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Actuate Therapeutics,Inc(ACTU) - 2024 Q3 - Quarterly Report
ACTUActuate Therapeutics,Inc(ACTU)2024-11-13 21:00

Financial Performance - The company reported net losses of approximately 24.7millionand24.7 million and 20.2 million for the years ended December 31, 2023 and 2022, respectively, and 20.8millionand20.8 million and 17.1 million for the nine months ended September 30, 2024 and 2023, respectively [137]. - The company has incurred significant operating losses and negative cash flows from operations since inception, with expectations that these losses will continue to increase as development efforts progress [137]. - The net loss for the three months ended September 30, 2024, was 5,970,961,animprovementof5,970,961, an improvement of 366,964 compared to a net loss of 6,337,925inthesameperiodof2023[161].−FortheninemonthsendedSeptember30,2024,totaloperatingexpenseswere6,337,925 in the same period of 2023 [161]. - For the nine months ended September 30, 2024, total operating expenses were 18,601,606, an increase of 1,242,958comparedto1,242,958 compared to 17,358,648 in the same period of 2023 [172]. - The net cash used in operating activities for the nine months ended September 30, 2024, was 20,839,239,comparedtoanetlossof20,839,239, compared to a net loss of 17,132,466 for the same period in 2023 [192]. Funding and Capital Structure - The company completed its IPO on August 14, 2024, raising net proceeds of approximately 22millionfromtheissuanceof3,220,000sharesofcommonstockataninitialofferingpriceof22 million from the issuance of 3,220,000 shares of common stock at an initial offering price of 8.00 per share [142]. - The Company issued 884,427 shares of common stock upon the conversion of Related Party Convertible Notes Payable at a conversion price of 6.40pershare,representing806.40 per share, representing 80% of the IPO price of 8.00 per share [159]. - Net cash provided by financing activities for the nine months ended September 30, 2024, was 27,635,023,significantlyhigherthan27,635,023, significantly higher than 4,134,516 for the same period in 2023 [194]. Cash Position - The company has cash and cash equivalents of approximately 13.5millionasofSeptember30,2024,whichisnotexpectedtosatisfyoperationalandcapitalrequirementsforthenexttwelvemonths[140].−Thecompanyestimatesthatitsexistingcashandcashequivalentswillnotsatisfyoperationalandcapitalrequirementsthroughtwelvemonthsfromtheissuancedateofthefinancialstatements[188].ClinicalDevelopment−ThecompanyplanstoconductaPhase1studyfortheElraglusibOralTablettoidentifythemaximumtolerateddoseandrecommendedPhase2doseinpatientswithadvanced,refractoryadultcancers[135].−ThecompanyisadvancingaPhase2clinicaltrialforthetreatmentofmetastaticpancreaticductaladenocarcinomaandaPhase1/2clinicaltrialinrefractorypediatricmalignancies,includingEwingsarcoma[134].−Thecompanyexpectstoincursignificantexpensesrelatedtodevelopingitscommercializationcapabilitytosupportproductsales,marketing,anddistributionifregulatoryapprovalforelraglusibisobtained[137].−Thecompanyexpectstoincursignificantexpensesandoperatinglossesintheforeseeablefutureasitadvancestheclinicaldevelopmentofelraglusib[186].OperatingExpenses−TotaloperatingexpensesforthethreemonthsendedSeptember30,2024,were13.5 million as of September 30, 2024, which is not expected to satisfy operational and capital requirements for the next twelve months [140]. - The company estimates that its existing cash and cash equivalents will not satisfy operational and capital requirements through twelve months from the issuance date of the financial statements [188]. Clinical Development - The company plans to conduct a Phase 1 study for the Elraglusib Oral Tablet to identify the maximum tolerated dose and recommended Phase 2 dose in patients with advanced, refractory adult cancers [135]. - The company is advancing a Phase 2 clinical trial for the treatment of metastatic pancreatic ductal adenocarcinoma and a Phase 1/2 clinical trial in refractory pediatric malignancies, including Ewing sarcoma [134]. - The company expects to incur significant expenses related to developing its commercialization capability to support product sales, marketing, and distribution if regulatory approval for elraglusib is obtained [137]. - The company expects to incur significant expenses and operating losses in the foreseeable future as it advances the clinical development of elraglusib [186]. Operating Expenses - Total operating expenses for the three months ended September 30, 2024, were 5,392,903, a decrease of 1,082,770comparedto1,082,770 compared to 6,475,673 in the same period of 2023 [161]. - Research and development expenses decreased by approximately 2.0millionto2.0 million to 3,757,102 for the three months ended September 30, 2024, primarily due to fewer contracted studies and a decrease in external clinical trial expenses [163]. - General and administrative expenses increased by approximately 0.9millionto0.9 million to 1,635,801 for the three months ended September 30, 2024, mainly due to higher personnel-related expenses and increased professional fees [164]. - General and administrative expenses increased by approximately 1.3millionto1.3 million to 3,611,269 for the nine months ended September 30, 2024, compared to 2,296,143forthesameperiodin2023[176].−Personnel−relatedexpensesrosebyapproximately2,296,143 for the same period in 2023 [176]. - Personnel-related expenses rose by approximately 0.4 million, primarily due to an increase in non-cash stock-based compensation [176]. - Professional and consulting fees increased by approximately 0.7million,mainlyduetosearchfirmfeesforaddingnewboardmembersandincreasedlegalfees[176].ValuationandFairValue−ThefairvalueofcommonstockpriortotheIPOwasdeterminedbytheboardofdirectorsbasedonthird−partyvaluationsandvarioussubjectivefactors[206].−ThecompanyutilizedtheBlack−Scholesvaluationmodelforstockoptions,requiringinputssuchasexpectedvolatilityandrisk−freerate[204].−TheestimatedfairvalueofRelatedPartyConvertibleNotesPayablewasdeterminedusingvaluationmodelswithsignificantunobservableinputs,classifiedasLevel3measurements[216].−Alossof0.7 million, mainly due to search firm fees for adding new board members and increased legal fees [176]. Valuation and Fair Value - The fair value of common stock prior to the IPO was determined by the board of directors based on third-party valuations and various subjective factors [206]. - The company utilized the Black-Scholes valuation model for stock options, requiring inputs such as expected volatility and risk-free rate [204]. - The estimated fair value of Related Party Convertible Notes Payable was determined using valuation models with significant unobservable inputs, classified as Level 3 measurements [216]. - A loss of 400,000 was recorded on the issuance of Related Party Convertible Notes Payable during the nine months ended September 30, 2024, reflecting the difference between estimated fair value and gross proceeds [217]. - The fair value of financial instruments approximates their carrying amounts due to their short-term nature [211]. Company Classification - The company is classified as an emerging growth company, allowing it to take advantage of an extended transition period for new accounting standards [221]. - The company is also a smaller reporting company, which permits scaled disclosures as long as certain revenue and market capitalization thresholds are met [222]. Miscellaneous - The company has no off-balance sheet arrangements during the periods presented [219]. - The fair value of Redeemable Convertible Preferred Stock Warrants was subject to remeasurement until the earlier of exercise, conversion, or expiration [212].