacturing organization, from March 1997 to May 2018.

Lytle received

in Business with an emphasis in Accounting from California State University at Long Beach and is a Certified Public Accountant

Fletcher, Ph.D.

Fletcher has served as our director since April 2015.

Fletcher is the Founder and has served as the President of Bios

Research, a financial services firm, since 2012.

Fletcher has also served as an independent consultant in the biotechnology and healthcare

equity industry for over 10 years, and a visiting professor at Dallas Baptist University since 2008, where he teaches Biochemistry, Bioethics

and Cell Biology.

Fletcher has served on the board of directors and as a member of the compensation committee of Cognition Therapeutics,

Inc., a public neuroscience company, since July 2015, and on the board of directors of ONL Therapeutics, Inc., a private clinical-stage

biopharmaceutical company, since September 2024.

Previously, he served on the board of directors and as a member of the compensation committee

and nominating and governance committee of TFF Pharmaceuticals, Inc., a public biopharmaceutical company, from March 2018 to November

2023, the board of directors and as a member of the compensation committee and pricing committee of Cue Biopharma, a public biopharmaceutical

company, from October 2019 to October 2023, the board of directors and compensation committee of Lung Therapeutics, Inc., a biopharmaceutical

company, from August 2014 to October 2023, the board of directors and as a member of the compensation committee of Rein Therapeutics (fka

Aileron Therapeutics, Inc.), a public biopharmaceutical company, from August 2014 to October 2023, the board of directors and as a member

of the compensation committee of AbiliTech Medical, Inc., a medical equipment manufacturer, from November 2016 to January 2023, and the

board of directors and as a member of the audit committee of SWK Holdings Corporation, a public finance company focused on global healthcare,

from August 2019 to December 2021.

Fletcher earned his PhD in Biochemistry from Colorado State University.

Fletcher is well qualified

to serve as a director due to his extensive experience in the healthcare industry, particularly in the biotech and med-tech sub-sectors.

Keyes has served as our director since August 2024.

Keyes currently serves as the Chief Financial Officer of Equillium, Inc., a public

clinical-stage biotechnology company, since March 2018, and as a director of its Australian subsidiary since January 2019.

Prior to this,

he served in various roles at Orexigen Therapeutics, Inc., a public pharmaceutical company which filed a voluntary petition for Chapter

11 bankruptcy in March 2018 that concluded with the bankruptcy court confirming a plan of liquidation in May 2019 following a sale of

substantially all of its assets in June 2018, including as Executive Vice President and Chief Financial Officer, from January 2013 to

February 2018.

Previously, Mr.

Keyes served in various roles at Amylin Pharmaceuticals, Inc., a public biopharmaceutical company, including

as Senior Director of Finance, from August 2007 to January 2013.

Keyes also held leadership positions in finance and corporate strategy

at Amgen, Inc., a public biopharmaceutical company, and Baxter Healthcare Corporation, a public healthcare company.

Keyes formerly

served on the board of directors, including as chair of the audit committee and as a member of the compensation committee, of Sesen Bio,

Inc., a public biopharmaceutical company, from 2020 to 2023.

Keyes received his B.S.

degrees in Civil Engineering from Stanford

University and an M.B.A.

from the Anderson School at the University of California, Los Angeles.

Keyes is well qualified to serve as

a director due to his extensive experience in finance and in the biotechnology and biopharmaceutical industries.

Amy Ronneberg.

Ronneberg has served as our director since August 2024.

Ronneberg currently serves as the Chief Executive Officer of NMDP (f/k/a Be

The Match), a nonprofit organization that facilitates bone marrow transplantation, since March 2020, and served as its Chief Financial

Officer from July 2013 to March 2020.

Ronneberg also served as the President at NMDP BioTherapies, LLC, a start-up company within

NMDP, and as its Chief of Staff from February 2018 to February 2020.

Prior to that, Ms.

Ronneberg served in various roles at Capella Education

Company, a public online postsecondary education services company, including as Chief Accounting Officer and Vice President of Operations,

from 2000 to 2012.

She also served as an Audit Manager of Ernst & Young, a professional services partnership, from 1995 to 2000.

Ronneberg has served as a director and member of the finance committee (Vice Chair) for Allina Health, a nonprofit healthcare company,

since November 2020, and previously served as a director of Magenta Therapeutics, Inc., a clinical stage biotechnology company, from June

2018 to August 2023, a director and executive committee member of Medical Alley Association, a healthcare industry network, from December

2020 to present, an executive committee member of the World Marrow Donor Association, an international healthcare organization, from January

2017 to January 2020, and chairman of the board of directors of Twin Cities in Motion, Minneapolis, a nonprofit running event organization,

from January 2012 to January 2014.

Ronneberg earned a Master’s in Business Administration from Capella University, Minneapolis,

Minnesota, a Corporate Directorship Certificate from Harvard Business School, and a B.B.A.

in Accounting from University of Wisconsin-Eau

Ronneberg is well qualified to serve as a director due to her extensive financial expertise and leadership in the biotechnology

and biopharmaceutical industries.

Roger Sawhney.

Sawhney has served as our director since August 2024.

Sawhney currently serves as the Chief Financial Officer of LB Pharmaceuticals,

Inc., a clinical-stage biopharmaceutical company, since June 2024.

Sawhney previously served as the Chief Financial Officer of Garuda

Therapeutics, Inc., a biotechnology company, from September 2022 to December 2023.

Prior to this, Dr.

Sawhney served as the Chief Business

Officer of Omega Therapeutics, Inc., a clinical-stage biotechnology company, from May 2022 to September 2022, and its Chief Financial

Officer from May 2020 to May 2022.

He served at KKR & Co., a global investment firm, as Director of its healthcare investment platform,

from September 2018 to February 2020.

Sawhney also served as Senior Vice President and Head of Global Corporate Strategy for Novartis

AG, a public pharmaceutical company, from August 2009 to August 2012, Senior Vice President of Corporate Strategy and Business Development

for Outcome Health, a healthcare technology company, from February 2017 to February 2018, a Partner with Bain & Company, a management

consulting firm, from August 2012 to February 2017, and Partner and Managing Director with the Boston Consulting Group, a management consulting

firm, from September 1996 to July 2009.

He has served as a director of Adlai Nortye Ltd., a public clinical-stage biopharmaceutical company,

since August 2024, a director of SIRPant Immunotherapeutics, Inc., a clinical-stage immuno-oncology company, since January 2024 and previously

served as a director of Alimera Sciences, Inc., a pharmaceutical company, from February 2023 to March 2023.

Sawhney earned an M.D.

from Harvard Medical School and a BA in Economics from Stanford University.

Sawhney is well qualified to serve as a director due to

his extensive financial and strategic expertise in the biotechnology and biopharmaceutical industries.

Todd Thomson.

Thomson has served as our director since September 2022.

Thomson has served as the Chief Operating and Financial Officer of Kairos

Ventures, a venture capital firm, since August 2019.

Previously, he co-founded and served as Chairman of Dynasty Financial Partners, an

investment and technology platform, from November 2010 to August 2019, and currently serves on the board of directors.

Prior to that,

Thomson served as CEO of the Wealth Management Division of Citigroup and previously Chief Financial Officer of Citigroup Inc., an

investment bank and financial services corporation, from 1998 to 2007.

Thomson has served on the board of directors and as a member

of the audit committee of Sivers Semiconductors, a public technology company, since January 2022, the board of directors of Dragonfly

Energy Holdings Corp., a public battery manufacturer, from August 2021 to October 2022, the board of directors of Cyren Ltd., a public

cybersecurity company, from November 2011 to July 2021, the board of directors of Cordia Bancorp Inc., a bank holding company, from 2010

to May 2016, and the board of directors and as a member of the Investment Committee for the Davidson College and World Resources Institute

He earned his MBA with Distinction in Finance and Strategy from the Wharton School of Business and his BA in Economics from

Davidson College.

Thomson is well qualified to serve as a director due to his extensive investing experience and years of executive

leadership, financial leadership, and experience in mergers and acquisitions and business strategy.

Dan Zabrowski, Ph.D.

Zabrowski has served as our director since March 2021.

Zabrowski has served as a Venture Partner of Decheng Capital, a private investment

firm, since July 2016.

Prior to that, Dr.

Zabrowski served in a number of roles for Roche, a healthcare company, from 1994 to 2016, including

Global Head of Regulatory Affairs, Global Head of Development Operations, Global Head of Roche Pharma Partnering, President of Ventana

Medical Systems and President of the Roche Sequencing Unit.

Zabrowski also previously held positions with Syntex, Fujisawa (now Astellas),

a pharmaceutical company, and G.D.

Searle, LLC, a pharmaceutical company, and served as Adjunct Assistant Professor at the School of Pharmacy,

University of Illinois — Chicago.

He also served on the board of directors of Apexigen, Inc., a public biopharmaceutical company,

from February 2021 to August 2023, including serving as Chairman of its compensation committee and member of its audit committee, BeyondSpring

Inc., a public biopharmaceutical company, from January 2020 to June 2022, including serving as a member of its compensation committee,

Nimble Therapeutics, Inc., a private biotechnology company, since 2019, Ariagen, Inc., a private biotechnology company, since 2018, Endogena

Therapeutics, Inc., a private biotechnology company, since 2018, and AccuraGen, Inc., a private biotechnology company, since 2013, and

also as a board observer for Encodia, Inc., a private biotechnology company, since 2018.

Zabrowski earned his PhD in Organic Chemistry

from Indiana University, Bloomington and his BA degree in Chemistry from Saint Louis University.

Zabrowski is well qualified to serve

as a director due to his extensive experience on a variety of public and private boards in the biotechnology and biopharmaceutical industries.

Family Relationships

There are no familial relationships

among our directors and executive officers.

Board Composition

Our business and affairs are organized

under the direction of the Board.

The Board currently consists of seven members.

The primary responsibilities of the Board are to provide

oversight, strategic guidance, counseling, and direction to our management.

The Board meets on a regular basis and additionally as required.

Audit Committee

The audit committee consists of

Keyes (chairperson), Dr.

Sawhney and Ms.

The Board has determined that each of Mr.

Sawhney and Ms.

is an independent director as defined by Nasdaq rules applicable to members of an audit committee, including that each such member meets

the criteria for independence set forth in Rule 10A-3(b)(1) under the Exchange Act.

In addition, as required by Nasdaq rules, each member

of the audit committee is able to read and understand fundamental financial statements, including a company’s balance sheet, income

statement, and statement of cash flows.

Financial Experts on Audit Committee

The Board determined that Mr.

Keyes qualifies as an audit committee financial expert within the meaning of the rules and regulations of the SEC.

In making this determination,

the Board considered Mr.

Keyes’ formal education and previous experience in financial roles.

In addition, as required by Nasdaq

rules, we have at least one member who has past employment experience in finance or accounting, requisite professional certification in

accounting, or other comparable experience or background that results in the individual’s financial sophistication.

The Board determined

Keyes qualifies as financially sophisticated under the Nasdaq rules.

Guidelines for Selecting Director Nominees

The nominating and corporate governance

committee does not have a written policy or formal procedural requirements for stockholders to submit recommendations for director nominations.

However, the nominating and corporate governance committee will consider properly submitted recommendations for candidates to the Board

from stockholders in accordance with our amended and restated bylaws.

Stockholders should communicate nominee suggestions directly to

the nominating and corporate governance committee and accompany the recommendation with biographical details and a statement of support

for the nominee.

The suggested nominee must also provide a statement of consent to being considered for nomination.

There have been no

material changes to the procedures by which stockholders may recommend nominees to the Board.

Code of Ethics

We have adopted a code of business

conduct and ethics that applies to our officers, directors, and employees.

The full text of our code of business conduct and ethics can

be found on our website (http://www.actuatetherapeutics.com) under the "Corporate Governance" heading on the “Investors”

We may satisfy the disclosure requirements under Item 5.05 of Form 8-K regarding an amendment to, or a waiver from, a provision

of our code of business conduct and ethics that applies to our principal executive officer, principal financial officer, or persons performing

similar functions, by posting such information on our website where it is accessible through the same link noted above.

Insider Trading Policy

We adopted an insider trading

policy that governs the purchase, sale and/or disposition of our securities by our directors, officers, employees and consultants.

believe the insider trading policy is reasonably designed to promote compliance with insider trading laws, rules and regulations, and

applicable Nasdaq listing standards.

A copy of the insider trading policy is filed as Exhibit 19.1 to this Annual Report.

The information required by

this item will be contained in our 2026 Proxy Statement and is incorporated herein by reference.

Executive Compensation.

This section discusses the material

components of the executive compensation program for our executive officers who are named in the “Summary Compensation Table”

In 2024, our “named executive officers,” which consist of our principal executive officer and our two next most highly

compensated executive officers during 2024, and their positions were as follows:

Schmitt, our President and Chief Executive Officer;

Mazar, Ph.D., our Chief Operating Officer;

· Paul Lytle, our Chief Financial Officer (appointed in February 2024).

Summary Compensation Table

The following table sets forth

information concerning the compensation of the named executive officers for the years ended December 31, 2024 and 2023.

and Principal Position

Other Compensation

and Chief Executive Officer

Chief Operating

Paul Lytle (4)

Chief Financial

(1) The dollar amounts listed reflect the value of the award as of

the grant date calculated in accordance with ASC Topic 718 based upon the fair-market value of our common stock on the date of the grant

and, therefore, do not necessarily reflect the actual value received by the individuals.

The assumptions made in computing the estimated

fair value of such awards are disclosed in Note 10 to our consolidated financial statements included in this Report for the fiscal year

ended December 31, 2024.

(2) The terms of Mr.

Schmitt’s compensation are set forth in

his employment agreement or as otherwise increased by the Board.

See “Employment Agreements — Chief Executive Officer.”

Upon the closing of the IPO, Mr.

Schmitt was granted 544,111 RSUs pursuant to his employment agreement, which award vests 50% on the

first anniversary date of the closing of the IPO and 50% of which vests on the second anniversary date of the closing of the IPO.

(3) The terms of Dr.

Mazar’s compensation are set forth in his

employment agreement or as otherwise increased by the Board.

See “Employment Agreements — Chief Operating Officer.”

Mazar was granted 37,374 stock options based on performance on October 23, 2023, of which, 25% vested on the grant date and the remaining

75% vest in equal installments on a monthly basis during the 36 months following the grant date.

Lytle was hired on June 1, 2024 as a full-time employee.

Lytle’s compensation are set forth in his employment agreement or as otherwise increased by the Board.

See “Employment

Agreements — Chief Financial Officer.” Prior to June 1, 2024, Mr.

Lytle provided consulting services to the Company and received

consulting fees of $98,517 prior to June 1, 2024.

In addition, pursuant to his employment agreement, Mr.

Lytle was granted 234,971 stock

options upon the closing of the IPO, of which, 25% vests on June 1, 2025 and the remaining 75% vests in equal monthly installments during

the 36 months following June 1, 2025.

(5) Bonus amounts for 2024 have not been paid as of the date of this

Narrative to Summary Compensation Table

For the years ended December 31,

2024 and 2023, the compensation program for our named executive officers consisted of base salary and incentive compensation delivered

in the form of cash bonuses and equity awards.

Base salary was set at a level that was commensurate with the executive’s duties

and authorities, contributions, prior experience and sustained performance.

Cash bonuses and equity awards were also set at a level that

was commensurate with the executive’s duties and authorities, contributions, prior experience and sustained performance, in accordance

with the employment or similar agreement with the executive.

Following our IPO, we grant all equity awards under the terms of our 2024

Equity awards, including stock options, are not granted in anticipation of the release of material non-public information,

and the release of material non-public information is not timed on the basis of stock option or equity grant dates.

All stock options

are granted with an exercise price per share that is no less than the fair market value of our common stock on the date of grant of such

We also provide benefits to our

named executive officers on the same basis as we provide benefits to all of our employees, including health, dental and vision insurance.

Employment Agreements

Chief Executive Officer

On April 15, 2015, we entered

into an employment agreement with Mr.

Schmitt, which was amended on each of February 5, 2016, September 28, 2017, September 23, 2018,

January 29, 2019, September 3, 2019, August 1, 2022, January 27, 2023, December 12, 2023, May 9, 2024 and March 11, 2025 (the “CEO

Employment Agreement”), that provides a base salary equal to $400,000 per year, and the ability to earn an annual bonus of up to

50% of his base salary, 70% of which shall be payable upon achievement of certain milestones mutually agreed to between the Company and

Schmitt and 30% of which shall be payable at the discretion of the Board.

On March 10, 2025, the Board approved an increase to Mr.

Schmitt’s annual base salary to $570,000 and bonus up to 55% of his base salary, contingent upon the Company raising at least $25

million in additional equity financing.

In addition, Mr.

receive, with a grant date of April 1, 2025 and at an exercise price equal to the closing price of our common stock as of such date, stock

option grants consisting of (1) a one-time grant of 4,285 stock options to reflect a catch-up of salary that would have been paid if his

salary increase had taken effect on August 14, 2024, representing the IPO closing date (a “Base Pay True Up Grant”);

one-time grant of 200,000 stock options to reflect a catch-up grant since no annual grants were made in 2024 (an “Equity True Up

Grant,” and together with the Base Pay True Up Grant, the “Special Option Grant”);

and (3) an annual grant of 66,503

stock options (an “Annual Option Grant”).

The Special Option Grant will vest as to 25% on August 14, 2025 with the remaining

75% vesting in equal monthly installments during the 36 months thereafter and the Annual Grant will vest as to 25% on the first anniversary

of the grant date with the remaining 75% vesting in equal monthly installments during the 36 months following the first anniversary of

the grant date.

In the event the Company is sold

on or before December 31, 2026 for cash in a transaction valued at or above $29.56 per share, immediately prior to the consummation of

such transaction, Mr.

Schmitt will also be (i) granted shares of common stock under the stock incentive plan of the Company that is then

in effect equal to that number of shares that would bring his total ownership (including the shares he owned prior to calculation of the

shares to be granted in the sale transaction) to 8.0% of the issued and outstanding shares of common stock immediately prior to the closing

of such transaction on a fully diluted basis, and (ii) entitled to receive a cash bonus equal to 100% of his base salary.

the event on or before December 31, 2026 the Company receives between $10,000,000 – $100,000,000 or more in gross revenue pursuant

to certain licensing arrangements between the Company and any third party or another non- dilutive capital transaction, Mr.

be (i) granted shares of common stock under the stock incentive plan of the Company that is then in effect equal to that number of shares

that would bring his total ownership (including the shares he owned prior to calculation of the shares to be granted in the transaction)

to 5.0 – 6.0% (depending on the geographic location from which such gross revenue is derived) of the issued and outstanding shares

of common stock on a fully diluted basis, and (ii) entitled to receive a cash bonus equal to 25 – 50% of his base salary (depending

on the geographic location from which such gross revenue is derived).

These potential stock awards are subject to limits under the stock

plan on the number of shares available for grant.

The CEO Employment Agreement

also provided that if the Company closed a transaction or series of related transactions occurring on or before December 31, 2026 pursuant

to which the Company issues and sells shares of its common or preferred equity securities in exchange for aggregate gross proceeds of

more than $10,000,000, excluding any gross proceeds attributable to sales to Bios Partners L.P.

or its affiliates, (a Qualified Financing),

Schmitt would be granted restricted stock units entitling him, upon vesting, to shares of common stock equal to that number of shares

that would bring his total ownership (including the shares he owned prior to calculation of the shares to be granted in the transaction)

to 4.25 – 5.0% of the issued and outstanding shares of common stock on a fully diluted basis at the time of the transaction, depending

on the per share price of the shares sold in such Qualified Financing.

Upon the closing of our IPO on August 14, 2024, which was considered

a Qualified Financing, Mr.

Schmitt was granted an award of 544,111 restricted stock units, which vest as follows:

(i) 50% will vest on

the first anniversary of the IPO closing, and (ii) 50% will vest on the second anniversary of the IPO closing.

In addition, such shares

will vest immediately upon:

(i) a change in control, (ii) termination of Mr.

Schmitt’s employment by us without “cause,”

(iii) termination of employment by Mr.

Schmitt for “good reason,” or (iv) death or disability.

The severance amount payable to

Schmitt upon his termination by the Company for any reason (other than Mr.

Schmitt’s death, disability or for “cause”),

or termination by Mr.

Schmitt for “good reason,” is equal to one times his then current base salary (the CEO Standard Severance

Upon termination upon a change in control, and if Mr.

Schmitt’s employment is terminated by the Company for any reason

other than Mr.

Schmitt’s death, disability or for “cause,” or termination by Mr.

Schmitt for “good reason,”

in any such case within the six months immediately preceding or the twelve months immediately following such change in control, Mr.

is entitled to a payment equal to one and one-half times his then current base salary reduced by the CEO Standard Severance Benefits to

which he would be entitled.

Chief Operating Officer

Mazar assumed the role

of Chief Operating Officer on April 1, 2022 pursuant to a consulting agreement, dated March 25, 2022 (the “COO Consulting Agreement”),

which entitled him to compensation equal to $35,000 per month for serving in that role.

On June 1, 2022, the COO Consulting Agreement

was superseded by an employment agreement, which was amended on March 11, 2025 (the “COO Employment Agreement”) that provides

for a base salary equal to $450,000 per year, the ability to earn an annual bonus of up to 50% of his base salary upon achievement of

certain milestones mutually agreed to between the Company and Dr.

Mazar, and a signing bonus equal to $200,000.

Upon execution of the

COO Employment Agreement, the Company granted to Dr.

Mazar 40,395 shares of restricted common stock, 25% of which vested on the first

anniversary of the grant date and the remaining 75% of which vest in equal monthly installments during the 36 months following the first

anniversary of the grant date.

In addition, Dr.

receive, with a grant date of April 1, 2025 and at an exercise price equal to the closing price of our common stock as of such date, stock

option grants consisting of (1) a one-time grant of 110,346 stock options as an Equity True Up Grant;

and (2) an Annual Option Grant of

51,046 stock options.

The Equity True Up Grant will vest as to 25% on August 14, 2025 with the remaining 75% vesting in equal monthly

installments during the 36 months thereafter and the Annual Grant will vest as to 25% on the first anniversary of the grant date with

the remaining 75% vesting in equal monthly installments during the 36 months following the first anniversary of the grant date.

In the event the Company

is sold on or before December 31, 2026 for cash in a transaction valued at or above $29.56 per share, immediately prior to the consummation

of such transaction, Dr.

Mazar will also be granted shares of common stock under the stock incentive plan of the Company that is then

in effect equal to that number of shares that would bring his total ownership (including the shares he owned prior to calculation of

the shares to be granted in the sale transaction) to 2.0% of the issued and outstanding shares of common stock on the day immediately

prior to the closing of such transaction on a fully diluted basis (subject to limits under the stock plan on the number of shares available

The shares issued to Dr.

Mazar in such transaction will be fully vested as of the date of grant.

The severance amount payable

Mazar upon termination by the Company for any reason (other than Dr.

Mazar’s death, disability or for “cause”),

or termination by Dr.

Mazar for “good reason,” is equal to 100% of his then current base salary plus reimbursement of the

cost associated with his premiums for elected COBRA coverage up to $25,000 (the “COO Standard Severance Benefits”).

termination upon a change in control, and if Dr.

Mazar’s employment is terminated by the Company for any reason (other than Dr.

Mazar’s death, disability or for “cause”), or termination by Dr.

Mazar for “good reason,” in any such case

within the six months immediately preceding or the twelve months immediately following such change in control, Dr.

Mazar is entitled

to a payment equal to one times his then current base salary reduced by the COO Standard Severance Benefits to which he would be entitled.

Chief Financial Officer

On February 17, 2024, we entered

into a consulting agreement with Mr.

Lytle (the Interim CFO Agreement), that provided for a consulting fee equal to $20,000 per month

for services of at least 20 hours per week.

The Interim CFO Agreement was superseded by an employment agreement effective June 1, 2024,

as amended on March 11, 2025 (the “CFO Employment Agreement”) that provides for a base salary equal to $360,000 per year,

and the ability for Mr.

Lytle to earn an annual bonus of up to 40% of his base salary upon achievement of certain milestones mutually

agreed to between the Company and Mr.

On March 10, 2025, the Board approved an increase to Mr.

Lytle’s annual base salary

to $435,363, contingent upon the Company raising at least $25 million in additional equity financing.

In addition, Mr.

receive, with a grant date of April 1, 2025 and at an exercise price equal to the closing price of our common stock as of such date, stock

option grants consisting of (1) a one-time grant of 1,900 stock options as a Base Pay True Up Grant;

(2) a one-time grant of 39,999 stock

options as an Equity True Up Grant;

and (3) an Annual Option Grant of 49,394 stock options.

The Special Option Grant will vest as to 25%

on August 14, 2025 with the remaining 75% vesting in equal monthly installments during the 36 months thereafter and the Annual Grant will

vest as to 25% on the first anniversary of the grant date with the remaining 75% vesting in equal monthly installments during the 36 months

following the first anniversary of the grant date.

In the event the Company is

sold on or before December 31, 2026 for cash in a transaction valued at or above $29.56 per share, immediately prior to the consummation

of such transaction, Mr.

Lytle will also be granted shares of common stock under the stock incentive plan of the Company that is then

in effect equal to that number of shares that would bring his total ownership (including the shares he owned prior to calculation of the

shares to be granted in the sale transaction) to 2.0% of the issued and outstanding shares of common stock on the day immediately prior

to the closing of such transaction on a fully diluted basis (subject to limits under the stock plan on the number of shares available

The shares issued to Mr.

Lytle in such transaction will be fully vested as of the date of grant.

Upon the closing of our initial

public offering, the Company granted Mr.

Lytle options to purchase that number of shares of common stock equal to 1.0% of the Company’s

issued and outstanding capital stock on a fully diluted basis as of such date, or 234,971 shares, 25% of which vest on June 1, 2025 and

the remaining 75% of which vest in equal monthly installments during the 36 months following June 1, 2025.

The CFO Employment Agreement may be terminated by the Company or Mr.

Lytle at any time, upon 30 days’ prior written

notice thereof to the other party.

The severance amount payable to Mr.

Lytle upon termination by the Company for any reason (other than

Lytle’s death, disability or for “cause”), or termination by Mr.

Lytle for “good reason,” is equal to

50% of his then current base salary (the “CFO Standard Severance Benefits”).

Upon termination upon a change in control, and

Lytle’s employment is terminated by the Company for any reason (other than Mr.

Lytle’s death, disability or for “cause”),

or termination by Mr.

Lytle for “good reason,” in any such case within the six months immediately preceding or the twelve

months immediately following such change in control, Mr.

Lytle is entitled to a payment equal to 50% of his then current base salary reduced

by the CFO Standard Severance Benefits to which he would be entitled.

Outstanding Equity Awards at Year End

The following table presents information

regarding the outstanding stock options and restricted common stock awards held by the Company’s named executive officers at December

Underlying Unexercised

Options (#) Unexercisable(1)

of Shares or Units of Stock That Have Not Vested

Value of Shares or Units of Stock That Have Not Vested ($)

units or other

shares, units

that have not

Mazar, Ph.D.(2)

______________

(1) The market value of the restricted stock as of December 31, 2024 is calculated by multiplying the

number of unvested shares outstanding under the award by $7.96 per share, which is the fair value we used for financial reporting purposes

as of such date.

(2) Each of Mr.

Schmitt and Dr.

Mazar are also entitled to receive shares of common stock following

the consummation of certain transactions.

See “Employment Agreements — Chief Executive Officer” and “—

Chief Operating Officer” above.

(3) 46,905 restricted common stock awards were granted on February 5, 2016, of which, (i) 11,727

shares vested on the grant date, (ii) 11,726 shares vested on September 18, 2017 upon the hiring of the Company’s Chief

Medical Officer, (iii) 11,726 shares vested on January 11, 2018 upon the filing of the Company’s “Investigation

of New Drug” application with the FDA, and (iv) 11,726 shares will vest upon the achievement of strategic partnership or licensing

transaction with anticipated gross proceeds of at least $25 million.

(4) 369,318 restricted common stock awards were granted on February 22, 2021, of which, 25% vested on

the first anniversary of the grant date and the remaining 75% vests in equal monthly installments during the 36 months following

the first anniversary of the grant date.

(5) 544,111 RSUs were granted upon the closing of the IPO on August 14, 2024, of which, 50% vest on each of

the first and second anniversary dates of the closing of the IPO.

(6) 27,778 restricted common stock awards were granted on February 22, 2021, of which, 25% vested on

the first anniversary of the grant date and the remaining 75% vests in equal monthly installments during the 36 months following

the first anniversary of the grant date.

(7) 40,395 restricted common stock awards were granted on July 7, 2022, of which, 25% vested on the first

anniversary of the grant date and the remaining 75% vests in equal monthly installments during the 36 months following the first

anniversary of the grant date.

(8) 37,374 non-qualified stock option awards were granted on October 23, 2023, of which, 25% of the option

vests on the first anniversary of the grant date and the remaining 75% vests in equal monthly installments during the 36 months following

the first anniversary of the grant date.

(9) 234,971 non-qualified stock option awards were granted upon the closing of the IPO, of which, 25% vest

on June 1, 2025 and the remaining 75% of which vest in equal monthly installments during the 36 months following June 1, 2025.

Potential Payments upon Termination or Change in Control

Our named executive officers

each have employment agreements with us, pursuant to which they are entitled to receive certain benefits upon qualifying termination.

See the section “Employment Agreements” above for additional information regarding these benefits.

Clawback Policy

We have adopted a compensation

recovery policy that is compliant with the Nasdaq Listing Rules, as required by the Dodd-Frank Act.

Director Compensation

The following table sets

forth compensation earned during the year ended December 31, 2024 by each director who is not a named executive officer and

served during the year ended December 31, 2024.

Fees Earned or

Fletcher, Ph.D.(2)

Jason Keyes(4)(5)

Les Kreis, Jr.(3)

Amy Ronneberg(4)(5)

Roger Sawhney, Ph.D.(4)(5)

Todd Thomson(2)

Dan Zabrowski, Ph.D.(2)

(1) The dollar amounts listed reflect the value of the underlying shares as of the grant date calculated in

accordance with ASC Topic 718 based upon the fair-market value of our common stock on the date of the grant and, therefore, do not necessarily

reflect the actual value received by the individuals.

The assumptions made in computing the estimated fair value of such awards are disclosed

in Note 10 to our consolidated financial statements included in this Report.

(2) Represents an annual grant for continued service on the Board on August 12, 2024 of an option to purchase

up to 15,000 shares of common stock with an exercise price of $8.00 per share, the public offering price of shares in the IPO.

Kreis resigned from the Board effective immediately prior to the closing of the initial public

Keyes was appointed to serve as a member of our Board effective upon the effectiveness of the registration

statement for the initial public offering on August 12, 2024.

Sawhney and Ms.

Ronneberg was appointed to serve as members

of our Board effective upon the closing of the IPO on August 14, 2024.

Each received an initial option grant in connection with such appointment

on August 12, 2024 to purchase up to 30,000 shares of common stock at an exercise price of $8.00 per share, the public offering price

of shares in the IPO.

Director Compensation Program

In connection with our initial

public offering, the Board established, based upon the recommendation of the compensation committee, a compensation program for the non-employee

members of the Board.

The compensation program is designed to align the directors’ compensation with our business objectives and

the creation of stockholder value.

The compensation committee and the Board expect to review non-employee director compensation periodically

to ensure that such compensation remains competitive and enables us to recruit and retain qualified directors.

Under the non-employee directors’

compensation program, beginning upon the effectiveness of the registration statement for this offering, each non-employee director will

receive an annual cash retainer and will receive cash fees for serving as chair or as a member of the audit, compensation or nominating

and corporate governance committees, as follows:

Annual Amount

Director Compensation Cash Retainer

Chair of the Board (in lieu of Director Compensation Cash Retainer)

Additional Annual Compensation for Committee Chairs

Audit Committee

Compensation Committee

Nominating and Corporate Governance Committee

Additional Annual Compensation for Committee Members (Non-Chairs)

Audit Committee

Compensation Committee

Nominating and Corporate Governance Committee

In addition, each non-employee

director, upon their initial appointment or election, and on an annual basis thereafter, will receive a grant of stock options under our

2024 Plan exercisable for 30,000 and 15,000 shares, respectively, with the initial grant vesting in three equal installments on the first,

second, and third anniversary of the grant date, and with the annual grants vesting in full on the first anniversary of the grant date.

The information required by

this item will be contained in our 2026 Proxy Statement and is incorporated herein by reference.

Security Ownership of Certain Beneficial

Owners and Management and Related Stockholder Matters.

The following table sets forth information regarding

the actual beneficial ownership of our common stock as of February 28, 2025 by:

• each person or group of affiliated persons known by us to be the beneficial owner of more than 5% of the outstanding shares of our

common stock;

• each of our named executive officers and directors;

• all of our executive officers and directors as a group.

Beneficial ownership is determined

according to the rules of the SEC, which generally provide that a person has beneficial ownership of a security if he, she or it possesses

sole or shared voting or investment power over that security, including options and warrants that are currently exercisable or exercisable

within 60 days.

Applicable percentage ownership is based on 19,531,636 shares of common stock outstanding on February 28, 2025.

Unless otherwise indicated, we

believe that all persons named in the table have sole voting and investment power with respect to all our common stock beneficially owned

Name and Address of Beneficial Owner (8)

Percentage of

Directors and Named Executive Officers

Andrew Mazar(2)

Fletcher(3)(4)

Todd Thomson(5)

Daniel Zabrowski(6)

Amy Ronneberg

Roger Sawhney

All directors and executive officers (9 individuals) (7)

5% Beneficial Holders

Bios Equity Affiliated Funds(4)

Kairos Venture Affiliated Funds(5)

* Less than 1%.

(1) Includes (i) 22,223 shares of common stock held by The Andrew Schmitt Irrevocable Trust, dated

December 31, 2019, of which Mr.

Schmitt is trustee, (ii) 22,223 shares of common stock held by The Anna Schmitt

Irrevocable Trust, dated December 31, 2019, of which Mr.

Schmitt is trustee, (iii) 22,223 shares of common stock held by

The Edward Schmitt Irrevocable Trust, dated December 31, 2019, of which Mr.

Schmitt is trustee, and (iv) 552,345

shares of common stock held by The Schmitt Family Irrevocable Trust, dated December 31, 2019, of which Mr.

(2) Includes 112,943 shares of common stock, 1,683 shares of restricted common stock that vest within 60 days,

and 14,015 shares of common stock underlying options that are exercisable within 60 days.

(3) Includes (i) 60,973 shares of common stock held by Dr.

Fletcher directly, (ii) 8,056 shares

of common stock held by the KF Legacy Trust U/A/D December 7, 2016, which has an independent trustee, and (iii) 8,056 shares

of common stock held by the MF Legacy Trust U/A/D December 7, 2016, which has an independent trustee.

Fletcher disclaims

beneficial ownership of the shares held by each of the KF Legacy Trust U/A/D December 7, 2016 and the MF Legacy Trust U/A/D December 7,

2016, which are trusts for the benefit of his children, other than to the extent he may have a pecuniary interest therein.

(4) Includes (i) 300,749 shares of common stock held by Bios Actuate Co-Invest I, LP, (ii) 2,094,650

shares of common stock held by Bios Actuate Co-Invest II, LP, (iii) 573,394 shares of common stock held by Bios Actuate Co-Invest

III, LP, (iv) 307,538 shares of common stock held by Bios Fund I QP, LP, (v) 525,797 shares of common stock held by Bios

Fund I, LP, (vi) 131,248 shares of common stock and 3,528 shares of common stock issuable upon the exercise of warrants held

by Bios Fund II NT, LP, (vii) 980,433 shares of common stock and 26,355 shares of common stock issuable upon the exercise of

warrants held by Bios Fund II QP, LP, (viii) 300,143 shares of common stock and 8,068 shares of common stock issuable upon the

exercise of warrants held by Bios Fund II, LP, (ix) 404,814 shares of common stock held by Bios Fund III NT, LP, (x) 2,506,667

shares of common stock held by Bios Fund III QP, LP, (xi) 383,791 shares of common stock held by Bios Fund III, LP, (xii)

84,917 shares of common stock and 31,884 shares of common stock underlying options that are or will be exercisable within 60 days held

by BP Directors, LP, (xiii) 1,259,427 shares of common stock held by Bios Clinical Opportunity Fund, LP, and (xiv) 125,000 shares

of common stock held by Bios 2024 Co-Invest, LP.

Bios Equity Partners, LP is the general partner of Bios Actuate Co-Invest I, LP;

Equity Partners III, LP is the general partner of Bios Actuate Co-Invest II, LP, Bios Actuate Co-Invest III, LP, Bios Fund III NT,

LP, Bios Fund III QP, LP, Bios Fund III, LP;

Bios Equity Partners, LP is the general partner of Bios Fund I QP, LP and

Bios Fund I, LP;

Bios Equity Partners II, LP is the general partner of Bios Fund II NT, LP, Bios Fund II QP, LP and Bios

Fletcher and Mr.

are the general partners of BP Directors, LP;

and Bios Equity COF, LP is

the general partner of Bios Clinical Opportunity Fund, LP (collectively, the Bios Equity Affiliated Funds).

Cavu Management, LP, an entity

managed and controlled by Mr.

Kreis, Jr., and Bios Capital Management, LP, an entity managed and controlled by Dr.

(Bios Capital Management, LP), are the general partners of Bios Equity Partners, LP, Bios Equity Partners II, LP and Bios Equity Partners

Bios Capital Management, LP is the general partner of Bios Equity COF, LP.

Cavu Advisors LLC, an entity that is managed and controlled

Kreis, Jr., is the general partner of Cavu Management LP.

Bios Advisors GP, LLC, an entity that is managed and controlled

Fletcher, is the general partner of Bios Capital Management, LP.

The shares owned by Bios Equity Affiliated Funds are aggregated

for purposes of reporting share ownership information.

Fletcher share voting and investment control with

respect to shares held by the Bios Equity Affiliated Funds.

The address for Bios Equity Affiliated Funds is 1751 River Run, Suite 400,

Fort Worth, Texas 76107.

(5) Includes (i) 321,781 shares of common stock held by Kairos SPV Fund LLC, (ii) 873,033 shares

held by Kairos Venture Opportunities I, L.P., (iii) 1,184,797 shares of common stock, 28,464 shares of common stock issuable upon

the exercise of warrants, and 15,942 shares of common stock underlying options that are or will be exercisable within 60 days held

by Kairos Venture Partners II, L.P., and (iv) 254,735 shares of common stock held by Kairos-Actuate SPV L.P.

Kairos Venture Investments,

LLC is the manager of Kairos SPV Fund LLC;

Kairos Venture Opportunities GP I, LLC is the general partner of Kairos Venture Opportunities

and Kairos Venture Partners GP II, LLC is the general partner of Kairos-Actuate SPV L.P.

and Kairos Venture Partners II, L.P.

(collectively, the “Kairos Venture Affiliated Funds”).

The shares owned by Kairos Venture Affiliated Funds are aggregated

for purposes of reporting share ownership information.

Thomson shares voting and investment control with James Demetriades, CEO

of Kairos Ventures, with respect to shares held by the Kairos Venture Affiliated Funds.

The address for Kairos Venture Affiliated Funds

Santa Monica Blvd., Ste.

710, Beverly Hills, CA 90210.

(6) Includes 76,348 shares of common stock and 15,942 shares of common stock underlying options that are exercisable

within 60 days held by the Catharine A.

Zabrowski Irrevocable Trust, of which Catherine A.

Zabrowski, the wife of Dr.

is the trustee and has sole voting and investment power over such shares and options.

Zabrowski may be deemed to have or share

such investment and/or voting power due to the trustee’s status as his spouse.

Zabrowski disclaims beneficial ownership

of such shares other than to the extent he may have a pecuniary interest therein.

(7) Includes 77,783 shares of common stock underlying options that are or will be exercisable within 60 days

and 1,683 shares of restricted common stock that will be vested within 60 days.

(8) Unless otherwise noted, the address of the beneficial owner is 1751 River Run, Suite 400, Fort Worth,

Equity Compensation Plan Information

The following table provides information

as of December 31, 2024 with respect to shares of common stock that may be issued under our equity compensation plans.

Plan Category

Number of Securities to be Issued Upon the Exercise of Outstanding Options, Warrants and Rights

Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights ($/share)

Number of Shares Remaining Available for Future Issuance Under Equity Compensation Plans (excluding securities reflected in column (a))

Equity compensation plans approved by stockholders

1,371,113 (1)

2,385,140 (3)

Equity compensation plans not approved by stockholders

(1) Consists of (a) (i) options to purchase a total of 780,539 shares of common stock under the 2015 and 2024

Plans, (ii) 46,463 shares of our common stock that are subject to unvested RSAs under the 2015 Plan, and (iii) 544,111 shares of our common

stock that are subject to outstanding RSUs under the 2024 Plan.

(2) The weighted average exercise price is calculated based solely on outstanding stock options.

take into account the shares of our common stock subject to outstanding restricted stock awards or restricted stock units, which have

no exercise price.

(3) Consists of 2,385,140 shares of our common stock reserved for issuance under the 2024 Plan.

The 2024 Plan

provides for an annual increase on the first day of each calendar year beginning January 1, 2025 and ending on and including January 1,

2034, equal to the lesser of (A) 5% of the aggregate number of shares of common stock outstanding on the final day of the immediately

preceding calendar year and (B) such smaller number of shares as is determined by the administrator.

These increases are not reflected

in the table above.

The 2015 Plan terminated prior to the IPO, and no additional awards will be granted under the 2015 Plan.

under outstanding awards under the 2015 that are subsequently cancelled, forfeited or expire will become available for grant under the

The information required by

this item will be contained in our 2026 Proxy Statement and is incorporated herein by reference.

Certain Relationships and Related Transactions, and Director

Independence.

The following includes a summary

of transactions since January 1, 2023 and any currently proposed transactions, to which we were or are to be a participant, in which (i)

the amount involved exceeded or will exceed the lesser of $120,000 or one percent of the average of our total assets at year-end for the

last two completed fiscal years;

and (ii) any of our directors, executive officers or holders of more than 5% of our capital stock, or

any affiliate or member of the immediate family of the foregoing persons, had or will have a direct or indirect material interest, other

than compensation and other arrangements that are described under Item 11 of Part III of this Annual Report.

We also describe below certain

other transactions with our directors, executive officers and stockholders.

Convertible Promissory Note, Preferred Stock and

Warrant Financings

From 2015 through 2024, we

entered into various financing transactions in which the Bios Equity Affiliated Funds and the Kairos Venture Affiliated Funds, each of

which beneficially own more than 5% of our capital stock, participated.

Fletcher, who has served as our director and chairperson of

the board since April 2015, is a Co-Founder and has served as the President of Bios Research since 2012.

Kreis, who served

as our director from March 2015 to August 2024, is also a Co-Founder and has served as the Managing Partner of Bios Partners since

Fletcher and Mr.

Kreis are each deemed to beneficially own the shares and warrants held by the Bios Equity Affiliated

Thomson, our director since September 2022, has served as the Chief Operating and Financial Officer of Kairos Ventures since

Thompson is deemed to beneficially own the shares and warrants held by the Kairos Venture Affiliated Funds.

From September 2015 to June

2017, we issued shares of Series A redeemable convertible preferred stock to Bios Equity Affiliated Funds for a purchase price of $2.00

From April 2019 to December

2020, we entered into a Series B preferred stock purchase agreement with various investors, including Bios Equity Affiliated Funds and

the Kairos Venture Affiliated Funds, pursuant to which we issued and sold Series B-1, B-2, B-3 and B-4 redeemable convertible preferred

The Series B-1 per share purchase price was $3.66, the Series B-2 per share purchase price was $3.83, the Series B-3 per share

purchase price was $4.00 and the Series B-4 per share purchase price was $4.18.

Investors in the Series B-1 redeemable convertible preferred

stock also received (i) warrants to purchase Series B-1 redeemable convertible preferred stock at an exercise price equivalent to $5.27

per share of common stock and (ii) warrants to purchase Series B-1 redeemable convertible preferred stock at an exercise price equivalent

to $10.55 per share of common stock (collectively, referred to as the “Series B Warrants”).

In May 2024, we agreed to amend

the terms of the Series B Warrants to provide that they will remain exercisable for common stock for a period of two years after the closing

of the IPO if they were not in the money based on the initial offering price in the IPO.

From August 2022 to June 2023,

we entered into a Series C preferred stock purchase agreement with various investors, including Bios Equity Affiliated Funds and the Kairos

Venture Affiliated Funds, pursuant to which, in seven separate tranches, we issued and sold Series C redeemable convertible preferred

stock at a price per share of $4.36.

In February, March and May

2024, we issued to Bios Clinical Opportunity Fund, LP, a Bios Equity Affiliated Fund, convertible promissory notes in the aggregate principal

amount of $5,500,000 (the “Bridge Notes”).

The Bridge Notes accrued interest at a rate of 7% per annum and were due and payable

on August 16, 2024, as amended, subject to their earlier conversion according to the terms of the Bridge Notes.

Upon the closing of our IPO

on August 14, 2024, (i) the Series A, B-1, B-2, B-3 and B-4 and C redeemable convertible preferred stock converted into common stock,

(ii) the Series B Warrants issued at an exercise price of $5.27 per share (in-the-money warrants) were automatically exercised and

settled on a cashless basis for shares of our Series B redeemable convertible preferred stock, which were subsequently converted into 26,070 shares

of our common stock, (iii) the remaining out-of-the money Series B Warrants became exercisable for the same number of shares of common

stock with an exercise price of $10.55 through August 13, 2026, and (iv) Bios Clinical Opportunity Fund, LP received 884,427 shares

of common stock upon the conversion of the Bridge Notes, 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 table below sets forth

the number of shares of our Series A, B-1, B-2, B-3, B-4 and C redeemable convertible preferred stock, number of Series B Warrants

and amount of the Bridge Notes acquired by the Bios Equity Affiliated Funds and Kairos Venture Affiliated Funds, as adjusted for the 1-for-1.8

reverse stock split, in each case, without giving effect to the conversion into common stock.

As of February 28, 2025, we have outstanding

an aggregate of approximately 19,531,636 shares of common stock and the Bios Equity Affiliated Funds beneficially hold approximately 51.26%

of our outstanding shares and the Kairos Venture Affiliated Funds beneficially own approximately 13.68% of our outstanding shares.

Name of Greater than 5%

stockholders(1)(2)

Warrants (#)(3)(4)

Bios Equity Affiliated Funds

Kairos Venture Affiliated Funds

(1) Additional details regarding these stockholders and their equity holdings are provided in the section

titled “Principal Stockholders.”

(2) Excludes 84,917 shares of common stock held by the Bios Equity Affiliated Funds and 47,320 shares of common stock held by the Kairos

Venture Affiliated Funds, each prior to the closing of the IPO on August 14, 2024.

(3) Represents shares adjusted for the 1-for-1.8 reverse stock split.

(4) Represents Series B Warrants outstanding prior to the closing of the IPO on August 14, 2024.

In connection

with the closing of the IPO, 12,952 shares of common stock were issued to the Bios Equity Affiliated Funds and 9,714 shares of common

stock were issued to the Kairos Venture Affiliated Funds, each upon the automatic exercise and settlement on a cashless basis of the Series

B Warrants issued at an exercise price of $5.27.

As of February 28, 2025, the Bios Equity Affiliated Funds held 37,951 Series B Warrants

and the Kairos Venture Affiliated Funds held 28,464 Series B Warrants, each with an exercise price of $10.55 exercisable through August

Promissory Note Financing

In August 2024, we issued to Bios

Clinical Opportunity Fund, LP, a Bios Equity Affiliated Fund, a promissory note in the principal amount of $200,000 (the “August

The August Note accrued interest at a rate of 7% per annum and was due and payable on the earlier of (i) the closing

of the IPO or (ii) August 16, 2024.

The August Note was paid in full on August 14, 2024, including accrued interest thereon.

Investors’ Rights, Voting and Right of First

Refusal and Co-Sale Agreements

The Bios Equity Affiliated Funds

and Kairos Ventures Affiliated Funds are parties to the following agreements entered into in connection with the investments described

Investor Rights Agreement

We entered into a fourth amended

and restated investor rights agreement in November 2022 (the Investor Rights Agreement) with the holders of our redeemable convertible

preferred stock, or the preferred stockholders.

The Investor Rights Agreement provides for certain customary demand and “piggy-back”

registration rights for a period of three years following our IPO, with respect to the shares of common stock underlying the redeemable

convertible preferred stock owned by the preferred stockholders.

All expenses incurred in connection with registrations, filings or qualifications,

including (without limitation) all registration, filing and qualification fees, printer’s fees, accounting fees and fees and disbursements

of our counsel and the reasonable fees and disbursements of one counsel for the selling holders not to exceed $30,000 per registration,

but excluding underwriting discounts and commissions relating to registrable securities, will be borne by us.

Except for the registration

rights (including the related provisions pursuant to which we have agreed to indemnify the parties to the Investors’ Rights Agreement),

all rights under this agreement terminated upon closing of the IPO.

The registration rights have continued following our IPO and will

terminate on August 14, 2027 or earlier for certain holders.

Voting Agreement

We entered into a fourth amended

and restated voting agreement in November 2022 (the Voting Agreement) with the preferred stockholders.

Through the date of the IPO, our

Board consisted of five members.

The holders of the Series A Preferred Stock, voting as a separate class, were entitled to elect one member

of the Board, with the initial director being Dr.

Fletcher, the holders of the Series B Preferred Stock, voting as a separate class, were

entitled to elect two members of the Board, with the initial directors being Messrs.

and Thomson, and the holders of the Series

C Preferred Stock, voting as a separate class, were entitled to elect one member of the Board.

No director was elected by the holders

of the Series C Preferred Stock.

The holders of common stock, voting as a separate class, were entitled to elect one member of the Board,

with the initial director being Mr.

The holders of the Preferred Stock and the common stock voting together as a single class

on an as-converted basis were also entitled to elect one additional “independent” director, as such term is defined in the

Exchange Act, with the initial director being Dr.

The Voting Agreement terminated

upon the closing of the IPO, and members previously elected to the Board pursuant to the Voting Agreement will continue to serve as directors

until they resign, are removed or their successors are duly elected by holders of our common stock.

The composition of our board of directors

is described in more detail in Item 10 of Part III of this Annual Report.

Right of First Refusal and Co-Sale Agreement

We entered into a fourth amended

and restated right of first refusal and co-sale agreement in November 2022 (the ROFR and Co-Sale Agreement) with Mr.

Francis Giles, each referred to in the ROFR and Co-Sale Agreement as a key holder, and certain holders of our preferred stock

that individually or together with their respective affiliates, hold at least 379,513 shares of common stock (on an as-converted basis),

which holders are referred to in the ROFR and Co-Sale Agreement as major investors.

Pursuant to the ROFR and Co-Sale Agreement, the major

investors had a right of first refusal on certain transfers of our shares by the key holders, and if any shares proposed to be transferred

by a key holder is not purchased pursuant to the major investors’ right of first refusal and is to be sold to a prospective transferee,

the major investors have a right of co-sale in respect of such transfers.

The ROFR and Co-Sale Agreement terminated upon the closing of

Participation in our Initial Public Offering

In August 2024, the Bios Equity

Affiliated Funds purchased 500,000 shares of our common stock in the IPO at the initial public offering price of $8.00 per share.

Indemnification Agreements

We have entered into indemnification

agreements with each of our current directors and executive officers.

Our amended and restated certificate of incorporation and our amended

and restated bylaws provide that we will indemnify our directors and officers to the fullest extent permitted by applicable law.

Policies and Procedures for Related Party Transactions

We have adopted a written related-person

transactions policy, which became effective upon the closing of our IPO, that sets forth our policies and procedures regarding the identification,

review, consideration and oversight of “related-person transactions.” For purposes of our policy only, a “related-person

transaction” is a transaction, arrangement or relationship (or any series of similar transactions, arrangements or relationships)

in which we and any “related person” are participants involving an amount that exceeds $120,000.

Transactions involving compensation

for services provided to us as an employee, consultant or director are not considered related-person transactions under this policy.

related person is any executive officer, director, nominee to become a director or a holder of more than five percent of our common

stock, including any of their immediate family members and affiliates, including entities owned or controlled by such persons.

Under the policy, where a transaction

has been identified as a related-person transaction, management must present information regarding the proposed related-person transaction

to our audit committee (or, where review by our audit committee would be inappropriate, to another independent body of our board of directors)

The presentation must include a description of, among other things, all of the parties thereto, the direct and indirect interests

of the related persons, the purpose of the transaction, the material facts, the benefits of the transaction to us and whether any alternative

transactions are available, an assessment of whether the terms are comparable to the terms available from unrelated third parties and

management’s recommendation.

To identify related-person transactions in advance, we rely on information supplied by our executive

officers, directors and certain significant stockholders.

In considering related-person transactions, our audit committee or another independent

body of our board of directors takes into account the relevant available facts and circumstances including, but not limited to:

• the risks, costs and benefits to us;

• the impact on a director’s independence in the event the related person is a director, immediate

family member of a director or an entity with which a director is affiliated;

• the terms of the transaction;

• the availability of other sources for comparable services or products;

• the terms available to or from, as the case may be, unrelated third parties.

In the event a director has an

interest in the proposed transaction, the director must recuse himself or herself from the deliberations and approval.

Director Independence

We utilize the Nasdaq listing

rules in determining whether a director is independent.

The Nasdaq rules generally define an “independent director” as a person,

other than an executive officer of a company or any other individual having a relationship which, in the opinion of the issuer’s

board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.

Schmitt is not considered

to be independent due to his role as an executive officer of the Company.

The Board has determined that each of Dr.

Fletcher, Mr.

Zabrowski, Mr.

Sawhney and Ms.

Ronneberg qualifies as an independent director, and that the Board currently consists of

a majority of independent directors, as such term is defined under the Nasdaq rules.

In making this determination, our Board considered

the current and prior relationships, as applicable, that each of Dr.

Fletcher, Mr.

Zabrowski, Mr.

Ronneberg has with our Company and all other facts and circumstances our Board deemed relevant in determining their independence,

including their beneficial ownership of our capital stock.

In addition, we are subject to the rules of the SEC and Nasdaq relating to

the membership, qualifications, and operations of the audit committee, the compensation committee, and the nominating and corporate governance

committee, as discussed below.

The information required by

this item will be contained in our 2026 Proxy Statement and is incorporated herein by reference.

Principal Accountant Fees and Services.

The following table is a summary

and description of fees for services provided by of each of KMJ Corbin & Company LLP (“KMJ”) and Crowe LLP (“Crowe”),

our independent registered public accounting firms, for each of the last two fiscal years for audit services and billed to us in each

of the last two fiscal years for other services.

On May 20, 2024, the partners

and professional staff of KMJ joined Crowe.

The Company continued to receive services from KMJ until it resigned as the Company’s

independent registered public accounting firm on August 19, 2024.

In connection with the resignation of KMJ, the Company’s Audit

Committee appointed Crowe to serve as the Company’s independent registered public accounting firm effective August 19, 2024 for

the fiscal year ended December 31, 2024.

Fees paid to KMJ Corbin &

Company LLP were as follows:

Year Ended December 31,

Audit fees (1)

Audit-related fees (2)

All other fees

Fees paid to Crowe LLP were as

December 31, 2024

Audit fees (1)

Audit-related fees (2)

All other fees

Audit fees pertain to the aggregate fees by our principal accountants for professional services rendered for the audit of our annual consolidated financial statements on Form 10-K, and reviews of quarterly consolidated financial statements included in our reports on Form 10-Q, and audit services provided in connection with other statutory or regulatory filings, such as registration statements.

This category of services would include, among others:

employee benefit plan audits, due diligence related to mergers and acquisitions, accounting consultations and audits in connection with acquisitions, internal control reviews, attest services related to financial reporting that are not required by statute or regulation and consultation concerning financial accounting and reporting standards.

This category consists of fees for professional services rendered for tax compliance and tax advice.

All fees described above were pre-approved by

the Audit Committee since the closing of the IPO and adoption of the Audit Committee Charter.

Audit Committee Pre-Approval of Audit and Non-Audit

The Audit Committee must pre-approve

the audit and non-audit services rendered by our independent registered public accounting firm.

The information required by

this item will be contained in our 2026 Proxy Statement and is incorporated herein by reference.

Exhibits and Financial Statement Schedules

(1) Financial Statements.

The consolidated financial statements

of Actuate Therapeutics, Inc.

The consolidated financial

statements of Actuate Therapeutics, Inc.

filed as part of this Report are listed on the Index to Financial Statements on page F-1.

(2) Finance Statement Schedules.

All schedules are omitted because they are not applicable

or the required information is shown in the financial statements or notes thereto.

All schedules are omitted because they are not

applicable or the required information is shown in the financial statements or notes thereto.

(3) Exhibits.

3 unchanged sentences

Description of Document

Sixth Amended and Restated Certificate of Incorporation (incorporated by reference from our Current Report on Form 8-K as filed on August 14, 2024)

Amended and Restated Certificate of Incorporation (incorporated by reference to Registrant’s Current Report on Form 8-K as

filed on August 14, 2024)

Amended and Restated Bylaws of Actuate Therapeutics, Inc.

(incorporated by reference from our Current Report on Form 8-K as filed on August 14, 2024)

Form of Common Stock Certificate of the registrant (incorporated by reference to the Registrant’s Registration Statement on Form S-1/A, filed with the SEC on June 11, 2024)

Fourth Amended and Restated Investors’ Rights Agreement, by and between the Registrant and certain of its stockholders, dated November 30, 2022 (incorporated by reference to the Registrant’s Registration Statement on Form S-1/A, filed with the SEC on May 24, 2024)

Form of Representative Warrant issued to underwriter under IPO (incorporated by reference to the Registrant’s Registration Statement on Form S-1/A, filed with the SEC on June 11, 2024)

Form of Second Amended and Restated Warrant issued to holders of Convertible Redeemable Preferred Stock (incorporated by reference to the Registrant’s Registration Statement on Form S-1/A, filed with the SEC on June 11, 2024)

Description of the Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934

Exclusive License Agreement with Equity, dated April 6, 2015, as amended, between The Board of Trustees of the University of Illinois and the Registrant (incorporated by reference to the Registrant’s Registration Statement on Form S-1/A, filed with the SEC on July

License Agreement, dated March 31, 2015, as amended, between Northwestern University and the Registrant (incorporated by reference to the Registrant’s Registration Statement on Form S-1, filed with the SEC on May 24, 2024)

(incorporated by reference to Registrant’s Current Report on Form 8-K as filed on August 14, 2024)

of Common Stock Certificate of Registrant (incorporated by reference to Registrant’s Registration Statement on Form

S-1/A, filed with the SEC on June 11, 2024)

Fourth Amended and Restated Investors’ Rights Agreement, by and between the Registrant and certain of its stockholders, dated November 30, 2022 (incorporated by reference to Registrant’s Registration Statement on Form S-1/A, filed with the SEC on May 24, 2024)

Form of Representative Warrant issued to Underwriter under IPO (incorporated by reference to Registrant’s Registration Statement on Form S-1/A, filed with the SEC on June 11, 2024)

Form of Second Amended and Restated Warrant issued to holders of Convertible Redeemable Preferred Stock (incorporated by reference to Registrant’s Registration Statement on Form S-1/A, filed with the SEC on June 11, 2024)

of the Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 (incorporated by reference to Registrant’s Annual Report on Form 10-K, filed with the SEC on March 13, 2025)

Form of Warrant, dated June 25, 2025, by and among Registrant and each of the purchasers party thereto under the Securities Purchase Agreement (incorporated by reference to Registrant’s Current Report on Form 8-K as filed on June 26, 2025)

Exclusive License Agreement with Equity, dated April 6, 2015, as amended, between The Board of Trustees of the University of Illinois and the Registrant (incorporated by reference to Registrant’s Registration Statement on Form S-1/A, filed with the SEC on July

License Agreement, dated March 31, 2015, as amended, between Northwestern University and the Registrant (incorporated by reference to Registrant’s Registration Statement on Form S-1, filed with the SEC on May 24, 2024)

Actuate Therapeutics, Inc.

2015 Equity Incentive Plan, as amended, and form of grant agreements thereunder (incorporated by reference to the Registrant’s Registration Statement on Form S-1, filed with the SEC on May 24, 2024)

2015 Equity Incentive Plan, as amended, and form of grant agreements thereunder (incorporated by reference to Registrant’s Registration Statement on Form S-1, filed with the SEC on May 24, 2024)

Actuate Therapeutics, Inc.

2024 Equity Incentive Plan (incorporated by reference to the Registrant’s Registration Statement on Form S-1, filed with the SEC on May 24, 2024)

2024 Equity Incentive Plan (incorporated by reference to Registrant’s Registration Statement on Form S-1, filed with the SEC on May 24, 2024)

Form of Stock Option Agreement under the Actuate Therapeutics, Inc.

2024 Stock Incentive Plan (incorporated by reference to the Registrant’s Registration Statement on Form S-1/A, filed with the SEC on June 11, 2024)

2024 Stock Incentive Plan (incorporated by reference to Registrant’s Registration Statement on Form S-1/A, filed with the SEC on June 11, 2024)

Form of Restricted Stock Unit Agreement under the Actuate Therapeutics, Inc.

2024 Stock Incentive Plan (incorporated by reference to the Registrant’s Registration Statement on Form S-1/A, filed with the SEC on June 11, 2024)

Non-Employee Director Compensation Policy (incorporated by reference to the Registrant’s Registration Statement on Form S-1/A, filed with the SEC on June 21, 2024)

2024 Stock Incentive Plan (incorporated by reference to Registrant’s Registration Statement on Form S-1/A, filed with the SEC on June 11, 2024)

Non-Employee Director Compensation Policy (incorporated by reference to Registrant’s Registration Statement on Form S-1/A, filed with the SEC on June 21, 2024)

Exhibit Number

Description of Document

Employment Agreement, effective April 15, 2015 and as amended on each of February 5, 2016, September 28, 2017, September 23, 2018, January 29, 2019, August 1, 2022, January 27, 2023 December 12, 2023 and May 9, 2024, between Daniel Schmitt, and the Registrant (incorporated by reference to the Registrant’s Registration Statement on Form S-1, filed with the SEC on May 24, 2024)

Employment Agreement, effective April 15, 2015 and as amended on each of February 5, 2016, September 28, 2017, September 23, 2018, January 29, 2019, August 1, 2022, January 27, 2023 December 12, 2023 and May 9, 2024, between Daniel Schmitt, and the Registrant (incorporated by reference to Registrant’s Registration Statement on Form S-1, filed with the SEC on May 24, 2024)

Employment Agreement, effective June 1, 2022, between Andrew P.

Mazar, Ph.D., and the Registrant (incorporated by reference to the Registrant’s Registration Statement on Form S-1, filed with the SEC on May 24, 2024)

Employment Agreement, effective June 1, 2024, between Paul Lytle, and the Registrant (incorporated by reference to the Registrant’s Registration Statement on Form S-1, filed with the SEC on May 24, 2024)

Form of Indemnification Agreement for Directors and Officers (incorporated by reference to the Registrant’s Registration Statement on Form S-1, filed with the SEC on May 24, 2024)

Insider Trading Policy

Mazar, Ph.D., and the Registrant (incorporated by reference to Registrant’s Registration Statement on Form S-1, filed with the SEC on May 24, 2024)

Employment Agreement, effective June 1, 2024, between Paul Lytle, and the Registrant (incorporated by reference to Registrant’s Registration Statement on Form S-1, filed with the SEC on May 24, 2024)

Form of Indemnification Agreement for Directors and Officers (incorporated by reference to Registrant’s Registration Statement on Form S-1, filed with the SEC on May 24, 2024)

Tenth Amendment to Employment Agreement by and between Daniel Schmitt and the Registrant dated March 11, 2025 (incorporated by reference to Registrant’s Quarterly Report on Form 10-Q, filed with the SEC on May 15, 2025)

First Amendment to Employment Agreement by and between Andrew P.

and the Registrant dated March 11, 2025 (incorporated by reference to Registrant’s Quarterly Report on Form 10-Q, filed with the SEC on May 15, 2025)

First Amendment to Employment Agreement by and between Paul Lytle and the Registrant dated March 11, 2025 (incorporated by reference to Registrant’s Quarterly Report on Form 10-Q, filed with the SEC on May 15, 2025)

Securities Purchase Agreement, dated March 27, 2025, by and between Registrant and B.

Riley Principal Capital II, LLC (incorporated by reference to Registrant’s Current Report on Form 8-K as filed on March 28, 2025)

Registration Rights Agreement, dated March 27, 2025, by and between Registrant and B.

Riley Principal Capital II, LLC (incorporated by reference to Registrant’s Current Report on Form 8-K as filed on March 28, 2025)

Form of Securities Purchase Agreement, dated June 25, 2025, by and among Registrant and each of the purchasers party thereto (incorporated by reference to Registrant’s Current Report on Form 8-K as filed on June 26, 2025)

Form of Registration Rights Agreement, dated June 25, 2025, by and among Registrant and each of the purchasers party thereto (incorporated by reference to Registrant’s Current Report on Form 8-K as filed on June 26, 2025)

the Market Issuance Sales Agreement dated as of November 28, 2025 between Registrant, on the one hand, and B.

Riley Securities, Inc.

and Craig-Hallum Capital Group LLC, on the other (incorporated by reference to Registrant’s Current Report on Form 8-K as

filed on November 28, 2025)

Trading Policy (incorporated by reference to Registrant’s Annual Report on Form 10-K, filed with the SEC on March 13, 2025)

Subsidiaries of the Registrant

Consent of Crowe LLP, Independent Registered Public Accounting Firm

Consent of KMJ Corbin & Company LLP, Independent Registered Public Accounting Firm

Power of Attorney (included on the signature page of this Annual Report on Form 10-K).

Certification of Principal Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as amended

3 unchanged sentences

Clawback Policy of Actuate Therapeutics, Inc.

(incorporated by reference to Registrant’s Annual Report on Form

10-K, filed with the SEC on March 13, 2025)

XBRL Instance Document

7 unchanged sentences

Indicates management contract or compensatory plan.

Certain portions of this exhibit have been omitted

pursuant to Item 601(b)(10) of Regulation S-K on the basis that they are not material and would likely cause competitive harm to the registrant

if disclosed.

Certain portions of this exhibit have been

omitted pursuant to Item 601(b)(10) of Regulation S-K on the basis that they are not material and would likely cause competitive harm

to the registrant if disclosed.

Form 10-K Summary.

Pursuant to the requirements of

the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto

Pursuant to the requirements

of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto

duly authorized.

4 unchanged sentences

(Principal Executive Officer)

SIGNATURES AND POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS,

that each person whose signature appears below hereby constitutes and appoints Daniel M.

Schmitt and Paul Lytle, and each of them, his

or her true and lawful attorneys-in-fact and agents, each with full power of substitution and resubstitution, for him or her and in his

or her name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file

the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting

unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite

or necessary to be done in and about the premises, as full to all intents and purposes as he might or could do in person, hereby ratifying

and confirming all that said attorneys-in-fact and agents or any of them, or their or his substitute or substitutes, may lawfully do or

cause to be done by virtue hereof.

Pursuant to the requirements of

the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the registrant and in the

capacities and on the dates indicated:

Pursuant to the requirements

of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the registrant and in

the capacities and on the dates indicated:

/s/ Daniel M.

1 unchanged sentence

(principal executive officer)

March 13, 2025

/s/ Paul Lytle

1 unchanged sentence

(principal financial and accounting officer)

Director and Chairperson

and Chairperson

Fletcher, Ph.D.

10 unchanged sentences

Report of Independent Registered Public Accounting Firm (PCAOB ID 173 )

Report of Independent Registered Public Accounting Firm (PCAOB ID 170 )

Consolidated Balance Sheets as of December 31, 2025 and 2024

10 unchanged sentences

balance sheet of Actuate Therapeutics Inc.

(the “Company”) as of December 31, 2024, the related consolidated statements of operations,

redeemable convertible preferred stock and stockholders’ equity (deficit), and cash flows for the year ended December 31, 2024,

and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present

fairly, in all material respects, the financial position of the Company as of December 31, 2024, and the results of its operations and

its cash flows for the year ended December 31, 2024, in conformity with accounting principles generally accepted in the United States

(the "Company") as of December 31, 2025 and 2024, the related consolidated statements

of operations, redeemable convertible preferred stock and stockholders’ equity (deficit), and cash flows for each of the two years

in the period ended December 31, 2025, and the related notes (collectively referred to as the "financial statements").

opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025

and 2024, and the results of its operations and its cash flows for each of the two years ended December 31, 2025, in conformity with accounting

principles generally accepted in the United States of America.

Going Concern

20 unchanged sentences

of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with

the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the

financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we

engaged to perform, an audit of its internal control over financial reporting.

We conducted our audit in accordance

with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether

the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were

we engaged to perform, an audit of its internal control over financial reporting.

As part of our audit, we are required to obtain an understanding

12 unchanged sentences

Costa Mesa, California

March 13 , 2025

REPORT OF INDEPENDENT REGISTERED PUBLIC

ACCOUNTING FIRM

To the Board of Directors and Stockholders of

Actuate Therapeutics, Inc.

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated

balance sheet of Actuate Therapeutics, Inc.

and subsidiary (the “Company”) as of December 31, 2023, the related consolidated

statements of operations, redeemable convertible preferred stock and stockholders’ deficit and cash flows for the year then ended,

and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated

financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and the

results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the

United States of America.

Going Concern

The accompanying consolidated financial statements

have been prepared assuming the Company will continue as a going concern.

As discussed in Note 1 to the consolidated financial statements,

the Company has incurred recurring operating losses, has had negative operating cash flows and has not recognized any revenues since its

In addition, the Company has an accumulated deficit of $105,094,521 as of December 31, 2023 and is dependent on its ability

to raise capital.

These matters raise substantial doubt about the Company’s ability to continue as a going concern.

plans in regard to these matters are also described in Note 1.

The consolidated financial statements do not include any adjustments that

might result from the outcome of this uncertainty.

Basis for Opinion

These consolidated financial statements are

the responsibility of the Company’s management.

Our responsibility is to express an opinion on these consolidated financial statements

based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”)

and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable

rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with

the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the

consolidated financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have,

nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audit, we are required to obtain

an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of

the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audit included performing procedures

to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures

that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the

consolidated financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by

management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audit provides

a reasonable basis for our opinion.

/s/ KMJ Corbin & Company LLP

We served as the Company’s auditor from 2021 to 2024.

Glendora, California

February 29, 2024 (except for

the retroactive effect of the 1-for-1.8 reverse stock split as described in the “Reverse Stock Split” section of Note 1,

as to which the date is June 7, 2024, and except for Note 14, as to which the date is March 13, 2025)

Actuate Therapeutics, Inc.

Consolidated Balance Sheets

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Total current assets

LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)

Deferred offering costs and other assets

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

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Long term liabilities:

Warrant liability

Accrued interest, less current portion

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Commitments and contingencies (Note 6)

Redeemable convertible preferred stock, $ 0.000001 par value;

no shares authorized, issued or outstanding at December 31, 2024;

33,463,018 shares authorized and 24,678,355 shares issued and outstanding at December 31, 2023;

aggregate liquidation value of $ 0 and $ 121,033,336 as of December 31, 2024 and 2023, respectively

Stockholders’ equity (deficit):

Preferred stock, $ 0.000001 par value;

10,000,000 shares authorized, no shares issued or outstanding at December 31, 2024;

no shares authorized, issued or outstanding at December 31, 2023

Common stock:

$ 0.000001 par value, 200,000,000 shares authorized, 19,531,636 shares issued and outstanding at December 31, 2024;

38,108,584 shares authorized and 1,690,760 shares issued and outstanding at December 31, 2023

Stockholders’ equity:

Preferred stock, $ 0.000001 par value, 10,000,000 shares authorized, no shares issued or outstanding

Common stock, $ 0.000001 par value, 200,000,000 shares authorized, 23,245,203 and 19,531,636 shares issued and outstanding at December 31, 2025 and 2024, respectively

Additional paid-in capital

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( 132,379,849 )

Total stockholders’ equity (deficit)

( 99,626,513 )

Total liabilities, redeemable convertible preferred stock and stockholders’ equity (deficit)

Total stockholders’ equity

Total liabilities and stockholders’ equity

See accompanying notes to consolidated financial

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Net loss per share attributable to common stockholders, basic and diluted

See accompanying notes consolidated financial

Actuate Therapeutics, Inc.

See accompanying notes consolidated

financial statements.

Actuate Therapeutics,

Consolidated Statements of Redeemable Convertible

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Preferred Stock

Additional Paid-in

Stockholders’ Equity

Balances, December 31, 2022

$ ( 80,349,901 )

$ ( 75,305,432 )

Proceeds from issuances of redeemable convertible preferred stock, net of issuance costs of $ 321,500

Fair market value of warrants issued to placement agent in conjunction with issuance of redeemable convertible preferred stock

Stock-based compensation expense

( 24,744,620 )

Stockholders’

Equity (Deficit)

Balances, December 31, 2023

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( 132,379,849 )

Issuance of shares under underwritten public offering, net of underwriter discounts and issuance costs of $ 1,676,036

Issuance of shares under June 2025 Private Placement, net of issuance costs of $ 73,017

Issuance of shares under Committed Equity Facility, net of issuance costs of $ 603,655

Exercise of stock option awards

Issuance of vested and settled restricted stock units

Stock-based compensation expense

( 22,227,852 )

Balances, December 31, 2025

$ 162,531,681

$ ( 154,607,701 )

See accompanying notes to consolidated financial

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Other accrued expenses

( 2,354,504 )

Net cash used in operating activities

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Financing Activities:

Proceeds from issuance of shares of common stock under underwritten public offering, net of underwriting discounts and offering costs

Proceeds from issuance of shares of common stock under June 2025 Private Placement, net

Proceeds from issuance of shares of common stock under the Committed Equity Facility, net

Proceeds from the exercise of stock options

Proceeds from initial public offering, net of underwriting discounts and commissions

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Proceeds from issuances of related party convertible notes payable

Proceeds from issuances of redeemable convertible preferred stock, net

Deferred offering costs

Net cash provided by financing activities

Net change in cash and cash equivalents

( 17,490,651 )

Cash and cash equivalents, beginning of period

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Conversion of related party convertible notes payable into common stock upon initial public offering

Estimated fair market value of warrants issued to placement agent in connection with issuance of redeemable convertible preferred stock

Deferred offering costs, unpaid and accrued

Deferred offering costs charged against Committed Equity Facility

See accompanying notes

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Actuate Therapeutics, Inc.

“Company”) was incorporated in the State of Delaware on January 16, 2015 and is headquartered in Fort Worth, Texas.

is a clinical-stage biopharmaceutical company focused on developing novel therapies for the treatment of cancers through the inhibition

(the “Company”) was incorporated in the State of Delaware on January 16, 2015 and is headquartered in Fort Worth, Texas.

Company is a clinical-stage biopharmaceutical company focused on developing novel therapies for the treatment of cancers through the inhibition

of glycogen synthase kinase-3 (“GSK-3”).

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of the cancer cells and the regulation of anti-tumor immunity.

The Company has a 100 %-owned Irish

subsidiary, Actuate Therapeutics Limited, that is currently dormant.

Reverse Stock Split

On May 31, 2024, the Company’s

board of directors approved a 1-for-1.8 reverse stock split of its issued and outstanding shares of common stock and stock option awards,

which was effected on June 7, 2024.

All issued and outstanding shares of common stock (including outstanding restricted stock awards),

stock option awards and per share data have been adjusted in these audited consolidated financial statements, on a retrospective basis,

to reflect the reverse stock split for all periods presented.

The par value of the common stock and preferred stock was not adjusted as

a result of the reverse stock split.

The shares of common stock underlying

outstanding stock options and other equity instruments were proportionately reduced and the respective exercise prices, if applicable,

were proportionately increased in accordance with the terms of the agreements governing such securities.

In addition, the conversion ratios

for each series of the Company’s Redeemable Convertible Preferred Stock (see Note 8), which automatically converted into shares

of common stock upon the closing of the Company’s initial public offering (“IPO”), were proportionally adjusted.

entitled to fractional shares as a result of the reverse stock split were rounded up to the nearest whole share.

The Company has a 100 %-owned

Irish subsidiary, Actuate Therapeutics Limited, that is currently dormant.

Initial Public Offering

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

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 of approximately $1.8 million and other offering expenses of approximately

$1.9 million (or approximately $ 3.7

million in aggregate) for the issuance of 3,220,000

shares of common stock of the Company, including shares issued under the Overallotment Option.

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”.

Company received net proceeds of approximately $ 22 million, after deducting discounts and commissions of approximately $1.8 million and

other offering expenses of approximately $1.9 million (or approximately $ 3.7 million in aggregate) for the issuance of 3,220,000 shares

of common stock of the Company, including shares issued under the Overallotment Option.

Upon the closing of the Company’s

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applicable, common stock immediately prior to the closing of the IPO.

Authorized Capital

Effective upon the closing of

the Company’s IPO, the Company’s authorized capital consists of 200,000,000 shares of common stock, $ 0.000001 par value per share,

and 10,000,000 shares of preferred stock, $ 0.000001 par value per share.

Basis of Presentation

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cash and cash equivalents of $ 13,159,423 and working capital of $ 7,936,503 .

The Company has not generated any revenue and has incurred recurring

operating losses since inception.

The Company expects to continue to incur losses for the foreseeable future and therefore, the Company’s

ability to continue its operations is highly dependent on its ability to raise additional capital to fund its future operations.

During the year ended December

31, 2024, the Company issued convertible promissory notes of $ 5,500,000 in aggregate to a related party (the “Related Party Convertible

Notes Payable”) in exchange for proceeds of $ 5,500,000 , which automatically converted into 884,427 shares of common stock upon the

closing of the IPO (see Note 5).

On August 14, 2024 and September 12, 2024, the Company received net proceeds of approximately $ 18.9 million

and $ 3.1 million upon the closing of the IPO and Overallotment Option, respectively, after deducting discounts and commissions and other

estimated offering expenses of approximately $ 3.5 million and $ 0.2 million, respectively.

The Company has not generated any revenue and has incurred

recurring operating losses since inception.

The Company expects to continue to incur losses for the foreseeable future and therefore,

the Company’s ability to continue its operations is highly dependent on its ability to raise additional capital to fund its future

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.

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, there were 3,364,407 shares of common stock in remaining capacity under the Committed Equity

Facility (see Note 7).

On June 25, 2025, the Company

entered into a securities purchase agreement for a private placement of common stock and warrants with certain institutional and accredited

investors, which closed on June 27, 2025 (the “June 2025 Private Placement”).

Under the June 2025 Private Placement, the Company

received aggregate net proceeds of $ 4,592,462 (see Note 7).

On September 10, 2025, the

Company entered into an underwriting agreement (the “Underwriter Agreement”) with Lucid Capital Markets, LLC (“Underwriter”)

relating to an underwritten public offering of 2,142,858 shares of common stock plus an over-allotment option to purchase up to an additional

321,428 shares of common stock at the public offering price of $ 7.00 per share, less underwriting discounts and commissions and other

offering expenses (“September 2025 Public Offering”).

The offering closed on September 11, 2025 and the Company issued 2,464,286

shares of common stock to the Underwriter, including shares issued under the over-allotment option, in exchange for net proceeds of $ 15,573,966

(see Note 7).

On November 28, 2025, the

Company entered into an At Market Issuance Sales Agreement (the “ATM Agreement”) with B.

Riley Securities, Inc.

and Craig-Hallum

Capital Group LLC (each a “Sales Agent” and collectively the “Sales Agents”) with respect to an “at the

market” offering program (the “ATM Facility”), under which the Company may, from time to time, at its sole discretion,

issue and sell through the Sales Agents, up to $100 million of shares of common stock.

Pursuant to the ATM Agreement, the Company may

sell the shares through the Sales Agents by any method permitted that is deemed an “at the market” offering as defined in

Rule 415 under the Securities Act.

The Sales Agents will use commercially reasonable efforts consistent with their normal trading and

sales practices to sell the shares from time to time, based upon instructions from us, including any price or size limits or other customary

parameters or conditions we may impose.

The Company will pay the Sales Agents a commission of up to 3.0% of the gross sales proceeds of

any common stock sold through the Sales Agents under the ATM Agreement and also has provided the Sales Agents with customary indemnification

During the year ended December 31, 2025, the Company did not sell any shares of common stock under the ATM Facility.

As of December

31, 2025, the Company had $ 100 million in remaining capacity under its ATM Facility (see Note 7).

There can be no assurance

that the Company will be able to raise sufficient proceeds in the future under the Committed Equity Facility, the ATM Facility, or any

additional financing will be available to the Company on acceptable terms, if at all.

Management anticipates, based

on currently proposed plans and assumptions, that our cash and cash equivalents on hand will not satisfy the Company’s operational

and capital requirements beyond the second quarter of fiscal year 2025.

As the Company continues to pursue its business plan, it expects

to finance its operations through equity offerings, debt financings, or other capital sources.

However, there can be no assurance that

any additional financing will be available to the Company on acceptable terms, if at all.

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.

Based on the above matters, we have concluded

that there is substantial doubt regarding the Company’s ability to continue as a going concern for a year from the date the financial

statements were issued.

SUMMARY OF SIGNIFICANT ACCOUNTING

and capital requirements beyond July 2026 without raising additional capital.

As the Company

continues to execute its business plan, it plans to seek financing for its operations through equity offerings, debt financings, or other

capital sources.

The Company’s ability to raise additional capital may be adversely impacted by business conditions, global economic

conditions, disruptions to, and volatility in, the financial markets in the United States and worldwide, among other matters, and it may

not obtain this necessary capital when needed on acceptable terms, or at all.

If events or circumstances occur such that the Company does

not obtain additional funding, it may be necessary to significantly reduce our scope of operations to reduce the current rate of spending

through actions such as the need to delay, limit, reduce, grant rights to develop or terminate its product development or even cease operations,

which could have a material adverse effect on the Company’s business, results of operations or financial condition.

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

SUMMARY OF SIGNIFICANT

ACCOUNTING POLICIES

Principles of Consolidation

The consolidated financial statements

include the accounts of Actuate Therapeutics, Inc.

The consolidated financial

statements include the accounts of Actuate Therapeutics, Inc.

and its wholly owned subsidiary, Actuate Therapeutics Limited.

All material intercompany

accounts and transactions have been eliminated in the consolidated financial statements.

intercompany accounts and transactions have been eliminated in the consolidated financial statements.

Use of Estimates

The preparation of financial statements

in conformity with U.S.

GAAP requires management to make estimates, assumptions, and judgements that affect the reported amounts of assets,

liabilities, expenses, and related disclosures in the accompanying notes.

The Company bases its estimates, assumptions and judgements

on historical experience when available and on various factors that it believes to be reasonable under the circumstances as of the date

of the accompanying consolidated financial statements including the fair value of its common stock, fair value of the warrant liability,

fair value of Related Party Convertible Notes Payable, stock-based compensation expense, accrued expenses (including accrued expenses

related to research and development (“R&D”) as described below), and the recoverability of the Company’s net deferred

tax assets and related valuation allowance.

In addition, other factors may affect estimates, including the expected business and operational

changes, the sensitivity and volatility associated with the assumptions used in developing estimates, and whether historical trends are

expected to be representative of future trends.

The estimation process often may yield a range of potentially reasonable estimates of

the ultimate future outcomes, and management must select an amount that falls within that range of reasonable estimates.

The preparation of financial

statements in conformity with U.S.

GAAP requires management to make estimates, assumptions, and judgements that affect the reported amounts

of assets, liabilities, expenses, and related disclosures in the accompanying notes.

The Company bases its estimates, assumptions and

judgements on historical experience when available and on various factors that it believes to be reasonable under the circumstances as

of the date of the accompanying consolidated financial statements including stock-based compensation expense, accrued expenses (including

accrued expenses related to research and development (“R&D”) as described below), and the recoverability of the Company’s

net deferred tax assets and related valuation allowance.

In addition, other factors may affect estimates, including the expected business

and operational changes, the sensitivity and volatility associated with the assumptions used in developing estimates, and whether historical

trends are expected to be representative of future trends.

The estimation process often may yield a range of potentially reasonable estimates

of the ultimate future outcomes, and management must select an amount that falls within that range of reasonable estimates.

Actual results

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Accrued Expenses Related to R&D Expenses

As part of the process of preparing

our consolidated financial statements, we are required to estimate our R&D expenses as of each balance sheet date.

This process involves

reviewing open contracts, including clinical site contracts, and communicating with our personnel to identify services that have been

performed on our behalf, and estimating the level of service performed and the associated cost incurred for the service when we have not

yet been invoiced or otherwise notified of the actual cost.

We make estimates of our R&D expenses as of each balance sheet date based

on facts and circumstances known to us at that time.

The significant estimates in our R&D expenses include the costs incurred for

services performed by our vendors in connection with services for which we have not yet been invoiced.

We base our expenses related to

R&D activities on our estimates of the services received and efforts expended pursuant to quotes and contracts with contractors and

vendors that conduct R&D on our behalf.

The financial terms of these agreements are subject to negotiation, vary from contract to

contract, and may result in uneven payment flows.

As part of the process of

preparing our consolidated financial statements, we are required to estimate our R&D expenses as of each balance sheet date.

process involves reviewing open contracts, including clinical site contracts, and communicating with our personnel to identify services

that have been performed on our behalf, and estimating the level of service performed and the associated cost incurred for the service

when we have not yet been invoiced or otherwise notified of the actual cost.

We make estimates of our R&D expenses as of each balance

sheet date based on facts and circumstances known to us at that time.

The significant estimates in our R&D expenses include the costs

incurred for services performed by our vendors in connection with services for which we have not yet been invoiced.

We base our expenses

related to R&D activities on our estimates of the services received and efforts expended pursuant to quotes and contracts with contractors

and vendors that conduct R&D on our behalf.

The financial terms of these agreements are subject to negotiation, vary from contract

to contract, and may result in uneven payment flows.

Advance payments for goods and services that will be used in future R&D activities

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investment portfolio are the preservation of capital and maintenance of liquidity.

The Company is subject to risks

common to companies in the biopharmaceutical industry, including, but not limited to, risks related to the successful development and

commercialization of product candidates, fluctuations in operating results and financial risks, the ability to successfully raise additional

funds when needed, protection of proprietary rights and patent risks, patent litigation, compliance with government regulations, dependence

on key personnel and collaboration partners, and competition from competing products in the marketplace.

The Company is subject to

risks common to companies in the biopharmaceutical industry, including, but not limited to, risks related to the successful development

and commercialization of product candidates, fluctuations in operating results and financial risks, the ability to successfully raise

additional funds when needed, protection of proprietary rights and patent risks, patent litigation, compliance with government regulations,

dependence on key personnel and collaboration partners, and competition from competing products in the marketplace.

Deferred Offering Costs

The Company capitalized as deferred

offering costs all direct and incremental legal, professional, accounting and other third-party fees incurred in connection with the Company’s

Deferred offering costs were offset against IPO proceeds upon the closing of the IPO.

Upon closing of the Company’s IPO in

August 2024, deferred offering costs of $ 1,931,189 were transferred to additional paid-in capital to offset the IPO proceeds.

The Company capitalized as

deferred offering costs all direct and incremental legal, professional, accounting and other third-party fees incurred in connection with

the Company’s equity offerings.

Deferred offering costs will be offset against offering proceeds upon the completion of an offering

or during the offering period as proceeds are received on a pro rata basis.

In the event that an offering is abandoned, deferred offering

costs will be expensed in the period of abandonment in the consolidated statement of operations.

Fair Value of Financial Instruments

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carried at fair value which is not equivalent to cost will be classified and disclosed in one of the following three categories:

· Level 1 — Quoted prices (unadjusted) in

active markets for identical assets and liabilities;

· Level 2 — Inputs other than Level 1 that

are observable, either directly or indirectly, such as unadjusted quoted prices for similar assets and liabilities, unadjusted quoted

prices in the markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially

the full term of the assets or liabilities;

· Level 3 — Unobservable inputs that are

supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Level 3 assets and

liabilities include those whose fair value measurements are determined using pricing models, discounted cash flow methodologies or similar

valuation techniques and significant management judgment or estimation.

The Company reviews the fair value

hierarchy classification at each reporting date.

Changes in the ability to observe valuation inputs may result in a reclassification of

levels for certain assets or liabilities within the fair value hierarchy.

1 — Quoted prices (unadjusted) in active markets for identical assets and liabilities;

2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as unadjusted quoted prices for similar

assets and liabilities, unadjusted quoted prices in the markets that are not active, or other inputs that are observable or can be corroborated

by observable market data for substantially the full term of the assets or liabilities;

3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets

or liabilities.

Level 3 assets and liabilities include those whose fair value measurements are determined using pricing models, discounted

cash flow methodologies or similar valuation techniques and significant management judgment or estimation.

The Company reviews the fair

value hierarchy classification at each reporting date.

Changes in the ability to observe valuation inputs may result in a reclassification

of levels for certain assets or liabilities within the fair value hierarchy.

The Company did not have any transfers of assets and liabilities

between the levels of the fair value measurement hierarchy during the years presented.

As of December 31, 2025 and 2024, there were no

financial assets or liabilities carried at fair value which were not equivalent to cost.

Comprehensive Loss

There were no differences between net loss and comprehensive

loss presented in the consolidated statements of operations for the years ended December 31, 2024 and 2023.

There were no differences

between net loss and comprehensive loss presented in the consolidated statements of operations for the years ended December 31, 2025 and

In accordance with authoritative

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Fair Value Option of Accounting for Related Party Convertible Notes

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

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.

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.

Based on the eligibility assessment

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for hybrid financial instruments at fair value in their entirety versus bifurcation of the embedded derivatives from the debt hosts.

The estimated fair values of the

Related Party Convertible Notes Payable are determined using valuation models that incorporated assumptions and estimates.

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

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 (see Note 5).

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 consolidated statements

of operations.

The estimated fair values

of the Related Party Convertible Notes Payable were determined using valuation models that incorporated assumptions and estimates.

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 (see Note 5).

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 consolidated

statements of operations.

In addition, in certain circumstances,

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probability-weighted IPO scenario.

In connection with the closing of the Company’s IPO on August 14, 2024, the Related Party Convertible

Notes Payable were converted into common stock and no amounts are outstanding as of December 31, 2024 (see Note 5).

In connection with the closing of the Company’s IPO, the Related Party Convertible Notes Payable

were converted into common stock and no amounts are outstanding as of December 31, 2024 (see Note 4).

Redeemable Convertible Preferred Stock

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based on their estimated fair value at the grant date.

The estimated fair value of service-based

RSAs is 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

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

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.

The estimated fair value of

service-based RSAs is 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.

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.

The Company classifies stock-based

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Net Loss Per Share Attributable to Common Stockholders

Basic net loss per common share

is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding

during the period, without consideration of potentially dilutive securities.

Diluted net loss per share is computed by dividing the net

loss attributable to common stockholders by the weighted-average number of shares of common stock and potentially dilutive securities

Basic net loss per common

share is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock

outstanding during the period, without consideration of potentially dilutive securities.

Diluted net loss per share is computed by dividing

the net loss attributable to common stockholders by the weighted-average number of shares of common stock and potentially dilutive securities

outstanding for the period.

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notes payable, warrants to purchase Redeemable Convertible Preferred Stock, unvested RSAs, and outstanding stock options and RSUs are

considered to be potentially dilutive securities (see Note 11).

Basic and diluted net loss attributable

to common stockholders per share is presented in conformity with the two-class method required for participating securities as the Redeemable

Convertible Preferred Stock and common stock subject to repurchase are considered participating securities.

The Redeemable Convertible

Preferred Stock did not have a contractual obligation to share in the Company’s losses, and unvested RSAs subject to repurchase

is considered an unvested stock-based compensation award for accounting purposes.

As such, the net loss is attributed entirely to common

stockholders.

Because the Company has reported a net loss for the reporting periods presented, the diluted net loss per common share is

the same as basic net loss per common share for those periods.

considered to be potentially dilutive securities when outstanding (see Note 10).

As of August 14, 2024, Redeemable Convertible Preferred

Stock, convertible notes payable, warrants to purchase Redeemable Convertible Preferred Stock were no longer outstanding, and therefore

were no longer considered to be potentially dilutive securities during the year ended December 31, 2025.

In addition, included in the

basic and diluted net loss per share calculation were RSUs awarded to an executive officer that had vested in August 2025, but the issuance

and delivery of the shares were deferred.

The number of shares underlying vested and unsettled RSUs at December 31, 2025 was 272,055 .

Basic and diluted net loss

attributable to common stockholders per share is presented in conformity with the two-class method required for participating securities

as the Redeemable Convertible Preferred Stock and common stock subject to repurchase are considered participating securities.

The Redeemable

Convertible Preferred Stock did not have a contractual obligation to share in the Company’s losses, and unvested RSAs subject to

repurchase is considered an unvested stock-based compensation award for accounting purposes.

As such, the net loss is attributed entirely

to common stockholders.

Because the Company has reported a net loss for the reporting periods presented, the diluted net loss per common

share is the same as basic net loss per common share for those periods.

The Company accounts for income

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on deferred tax assets unless realization is considered more likely than not.

The Company evaluates its tax

positions taken or expected to be taken in the course of preparing the Company’s tax returns to determine whether the tax positions

The Company evaluates its

tax positions taken or expected to be taken in the course of preparing the Company’s tax returns to determine whether the tax positions

are “more-likely-than-not” of being sustained by the applicable tax authority.

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as of the issuance date of these consolidated financial statements.

The Company also has elected to

utilize research credits against the employer portion of payroll tax as it is considered a qualified small business under the Internal

The Company also has elected

to utilize research credits against the employer portion of payroll tax as it is considered a qualified small business under the Internal

Revenue code.

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Recently Adopted Accounting Standards

In November 2023, the FASB issued

ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures .

The guidance includes the requirements

that a public entity disclose, on an annual and interim basis, significant segment expenses that are regularly provided to the chief operating

decision maker and included within each reported measure of segment profit or loss, the title and position of the chief operating decision

maker, and an explanation of how the chief operating decision maker uses the reported measure(s) of segment profit or loss in assessing

segment performance and deciding how to allocate resources.

The guidance also requires that a public entity that has a single reportable

segment provide all the disclosures required by the guidance and all existing segment disclosures in ASC 280, Segment Reporting .

The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after

December 15, 2024.

Early adoption is permitted.

A public entity should apply the amendments in the guidance retrospectively to all prior

periods presented in the financial statements.

Upon transition, the segment expense categories and amounts disclosed in the prior periods

should be based on the significant segment expense categories identified and disclosed in the period of adoption.

The Company adopted

the guidance as of December 31, 2024 with no material impact on the Company’s consolidated financial statements upon adoption, as

further described in Note 14.

In August 2020, the FASB issued

ASU 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in

Entity’s Own Equity (Subtopic 815-40) .

The guidance simplifies the accounting for certain financial instruments, eliminates

the current models that require separation of beneficial conversion and cash conversion features from convertible instruments, and simplifies

the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity.

It also introduces

additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity

and amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments.

The guidance is effective for public business entities that meet the definition of a Securities and Exchange Commission filer, excluding

entities eligible to be smaller reporting companies as defined by the Securities and Exchange Commission, for fiscal years beginning after

December 15, 2021, including interim periods within those fiscal years.

For all other entities, the guidance is effective for fiscal years

beginning after December 15, 2023, including interim periods within those fiscal years.

Early adoption is permitted, but no earlier than

fiscal years beginning after December 15, 2020, including interim periods within those fiscal years.

The Company adopted the guidance

as of January 1, 2024 with no material impact on the Company’s consolidated financial statements upon adoption.

Recently Issued Accounting Standards Not Yet Adopted

Accounting standards not listed

below were assessed and determined not to be applicable or are expected to have minimal impact on the Company’s consolidated financial

In December 2023, the FASB issued

ASU 2023-09, Income Taxes (Topic 740):

In December 2023, the FASB

issued ASU 2023-09, “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures”.

The guidance includes the requirement that public

business entities, on an annual basis, disclose specific categories in the rate reconciliation and provide additional information for

reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5% of the amount

computed by multiplying pretax income (or loss) by the applicable statutory income tax rate).

It also requires that all entities disclose,

on an annual basis, the amount of income taxes paid (net of refunds received) disaggregated by federal (national), state, and foreign

taxes and the amount of income taxes paid (net of refunds received) disaggregated by individual jurisdictions in which income taxes paid

(net of refunds received) is equal to or greater than 5% of total income taxes paid (net of refunds received) and requires that all entities

disclose income (or loss) from continuing operations before income tax expense (or benefit) disaggregated between domestic and foreign

and income tax expense (or benefit) from continuing operations disaggregated by federal (national), state, and foreign.

Lastly, the guidance

eliminates the requirement for all entities to disclose the nature and estimate of the range of the reasonably possible change in the

unrecognized tax benefits balance in the next 12 months or make a statement that an estimate of the range cannot be made.

For public business

entities, the guidance is effective for annual periods beginning after December 15, 2024.

Early adoption is permitted for annual financial

statements that have not yet been issued or made available for issuance.

The guidance includes the requirement

that public business entities, on an annual basis, disclose specific categories in the rate reconciliation and provide additional information

for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5% of the

amount computed by multiplying pretax income (or loss) by the applicable statutory income tax rate).

It also requires that all entities

disclose, on an annual basis, the amount of income taxes paid (net of refunds received) disaggregated by federal (national), state, and

foreign taxes and the amount of income taxes paid (net of refunds received) disaggregated by individual jurisdictions in which income

taxes paid (net of refunds received) is equal to or greater than 5% of total income taxes paid (net of refunds received) and requires

that all entities disclose income (or loss) from continuing operations before income tax expense (or benefit) disaggregated between domestic

and foreign and income tax expense (or benefit) from continuing operations disaggregated by federal (national), state, and foreign.

the guidance eliminates the requirement for all entities to disclose the nature and estimate of the range of the reasonably possible change

in the unrecognized tax benefits balance in the next 12 months or make a statement that an estimate of the range cannot be made.

business entities, the guidance is effective for annual periods beginning after December 15, 2024.

Early adoption is permitted for annual

financial statements that have not yet been issued or made available for issuance.

The guidance should be applied on a prospective basis.

Retrospective

application is permitted.

The Company is currently evaluating the impact that this guidance may have on its consolidated financial statements.

FAIR VALUE MEASUREMENTS

As of December 31, 2024,

there were no financial assets or liabilities carried at fair value which were not equivalent to cost.

The following table summarizes

the Company’s liabilities measured at fair value as of December 31, 2023:

Schedule of liabilities measured at fair value

Fair Value Measurements at December

31, 2023 Using

Fair Value at

Quoted Prices

Identical Assets

Significant Other

Redeemable Convertible Preferred Stock Warrant liability

Total liabilities

Information pertaining to the

changes in the estimated fair value of the Redeemable Convertible Preferred Stock Warrant Liability in connection with the Company’s

outstanding warrants to purchase Series B Redeemable Convertible Preferred Stock and Series C Redeemable Convertible Preferred Stock for

the year ended December 31, 2024 is described in Note 9.

Retrospective application is permitted.

The Company adopted the guidance as of December 31, 2025 with no material impact on the Company’s

consolidated financial statements upon adoption.

On July 4, 2025, the U.S.

H.R.1, an act to provide for reconciliation pursuant to title II of H.Con.Res.14.

(the One Big Beautiful Bill Act or “OBBA”)

The OBBA introduces multiple tax law and other legislative changes, including modifications to income tax provisions such

as domestic research and development expenses, capital expenditures, and U.S.

taxation of international earnings;

the repeal or acceleration

of the sunset of certain tax credits under the 2022 Inflation Reduction Act and elimination of certain penalties for violations of certain

regulatory credit programs.

We have recognized the effects of the OBBA provisions in our financial results to the extent they are applicable

to the year ended December 31, 2025.

Recently Issued Accounting Standards Not Yet

Accounting standards not listed

below were assessed and determined not to be applicable or are expected to have minimal impact on the Company’s consolidated financial

In November 2024, the FASB

issued ASU 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses”.

This amended guidance requires disaggregation of specific expense categories in the

notes to the financial statements and a qualitative description of the remaining expense amounts not separately disaggregated.

This standard

becomes effective for reporting companies with annual reporting periods beginning after December 15, 2026, and requires prospective application

with an option to apply it retrospectively.

The Company anticipates adopting this standard in its Annual Report on Form 10-K for the year

ending December 31, 2027.

The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated

financial statements.

OTHER ACCRUED EXPENSES

Other accrued expenses as of

December 31, 2024 and 2023 consisted of the following:

Other accrued expenses as

of December 31, 2025 and 2024 consisted of the following:

Schedule of other accrued expenses

December 31, 2024

Accrued clinical trial costs

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and unpaid interest thereon, divided by eighty percent (80%) of the initial public offering price.

In the event a Qualified Financing

or an initial public offering did not occur prior to the Maturity Date, then on or after the Maturity Date, the holder could elect to

either (i) convert the Related Party Convertible Notes Payable into such number of shares of Series C Redeemable Convertible Preferred

Stock equal to the principal amount plus the accrued but unpaid interest thereon divided by $7.848 or (ii) elect that the Related Party

Convertible Notes Payable become fully due and payable in cash.

Transaction fees of the related

party in the amount of $ 50,000 that were withheld by the related party were expensed as incurred in accordance with ASC 825.

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 include

but are not limited to the following:

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

include but are not limited to the following:

equity value, conversion price, accrued interest, volatility, risk-free interest rate, dividend

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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.

The following table sets forth the changes in the

estimated fair value of the Company’s Related Party Convertible Notes Payable for the year ended December 31, 2024:

of the Company’s IPO, 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.

The following table sets forth the changes in

the estimated fair value of the Company’s Related Party Convertible Notes Payable for the year ended December 31, 2024:

Schedule of estimated

fair value of related party convertible notes payable

Balance as of December 31, 2023

Balance as of January 1, 2024

Principal amount of Related Party Convertible Notes Payable issued

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Rent expense recorded during

the years ended December 31, 2024 and 2023 was $ 4,200 and $ 0 , respectively, which amount is included in general and administrative expenses

in the accompanying consolidated statements of operations.

The Company may be involved, from

time to time, in legal proceedings and claims arising in the ordinary course of its business.

the years ended December 31, 2025 and 2024 was $ 51,200 and $ 4,200 , respectively, which amount is included in general and administrative

expenses in the accompanying consolidated statements of operations.

The Company may be involved,

from time to time, in legal proceedings and claims arising in the ordinary course of its business.

Such matters are subject to many uncertainties

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effect on its business and financial condition.

To the Company’s knowledge, the Company is not subject to any pending legal proceedings.

To the Company’s knowledge, the Company is not subject to any ongoing or pending

legal proceedings.

Indemnities and Guarantees

made certain indemnities and guarantees, under which we may be required to make payments to a guaranteed or indemnified party, in relation

to certain transactions.

We indemnify our officers and directors to the maximum extent permitted under the laws of the State of Delaware.

have made certain indemnities and guarantees, under which we may be required to make payments to a guaranteed or indemnified party, in

relation to certain transactions.

We indemnify our officers and directors to the maximum extent permitted under the laws of the State

The duration of these indemnities and guarantees varies and, in certain cases, is indefinite.

These indemnities and guarantees do not

provide for any limitation of the maximum potential future payments we could be obligated to make.

Historically, we have not been obligated

to make any payments for these obligations and no liabilities have been recorded for these indemnities and guarantees in the accompanying

consolidated balance sheets.

These indemnities and guarantees

do not provide for any limitation of the maximum potential future payments we could be obligated to make.

Historically, we have not been

obligated to make any payments for these obligations and no liabilities have been recorded for these indemnities and guarantees in the

accompanying consolidated balance sheets.

LICENSES AND AGREEMENTS

Northwestern License Agreement

On March 31, 2015, the Company

entered into an Exclusive License Agreement with Equity (the “Northwestern License Agreement”) with Northwestern University

(“Northwestern”).

Pursuant to the Northwestern License Agreement, Northwestern granted the Company (a) a nonexclusive license

to certain technical information developed in the laboratory of Andrew Mazar (who now serves as the Company’s Chief Operating Officer),

and (b) an exclusive license to all results obtained by Andrew Mazar and his collaborators at Northwestern on the use of glycogen synthase

kinase-3 beta (“GSK-3β”) (formerly 9-ING-41) and related compounds used for the treatment of cancer, including combination

In consideration of the license granted pursuant to the Northwestern License Agreement, the Company granted Northwestern 27,778

shares of the Company’s common stock, representing 5% of the Company’s capital stock on a fully diluted basis on the date

In addition, the Company granted Northwestern the right to participate in future offerings of the Company’s capital securities

on the same terms as offered to those participating in the offering.

In 2019, Northwestern’s right to participate in future offerings

UIC License Agreement

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of Illinois (“UIC”), whereby, UIC granted the Company (a) an exclusive, nontransferable license, with the right to sublicense

under UIC’s rights in the Patent Rights (as defined in the UIC License Agreement), and (b) a non-exclusive, non-transferable license,

with the right to sublicense, to use UIC’s rights in the Technical Information (as defined in the UIC License Agreement) within

the Territory and the Field as each such term is defined in the UIC License Agreement.

In consideration of the license granted under the

UIC License Agreement, the Company issued 46,528 shares of the Company’s common stock to UIC, which represented 5% of the Company’s

capital stock on a fully diluted basis at the time of issuance, as defined in the UIC License Agreement, and agreed to pay UIC (i) development

milestones of up to $1.25 million, of which, up to $0.25 million is due upon the progress of clinical trials and $1.0 million is due upon

the initiation of commercial sales (ii) annual minimum royalty payments of $5,000 beginning on the third anniversary year of the UIC License

Agreement and increasing to $15,000 in year four, $35,000 in year five, and $50,000 in year six and each year thereafter, (iii) royalty

on net sales for product covered under the Patent Rights in the low single digits with a 50% reduction in royalties for products solely

utilizing Technical Information, (iv) a declining percentage of sublicensing revenue based on the escalating stage of development upon

a sublicensing event, and (v) the reimbursement of all patent and related expenses incurred by UIC covering the Patent Rights.

years ended December 31, 2024 and 2023, the Company incurred minimum royalties and other reimbursable expenses to UIC in the aggregate

amount of $ 75,000 and $ 64,711 , respectively, which amounts were included in general and administrative expenses in the accompanying consolidated

statements of operations.

under UIC’s rights in the Patent Rights (as defined in the UIC License Agreement), and (b) a non-exclusive, non-transferable worldwide

license, with the right to sublicense, to use UIC’s rights in the Technical Information (as defined in the UIC License Agreement)

for all uses.

In consideration of the license granted under the UIC License Agreement, the Company agreed to pay UIC (i) development milestones

of up to $1.25 million, of which, up to $0.25 million is due upon the progress of clinical trials and $1.0 million is due upon the initiation

of commercial sales, (ii) annual minimum royalty payments, increasing to $50,000 in year six and each year thereafter, (iii) royalty on

net sales for product covered under the Patent Rights in the low single digits with a 50% reduction in royalties for products solely utilizing

Technical Information, (iv) a declining percentage of sublicensing revenue based on the escalating stage of development upon a sublicensing

event, and (v) the reimbursement of all patent and related expenses incurred by UIC covering the Patent Rights.

For the years ended December

31, 2025 and 2024, the Company incurred minimum royalties and other reimbursable expenses to UIC in the aggregate amount of $ 62,008 and

$ 75,000 , respectively, which amounts were included in general and administrative expenses in the accompanying consolidated statements

of operations.

In addition, the Company entered

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the prime rate as of the date of the agreement plus 1%.

On July 16, 2024, the Company and UIC entered an amendment to the UIC License

On July 16, 2024, the Company and UIC entered into an amendment to the UIC License

Agreement (“UIC Amendment”).

Pursuant to the UIC Amendment, accrued interest is due and payable in two installments:

was due within 30 days following the closing of the Company’s IPO;

and (ii) 50% is due within 30 days following the first anniversary

of the closing of the IPO.

Thereafter, interest will be paid annually within 30 days following the second anniversary of the closing of

the IPO and annually thereafter.

In addition, the UIC Amendment provides for payment of the Deferred Amount and any accrued interest thereon

upon the sooner of (i) termination of the UIC License Agreement by the Company, (ii) the Company ceases development of the licensed UIC

technology, (iii) the Company consummates a Change in Control (as defined in the UIC License Agreement), (iv) the Company sublicenses

Interest is due and payable annually within 30 days following the second anniversary of the closing

of the IPO and annually thereafter.

In addition, the UIC Amendment provides for payment of the Deferred Amount and any accrued interest

thereon upon the sooner of (i) termination of the UIC License Agreement by the Company, (ii) the Company ceases development of the licensed

UIC technology, (iii) the Company consummates a Change in Control (as defined in the UIC License Agreement), (iv) the Company sublicenses

the licensed technology or the developed product, (v) the one-year anniversary following approval of a NDA of a licensed product, or (vii)

11 unchanged sentences

survive termination of the UIC License Agreement.

Interest payable to UIC was $ 77,725

as of December 31, 2024, of which, $ 70,957 is classified as current and $ 6,768 is classified as non-current, and are included in the accompanying

consolidated balance sheet.

At December 31, 2023, accrued interest to UIC was $ 130,041 , which is included in the accompanying consolidated

balance sheet.

As of December 31, 2025,

interest payable to UIC was $ 27,018 included in the accompanying consolidated balance sheet.

As of December 31, 2024, interest payable

to UIC was $ 77,725 , of which, $ 70,957 was classified as current and $ 6,768 was classified as non-current, which amounts are included

in the accompanying consolidated balance sheet.

STOCKHOLDERS’

EQUITY (DEFICIT)

Authorized and Issued Capital

Effective upon the closing of

the Company’s IPO, the Company’s authorized capital consists of 200,000,000 shares of common stock, $ 0.000001 par value per

share, and 10,000,000 shares of preferred stock, $ 0.000001 par value per share.

As of December 31, 2024 and 2023, there were 19,531,636

and 1,690,760 shares of common stock issued and outstanding, respectively.

Prior to the closing of the Company’s

IPO, the Company’s authorized capital consisted of 38,108,584 shares of common stock, $ 0.000001 par value per share, and 33,463,018

shares of preferred stock, $ 0.000001 par value per share, of which, the Company had designated multiple series of redeemable convertible

preferred stock (“Redeemable Convertible Preferred Stock”) that were converted into common stock upon the closing of the IPO.

The Company’s authorized

capital consists of 200,000,000 shares of common stock, $ 0.000001 par value per share, and 10,000,000 shares of preferred stock, $ 0.000001

par value per share.

As of December 31, 2025 and 2024, there were 23,245,203 and 19,531,636 shares of common stock issued and outstanding,

respectively.

There were no shares of preferred stock outstanding as of December 31, 2025 and 2024.

Reverse Stock Split

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The par value of the common stock and preferred stock was not adjusted as a result of the reverse stock

The shares of common stock underlying

outstanding stock options and other equity instruments were proportionately reduced and the respective exercise prices, if applicable,

were proportionately increased in accordance with the terms of the agreements governing such securities.

In addition, the conversion price

for each series of the Company’s Redeemable Convertible Preferred Stock, which automatically converted into shares of common stock

upon the closing of the IPO, were proportionally adjusted.

Fractional shares resulting from the reverse stock split were rounded up to

the nearest whole share.

The shares of common stock

underlying outstanding stock options and other equity instruments were proportionately reduced and the respective exercise prices, if

applicable, were proportionately increased in accordance with the terms of the agreements governing such securities.

In addition, the

conversion price for each series of the Company’s Redeemable Convertible Preferred Stock, which automatically converted into shares

of common stock upon the closing of the IPO, were proportionally adjusted.

Fractional shares resulting from the reverse stock split were

rounded up to the nearest whole share.

Funding Agreements

November 2025 ATM Facility

On November 28, 2025, the

Company entered into an ATM Agreement, under which the Company may, from time to time, at its sole discretion, issue and sell through

the Sales Agents, up to $ 100 million of shares of common stock.

Pursuant to the ATM Agreement, the Company may sell the shares through

the Sales Agents by any method permitted that is deemed an “at the market” offering as defined in Rule 415 under the Securities

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 the Company, including any price or size limits or other customary parameters or conditions

we may impose.

The Company will pay the Sales Agents a commission of up to 3.0 % of the gross sales proceeds of any common stock sold through

the Sales Agents under the ATM Agreement and also has provided the Sales Agents with customary indemnification rights.

During the year

ended December 31, 2025, the Company did not sell any shares of common stock under the ATM Facility.

As of December 31, 2025, the Company

had $ 100 million in remaining capacity under its ATM Facility (see Note 14).

September 2025 Public Offering

On September 10, 2025, the

Company entered into an underwritten public offering of 2,142,858 shares of common stock plus an over-allotment option to purchase up

to an additional 321,428 shares of common stock at the public offering price of $ 7.00 per share, less underwriting discounts and commissions

and other offering expenses.

Upon closing the September 2025 Public Offering on September 11, 2025 (“Closing Date”), the Company

issued 2,464,286 shares of common stock to the Underwriter, including shares issued under the over-allotment option, in exchange for net

proceeds of $ 15,573,966 , after deducting underwriter discounts and commissions and other offering expenses of approximately $ 1,676,036 .

In addition, the Company agreed, subject to certain exceptions, not to sell any shares of its capital stock or any securities convertible

into or exercisable or exchangeable for shares of capital stock for a period of seventy-five (75) days from the Closing Date.

June 2025 Private Placement

On June 25, 2025, the Company

entered into a securities purchase agreement for a private placement of common stock and warrants with certain institutional and accredited

investors, including Bios 2024 Co-Invest, LP.

Fletcher, the Chairman of the Company’s Board of Directors, is a Managing

Partner and co-founder of Bios Partners, of which Bios 2024 Co-Invest, LP is an affiliate entity.

Upon closing of the June 2025 Private

Placement on June 27, 2025, the Company issued and sold an aggregate of (i) 666,497 shares of common stock of the Company at a purchase

price of $ 7.00 per share, and (ii) issued warrants to purchase up to an aggregate of 666,497 shares of common stock at an exercise price

of $ 7.00 per share (see Note 8).

The Company received aggregate gross proceeds of $ 4,665,479 from the June 2025 Private Placement, before

deducting fees and offering expenses of $ 73,017 , of which the Company received gross proceeds of $ 499,996 from Bios 2024 Co-Invest, LP

in exchange for 71,428 shares of common stock and warrants to purchase 71,428 shares of common stock.

Pursuant to the securities

purchase agreement, the Company entered into a registration rights agreement (“Registration Rights Agreement”) with the investors,

pursuant to which the Company agreed to register for resale the shares of common stock and shares of common stock underlying the warrants

(“Registrable Securities”).

Under the Registration Rights Agreement, the Company agreed to file a registration statement with

Securities and Exchange Commission (the “SEC”), covering the resale of the shares of common stock, which was filed

on July 25, 2025 prior to the filing deadline.

The registration statement was declared effective by the SEC on August 4, 2025.

also agreed to use reasonable efforts to keep such registration statement effective until the earlier of (i) the date on which the Purchasers

have resold all the Registrable Securities covered thereby or (ii) the date on which the Registrable Securities may be resold by the investors

without registration and without regard to any volume or manner-of-sale limitations by reason of Rule 144 (“Rule 144”) of

the Securities Act, without the requirement for the Company to be in compliance with the current public information requirement under

Rule 144 under the Securities Act or any other rule of similar effect.

In addition, certain liquidated damages provisions will apply to

the Company in the event that the registration is not effective or its use has been suspended beyond specified grace periods, as described

in the Registration Rights Agreement.

Committed Equity Facility

On March 27, 2025, the Company

entered into a Committed Equity Facility with B.

Riley giving the Company the right, but not the obligation, to sell to B.

a 36-month period up to the lesser of (i) $50 million of newly issued shares of our common stock and (ii) 3,904,374 shares of the Company’s

common stock.

The price per share of common stock sold to B.

Riley is determined by reference to the daily volume weighted-average price

of the Company’s common stock as defined within the Committed Equity Facility less a 3% discount, subject to certain limitations

and conditions, as calculated on each day the Company sells shares of its common stock under the Committed Equity Facility.

net proceeds that the Company will receive under the Committed Equity Facility will depend on the quantity, frequency and prices at which

the Company sells common stock to B.

Upon the initial satisfaction

of the conditions to B.

Riley’s obligation to purchase shares under the Committed Equity Facility, including that a registration

statement registering the resale by B.

Riley of the shares of common stock under the Securities Act is declared effective by the SEC and

a final prospectus relating thereto is filed with the SEC (which occurred on April 16, 2025), we have the right, but not the obligation,

from time to time at our sole discretion, to deliver one or more notices to direct B.

Riley to purchase a specified number of shares of

common stock on any trading day, not to exceed the lesser of:

(i) 1,000,000 shares of common stock and (ii) up to 50.0% of the total aggregate

number (or volume) of shares of our common stock traded on Nasdaq during the applicable trading day, provided the closing sale price of

our common stock on Nasdaq on the trading day immediately prior to such purchase date is not less than $1.00.

In addition, we will not sell,

Riley will not purchase any shares pursuant to the Committed Equity Facility, which, when aggregated with all other shares of common

stock then beneficially owned by B.

Riley and its affiliates, would result in the beneficial ownership by B.

Riley and its affiliates

of more than 4.99% of our outstanding voting power or shares of common stock.

Moreover, under the applicable

Nasdaq rules, in no event may we issue to B.

Riley more than 3,904,374 shares of common stock (representing 19.99% of the shares of common

stock outstanding immediately prior to the execution of the Committed Equity Facility) unless (i) we obtain stockholder approval in accordance

with applicable Nasdaq rules, or (ii) the average price per share paid by B.

Riley for all of the shares of common stock that we direct

Riley to purchase from us pursuant to the Committed Equity Facility equals or exceeds $7.56 per share (representing the lower of (a)

the official closing price of our common stock on Nasdaq immediately preceding the execution of the Committed Equity Facility and (b)

the average official closing price of our common stock on Nasdaq for the five consecutive trading days immediately preceding the execution

of the Committed Equity Facility, as adjusted to take into account the payment of the Cash Commitment Fee (as defined below) to B.

As consideration for B.

commitment to purchase shares of common stock at the Company’s direction, the Company agreed to pay B.

Riley a cash commitment fee

in the amount of up to $ 500,000 (the “Cash Commitment Fee”), which represents 1.0% of B.

Riley’s $50,000,000 total aggregate

purchase commitment under the Committed Equity Facility.

The Cash Commitment Fee will be earned and paid by withholding cash amounts equal

to 10% of the total aggregate purchase price payable by B.

Riley to the Company in connection with each purchase effected under the Committed

Equity Facility, until such time as B.

Riley shall have earned and received from such cash withholdings a total aggregate amount in cash

equal to $500,000.

As of December 31, 2025, the Company has paid to B.

Riley an aggregate Cash Commitment Fee of $ 440,412 .

In addition, the Company reimbursed

Riley for the reasonable legal fees and disbursements of B.

Riley’s legal counsel and other expenses in the amount of $ 125,000

and agreed to future quarterly reimbursements of $5,000 during the term of the Committed Equity Facility.

We have the right to terminate

the Committed Equity Facility at any time, at no cost or penalty, upon ten (10) trading days’ prior written notice to B.

In addition, there are no restrictions on future financings, rights of first refusal, participation rights, penalties or liquidated damages

under the Committed Equity Facility, other than a prohibition (with certain limited exceptions) on entering into specified variable rate

transactions, as defined.

During the year ended December

Riley purchased 539,967 and shares of common stock under the Committed Equity Facility in exchange for net proceeds to the

Company of $ 3,800,465 , after deducting the 3% discount, the earned Cash Commitment Fee, and other offering expenses in the aggregate amount

of $ 603,655 .

Redeemable Convertible Preferred Stock

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of common stock.

Immediately prior to the closing

of the Company’s IPO, Redeemable Convertible Preferred Stock was comprised of the following:

Schedule of redeemable convertible preferred stock

Number of Shares Authorized

Number of Shares Issued and Outstanding

Original Issue Price

Common Stock Issuable Upon Conversion

As of December 31, 2023,

the Redeemable Convertible Preferred Stock was comprised of the following:

Number of Shares Authorized

Number of Shares Issued and Outstanding

Liquidation Value

Original Issue Price

Common Stock Issuable Upon Conversion

$ 121,033,336

The rights, preferences, privileges and restrictions

granted to or imposed on the Company’s Redeemable Convertible Preferred Stock or the holders thereof was as follows:

The holders of Redeemable Convertible

Preferred Stock were entitled to receive dividends, out of any assets legally available therefore, prior and in preference to any declaration

or payment of any dividend to the common stockholders, at the rate of 8.0 % per annum on each of the Series A, Series B-1, Series B-2,

Series B-3, Series B-4, and Series C original issue prices, payable when, and if declared by the Board.

Such dividends shall be cumulative

and if less than the full amount of dividends payable on the Redeemable Convertible Preferred Stock if declared and paid, any such payments

shall be made ratably among the holders of the Redeemable Convertible Preferred Stock in proportion to the total amount each holder would

be entitled to receive if the full amount of dividends payable on the Redeemable Convertible Preferred Stock had been declared.

the years ended December 31, 2024 and 2023, no dividends had been declared or paid.

Effective upon the closing of

the IPO, each share of Redeemable Convertible Preferred Stock converted into that number of shares of common stock based on the conversion

ratio of approximately 0.555555 shares of common stock per share of Redeemable Convertible Preferred Stock (“Conversion Ratio”).

The Conversion Ratio was determined by dividing the applicable initial purchase price (the “Initial Purchase Price”) of such

share by the applicable Conversion Price.

The Conversion Price for each series of Redeemable Convertible Preferred Stock as of August

14, 2024 (the closing date of the IPO) and December 31, 2023 were as follows:

Series A - $ 3.6000 ;

Series B-1 - $ 6.5874 ;

Series B-2 - $ 6.8855 ;

Series B-3 - $ 7.2000 ;

Series B-4 - $ 7.5240 ;

and Series C - $ 7.8480 , which reflects the 1-for-1.8 reverse stock split discussed above.

Voting Rights

Prior to conversion, the holders

of Redeemable Convertible Preferred Stock had the right to one vote for each whole share of common stock into which such Redeemable Convertible

Preferred Stock could then be converted.

With respect to such vote, the holder had full voting rights and powers equal to the voting rights

and powers of the holders of common stock, was entitled to notice of any stockholders’ meeting in accordance with the bylaws of

the Company, and was entitled to vote, together with holders of common stock, with respect to any matter upon which holders of common

stock had the right to vote.

Redemption and Balance Sheet Classification

Prior to conversion, the Redeemable

Convertible Preferred Stock was recorded outside permanent equity because, while it was not mandatorily redeemable, it would become redeemable

at the option of the holders upon the occurrence of certain deemed liquidation events that were considered not solely within the Company’s

Reserved Shares

As of December 31, 2024, the

Company reserved the following shares of common stock for issuance upon the (i) exercise of outstanding warrants, (ii) exercise of issued

and outstanding stock option awards and restricted stock unit awards, and (iii) to reserve the remaining shares available for grant under

the 2024 Stock Incentive Plan (“2024 Plan”):

As of December 31, 2025,

the Company reserved the following shares of common stock for issuance upon the (i) exercise of outstanding warrants, (ii) issuance of

shares reserved under the Committed Equity Facility, (iii) exercise of issued and outstanding stock option awards and restricted stock

unit awards, and (v) to reserve the remaining shares available for grant under the 2024 Stock Incentive Plan (“2024 Plan”):

Schedule of reserved shares of common stock for issuance

December 31, 2025

Warrants issued and outstanding to purchase common stock

Shares of common stock reserved under the Committed Equity Facility

Shares reserved for issuance under the 2024 Plan

Stock option awards issued and outstanding

Warrants issued and outstanding to purchase common stock

Restricted stock unit awards issued and outstanding

Shares reserved for issuance under the 2024 Plan

As of December 31, 2024, the following warrants to

purchase up to 255,599 shares of common

stock were outstanding:

As of December 31, 2025, the following warrants

to purchase shares of common stock were outstanding:

Schedule of warrant outstanding

Warrants Outstanding

Exercise Price

Exercise Price per Share

June 2025 Private Placement Warrants

Warrant Expiry Date

(defined below)

Underwriter warrants issued under IPO

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August 13, 2026

June 2025 Private Placement Warrant

Upon closing of the June 2025

Private Placement on June 27, 2025 (see Note 7), the Company issued warrants to purchase up to an aggregate of 666,497 shares of common

stock at an exercise price of $ 7.00 per share.

The warrants are exercisable on a cash only basis at any time after the date of issuance

and expire 20 days following the earliest to occur of (i) the U.S.

Food and Drug Administration (“FDA”) issuing Breakthrough

Therapy Designation (“BTD”) for elraglusib and (ii) the date that the FDA provides written communication available to the

Company of its determination as to whether the Company may pursue registration for elraglusib using its currently available Phase 2 data

or data from a Phase 3 clinical trial (“Warrant Expiry Date”).

The warrants issued under the June 2025 Private Placement were

classified as a component of permanent stockholders’ equity within additional paid-in-capital and were recorded at the issuance

The warrants are equity classified because they are freestanding financial instruments that are legally detachable and separately

exercisable from the equity instruments, are immediately exercisable, do not embody an obligation for the Company to repurchase its shares,

permit the holders to receive a fixed number of shares of common stock upon exercise, are indexed to the Company’s common stock

and meet the equity classification criteria.

In addition, the warrants do not provide any guarantee of value or return.

Warrants Issued Under IPO

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Warrants”), representing 125% of the initial offering price.

The Underwriter Warrants are not exercisable prior to February 8, 2025

The Underwriter Warrants were 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.

The Underwriter

Warrants met the criteria for equity classification and were recorded as a component of additional paid-in capital at the time of issuance.

be exercised on a cashless basis.

The Underwriter Warrants met the criteria for equity classification and were recorded as a component

of additional paid-in capital at the time of issuance.

Redeemable Convertible Preferred Stock Warrants

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Preferred Stock Warrants” or “Series C Warrants”).

The warrants were to terminate at the earlier of (i) five (5) years

from the issuance date, (ii) the consummation of a change of control, or (iii) upon the first closing of an initial public offering of

the Company’s common stock.

The warrants had a net exercise provision under which the holders could, in lieu of payment of the exercise

price in cash, surrender the warrant and receive a net amount of shares based on the fair market value of the Company’s stock at

the time of exercise of the warrants after deduction of the aggregate exercise price.

The warrants contained provisions for adjustment

of the exercise price and number of shares issuable upon the exercise of warrants in the event of certain stock dividends, stock splits,

reorganizations, reclassifications, and consolidations.

The initial estimated fair value of the 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.

On September 7, 2018, in connection

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price of $ 10.55 per share.

The warrants were to terminate at the earlier of (i) ten (10) years from the issuance date, (ii) the consummation

of a change of control, or (iii) upon the first closing of an initial public offering of the Company’s common stock.

had a net exercise provision under which the holders could, in lieu of payment of the exercise price in cash, surrender the warrant and

receive a net amount of shares based on the fair market value of the Company’s stock at the time of exercise of the warrants after

deduction of the aggregate exercise price.

The warrants contained provisions for adjustment of the exercise price and number of shares

issuable upon the exercise of warrants in the event of certain stock dividends, stock splits, reorganizations, reclassifications, and

consolidations.

The initial estimated fair value of the warrants of $ 805,292 was recorded on the closing date of a private placement in

April 2019, representing the initial date the warrants could be measured.

The Company remeasured the fair

value of the Series B Warrants and Series C Warrants at the end of each reporting period, with any adjustments being recorded as a component

of other income (expense) in the accompanying consolidated statements of operations.

Upon the closing of the IPO on

August 14, 2024, the Series B Warrants issued at an exercise price of $ 5.27 per share (in-the-money warrants) were automatically exercised

The Company remeasured the

fair value of the Series B Warrants and Series C Warrants at the end of each reporting period, with any adjustments being recorded as

a component of other income (expense) in the accompanying consolidated statements of operations.

Upon the closing of the IPO

on August 14, 2024, the Series B Warrants issued at an exercise price of $ 5.27 per share (in-the-money warrants) were automatically exercised

and settled on a cashless basis for shares of our Series B Redeemable Convertible Preferred Stock, and such shares of Series B Redeemable

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for a period of two years after the closing date of the IPO or through August 13, 2026.

The estimated fair value of the

warrant liability for the Series B Warrants and Series C Warrants was $ 0

and $ 988,049

as of December 31, 2024 and 2023, respectively (see Note 3).

The following table sets forth the changes in the estimated fair

value of the warrant liability in connection with the Company’s Series B Warrants and Series C Warrants for the two years ended

December 31, 2024:

The estimated fair value

of the warrant liability for the Series B Warrants and Series C Warrants was $ 0

as of December 31, 2024.

The following table sets forth the changes in the estimated fair value of the warrant liability in connection

with the Company’s Series B Warrants and Series C Warrants for the year ended December 31, 2024:

Schedule of estimated fair value of the

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Estimated fair value as of December 31, 2023

Estimated fair market value of Series C Warrants issued to placement agent in connection with issuance of redeemable convertible preferred stock

Change in fair value

Estimated fair value as of December 31, 2023

Change in fair value

Exercise of in-the-money warrants to purchase redeemable convertible preferred stock and conversion into common stock upon closing of IPO

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Balance as of December 31, 2024

During the years ended December

31, 2024 and 2023, the aggregate increase in the fair value of the Series B Warrants and Series C Warrants was $ 78,903 and $ 79,822 , respectively.

During the year ended December

31, 2024, the aggregate increase in the fair value of the Series B Warrants and Series C Warrants was $ 78,903 .

During the year ended December

31, 2024, the increase in fair value of the in-the-money Series B Warrants was $ 96,050 .

Prior to settlement and as of December 31, 2023, the fair value of the in-the-money Series B Warrants was determined using the Black-Scholes

valuation model with the following assumptions:

Prior to settlement, the fair value of the in-the-money Series B Warrants was determined using the Black-Scholes valuation model with

the following assumptions:

Schedule of assumptions

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Prior to Settlement

December 31, 2023

Expected term (in years)

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Fair value of convertible preferred stock

The out-of-the money Series B

Warrants and Series C Warrants were remeasured upon the closing of the IPO and marked to market to its aggregate fair value of $ 485,172

The out-of-the money Series

B Warrants and Series C Warrants were remeasured upon the closing of the IPO and marked to market to its aggregate fair value of $ 485,172

before being reclassified to equity.

During the year ended December 31, 2024, the decrease in fair value of the out-of-the-money

Series B Warrants and Series C Warrants was $ 17,147 .

The fair value of the out-of-the money Series B Warrants and Series C Warrants as of the closing date of the IPO and December 31, 2023

was determined using the Black-Scholes valuation model with the following assumptions:

During the year ended December 31, 2024, the decrease in fair value of the out-of-the-money Series

B Warrants and Series C Warrants was $ 17,147 .

The fair value of the out-of-the money Series B Warrants and Series C Warrants as of August 14, 2024, the closing date of the Company’s

IPO, was determined using the Black-Scholes valuation model with the following assumptions:

Schedule of assumptions

Out-of-the Money

Series B Warrants

Out-of-the Money

Series C Warrants

August 14, 2024

December 31, 2023

August 14, 2024

December 31, 2023

Out-of-the Money Series B Warrants

Out-of-the Money Series C Warrants

Expected term (in years)

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Fair value of common stock per share

EQUITY COMPENSATION PLANS

EQUITY COMPENSATION

Stock Incentive Plans

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other awards.

Up to 3,316,444 shares of common stock were reserved for future issuance under the 2024 Plan, which number included 496,801

shares of common stock reserved for issuance under the 2015 Plan as of the closing of the IPO.

In addition, the number of shares of common

stock available for issuance under the 2024 Plan is subject to an annual increase on the first day of each calendar year beginning on

January 1, 2025 and ending on and including January 1, 2034 equal to the lesser of (i) 5% of the aggregate number of shares of common

stock outstanding on the final day of the immediately preceding calendar year and (ii) such smaller number of shares of common stock as

determined by the Board.

Up to 3,316,444 shares of common stock were originally reserved for future issuance under the 2024 Plan, which number included

496,801 shares of common stock reserved for issuance under the 2015 Plan as of the closing date of the IPO.

In addition, the number of

shares of common stock available for issuance under the 2024 Plan is subject to an annual increase on the first day of each calendar year

beginning on January 1, 2025 and ending on and including January 1, 2034 equal to the lesser of (i) 5% of the aggregate number of shares

of common stock outstanding on the final day of the immediately preceding calendar year and (ii) such smaller number of shares of common

stock as determined by the Board.

As of December 31, 2025, there were 2,184,341 shares available for grant under the 2024 Plan.

In addition, the Company had previously

adopted the 2015 Stock Incentive Plan (the “2015 Plan”).

As of December 31, 2024, there were 365,568 stock options outstanding

and 46,463 unvested RSAs outstanding under the 2015 Plan.

Upon the effective date of the 2024 Plan on August 12, 2024, there were no remaining

shares available for grant under the 2015 Plan.

In addition, the Company had

previously adopted the 2015 Stock Incentive Plan (the “2015 Plan”).

As of December 31, 2025, there were 349,626 stock options

outstanding and 17,617 unvested RSAs outstanding under the 2015 Plan.

On August 12, 2024, the effective date of the 2024 Plan, there were

no remaining shares available for grant under the 2015 Plan.

Restricted Stock Awards

There were no RSAs granted during

the two years ended December 31, 2024.

At December 31, 2024, the total estimated unrecognized compensation cost related to unvested service-based

RSAs and unvested performance based RSAs was approximately $ 66,000 and $ 42,000 , respectively.

The unrecognized cost related for service-based

RSAs is expected to be recognized over the remaining weighted average vesting period of 0.44 years.

The unrecognized cost related to performance-based

RSAs will be recognized ratably over the performance period based upon the probable number of shares expected to vest.

During the years

ended December 31, 2024 and 2023, there was no expense recorded for the outstanding performance-based RSAs.

The following summarizes our RSAs transaction activity

for two years ended December 31, 2024:

There were no RSAs granted

during the years ended December 31, 2025 and 2024.

At December 31, 2025, the total estimated unrecognized compensation cost related to

unvested service-based RSAs and unvested performance based RSAs was approximately $ 11,000 and $ 42,000 , respectively.

The unrecognized

cost related to service-based RSAs is expected to be recognized over the remaining weighted average vesting period of 0.30 years.

unrecognized cost related to performance-based RSAs will be recognized ratably over the performance period based upon the probable number

of shares expected to vest.

During the years ended December 31, 2025 and 2024, there was no expense recorded for the outstanding performance-based

The following summarizes our RSAs transaction

activity for years ended December 31, 2025 and 2024:

Schedule of RSAs transaction activity

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Restricted Stock Units

Upon the closing of the IPO, we

granted 544,111 RSUs to our president and chief executive officer pursuant to his employment agreement.

At December 31, 2024, the total

estimated unrecognized compensation cost related to unvested RSUs was approximately $ 4,026,000 .

At December 31, 2025, the

total estimated unrecognized compensation cost related to unvested RSUs was approximately $ 1,653,000 .

This cost is expected to be recognized

over the remaining weighted average vesting period of 0.60 years.

There were no RSUs granted or outstanding for

the year ended December 31, 2023.

The following summarizes our RSUs transaction activity for the year ended December 31, 2024:

The following summarizes our RSUs transaction

activity for the years ended December 31, 2025 and 2024:

Schedule of RSUs transaction activity

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Weighted Average Grant Date Fair Value ($)

Unvested balance at December 31, 2023

Unvested balance at December 31, 2024

Outstanding at December 31, 2023

Vested and settled

Outstanding at December 31, 2024

Vested and settled

Outstanding at December 31, 2025

Awards vested at December 31, 2025

Awards nonvested at December 31, 2025

Stock Options

following summarizes our stock option transaction activity for the two years ended December 31, 2024:

following summarizes our stock option transaction activity for the years ended December 31, 2025 and 2024:

Schedule of stock option transaction activity

Number of Shares

(per share)($)

Outstanding at December 31, 2023

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value of the Company’s common stock.

The aggregate intrinsic value of stock options exercised during the year ended December 31,

2025 was $ 131,362 .

As of December 31, 2025, total

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NET LOSS PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS

The following table sets forth

the computation of basic and diluted net loss per share attributable to common stockholders:

The following table sets

forth the computation of basic and diluted net loss per share attributable to common stockholders:

Schedule of computation of basic and diluted net loss per share attributable to common stockholders

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Weighted-average shares of common stock outstanding, basic and diluted

Net loss per share attributable to common stockholders, basic and diluted

Net loss per share attributable to

common stockholders, basic and diluted

The potential dilutive effect

of Redeemable Convertible Preferred Stock and Related Party Convertible Notes outstanding during the periods were calculated using the

if-converted method assuming the conversion of underlying instruments as of the earliest period reported or at the date of issuance, if

later, but are excluded if their effect is anti-dilutive.

The potential dilutive effect of outstanding stock options, unvested RSAs, unvested

RSUs, and outstanding warrants during the period are calculated in accordance with the treasury stock method, but are excluded if their

effect is anti-dilutive.

The number of whole shares of

common stock that were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods

of Redeemable Convertible Preferred Stock and Related Party Convertible Notes outstanding during the periods prior to their exercise were

calculated using the if-converted method assuming the conversion of underlying instruments as of the earliest period reported or at the

date of issuance, if later, but are excluded if their effect is anti-dilutive.

The potential dilutive effect of outstanding stock options,

outstanding warrants, outstanding RSUs, and unvested RSAs during the period are calculated in accordance with the treasury stock method,

but are excluded if their effect is anti-dilutive.

The number of whole shares

of common stock that were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods

indicated because including them would have had an anti-dilutive effect were as follows:

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As of December 31,

Redeemable Convertible Preferred Stock

Options issued and outstanding

Unvested RSAs

Unvested RSUs

Warrants issued and outstanding

The Company had no income tax

expense due to operating losses incurred for the years ended December 31, 2024 and 2023.

The Company accounts for income taxes in accordance

with ASC 740, “Income Taxes” (“ASC 740”), which requires that the tax benefit of net operating losses, temporary

differences and credit carryforwards be recorded as an asset to the extent that management assesses that realization is “more likely

than not.” Realization of the future tax benefits is dependent on the Company’s ability to generate sufficient taxable income

within the carryforward period.

Because of the Company’s recent history of operating losses, management believes that recognition

of the deferred tax assets arising from the above-mentioned future tax benefits is currently not likely to be realized and, accordingly,

has provided a full valuation allowance.

The provision (benefit) for income taxes for the years

ended December 31, 2024 and 2023 is as follows:

Unvested restricted stock unit awards issued and outstanding

Unvested RSAs

The Company accounts for income

taxes in accordance with ASC 740, “Income Taxes” (“ASC 740”), which requires that the tax benefit of net operating

losses, temporary differences and credit carryforwards be recorded as an asset to the extent that management assesses that realization

is “more likely than not.” Realization of the future tax benefits is dependent on the Company’s ability to generate

sufficient taxable income within the carryforward period.

Because of the Company’s recent history of operating losses, management

believes that recognition of the deferred tax assets arising from the above-mentioned future tax benefits is currently not likely to be

realized and, accordingly, has provided a full valuation allowance.

The provision (benefit) for income taxes for the

years ended December 31, 2025 and 2024 is as follows:

Schedule of provision (benefit) for income taxes

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Income tax provision

The income tax provision is included

in general and administrative expenses in the accompanying consolidated statements of operations.

Deferred tax assets and liabilities

reflect the net tax effect of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes

and amounts used for income tax purposes.

Significant components of our deferred tax assets as of December 31, 2024 and 2023 are as follows:

The income tax provision

is included in general and administrative expenses in the accompanying consolidated statements of operations.

Deferred tax assets and

liabilities reflect the net tax effect of temporary differences between the carrying amount of assets and liabilities for financial reporting

purposes and amounts used for income tax purposes.

Significant components of our deferred tax assets as of December 31, 2025 and 2024

are as follows:

Schedule of components of deferred tax assets

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Net deferred tax assets

The reconciliation of the effective

income tax rate to the Federal statutory rate for the years ended December 31, 2024 and 2023 is as follows:

Upon adoption of ASU 2023-09,

Income Taxes (Topic 740):

Improvements to Income Tax Disclosures, the reconciliation of the effective income tax rate at the Federal

statutory rate for the year ended December 31, 2025 is as follows:

Schedule of effective income tax rate

December 31, 2025

Statutory federal income tax rate

$ ( 4,667,681 )

State income tax rate, net of federal income tax effect

Research and development tax credits

Change in valuation allowance

Nontaxable and nondeductible items:

Effective income tax

The reconciliation of taxes

at the federal statutory rate to our provision for (benefit from) income taxes for the year ended December 31, 2024 in accordance with

the guidance prior to the adoption of ASU 2023-09 was as follows:

December 31, 2024

Statutory federal income tax rate

Research and development tax credits

Change in valuation allowance

Effective income tax rate

Upon adoption of ASU 2023-09,

cash paid for income taxes, net of refunds, during the years ended December 31, 2025 and 2024 was as follows:

Schedule of cash paid for income taxes

State (California)

Total cash paid for income taxes, net of refunds

As of December 31, 2025 and

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taxable year could be limited and may expire unutilized.

Federal net operating losses incurred

in tax years beginning before December 31, 2017, are subject to a 20 year carry forward period and net operating losses incurred after

December 31, 2017, can be carried forward indefinitely but will be subjected to the 80% taxable income limitation.

In assessing the realization

of deferred tax assets, management considers whether it is more likely than not that some portion, or all, of the deferred tax asset will

The ultimate realization of deferred tax assets is dependent upon the Company attaining future taxable income during periods

in which those temporary differences become deductible.

Federal net operating losses

incurred in tax years beginning before December 31, 2017, are subject to a 20 year carry forward period and net operating losses incurred

after December 31, 2017, can be carried forward indefinitely but will be subjected to the 80% taxable income limitation.

the realization of deferred tax assets, management considers whether it is more likely than not that some portion, or all, of the deferred

tax asset will be realized.

The ultimate realization of deferred tax assets is dependent upon the Company attaining future taxable income

during periods in which those temporary differences become deductible.

Due to the uncertainty surrounding

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RELATED PARTY TRANSACTIONS

On June 25, 2025, the Company

entered into a securities purchase agreement for a private placement of common stock and warrants with certain institutional and accredited

investors, including Bios 2024 Co-Invest, LP.

Fletcher, the Chairman of the Company’s Board of Directors, is a Managing

Partner and co-founder of Bios Partners, with which Bios 2024 Co-Invest, LP is affiliated.

The Company received $ 499,996 from Bios 2024

Co-Invest, LP in exchange for 71,428 shares of common stock and warrants to purchase 71,428 shares of common stock (see Note 7).

On August 12, 2024, we issued

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to Bios Clinical Opportunity Fund, LP (see Note 4).

During 2018, the Company entered

into a master service agreement with Pacific BioPharma Logistics, Inc.

(“PBL”) to provide clinical support related to the

packaging, labeling, kitting, storage, distribution and inventory of the Company’s investigational products.

Richard Kenley,

Vice President of Manufacturing for the Company (but not an “executive officer” of the Company, as defined under Rule 3b-7

of the Securities Exchange Act of 1934, as amended), is an unpaid advisor for PBL and his spouse is a shareholder in PBL.

During the years

ended December 31, 2024 and 2023, we incurred $ 886,905 and $ 853,574 , respectively, in services provided by PBL, which amounts are included

in research and development expense in the accompanying consolidated statements of operations.

As of December 31, 2024 and 2023, we had

an outstanding balance owed to PBL of $ 51,540 and $ 52,206 , respectively, which amounts are included in accounts payable in the accompanying

consolidated balance sheets.

SEGMENT REPORTING

15 unchanged sentences

Personnel and consulting expenses

CMC related costs

Preclinical and biomarker research

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

Total research and development expenses

In addition, the Company has a

wholly-owned subsidiary, Actuate Therapeutics Limited, which is a dormant entity with no assets, liabilities or operations in any foreign

In addition, the Company has

a wholly-owned subsidiary, Actuate Therapeutics Limited, which is a dormant entity with no assets, liabilities or operations in any foreign

SUBSEQUENT EVENTS

The Company has evaluated all

subsequent events and transactions through the date these consolidated financial statements were issued, to ensure these financial statements

include appropriate disclosure of events both recognized in the financial statements and events which occurred but were not recognized

in the financial statements.

The Company has evaluated

all subsequent events and transactions through the date these consolidated financial statements were issued, to ensure these financial

statements include appropriate disclosure of events both recognized in the financial statements and events which occurred but were not

recognized in the financial statements.

The Company has concluded that no subsequent event has occurred that requires disclosure, except

as described herein.

Executive Compensation

On March 10, 2025, the Compensation

Committee of the Board recommended and the Board approved an increase in annual base compensation for Mr.

Daniel Schmitt, our President

and CEO, and Mr.

Paul Lytle, our Chief Financial Officer, to $570,000 and $435,363, respectively, provided the Company receives at least

$25 million in additional funding from one or more financings no later than December 31, 2025.

In addition, the executive

officers will receive, with a grant date of April 1, 2025 and at an exercise price equal to the closing price of the Company’s common

stock as of such date, stock option grants consisting of (1) one-time grants to reflect a catch-up of salary that would have been paid

if such salary increases had taken effect on August 14, 2024, representing the IPO closing date, in the following amounts:

4,285 stock options;

Lytle, 1,900 stock options (the “Base Pay True Up Grants”);

(2) one-time grants to reflect a

catch-up grant, since no annual grants were made in 2024, in the following amounts:

Sales under November 2025 ATM Facility

After the year ended December

31, 2025 through March 25, 2026, we sold 197,059 shares of common stock under the ATM Facility at a weighted-average price of $2.68 per

share for net proceeds of approximately $516,000 (see Note 7).

Annual Stock Option Grants

On February 9, 2026, the

Company approved the annual grant of 775,000 stock options to employees and other service providers to be granted on April 1, 2026,

including the following amounts to be granted to the Company’s executive officers:

Schmitt, 237,000 stock options;

Lytle, 39,999

stock options;

Mazar (our Chief Operating Officer), 110,346 stock options (the “Equity True Up Grants,” and together

with the Base Pay True Up Grants, the “Special Option Grants”);

and (3) annual grants in the following amounts:

66,503 stock options;

Lytle, 105,000 stock options;

Mazar, 105,000 stock options (the “Annual Option Grants”).

Special Option Grants will vest as to 25% on August 14, 2025 with the remaining 75% vesting in equal monthly installments during the 36

months thereafter and the Annual Option Grants will vest as to 25% on the first anniversary of the grant date with the remaining 75% vesting

in equal monthly installments during the 36 months following the first anniversary of the grant date.

Also, the Board approved

Lytle’s employment agreement (to align with similar provisions in each of Mr.

Schmitt’s and Dr.

agreements) to provide that in the event the Company is sold on or before December 31, 2026 for cash in a transaction valued at or above

$29.56 per share (“Sale Transaction”), immediately prior to the consummation of such Sale Transaction, Mr.

Lytle will also

be granted shares of common stock under the stock incentive plan of the Company that is then in effect equal to that number of shares

that would bring his total ownership (including the shares he owned prior to calculation of the shares to be granted in the sale transaction)

to 2.0% of the issued and outstanding shares of common stock on the day immediately prior to the closing of such transaction on a fully

diluted basis (subject to limits under the stock plan on the number of shares available for grant).

The shares issued to Mr.

such transaction will be fully vested as of the date of grant.

In addition, the Board also approved (1) an amendment to the employment

agreement with Dr.

Mazar to provide that the deadline by which the Company would need to complete a Sale Transaction for him to receive

an additional equity award be extended from March 31, 2024 to December 31, 2026.

The Annual Option

Grants will vest as to 25% on the first anniversary of the grant date with the remaining 75% vesting in equal monthly installments

during the 36 months following the first anniversary of the grant date.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures