1. Organization and Description of Business

Forte Biosciences, Inc. (www.fortebiorx.com) and its subsidiaries, referred to herein as the “Company” or "Forte", is a clinical-stage biopharmaceutical company focused on autoimmune and autoimmune-related diseases. The Company’s current lead product candidate is FB102. FB102 is a proprietary anti-CD122 monoclonal antibody therapeutic candidate with potentially broad autoimmune and autoimmune-related indications. In June 2025, the Company announced data from a celiac disease Phase 1b study and has subsequently commenced a Phase 2 study. The Company is also advancing clinical development of FB102 in patient-based trials for non-segmental vitiligo and alopecia areata.

The Company merged with Tocagen, Inc. ("Merger"), a publicly traded biotechnology company, on June 15, 2020. Prior to the Merger, Forte was a privately held company incorporated in Delaware on May 3, 2017. The Company's headquarters is in Dallas, Texas. The Company’s common stock is traded on the Nasdaq stock exchange under the ticker symbol “FBRX”‌.

Liquidity and Risks

Since inception, the Company has incurred losses and negative cash flows from operations. As of March 31, 2026, the Company had an accumulated deficit of $245.5 million and used $18.8 million of cash in operating activities during the three months ended March 31, 2026. Management expects to continue to incur additional losses in the foreseeable future as the Company focuses its development efforts on advancing FB102 through clinical trials.

On April 8, 2026, the Company closed a public offering (the "2026 Offering") pursuant to which it sold 5,709,936 shares of common stock at a price to the public of $26.27 per share. The Company also granted the underwriters an option exercisable for a period of 30 days, to purchase up to an additional 856,490 shares of common stock which was exercised. The gross proceeds from the 2026 Offering were $172.5 million including the exercise of the underwriters' option. Net proceeds were $162.1 million after underwriting discounts and commissions of $10.4 million but before other offering expenses.

The Company had cash and cash equivalents of approximately $58.2 million as of March 31, 2026. The Company’s cash and cash equivalents are held at financial institutions with balances that exceed federally insured limits. The Company believes that its existing cash and cash equivalents and net proceeds from the 2026 Offering will be sufficient to allow the Company to fund its operations for at least twelve months from the filing date of this Form 10-Q.

The Company will need to secure significant additional funding in the future in order to carry out all of the Company’s planned research and development activities and regulatory activities, conduct any substantial additional development requirements requested by the U.S. Food and Drug Administration ("FDA"), and commercialize product candidates. Management may fund future operations through the sale of equity and debt financings and may also seek additional capital through arrangements with strategic partners or other sources. There can be no assurance that additional funding will be available on terms acceptable to the Company, or at all. If the Company is unable to raise additional funding to meet its working capital needs in the future, it may be forced to delay or reduce the scope of its research and development programs and/or limit or cease its operations.

There are numerous risks and uncertainties associated with pharmaceutical development and the Company is unable to predict the timing or amount of increased expenses on the development of future product candidates or when or if it will start to generate revenues. Even if the Company does generate revenues, it may not be able to achieve or maintain profitability. If the Company fails to become profitable or is unable to sustain profitability on a continuing basis, then it may be unable to continue its operations at planned levels and may be forced to reduce its operations.

Businesses throughout the Company's industry have been and will continue to be impacted by a number of challenging and unexpected global and national events and circumstances that continue to evolve, including without limitation the military conflicts in Eastern Europe and the Middle East, increased economic uncertainty, inflation, rising interest rates, recent and any potential future financial institution failures, government shutdowns and other geopolitical tensions. The extent of the impact of these events and circumstances on the Company's business, operations, development timelines and plans remains uncertain, and will depend on certain developments, including the duration and scope of the events and their impact on the Company's development activities, third parties with whom it does business, as well as its impact on regulatory authorities and its key scientific and management personnel. The Company has been and continues to actively monitor the potential impacts that these various events and circumstances may have on its business and the Company takes steps, where warranted, to minimize any potential negative impacts on its business resulting from these events and circumstances.