Item 7. Management’s Discussion and Analysis of Financial

Condition and Results of Operations.

The following discussion

and analysis of the financial condition and results of our operations should be read together with the consolidated financial statements

and related notes of Actuate Therapeutics, Inc. included in Part II Item 8 of this Annual Report on Form 10-K (“Annual Report”

or “Report”).

This discussion and analysis

contain forward-looking statements reflecting our management’s current expectations that involve risks, uncertainties and assumptions.

See the section entitled “Cautionary Note Regarding Forward-Looking Statements.” Our actual results and the timing of events

may differ materially from those described in or implied by these forward-looking statements due to a number of factors, including those

discussed below and elsewhere in this Report, particularly those set forth under “Risk Factors.”

Business Overview

We are a clinical stage biopharmaceutical

company focused on developing therapies for the treatment of high impact, difficult to treat cancers through the inhibition of glycogen

synthase kinase-3 (GSK-3). We are developing elraglusib, an ATP-competitive small molecule that is designed to enter cancer cells and

block the function of the enzyme glycogen synthase kinase-3 beta (“GSK-3β”), a master regulator of complex biological

signaling cascades, including those mediated by oncogenes, that lead to tumor cell survival, growth, migration, and invasion. We believe

that the blockade of GSK-3β signaling ultimately results in the death of the cancer cells and the regulation of anti-tumor immunity.

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

in clinical development. Elraglusib was originally known as 9-ING-41 but was granted the elraglusib International Nonproprietary Names

(“INN”) and United States Adopted Names (“USAN”) generic name in 2021.

We have exclusively licensed

elraglusib, a proprietary and patent protected GSK-3 inhibitor developed in a collaboration between The Board of Trustees of the University

of Illinois-Chicago (“UIC”) and Northwestern University (“NU”).

We believe elraglusib represents

a “pipeline in a molecule” with a broad opportunity for us to potentially initiate and advance multiple drug development programs

around our lead asset based on its multimodal mechanisms of action, data emerging from completed or ongoing clinical trials and non-clinical

biological, cellular, and animal data. Animal tumor model data, clinical trial data and AI-based computational approaches have identified

a number of areas of unmet clinical need in cancer treatment where elraglusib may play an interventional role, including pancreatic, metastatic

melanoma, lung, colon, breast, renal, and ovarian cancer, leukemias and lymphomas, as well as some pediatric cancers including Ewing sarcoma,

neuroblastoma and pediatric leukemias.

To date, we have treated over

500 patients with elraglusib as an IV injection (“Elraglusib Injection”) in Phase 1 and Phase 2 studies. Our most advanced

clinical indication is first-line metastatic pancreatic ductal adenocarcinoma (“mPDAC”). Our Phase 2 study in mPDAC, known

as Actuate-1801 Part 3B study, is a randomized, controlled Phase 2 trial that enrolled 286 patients with no prior systemic treatment for

metastatic disease. The primary endpoint for this study was mOS, with OS summarized throughout the study by estimates of 1-year survival.

Updated data results presented at the American Society of Clinical Oncology (“ASCO”) Genitourinary Cancers Symposium (“ASCO

GI”) in January 2026 utilizing a data cutoff as of November 22, 2025 showed that the trial met its primary endpoint, demonstrating

a statistically significant improvement in mOS with elraglusib plus gemcitabine/nab-paclitaxel (“GnP”) versus GnP alone. Data

presented at ASCO GI included:

In addition to treating mPDAC,

Elraglusib Injection is also being evaluated in pediatric cancer patients with recurrent/refractory solid cancers. This study, Actuate-1902,

is a Phase 1/2 study that evaluated escalating doses of elraglusib as a single agent as well as in combination with irinotecan or cyclophosphamide/topotecan

in the Phase 1 portion of the trial. Patients in this Actuate-1902 study also experienced a number of objective responses in the combination

chemotherapy arms, and based on this data, we identified Ewing sarcoma and neuroblastoma as new indications for further development of

Elraglusib Injection, further expanding the potential of elraglusib.

We have developed several

oral dosage forms of elraglusib, which we believe will allow us to expand the number of cancer indications that we are able to target

and allow us to further explore more convenient dose delivery options for patients. A clinical candidate tablet, the Elraglusib Oral Tablet,

has been selected for further development and, subject to future funding, we are planning a Phase 1 study to identify the maximum tolerated

dose and RP2D for Elraglusib Oral Tablet in adult patients with advanced, refractory cancers. Once we have determined a RP2D, several

Phase 2 studies have been identified for further clinical development of Elraglusib Oral Tablet, subject to additional funding, based

on data from previous studies, including but not limited to, refractory, metastatic melanoma and refractory, metastatic colorectal cancer,

and non-small cell lung cancer.

Components of Our Results of Operations

Since our inception in 2015,

we have focused substantially all of our resources on organizing and staffing our Company, business planning, raising capital, establishing

and maintaining our intellectual property portfolio, conducting research, preclinical studies, and clinical trials, establishing arrangements

with third parties for the manufacture of elraglusib, and providing general and administrative support for these operations. We do not

have any products approved for sale and have not generated any revenue from product sales since inception.

Our operating expenses consist

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

Research and Development Expenses

Research and development expenses

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

research and development costs primarily consists of the cost incurred under agreements with hospitals to treat and monitor patients enrolled

in our clinical trials, contract research organizations and contract manufacturers, consultants and other third parties to conduct and

support our clinical trials and preclinical studies. Our internal research and development costs primarily include research and development

personnel-related expenses such as employee compensation, employer taxes, group insurance benefits, and stock-based compensation.

We expense research and development

costs as incurred. We currently only have one product candidate, elraglusib. Therefore, since our inception, substantially all of our

research and development costs were related to the development of elraglusib. We track research and development expenses on an aggregate

basis and not on an indication-by-indication or treatment setting-by-treatment setting basis.

Although research and development

activities are central to our business model, the successful development of elraglusib and any future product candidates is highly uncertain.

There are numerous factors associated with the successful development of any product candidate such as elraglusib, including future trial

design and various regulatory requirements, many of which cannot be determined with accuracy at this time based on our stage of development.

In addition, future regulatory factors beyond our control may impact our clinical development programs. Product candidates in later stages

of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to

the increased number of patients and duration of later-stage clinical trials. As a result, we expect our research and development expenses

to increase substantially in connection with our ongoing and planned clinical and preclinical development activities in the near term

and in the future, provided we are able to raise additional capital. At this time, we cannot accurately estimate or know the nature, timing

and costs of the efforts that will be necessary to complete the preclinical and clinical development of elraglusib and any future product

candidates. Our future research and development expenses may vary significantly based on a wide variety of factors such as:

· per patient trial costs;

· the number of trials required for approval;

· the number of doses that patients receive;

· the potential additional safety monitoring requested by regulatory agencies;

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

· the extent of changes in government regulation and regulatory guidance;

A change in the outcome of

any of these variables with respect to the development of elraglusib or any future product candidates could significantly change the costs

and timing associated with the development of that product candidate. We may never succeed in obtaining regulatory approval for any product

candidate.

General and Administrative Expenses

General and administrative

expenses consist primarily of personnel-related expenses such as employee compensation, benefits, and stock-based compensation, for our

personnel in executive and other administrative functions. General and administrative expenses also include legal fees relating to patent

and corporate matters and professional fees paid for accounting, auditing, consulting and tax services, as well as other costs such as

insurance costs, board of director fees, investor and public relations, and travel expenses.

We anticipate our general

and administrative expenses will increase in the future as we expand our operations, including increasing our headcount to support our

continued research and development activities and preparing for later-stage clinical trials and potential commercialization of elraglusib.

We also anticipate we will continue to incur increased accounting, audit, legal, regulatory, compliance, director and officer insurance,

and investor and public relations expenses associated with operating as a public company.

Other Income (Expense)

Change in Fair Value of Warrant Liability

We previously had outstanding

warrants that required liability classification. The warrants were recorded at fair value upon issuance and were subject to remeasurement

to fair value at each balance sheet date, with any changes in fair value recognized in other income (expense), net. The warrant liabilities

were remeasured upon the closing of our IPO and marked to market to its fair value before being reclassified to equity.

Loss on Issuance of Related Party Convertible

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

Upon issuance of certain notes

payable, we elected to apply the fair value option in accordance with Accounting Standards Codification (“ASC”) 825, Financial

Instruments. In certain circumstances, the estimated fair value at issuance may be greater than the principal amount at issuance.

The fair value of these notes payable was estimated at each reporting period while outstanding. These notes payable were converted into

common stock upon the closing of the IPO in August 2024.

Interest Expense

Interest expense represents

interest owed to UIC under our license agreement with UIC, whereby UIC agreed to defer amounts owed to UIC under a former sublicense agreement

in the amount of $404,991.

Interest Income

Interest income represents

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

Results of Operations

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

The following table summarizes our results of operations

for the year ended December 31, 2025 and 2024:

Year Ended December 31,

Operating expenses:

Other income (expense):

Gain on settlement of warrants (non-cash) – 343,240 (343,240 )

Research and Development Expenses

The following table summarizes

our research and development expenses for the year ended December 31, 2025 and 2024:

Year Ended December 31,

The decrease in research and

development expenses of $8,383,656 for the year ended December 31, 2025 compared to the prior year was primarily due to (i) a decrease

in external clinical trial expenses of $8,336,486 mostly related to lower patient fees and CRO costs associated with fewer patients on

study related to the randomized Phase 2 mPDAC trial (Actuate-1801 Part 3B) as the trial winds down and (ii) a decrease in CMC related

costs of $953,419 primarily due to the timing of drug product manufacturing and stability studies. These decreases were partially offset

by (i) an increase in preclinical and biomarker studies of $575,238, driven by new studies completed during 2025, and (ii) an increase

in personnel and consulting expenses of $331,011, primarily due to higher non-cash stock-based compensation expense of $314,933.

General and Administrative Expenses

The

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

Year Ended December 31,

The increase in general and

administrative expenses of $5,718,234 for the year ended December 31, 2025 compared to the prior year was primarily due to (i) an increase

in personnel-related expenses of $3,834,300 mostly due to an increase in non-cash stock-based compensation expense of $3,735,935 related

to awards granted to employees, non-employee members of the board of directors, and consultants of the Company combined with an increase

in payroll and related expenses primarily related to the hiring of the Company’s chief financial officer in June 2024, an increase

in base salaries for certain administrative employees, offset by a decrease in bonus expense, (ii) an increase in professional and consulting

fees of $1,148,376 primarily due to an increase in (a) investor and public relation fees, (b) consulting fees associated with increased

administrative support, and (c) legal fees related to routine corporate activities, which amounts were offset by a decrease in board member

search fees and valuation services and (iii) an increase in other expenses of $735,558 primarily due to an increase in the cost of directors

and officers insurance, board fees, listing fees, and other public company expenses.

Other Income (Expense)

Other income (expense), net,

for the year ended December 31, 2025 and 2024 is comprised of the following:

Liquidity and Capital Resources

Sources of Liquidity

Since our inception, we have

not generated any revenue from product sales and have incurred significant operating losses and negative cash flows from operations. We

expect to incur significant expenses and operating losses in the foreseeable future as we advance the clinical development of elraglusib

and any future product candidates.

On March 27, 2025, we entered

into a common stock purchase agreement (the “Committed Equity Facility”) with B. Riley Principal Capital II (“B. Riley”)

giving the Company the right, but not the obligation, to sell to B. Riley over a 36-month period up to the lesser of (i) $50 million of

newly issued shares of our common stock and (ii) 3,904,374 shares of the Company’s common stock. During the year ended December

31, 2025, we received net proceeds of $3,800,465 in exchange for 539,967 shares of common stock sold under the Committed Equity Facility.

As of December 31, 2025, we had 3,364,407 shares of common stock in remaining capacity under our Committed Equity Facility.

On June 25, 2025, we entered

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

which closed on June 27, 2025 (the “June 2025 Private Placement”). Under the June 2025 Private Placement, the Company received

aggregate net proceeds of $4,592,462 in exchange for the issuance of 666,497 shares of common stock and warrants to purchase up to 666,497

shares of common stock.

On September 10, 2025, we

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

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

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

offering expenses (“September 2025 Public Offering”). The offering closed on September 11, 2025, and the Company issued 2,464,286

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

On November 28, 2025, we entered

into an At Market Issuance Sales Agreement (the “ATM Agreement”) with B. Riley Securities, Inc. and Craig-Hallum Capital Group

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

offering program (the “ATM Facility”), under which we may, from time to time, at our sole discretion, issue and sell through

the Sales Agents, up to $100 million of shares of common stock. Pursuant to the ATM Agreement, we may sell the shares through the Sales

Agents by any method permitted that is deemed an “at the market” offering as defined in Rule 415 under the Securities Act.

The Sales Agents will use commercially reasonable efforts consistent with their normal trading and sales practices to sell the shares

from time to time, based upon instructions from us, including any price or size limits or other customary parameters or conditions we

may impose. We will pay the Sales Agents a commission of up to 3.0% of the gross sales proceeds of any common stock sold through the Sales

Agents under the ATM Agreement, and we also have provided the Sales Agents with customary indemnification rights. During the year ended

December 31, 2025, the Company did not sell any shares of common stock under the ATM Facility. As of December, we had $100 million in

remaining capacity under our ATM Facility.

As of December 31,

2025, we had cash and cash equivalents of $13,159,423 and working capital of $7,936,503. We expect our expenses to increase substantially

in connection with our ongoing activities, particularly as we continue our development of, seek regulatory approval for, and potentially

commercialize elraglusib and potentially seek to discover and develop and/or license or acquire additional product candidates, conduct

our ongoing and planned clinical trials and preclinical studies, continue our research and development activities, utilize third parties

to manufacture elraglusib, hire additional personnel, expand and protect our intellectual property, and incur additional costs associated

with being a public company. Based on our current operating plan, we estimate that our existing cash and cash equivalents as of the date

of this Annual Report will not satisfy the Company’s operational and capital requirements beyond July 2026 without raising additional

capital. There can be no assurance that the Company will be able to raise sufficient proceeds in the future under the ATM Facility or

Committed Equity Facility or any additional financing will be available to the Company on acceptable terms, if at all.

Until such time, if ever,

as we can generate substantial product revenue, we expect to finance our operations through equity offerings, debt financings, or other

capital sources, including current or potential future collaborations, licenses, and other similar arrangements. As we seek additional

financing in the near future, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable

terms or at all. Our ability to raise additional funds may be adversely impacted by business conditions, global economic conditions, disruptions

to, and volatility in, the credit and financial markets in the United States and worldwide, and diminished liquidity and credit availability.

To the extent we raise additional capital through the sale of equity or convertible debt securities, stockholders’ ownership interest

in our common stock will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect

the rights of our common stockholders. Debt financing and preferred equity financing, if available, may involve agreements that include

covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making acquisitions, engaging

in acquisition, merger or collaboration transactions, selling or licensing our assets, making capital expenditures, redeeming our stock,

making certain investments or declaring dividends. If we raise additional funds through collaborations or license agreements with third

parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates,

or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity, debt, or other

financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts

or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves, or even cease

operations.

Based on the above matters,

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

Material Cash Requirements for Known Contractual and Other Obligations

Research and Development Costs

We are continuing to invest

in our elraglusib clinical trials and have entered into contractual obligations with each clinical trial site. Each contract shall continue

until the completion of the trial at that site. Our clinical trial costs are dependent on, among other things, the size, number and length

of our clinical trials.

Other Capital Requirements and Additional Royalty Obligations.

We enter into agreements in

the normal course of business with various vendors, which are generally cancellable upon notice. Payments due upon cancellation typically

consist only of payments for services provided or expenses incurred, including non-cancellable obligations of service providers, up to

the date of cancellation.

Cash Flow Summary

The following table provides a summary of our cash

flows for the year ended December 31, 2025 and 2024:

Year Ended December 31,

Cash Flows From Operating Activities

Year Ended December 31,

2025 — Net cash used in operating activities for the year ended December 31, 2025 consisted of our net loss of

$22,227,852 combined with cash used by a net change in operating assets and liabilities of $3,045,312, which amounts were offset by non-cash

stock-based compensation expense of $6,046,661 and an increase in accrued interest on license payable of $20,250

Year Ended December 31,

2024 — Net cash used in operating activities for the year ended December 31, 2024 consisted of our net loss of

$27,285,328 combined with the non-cash gain on settlement of the warrant liability of $343,240, which amounts were offset by (i) non-cash

stock-based compensation expense of $1,995,793, (ii) a non-cash increase in the fair value of our warrant liability of $78,903, (iii)

a loss on issuance of Related Party Convertible Notes Payable at fair value of $400,000, (iv) the change in estimated fair value of Related

Party Convertible Notes Payable of $2,192,507, (v) an increase in accrued interest on license payable of $18,641, and (vi) cash provided

by a net change in operating assets and liabilities of $1,100,076.

Cash Flows From Financing Activities

Year Ended December 31,

2025 —During the year ended December 31, 2025, net cash provided by financing activities consisted of net proceeds received

of (i) $15,573,966 under the September 2025 Public Offering, (ii) $4,592,462 under the June 2025 Private Placement, (iii) $3,826,336 from

the sale of common stock to B. Riley under the Committed Equity Facility, and (iv) $34,115 from the exercise of stock options, which amounts

were offset by the payment of deferred offering costs of $302,825.

Year Ended December 31,

2024 — During the year ended December 31, 2024, net cash provided by financing activities primarily consisted

of net proceeds received from the closing of the IPO and Overallotment Option of $22,025,611 (net of underwriting discounts and commissions

and after payment of offering costs of $1,931,189), proceeds of $5,500,000 from the issuance of the Related Party Convertible Notes Payable,

and proceeds of $200,000 from the issuance of a related party short-term loan, which amount was offset by the payment of the related party

short-term loan of $200,000.

Critical Accounting Policies and Significant Judgments and Estimates

Our financial statements are

prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation

of our financial statements and related disclosures requires us to make estimates and judgments that affect the reported amounts of assets,

liabilities, costs and expenses, and the disclosure of contingent assets and liabilities in our financial statements. We base our estimates

on historical experience, known trends and events, and various other factors we believe are reasonable under the circumstances, the results

of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other

sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different

assumptions or conditions.

While our significant accounting

policies are described in more detail in Note 2 to the accompanying consolidated financial statements included elsewhere in this Report,

we believe the following accounting policies are those most critical to the judgments and estimates used in the preparation of our financial

statements.

Research and Development Expenses and Related Accrued Expenses

In accordance with authoritative

guidance, the Company charges research and development costs to operations as incurred. Research and development expenses consist primarily

of personnel and related costs, external costs of outside vendors engaged clinical trials, contract manufacturers, consultants and other

third parties to conduct and support our clinical trials and preclinical studies.

As part of the process of

preparing our consolidated financial statements, we are required to estimate our research and development expenses as of each balance

sheet date. This process involves reviewing open contracts, including clinical site contracts, and communicating with our personnel to

identify services that have been performed on our behalf, and estimating the level of service performed and the associated cost incurred

for the service when we have not yet been invoiced or otherwise notified of the actual cost. We make estimates of our research and development

expenses as of each balance sheet date based on facts and circumstances known to us at that time. The significant estimates in our research

and development expenses include the costs incurred for services performed by our vendors in connection with services for which we have

not yet been invoiced. We base our expenses related to research and development activities on our estimates of the services received and

efforts expended pursuant to quotes and contracts with contractors and vendors that conduct research and development on our behalf. The

financial terms of these agreements are subject to negotiation, vary from contract to contract, and may result in uneven payment flows.

Advance payments for goods and services that will be used in future research and development activities are expensed when the activity

has been performed or when the goods have been received rather than when the payment is made. Although we do not expect our estimates

to be materially different from amounts actually incurred, if our estimates of the status and timing of services performed differ from

the actual status and timing of services performed, it could result in us reporting amounts that are too high or too low in any particular

period. To date, there have been no material differences between our estimates of such expenses and the amounts actually incurred.

Stock-Based Compensation

In April 2015 and August 2024,

the Company’s Board of Directors (“Board”) adopted the 2015 Stock Incentive Plan (“2015 Plan”) and the 2024

Stock Incentive Plan (“2024 Plan”), respectively. Under the 2015 Plan and 2024 Plan, the Company periodically grants equity-based

payment awards in the form of restricted common stock awards (“RSAs”), restricted stock units (“RSUs”), and stock

options to employees, directors, consultants and non-employees and records stock-based compensation expenses for awards of stock-based

payments based on their estimated fair value at the grant date.

The estimated fair value of

service-based RSAs and RSUs are measured at the grant date based on the estimated fair market value of the Company’s common stock

on the date of grant and is recognized as expense over the requisite service period, which is generally the awards’ vesting period.

The estimated fair value of performance-based RSAs is measured at the grant date based on the estimated fair value of shares expected

to be earned at the end of the performance period, and is recognized as expense ratably over the performance period based upon the probable

number of shares expected to vest.

The Company accounts for the

grant of stock options based on the estimated fair value of the underlying option using the Black-Scholes valuation model on the date

of grant and are recognized as expense in the consolidated statement of operations on a straight-line basis over the requisite service

period, which is the vesting period. The Black-Scholes valuation model requires the input of subjective assumptions, including expected

volatility, expected dividend yield, expected term, risk-free rate of return and the estimated fair value of the underlying common stock

on the date of grant. Prior to the IPO, the Company regularly engaged a third-party valuation specialist to assist with estimates related

to the valuation of the Company’s common stock. Since the Company’s IPO, the fair value of our common stock was determined

based on the closing price of our common stock as reported on the date of grant on the primary stock exchange on which our common stock

is traded.

The Company classifies stock-based

compensation expense in the consolidated statements of operations in the same manner in which the award recipients’ payroll costs

are classified or in which the award recipients’ service payments are classified.

The Company recognizes forfeitures

related to stock-based compensation awards as they occur.

Off-Balance Sheet Arrangements

We did not have, during the

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

Recent Accounting Pronouncements

A description of recently

issued accounting standards that may potentially impact our financial position, results of operations, and cash flows is included in Note

2 to our consolidated financial statements in this Report.

Emerging Growth Company Status and Smaller

Reporting Company Status

We are an emerging growth

company, as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). The JOBS Act permits an emerging

growth company such as ours to take advantage of an extended transition period to comply with new or revised accounting standards. We

have elected to avail ourselves of such extended transition period, which means that when a standard is issued or revised and it has different

application dates for public or private companies, we can adopt the new or revised standard at the time private companies adopt the new

or revised standard and may do so until such time that we either (i) irrevocably elect to opt out of such extended transition period or

(ii) no longer qualify as an emerging growth company. We may choose to early adopt any new or revised accounting standards whenever such

early adoption is permitted for private companies. We will continue to remain an emerging growth company until the earliest of the following:

(1) the last day of the fiscal year following the fifth anniversary of the date of the completion of the IPO; (2) the last day of the

fiscal year in which our total annual gross revenue is equal to or more than $1.235 billion; (3) the date on which we have issued more

than $1.0 billion in nonconvertible debt during the previous three years; or (4) the date on which we are deemed to be a large accelerated

filer under the rules of the SEC.

We are also a smaller reporting

company as defined in the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We may continue to be a smaller

reporting company even after we are no longer an emerging growth company. We may take advantage of certain of the scaled disclosures available

to smaller reporting companies and will be able to take advantage of these scaled disclosures for so long as our voting and non-voting

common stock held by non-affiliates is less than $250.0 million measured on the last business day of our second fiscal quarter, or our

annual revenue is less than $100.0 million during the most recently completed fiscal year and our voting and non-voting common stock held

by non-affiliates is less than $700.0 million measured on the last business day of our second fiscal quarter.

Item 7A. Quantitative and Qualitative Disclosures About Market

Risk.

As a “smaller reporting company” as defined in Rule 12b-2

of the Exchange Act, we are not required to provide the information called for by this item.

Item 8. Financial Statements and Supplementary Data.

Our consolidated financial

statements, together with the report of our independent registered public accounting firm, are included in this Annual Report on Form

10-K beginning on page F-1.

Item 9. Changes in and Disagreements with Accountants on Accounting

and Financial Disclosure.

None.

Item 9A. Controls and Procedures.

Attestation Report of the Independent Registered Public Accounting

Firm

This Annual Report does not

include an attestation report of our independent registered public accounting firm due to an exemption provided by the JOBS Act for “emerging

growth companies.”

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). Management’s

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

Reporting

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.

Item 9B. Other Information.

Rule 10b5-1 Trading Plans

During the quarter ended December

31, 2025, no director or officer of the Company adopted or terminated any Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement,

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

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent

Inspections.

Not applicable.

PART III

The

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.