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

The following discussion and analysis provide information which our management believes is relevant to an assessment and understanding of our consolidated results of operations and financial condition. You should read the following discussion and analysis of our financial condition and results of operations together with our audited consolidated financial statements and notes thereto included elsewhere in this Annual Report. In addition to historical financial information, this discussion contains forward-looking statements based upon our current expectations that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Risk Factors” and elsewhere in this Annual Report. Unless otherwise indicated or the context otherwise requires, references in this Management’s Discussion and Analysis of Financial Condition and Results of Operations section to the "Company," “Allarity,”“we,”“us,”“our,” and other similar terms refer to Allarity Therapeutics, Inc. and its consolidated subsidiaries.

We caution readers not to place undue reliance on any forward-looking statements made by us, which speak only as of the date they are made. We disclaim any obligation, except as specifically required by law and the rules of the Securities and Exchange Commission (the "SEC"), to publicly update or revise any such statements to reflect any change in our expectations or in events, conditions or circumstances on which any such statements may be based, or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements.

Overview

We are a clinical-stage, precision medicine pharmaceutical company focused on developing novel anti-cancer therapeutics for patients with high unmet medical need. We were founded on the innovation of our novel Drug Response Predictor (DRP®) platform. The DRP® technology is designed to define the gene expression signatures in cancer cells that predict the cancer cell’s sensitivity to a specific cancer therapeutic. Once defined, the DRP® gene expression signature can then be assessed in cancer tissue biopsies from patients to identify those cancers that share this signature of drug sensitivity, and by extension, to identify those patients who may then be most likely to receive benefit from that specific anti-cancer therapeutic. We have developed and published DRP®signatures for dozens of anti-cancer therapeutics. Ideally, by using DRP to identify the patients most likely to benefit clinically from a given therapeutic, clinical development of that therapeutic can be focused on a smaller, more responsive patient population, which would allow for smaller, cheaper and quicker trials while also enhancing the probability of clinical and regulatory success for that therapeutic. Historically, we have generated DRP signatures for numerous anti-cancer therapeutics and had in-licensed numerous assets for DRP-guided development, including Liposomal CisPlatin (LiPlaCis), Irofulven and dovitinib as well as the novel PARP/tankyrase inhibitor, stenoparib.

During 2024, Thomas H. Jensen, co-founder of Allarity, was permanently installed as Chief Executive Officer due to his extensive experience not only with the core DRP® platform technology but also with capital fund raising. Mr. Jensen was tasked with streamlining the organization and its finances. To help Mr. Jensen re-focus our clinical development program, we also added a new President and Chief Development Officer, Jeremy R. Graff, PhD, who was brought in with deep experience in cancer drug development, including nearly 17 years at Eli Lilly and Company and 10 more years in various C-suite roles in biotech. During 2025, Jeffrey Ervin was hired as Chief Financial Officer. He has a combined seven years of experience as CEO and CFO of Nasdaq- and NYSE-listed companies.

We are now singularly focused on the development of stenoparib and the parallel development of the stenoparib-DRP® as a companion diagnostic. All other assets including dovitinib, Irofulven and LiPlaCis, were terminated and are no longer part of our portfolio. Stenoparib was in-licensed with exclusive world-wide rights from the Japanese Pharmaceutical company, Eisai Pharmaceuticals. Stenoparib is a novel, dual inhibitor of poly-ADP-ribose polymerase (PARP1/2) as well as tankyrases, enzymes critically important in the WNT cancer cell survival pathway. Stenoparib is currently being explored in a phase 2 clinical trial in patients with advanced, recurrent ovarian cancer who have been pre-selected for enrollment using the stenoparib-DRP®. Emerging clinical data from this ongoing trial in heavily pre-treated, advanced ovarian cancer patients show promising clinical benefit including a patient with a complete, confirmed response (i.e., absence of active disease by RECISTv1.1 criteria) as well as two patients with ongoing stable disease still on therapy more than 14 months. These compelling data in heavily pre-treated ovarian cancer patients have now prompted us to design a new clinical protocol, guided by key gynecologic oncology experts, to deepen and enrich the understanding of the clinical benefit from stenoparib treatment while also advancing the stenoparib- DRP® as a companion diagnostic used to select patients for stenoparib treatment.

Recent Developments

Authorized Share Decrease

On September 9, 2024, we filed the Sixth Certificate of Amendment with the Secretary of State of the State of Delaware to decrease the number of authorized shares from 750,500,000 to 250,500,000, and to decrease the number of our common stock from 750,000,000 to 250,000,000. The amendment was approved by our stockholders at the 2024 annual meeting held on September 3, 2024.

Novartis Termination Notice

On January 26, 2024, we received a termination notice from Novartis Pharma AG, a company organized under the laws of Switzerland (“Novartis”) due to a material breach of that certain license agreement dated April 6, 2018, as amended to date (the “License Agreement”). Accordingly, under the terms of the License Agreement, we ceased all development and commercialization activities with respect to all licensed products, all rights and licenses granted by Novartis to us reverted to Novartis; and all liabilities due to Novartis became immediately due and payable inclusive of interest which is continuing to accrue at 5% per annum. There were no payments made to Novartis in 2024. As of December 31, 2025, the liability is recorded as a current liability on our consolidated balance sheets as follows: $3.6 million in accounts payable, $0.5 million interest recorded as accrued expenses, and $1.4 million in convertible promissory notes and accrued interest.

SEC Investigation

On July 19, 2024, we received a “Wells Notice” from the Staff of the SEC relating to our previously disclosed SEC investigation. The Wells Notice relates to our disclosures regarding meetings with the United States Food and Drug Administration (the “FDA”) regarding our NDA for Dovitinib or Dovitinib-DRP, which was submitted to the FDA in 2021. We understand that all conduct relating to the SEC Wells Notice occurred during or prior to fiscal year 2022. We also understand that three of our former officers received Wells Notices from the SEC relating to the same conduct. A Wells Notice is neither a formal charge of wrongdoing nor a final determination that the recipient has violated any law. The Wells Notice informed us that the SEC Staff has made a preliminary determination to recommend that the SEC file an enforcement action against us that would allege certain violations of the federal securities laws. On March 13, 2025, we issued a press release that we have reached a final settlement with the SEC relating to our previously disclosed SEC investigation, and as part of the settlement, we paid a one-time civil penalty of $2.5 million in April 2025 and all regulatory/legal challenges related to those issues are now concluded.

Class Action

On September 13, 2024, a purported class action captioned Osman Mukeljic v. Allarity Therapeutics, Inc., et al, 1:24-cv-06952, was filed in the United States District Court for the Southern District of New York against us and certain of our current and former officers. The complaint alleged, among other things, that defendants made false and misleading statements and/or failed to disclose information related to Dovitinib NDA’s continued regulatory prospects and purported misconduct in connection with the Dovitinib NDA and/or the Dovitinib-DRP PMA. The complaint asserted violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder against all defendants as well as violations of Section 20(a) of the Exchange Act against the individual defendants. On February 26, 2025, we issued a press release announcing the dismissal of this class action lawsuit, resolving that matter favorably for the Company.

Funding and Capital Resources

Since our inception through December 31, 2025, our operations have been financed primarily by the sale of preferred stock, convertible promissory notes, and the sale and issuance of our common shares.

Since inception, we have had significant operating losses. Our net loss was $11.2 million and $24.5 million for the years ended December 31, 2025 and 2024, respectively. As of December 31, 2025, we had $14.7 million in cash, and an accumulated deficit of $130.2 million. Our primary use of cash is to fund operating expenses, which consist of research and development as well as regulatory expenses related to advancing our therapeutic candidate, stenoparib, in addition to general and administrative expenses. Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable and accrued expenses.

We expect that our current cash is sufficient to fund operations through at least the next 12 months from the date of this Annual Report. We have based this estimate on assumptions that may prove wrong, and we could use our capital resources sooner than we currently expect. We will need to secure additional funding to carry out potential future pre-clinical, clinical, and commercialization activities. Until we can generate substantial revenue from product sales, if that occurs, we plan to finance our activities through equity sales, debt financing, or other capital sources, including collaborations or strategic transactions. However, we may face challenges in raising additional funds or securing favorable terms for such agreements. If we fail to secure necessary capital or agreements in a timely manner, we may need to significantly delay, reduce, or halt the development and commercialization of one or more programs which would adversely affect our business prospects and our ability to continue operations.

Given the inherent risks in product development, we cannot accurately predict the timing or magnitude of increased expenses or when we might achieve profitability. Even if we successfully generate product sales, profitability is not guaranteed. If we fail to achieve or sustain profitability, we may be compelled to reduce or terminate operations at planned levels.

In the year ended December 31, 2025, we received $10.9 million, net, from financing activities inclusive of: $14.0 million from equity issuances and $3.2 million of stock repurchases.

In the year ended December 31, 2024, we received $37.3 million in proceeds from ATM sales net of issuance costs, $1.3 million in proceeds from 3i promissory notes, and $2.9 million in proceeds from the issuance of Convertible Redeemable Series A Preferred Stock; and we repaid $1.3 million of 3i promissory notes, and redeemed $3.5 million of Convertible Redeemable Series A Preferred Stock.

3i Convertible Senior Promissory Notes (2024)

During the year ended December 31, 2024, we entered into a Securities Purchase Agreement ("SPA") with 3i, pursuant to which three senior convertible promissory notes (the "2024 Notes") were issued as follows:

We agreed to pay interest to 3i on the aggregate unconverted and then outstanding principal amount of the 2024 Notes at the rate of 8% per annum with interest payments commencing one month after initial receipt of net proceeds.

The 2024 Notes and accrued interest were redeemed in full and cancelled on May 6, 2024.

Amendments to the Certificate of Designation of Series A Preferred Stock

On January 14, 2024, pursuant to the terms of the First Note, we modified the conversion price of the 3i Exchange Warrants from $600.00 to $268.50, thereby increasing the number of Exchange Warrants outstanding from 7,346 at December 31, 2023 to 16,411 outstanding at January 14, 2024. Also on January 14, 2024, the conversion price of the outstanding 1,417 shares of Series A Preferred Stock was revised from $600.00 to $268.50. We filed the Fifth Certificate of Amendment to Amended and Restated COD (the “Fifth Amendment”) with the Secretary of State of the State of Delaware to reflect the new conversion price of the Series A Preferred Stock of $268.50. As of January 14, 2024, we used the Black-Scholes option pricing model to determine the fair value of the 1,417 Series A Preferred Stock outstanding at $2.0 million versus their carrying value of $1.7 million. Accordingly, we had recorded a deemed dividend of $0.2 million on January 14, 2024. At a stated value of $1.1 million for each share of Series A Preferred Stock, the revised price of $268.50 per share results in the 1,417 shares being convertible into 5,699 shares of common stock as of January 14, 2024.

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On February 13, 2024, pursuant to the terms of the Second Note, we modified the conversion price of the 3i Exchange Warrants from $268.50 to $243.00 and thereby increased the number of Exchange Warrants outstanding from 16,411 on January 18, 2024, to 18,137 on February 13, 2024. We filed the Sixth Certificate of Amendment to Amended and Restated COD (the “Sixth Amendment”) with the Secretary of State of the State of Delaware to reflect the new conversion price of the Series A Preferred Stock of $243.00. As of February 14, 2024, we used the Black-Scholes option pricing model to determine the fair value of the then 1,296 Series A Preferred Stock outstanding and concluded there was a gain on extinguishment of $0.1 million. At a stated value of $1.1 million for each share of Series A Preferred Stock, the revised price of $243.00 per share results in the 1,296 shares being convertible into 16,453 shares of common stock.

On March 14, 2024, pursuant to the terms of the Third Note, we modified the conversion price of the 3i Exchange Warrants from $243.00 to $210.00 and thereby increased the number of Exchange Warrants outstanding from 18,137 on February 13, 2024, to 27,648 on March 14, 2024. We filed the Seventh Certificate of Amendment to Amended and Restated COD (the “Seventh Amendment”) with the Secretary of State of the State of Delaware to reflect the new conversion price of the Series A Preferred Stock of $210.00. As of March 14, 2024, we used the Black-Scholes option pricing model to determine the fair value of the then 1,296 Series A Preferred Stock outstanding and concluded there was a gain on extinguishment of $0.1 million. At a stated value of $1.1 million for each share of Series A Preferred Stock, the revised price of $210.00 per share results in the 1,215 shares being convertible into 17,843 shares of common stock.

During the period April 1, 2024, through May 2, 2024, we had further amended the conversion prices of the Series A Convertible Preferred Stock, the Exchange Warrants and the 2024 Notes to equal the then current last sale price of shares of our common stock of $34.50 as of May 1, 2024. 3i exercised its option to convert 1,417 shares of Series A Preferred Stock for 14,376,690 shares of common stock at fair value of $1.8 million. As of December 31, 2024, there were no issued and outstanding shares of Series A Preferred Stock.

ATM Facility

On March 19, 2024, the Company entered into an At-The-Market Issuance Sales Agreement, as amended (the “Sales Agreement”) with Ascendiant Capital Markets, LLC (“Ascendiant”) pursuant to which, the Company may offer and sell, from time to time at its sole discretion, shares of its common stock, par value $0.0001 per share, having an aggregate gross sales price of up to $50 million, to or through Ascendiant. The offer and sale of the shares will be made pursuant to a previously filed shelf registration statement on Form S-3 (File No. 333-275282), originally filed with the SEC on November 2, 2023 and declared effective by the SEC on November 29, 2023, and the related prospectus supplement dated September 9, 2024 and filed with the SEC on such date pursuant to Rule 424(b) under the Securities Act of 1933, as amended (the “Securities Act”). On May 2, 2024, the Company's public float increased above $75.0 million and, as a result, the Company was not subject to the limitations contained in General Instruction I.B.6 of Form S-3.

Under the Sales Agreement, Ascendiant may sell shares by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415(a)(4) under the Securities Act. Ascendiant will use commercially reasonable efforts to sell the shares from time to time, based upon instructions from the Company (including any price, time or size limits or other customary parameters or conditions the Company may impose). The Company agreed to pay Ascendiant a commission of 3.0% of the gross proceeds from the sales of shares sold through Ascendiant under the Sales Agreement and has provided Ascendiant with customary indemnification and contribution rights. The Company also agreed to reimburse Ascendiant for certain expenses incurred in connection with the Sales Agreement. The Company and Ascendiant may each terminate the Sales Agreement at any time upon specified prior written notice.

For the year ended December 31, 2025, the Company sold 9,719,173 shares of its common stock for net proceeds of $9.7 million. For the year ended December 31, 2024, the Company sold an aggregate of 6,953,259 shares of its common stock pursuant to the Sales Agreement, resulting in net proceeds of approximately $38.8 million, after deducting underwriting discounts. The Sales Agreement was fully utilized and terminated as of December 31, 2025.

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August 2024 Series A Convertible RedeemablePreferred Stock

On August 19, 2024 (the "Closing Date") we entered into a Securities Purchase Agreement (the “August 2024 SPA”) with certain purchasers (the “August 2024 Purchasers”), pursuant to which we issued and sold, in a private placement (the “August 2024 Offering”), 35,000 shares of our Series A Convertible Redeemable Preferred Stock, par value $0.0001 per share (the “August 2024 Preferred Stock”), for net proceeds of approximately $2.9 million, after the deduction of discounts, fees and offering expenses.

On the Closing Date, we filed a certificate of designation (the “August 2024 COD”) with the Secretary of the State of Delaware designating the rights, preferences and limitations of the August 2024 Preferred Stock. Under the August 2024 COD, for purposes of determining the presence of a quorum at any meeting of the stockholders of Allarity at which the August 2024 Preferred Stock are entitled to vote and the voting power of the August 2024 Preferred Stock, each holder of the August 2024 Preferred Stock shall be entitled to a number of votes equal to shares of our common stock into which such August 2024 Preferred Stock are then convertible, disregarding, for such purposes, any limitations on conversion. The August 2024 Preferred Stock shall be entitled to vote on each matter submitted to a vote of the stockholders generally and shall vote together with the common stock and any other class or series of capital stock entitled to vote thereon as a single class and on an as converted to the common stock basis.

The holders of the August 2024 Preferred Stock are entitled to dividends, on an as-if converted basis, equal to dividends actually paid, if any, on the common stock. The August 2024 Preferred Stock is convertible, at the option of the holders and, in certain circumstances, by us, into common stock, as determined by dividing the net purchase price of $90 per share by the conversion price of $5.10, at the option of the holders.

On the Closing Date, we entered into a Registration Rights Agreement (the “August 2024 RRA”) with the August 2024 Purchasers, pursuant to which we agreed to file a registration statement with the SEC, to register for resale the common stock issuable upon the conversion of the August 2024 Preferred Stock. The registration statement was filed with the SEC on August 30, 2024.

In connection with the August 2024 Offering, we paid $0.2 million to Ascendiant Capital Markets, LLC, our placement agent. All of the August 2024 Preferred Stock was redeemed in September 2024. As a result of the redemption of the August 2024 Preferred Stock, we presented a deemed dividend of $0.6 million during the twelve months ended December 31, 2024.

The Private Placement (PIPE Financing) and Amendments to the Certificate of Designation of Series A Preferred Stock

On January 14, 2024, pursuant to the terms of the January 14th, 2024, 3i, LP Bridge Loan, we modified the conversion price of the 3i Exchange Warrants from $1.00 to $0.4476, thereby increasing the number of Exchange Warrants outstanding from 4,407,221 at December 31, 2023, to 9,846,339 outstanding at January 14, 2024. Also on January 14, 2024, the conversion price of the outstanding 1,417 shares of Series A Preferred Stock was revised from $1.00 to $0.4476. We filed the Fifth Amendment with the Secretary of State of the State of Delaware to reflect the new conversion price of the Series A Preferred Stock of $0.4476. At a stated value of $1,080 for each share of Series A Preferred Stock, the revised price of $0.4476 per share results in the 1,417 shares being convertible into 3,419,035 common shares as of January 14, 2024.

On February 13, 2024, pursuant to the terms of the February 13, 2024, 3i, LP Bridge Loan, we modified the conversion price of the 3i Exchange Warrants from $0.4476 to $0.4050 and thereby increased the number of Exchange Warrants outstanding from 9,846,339 on January 18, 2024, to 10,882,028 on February 13, 2024. We also agreed to amend the conversion price of the Series A Preferred Stock to equal $0.405 as soon as practicable. We filed the Sixth Amendment with the Secretary of State of the State of Delaware to reflect the new conversion price of the Series A Preferred Stock of $0.405. At a stated value of $1,080 for each share of Series A Preferred Stock, the revised price of $0.405 per share results in the 1,296 shares being convertible into 3,456,000 common shares.

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Risks and Uncertainties

We are subject to risks common to companies in the biotechnology industry, including but not limited to, risks of failure of preclinical studies and clinical trials, the need to obtain marketing approval for any drug product candidate that it may identify and develop, the need to successfully commercialize and gain market acceptance of its product candidates, dependence on key personnel and collaboration partners, protection of proprietary technology, compliance with government regulations, development by competitors of technological innovations, and the ability to secure additional capital to fund operations. Product candidates currently under development will require significant additional research and development efforts, including preclinical and clinical testing and regulatory approval prior to commercialization. Even if our research and development efforts are successful, it is uncertain when, if ever, we will realize significant revenue from product sales.

Contractual Obligations and Commitments

We enter into agreements in the normal course of business with vendors for preclinical studies, clinical trials and other service providers for operating purposes. These contracts are generally cancellable at any time by us following a certain period after notice and therefore, we believe that our non-cancellable obligations under these agreements are not material.

Critical Accounting Policies and Significant Judgments and Estimates

Our management’s discussion and analysis of financial condition and results of operations is based upon our audited consolidated financial statements for the years ended December 31, 2025 and 2024, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues, expenses, and taxes during the reporting years. Actual results could differ from those estimates or assumptions.

While our significant accounting policies are described in the notes to our consolidated financial statements for the years ended December 31, 2025 and 2024, we believe that the following critical accounting policies are most important to understanding and evaluating our reported financial results.

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Research contract costs and accruals

We have entered into various research and development contracts with companies both inside and outside of the United States. These agreements are generally cancellable, and related payments are recorded as research and development expenses as incurred. We record accruals for estimated ongoing research costs. When evaluating the adequacy of the accrued liabilities, we analyze progress of the studies or trials, including the phase or completion of events, invoices received and contracted costs. Significant judgments and estimates are made in determining the accrued balances at the end of any reporting period. Actual results could differ from our estimates. Our historical accrual estimates have not been materially different from the actual costs.

Convertible debt instruments

We follow ASC 480-10, Distinguishing Liabilities from Equity in its evaluation of the accounting for a hybrid instrument. A financial instrument that embodies an unconditional obligation, or a financial instrument other than an outstanding share that embodies a conditional obligation, that the issuer must or may settle by issuing a variable number of its equity shares shall be classified as a liability (or an asset in some circumstances) if, at inception, the monetary value of the obligation is based solely or predominantly on any one of the following: (a) a fixed monetary amount known at inception; (b) variations in something other than the fair value of the issuer’s equity shares; or (c) variations inversely related to changes in the fair value of the issuer’s equity shares. Hybrid instruments meeting these criteria are not further evaluated for any embedded derivatives and are carried as a liability at fair value at each balance sheet date with remeasurements reported in change on fair value expense in the accompanying Statements of Operations and Comprehensive Loss.

Additionally, we account for certain convertible debt (“Convertible Notes”) issued under the fair value option election of ASC 825, Financial Instruments wherein the financial instrument is initially measured at its issue-date estimated fair value and then subsequently re-measured at estimated fair value on a recurring basis at each reporting period date. The estimated fair value adjustment is recognized as other income (expense) in the accompanying consolidated statements of operations and the portion of the fair value adjustment attributed to a change in the instrument-specific credit risk is recognized as a component of other comprehensive loss. Convertible Notes are settled with shares at fair value of the stock issued with any differences recorded to other income (expense), as a gain or (loss) on extinguishment.

Warrants

When we issue warrants we evaluate the proper balance sheet classification to determine classification as either equity or as a derivative liability on the consolidated balance sheets. In accordance with ASC 815-40, Derivatives and Hedging-Contracts in the Entity’s Own Equity (“ASC 815-40”), we classify a warrant as equity so long as it is “indexed to our equity” and several specific conditions for equity classification are met. A warrant is not considered indexed to our equity, in general, when it contains certain types of exercise contingencies or adjustments to exercise price. If a warrant is not indexed to our equity or it has net cash settlement that results in the warrants to be accounted for under ASC 480, Distinguishing Liabilities from Equity, or ASC 815-40, it is classified as a derivative liability, which is carried on the Consolidated Balance Sheet at fair value with any changes in its fair value recognized immediately in the Consolidated Statement of Operations and Comprehensive Loss. As of December 31, 2025, and 2024, we had warrants outstanding for stock-based compensation that were classified as equity, and outstanding investor warrants that were classified as derivative liabilities and classified as “Warrant liability” in the consolidated balance sheets.

Stock-based compensation

We account for stock-based compensation in accordance with ASC 718, Compensation — Stock Compensation (“ASC 718”). ASC 718 requires companies to estimate the fair value of equity-based payment awards on the date of grant. The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite service period in our consolidated statements of operations and comprehensive loss.

We record the expense for option awards using either a graded or straight-line vesting method. We account for forfeitures as they occur. For stock-based awards granted to employees, directors and non-employee consultants, the measurement date is the date of grant. The compensation expense is then recognized over the requisite service period, which is the vesting period of the respective award.

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We review stock award modifications when there is an exchange of original award for a new award. We calculate the incremental fair value based on the difference between the fair value of the modified award and the fair value of the original award immediately before it was modified. We immediately recognize the incremental value as compensation cost for vested awards and recognizes, on a prospective basis over the remaining requisite service period, the sum of the incremental compensation cost and any remaining unrecognized compensation cost for the original award on the modification date.

The fair value of restricted stock units is based on the fair value of the Company's common stock on the date of the grant.

The fair value of stock options (“options”) on the grant date is estimated using the Black-Scholes option-pricing model using the single-option approach. The Black-Scholes option pricing model requires the use of highly subjective and complex assumptions, including the option’s expected term and the price volatility of the underlying stock, to determine the fair value of the award. The Company applies the Black-Scholes model as it believes it is the most appropriate fair value method for all option awards. The Black-Scholes model requires several assumptions, of which the most significant are the share price, expected volatility and the expected award term.

Since the Company has limited option exercise history, it has generally elected to estimate the expected life of an award based upon the "simplified method" with the continued use of this method extended until such time the Company has sufficient exercise history. The Company has no foreseeable plans to pay dividends on its common stock, and therefore, uses an expected dividend yield of zero in the option pricing model. The risk-free interest rate is based on the yield of U.S. treasury bonds with equivalent terms. The expected share price volatility for the Company's common shares is estimated by taking the average historical price volatility for industry peers. The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances.

The Company classifies stock-based compensation expense in its Consolidated Statements of Operations and Comprehensive Loss in the same way the award recipient’s payroll costs are classified or in which the award recipient’s service payments are classified.

Financial Operations Overview

Since our inception in September of 2004, we have focused substantially all our resources on conducting research and development activities, including drug discovery and preclinical studies, establishing, and maintaining our intellectual property portfolio, the manufacturing of clinical and research material, hiring personnel, raising capital and providing general and administrative support for these operations. In recent years, we have recorded very limited revenue from collaboration activities, or any other sources. We have funded our operations to date primarily from convertible notes and the issuance and sale of our securities.

Since our inception of our predecessor, Allarity Therapeutics A/S, we have incurred losses and have an accumulated deficit of $130.2 million as of December 31, 2025. Our net losses were $11.2 million and $24.5 million for the years ended December 31, 2025 and 2024, respectively.

We expect to continue to incur significant expenses and increasing operating losses over at least the next several years. We expect our expenses will increase substantially in connection with our ongoing activities, as we:

● advance stenoparib through clinical trials;

● pursue regulatory approval of stenoparib;

● operate as a public company;

● continue our preclinical programs and clinical development efforts;

● continue research activities for stenoparib; and

● manufacture supplies for our preclinical studies and clinical trials.

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Components of Operating Expenses

Research and Development Expenses

Research and development expenses include:

We expense all research and development costs in the periods in which they are incurred. Costs for certain development activities are recognized based on an evaluation of the progress to completion of specific tasks and estimates of services performed using information and data provided to us by our vendors and third-party service providers. Non-refundable advance payments for goods or services to be received in future periods for use in research and development activities are deferred and accounted for as prepaid expenses. The prepayments are then expensed as the related goods are delivered and as services are performed. To date, most of these expenses have been incurred to advance our lead drug candidate stenoparib.

We expect additional costs in research and development activities as we continue to conduct clinical trials. The process of conducting the necessary clinical research to obtain regulatory approval is costly and time-consuming, and the successful development of stenoparib is highly uncertain. As a result, we are unable to determine the duration and completion costs of our research and development projects or when and to what extent we will generate revenue from the commercialization and sale of stenoparib.

General and Administrative Expenses

General and administrative expenses consist primarily of personnel-related costs, facilities costs, depreciation and amortization expenses and professional services expenses, including legal, human resources, audit, and accounting services. Personnel-related costs consist of salaries, benefits, and stock-based compensation. Facilities costs consist of rent and maintenance of facilities. We expect our general and administrative expenses to increase for the foreseeable future due to anticipated increases in headcount to advance stenoparib and because of operating as a public company, including expenses related to compliance with the rules and regulations of the SEC, Nasdaq Stock Market, additional insurance expenses, investor relations activities and other administrative and professional services.

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Results of Operations

Comparison of years ended December 31, 2025 and 2024

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

Year ended

December 31, Increase/

(In thousands)

Revenue:

License Revenue $ 320 $ — $ 320

Operating expenses:

Impairment of intangible assets — 9,703 (9,703 )

Other income (expense) —

Foreign exchange gains (losses) 757 (212 ) 969

Income tax expense (benefit) — (381 ) 381

Revenues

We generated $0.3 million of service revenue for the year ended December 31, 2025 from the license of DRP testing services. There was no revenue for the year ended December 31, 2024.

Research and Development Expenses

Our research and development costs were primarily for stenoparib. A breakdown by nature of type of expense for the years ended December 31, 2025 and 2024, is provided below.

Year ended

December 31, Increase/

(In thousands)

Milestone payments — 150 (150 )

The increase of $0.5 million in research and development cost was the result of a $0.5 million decrease in contractor spending, and an $1.1 million increase in staff costs. Manufacturing and research study expenses remained consistent year over year.

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Impairment of Intangible Assets

For the year ended December 31, 2024, a full impairment charge of $9.7 million was applied against the intangible assets. There is no impairment charge nor any remaining intangible asset value as of the year ending December 31, 2025.

General and Administrative Expenses

General and administrative expenses decreased by $5.1 million for the year ended December 31, 2025, compared to the year ended December 31, 2024. The decrease was primarily due to a $5.7 million decrease in legal and professional fees which included a $2.5 million SEC settlement charge. General operating and IT costs decreased $0.1 million along with a $0.1 million drop in franchise tax expense, while other administrative cost increased $0.7 million with an increase of $0.2 million in personnel costs related to staff severance.

Other Income (Expense)

Other income of $1.4 million was recognized in the year ended December 31, 2025, and consisted primarily of a $0.2 million increase in interest income and decrease of interest expense ($0.5 million) due to an improved cash position for the company throughout the year. With no warrant liability during the year, a $2.7 million change in fair value adjustment of warrant derivative liabilities and change of $1.0 million foreign exchange gain comprise the $1.0 total decrease in other income from the prior year.

Other income of $2.3 million was recognized in the year ended December 31, 2024, which consisted primarily of a $2.7 million fair value adjustment of warrant derivative liabilities, and $0.5 million in interest income, partially offset by $0.7 million in interest expense and $0.2 million in foreign exchange loss.

Changes in the fair value of our derivative and warrant liabilities and convertible debt are measured using level 3 inputs as described in our consolidated financial statements.

Income taxes

During the years ended December 31, 2025, and 2024, we recognized no income tax and $0.4 million in income tax benefit, respectively.

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Liquidity, Capital Resources and Plan of Operations

Cash Flows for the Years Ended December 31, 2025 and 2024

The following table summarizes our cash flows for the years indicated:

Year Ended

December 31,

Total cash provided by (used in):

Investing activities (8 ) (298 )

Effect of foreign exchange rates on cash (667 ) 225

Net increase (decrease) in cash $ (4,846 ) $ 19,367

Operating Activities

Net cash used in operating activities was approximately $14.8 million for the year ended December 31, 2025, primarily comprised of our $11.2 million net loss. The balance was due to a $2.7 million reduction in accrued expenses, a $1.1 million reduction in accounts payable, a $1.6 million increase of prepaid expenses, a $1.2 million unrealized foreign exchange gain, $0.2 million in common stock issued for services, $0.2 million non-cash interest expense, and $0.2 million change in operating assets and liabilities.

Net cash used in operating activities was approximately $17.4 million for the year ended December 31, 2024, primarily comprised of our $27 million net loss and $2.7 million reduction in fair value of warrant derivative liability, $0.4 million reduction in deferred income tax, and $0.1 million unrealized foreign exchange gain, partially offset by $9.7 million intangible asset impairment, $0.3 million in common stock issued for services, $0.2 million non-cash interest expense, $0.1 million stock-based compensation and $0.1 million change in operating assets and liabilities.

Investing Activities

There was eight thousand of investing activity for the year December 31, 2025. Net cash used in investing activities was approximately $0.3 million for the year ended December 31, 2024, due to $0.3 million in purchases of lab equipment.

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Net cash provided by financing activities for the year ended December 31, 2025 was $10.9 million, primarily related to $14.0 million from equity issuances and $3.2 million of stock repurchases

Net cash provided by financing activities for the year ended December 31, 2024 was $36.8 million, primarily related to $38.8 million in proceeds from ATM sales of common stock net of issuance costs, $2.9 million in net proceeds from the issuance of Series A Convertible Redeemable Preferred Stock, and $1.3 million in proceeds from 3i debt promissory notes, partially offset by the $3.5 million redemption of Series A Convertible Redeemable Preferred Stock and repayment of $1.3 million of 3i debt promissory notes.

In January 2026, Allarity entered a stock purchase agreement providing up to $6 million in additional equity financing.

In February 2026, the Allarity board approved a stock repurchase plan of up to $5 million over a 12 month period upon the term expiration of the prior repurchase plan on March 1, 2026.

In March 2026, Allarity issued $20 million in promissory notes to Streeterville Capital as a debt financing.

Recently Issued Accounting Pronouncements

See the section titled in Note 2 to the Company’s consolidated financial statements for the year ended December 31, 2025, appearing elsewhere herein.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this Item.

Item 8. Financial Statements and Supplementary Data.

The financial statements required by this item begin on page F-1 with the index to financial statements followed by the financial statements.

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

None.

Item 9A. Controls And Procedures.

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, as of the end of the period covered by this Annual Report, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Our disclosure controls and procedures are designed to provide reasonable assurance that the information required to be included in our SEC reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, relating to the Company, including our consolidated subsidiaries, and was made known to them by others within those entities, particularly during the period when this report was being prepared. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of December 31, 2025.

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Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. As of December 31, 2025, our management assessed the effectiveness of our internal control over financial reporting based on the criteria for effective internal control over financial reporting established in “Internal Control - Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Based on the results of its evaluation, our management concluded that our internal control over financial reporting was effective as of December 31, 2025.

Because we are a non-accelerated filer and smaller reporting company, Wolf & Company, P.C., our independent registered public accounting firm, is not required to attest to or issue a report on the effectiveness of our internal control over financial reporting.

Change in Internal Control over Financial Reporting

Upon the arrival of our current Chief Financial Officer during the third quarter, the company identified a material weakness in its internal controls related to the Company's accounting of the share repurchase plan that was initiated in the quarter ended June 30, 2025. To address the material weakness, management, under the oversight of the audit committee, has devoted, and plans to continue to devote, significant effort and resources to the remediation and improvement of its internal control over financial reporting. As a result, the company updated internal controls over financial reporting and implemented enhanced review processes to ensure timely identification of appropriate accounting related to all contractual agreements. As a result of these initiatives, management concluded that our internal control over financial reporting was effective as of December 31, 2025.

Inherent Limitations of Controls

Management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all errors and all fraud. 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. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. 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 deterioration in the degree of compliance with the policies or procedures. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Item 9B. Other Information.

None.

Item 9C. Disclosure Regarding Foreign Jurisdiction that Prevents Inspections.

Not applicable.

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PART III

Item 10. Directors, Executive Officers and Corporate Governance.

EXECUTIVE OFFICERS

Our executive officers are appointed by our Board in accordance with our Bylaws. The table below identifies and sets forth certain biographical and other information regarding our executive officers as of March 20, 2026. There are no family relationships among any of our executive officers or directors.

Name Year First Became Officer Age Position

Thomas H. Jensen 2023 47 Chief Executive Officer

Jeffrey S. Ervin 2025 48 Chief Financial Officer

Steen Knudsen 2021 65 Chief Scientific Officer

Jeremy R. Graff 2024 56 President and Chief Development Officer

Thomas H.Jensen. Thomas H. Jensen has been the Chief Executive Officer of Allarity Therapeutics, Inc. since December 2023, a director of ours since July 2022, and has been a part of the Company’s since its inception serving in a range of capacities. Before becoming the CEO, Mr. Jensen has been the Senior Vice President, Investor Relations since June 2022, and a director of ours since July 2022. Previously, Mr. Jensen served as Senior Vice President of information Technology of Allarity Therapeutics, Inc. as well as of our predecessor, Allarity Therapeutics A/S, since June 2020. Mr. Jensen previously served as the Chief Technology Officer of our predecessor from 2004 to June 2020. Mr. Jensen co-founded Allarity Therapeutics A/S in 2004. Mr. Jensen also established and currently leads our laboratories in Denmark. Alongside nurturing our global laboratories, Mr. Jensen is instrumental in building our investor relations operations, securing operational financing, and fostering the business growth of Allarity Therapeutics. Amongst Mr. Jensen’s accolades are his inventions of molecular biological guidelines combined with techniques for high quality reproducible RNA extraction and downstream processing. This allows for high resolution analysis of cancer patients’ biopsies. Mr. Jensen’s inventions are an important foundation of the DRP® -Drug Response Prediction platform. Mr. Jensen also currently serves on the Board of Cardeon AB, a Swedish company that invests in innovative Nordic companies and start-ups in medical technology and Life Science. Mr. Jensen holds a Bachelor of Science degree in Biology from the Technical University of Denmark, and conducted further studies in Biology at the University of Copenhagen.

Jeffrey S. Ervin. Mr. Ervin joined the Company on July 1, 2025 with over 25 years of financial and leadership experience. Initially starting in a fractional capacity, Mr. Ervin became the full-time Chief Financial Officer of the Company on November 1, 2025. Prior to joining the Company, Mr. Ervin served as founder and chief executive officer of Sanaregen Vision Therapeutics, Inc., a clinical-stage biopharmaceutical research and development company, in February 2025 to October, 2025 in a fractional capacity. From June 2024 to January 2025, Mr. Ervin served in a fractional capacity as co-chief financial officer of DDC Enterprise, Ltd (NYSE: DDC), a consumer food company. From February 2015 and May 2024, Mr. Ervin served as chairman and chief executive officer of IMAC Holdings, Inc., a provider of innovative medical advancements and care specializing in regenerative rehabilitation orthopedic treatments. Mr. Ervin was co-founder of IMAC Holdings, Inc. and led an initial public offering in February 2019 (Nasdaq: BACK). Mr. Ervin earned his M.B.A. from Vanderbilt University and a B.S. in Finance from Miami University. Mr. Ervin currently serves as an independent director of Cingulate, Inc. (Nasdaq: CING), a biopharmaceutical company focused on the development of new product candidates for the central nervous system.

Steen Knudsen. Dr. Knudsen has been our Chief Scientific Officer since July 2021. Dr. Knudsen is a co-founder of our predecessor Allarity Therapeutics A/S and the inventor of DRP®, the Drug Response Prediction Platform, which is our core technology and companion diagnostics platform, and was the Chief Scientific Officer of Allarity Therapeutics A/S since 2006. Dr. Knudsen is also a former Professor of Systems Biology with extensive expertise in mathematics, bioinformatics, biotechnology, and systems biology. He co-founded our predecessor in 2004 and served as its Chief Executive Officer from 2004 to 2006. Dr. Knudsen also previously served as a member on our predecessor’s board of directors from 2016 to 2020. In addition, Dr. Knudsen also currently serves as the Chief Executive Officer of MPI, Inc., our operating subsidiary in the U.S. Dr. Knudsen holds an M.Sc. degree in Engineering from the Technical University of Denmark and a Ph.D. degree in Microbiology from the University of Copenhagen. He received Postdoctoral training in computational biology from Harvard Medical School.

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Jeremy R. Graff. Dr. Graff has worked in the Biotech/Pharma industry for more than 25 years, garnering deep experience and expertise in the preclinical and clinical development of targeted small and large molecule therapeutics as well as novel immunotherapeutics. Previously, Dr. Graff held C-level and senior executive positions at various biotechnology companies. Form November 2023 to September 2024, Dr. Graff served as a consultant to the Company providing consulting and advisory services on the Company’s research and development programs in the field of small molecule inhibitors and their use in the treatment of cancer. Since January of 2024, Dr. Graff has also served as a C-Suite Executive Advisor and Consultant to a number of companies. From June 2021 to January 2024, Dr. Graff served as the Chief Scientific Officer at IMV, Inc., an early-stage Canadian biotechnology company. There, Dr. Graff oversaw the company’s research programs and the development of its cutting-edge cancer vaccine platform. From June 2020 to March 2021, Dr. Graff served as the Chief Development Officer of HiberCell, a clinical stage oncology company. From November 2018 to June 2020, Dr. Graff served as President and Chief Scientific Officer of Biothera Pharmaceuticals, Inc. (“Biothera”), a privately held clinical stage immuno-oncology company developing Biothera’s proprietary immunotherapy, Imprime PGG, in combination with immune checkpoint inhibitors, or CPIs, for multiple cancer indications. Dr. Graff also served as CSO and Senior Vice President of Research at Biothera from November 2014 to November 2018. From February 1998 to November 2014, Dr. Graff held various positions at Eli Lilly and Company (“Eli Lilly”), an American pharmaceutical company that discovers, develops, and markets human pharmaceuticals worldwide. During his nearly 17-year tenure at Eli Lilly, Dr. Graff identified and validated new molecular targets for advanced cancers, working alongside the clinical development team to establish and lead the translational oncology group. This group supported and advanced the 31 clinical assets in Eli Lilly’s oncology portfolio at the time. Dr. Graff currently serves on the Board of Directors of IN8bio, Inc., a clinical-stage biopharmaceutical company developing gamma-delta T cell-based immunotherapies for cancer patients. Dr. Graff also serves as a member of the Board of Trustees for the Wood Hudson Cancer Research Laboratory, a non-profit research organization, and he is on the Scientific Advisory Board of Avicenna Biosciences, Inc., a drug development company using machine learning-enhanced medicinal chemistry to accelerate the lead-to-candidate optimization process for small molecule drug development. Dr. Graff completed a post-doctoral fellowship at the Johns Hopkins University School of Medicine. He holds a Ph.D. from the University of Kentucky’s Markey Cancer Center, and a Bachelor of Arts degree in Biology and Chemistry from Thomas More College (now Thomas More University).

CORPORATE GOVERNANCE

Role of Our Board

Our Board oversees and provides guidance for our business and affairs. Our Board oversees the development of our strategy and business planning process and management’s implementation of them and oversees management. Mr. McLaughlin serves as Chairman of our Board. The primary responsibilities of our Board is to provide oversight, strategic guidance, counseling, and direction to our management. Our Board meets regularly in executive sessions of the directors without those directors who are also our executive officers.

In accordance with the terms of our Bylaws, subject to the rights of holders of any series of preferred stock, our Board may establish the authorized number of directors from time to time by resolution. Our Board consists of four members and is divided into three classes, Class I, Class II and Class III, with members of each class serving staggered three-year terms. Our Board is divided into the following classes:

• Class I, consists of Mr. Hoiland;

• Class II, consists of Mr. McLaughlin and Dr. Benjamin; and

• Class III, consists of Mr. Jensen.

Board Leadership Structure

The positions of Chairman of our Board and Chief Executive Officer are separate. The Chairman of our Board has the authority, among other things, to call and preside over our Board meetings, to set meeting agendas and to determine materials to be distributed to our directors. The Chairman has substantial ability to shape the work of our Board. We believe that separation of the positions of Chairman and Chief Executive Officer reinforces the independence of our Board in its oversight of our business and affairs. In addition, we believe that separation of the positions of Chairman and Chief Executive Officer creates an environment that is more conducive to objective evaluation and oversight of management’s performance, increasing management accountability and improving the ability of our Board to monitor whether management’s actions are in our best interests and in the best interests of our stockholders. As a result, we believe that having the positions of Chairman and Chief Executive Officer separated can enhance the effectiveness of our Board as a whole.

In addition, we have a separate Chairman for each committee of our Board. The Chairman of each committee is expected to report to our Board from time to time, or whenever so requested by our Board, on the activities of the committee he or she chairs in fulfilling its responsibilities as detailed in its respective charter or specify any shortcomings should that be the case.

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Director Independence

As required under the Nasdaq listing standards, a majority of the members of a listed company’s board of directors must qualify as “independent,” as affirmatively determined by the board of directors. Our Board consults with our legal counsel to ensure that its determinations are consistent with relevant securities and other laws and regulations regarding the definition of “independent,” including those set forth in Nasdaq listing standards, as in effect from time to time. Consistent with these considerations, after review of all relevant identified transactions or relationships between each of our directors, or any of his or her family members, and us, its senior management and its independent auditors, our Board affirmatively determined that all of our directors, except Mr. Jensen who is not considered independent because he is our executive officer, is independent director as defined by Rule 5605(a)(2) of the Nasdaq Listing Rules.

Board Committees

Our Board has established an Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee comprised of the members identified below. Our Board has also adopted charters for each of these committees, which comply with the applicable requirements of current SEC and Nasdaq rules. Copies of the charters for each committee are available at www.allarity.com. Our Board has determined that all committee members are independent under applicable Nasdaq and SEC rules for committee memberships.

Gerald W. McLaughlin, Director, Chairman of our Board Chairman Chairman Chairman

Thomas H. Jensen, Director, Chief Executive Officer

Jesper Hoiland, Director X X X

Laura E. Benjamin, Director X X X

Compensation Committee

The Compensation Committee consists of Mr. McLaughlin, Mr. Hoiland and Dr. Benjamin. The Chairman of the Compensation Committee is Mr. McLaughlin. Our Board has determined that each member of the Compensation Committee is independent under the Nasdaq listing standards and a “non-employee director” as defined in Rule 16b-3 promulgated under the Exchange Act.

The Compensation Committee operates pursuant to a charter which is reviewed annually by the Compensation Committee. The Compensation Committee charter can be accessed online at https://allarity.com/governance-documents/.

The primary purpose of the Compensation Committee is to discharge the responsibilities of our Board relating to compensation of our directors and executive officers, to assist our Board in establishing appropriate incentive compensation and equity-based plans and to administer such plans, and to oversee the annual process of evaluation of the performance of our management. Specific responsibilities of the Compensation Committee are to:

• Make regular reports to our Board.

• Annually evaluate its own performance.

• Oversee the annual process of performance evaluations of our management.

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Nominating and Corporate Governance Committee

The Nominating and Corporate Governance Committee consists of Mr. McLaughlin, Mr. Hoiland and Dr. Benjamin. The Chairman of the Nominating and Corporate Governance Committee is Mr. McLaughlin. Our Board has determined that each member of the Nominating and Corporate Governance Committee is independent under the Nasdaq listing standards.

The Nominating and Corporate Governance Committee operates pursuant to a charter which is reviewed annually by the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee charter can be accessed online at https://allarity.com/governance-documents/.

The primary purpose of the Nominating and Corporate Governance Committee is (1) to assist our Board by identifying qualified candidates for director, and to recommend to our Board the director nominee(s) for the next annual meeting of stockholders; (2) to lead our Board in its annual review of our Board’s performance; (3) to recommend to our Board director nominee(s) for each Board committee; and (4) to develop and recommend to our Board our corporate governance guidelines. Specific responsibilities of the Nominating and Corporate Governance Committee are to:

• Make regular reports to our Board concerning its activities.

• Annually evaluate its own performance.

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Audit Committee

The Audit Committee consists of Mr. McLaughlin, Dr. Benjamin, and Mr. Hoiland. The chairman of the Audit Committee is Mr. McLaughlin, who our Board has determined is an “audit committee financial expert” within the meaning of SEC regulations. Our Board has determined that each member of the Audit Committee satisfies the independence requirements under Nasdaq listing standards and Rule 10A-3(b)(1) of the Exchange Act. Each member of the Audit Committee can read and understand fundamental financial statements in accordance with applicable requirements. In arriving at these determinations, our Board has examined each Audit Committee member’s scope of experience and the nature of their employment in the corporate finance sector.

The Audit Committee operates pursuant to a charter which is reviewed annually by the Audit Committee. The Audit Committee charter can be accessed online at https://allarity.com/governance-documents/.

The primary purpose of the Audit Committee is to provide assistance to our Board in fulfilling our Board’s responsibility to our stockholders relating to our accounting and financial reporting practices, system of internal controls, the audit process, the quality and integrity of our financial reporting, and our process for monitoring compliance with laws and regulations and our code of conduct. Specific responsibilities of the Audit Committee are to:

• Appoint, compensate, and oversee the work of any independent auditor;

Meetings of our Board and its Committees

During the fiscal year ended December 31,2025:

• our Board held four (4) meetings;

• our Audit Committee held four (4) meetings;

• our Compensation Committee held two (2) meetings; and

• our Nominating and Corporate Governance Committee held no meetings.

Board Attendance at Annual Meeting of Stockholders

Our policy is to invite and encourage each member of our Board to be present at our annual meetings of stockholders. All of our directors intend to attend the Annual Meeting.

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Board Oversight of Risk

One of the key functions of our Board is informed oversight of our risk management process. Our Board does not have a standing risk management committee, but rather administers this oversight function directly through our Board as a whole, as well as through various standing committees of our Board that address risks inherent in their respective areas of oversight. In particular, our Board is responsible for monitoring and assessing strategic risk exposure, and our Audit Committee has the responsibility to consider and discuss our major financial risk exposures and the steps our management has taken to monitor and control these exposures, including guidelines and policies to govern the process by which risk assessment and management is undertaken. The Audit Committee also monitors compliance with legal and regulatory requirements and reviews our information technology and data security policies and practices and assesses cybersecurity related risks. The Nominating and Corporate Governance Committee monitors the effectiveness of our corporate governance practices, including oversight of processes and procedures designed to prevent illegal or improper conduct. The Compensation Committee assesses and monitors whether any of our compensation policies and programs has the potential to encourage excessive risk-taking.

Code of Conduct and Ethics

Our Board has adopted a Code of Business Conduct and Ethics (the “Code of Conduct”), applicable to all of our employees, executive officers and directors. We will provide any person, without charge, a copy of the Code of Conduct upon written request to Investor Relations, Allarity Therapeutics, Inc., 123 E Tarpon Ave, Tarpon Springs, FL 34689. The Code of Conduct is available at the Investors section of our website at www.allarity.com. Information contained on or accessible through this website is not a part of this report, and the inclusion of such website address in this report is an inactive textual reference only. Any amendments to the Code of Conduct, or any waivers of its requirements, are expected to be disclosed on its website to the extent required by applicable SEC and Nasdaq rules and requirements.

Insider Trading Policy

The Company has an insider trading policy governing the purchase, sale and other dispositions of the Company’s securities that applies to all Company personnel, including directors, officers, employees, and other covered persons. The Company also follows procedures for the repurchase of its securities. The Company believes that its insider trading policy and repurchase procedures are reasonably designed to promote compliance with insider trading laws, rules and regulations, and listing standards applicable to the Company. A copy of the Company’s insider trading policy is filed as Exhibit 19 to this Annual Report.

Hedging Policy

Our Board has not adopted, and we do not have, any specific practices or policies regarding the ability of our officers, our directors, the employees of our sponsor and its affiliates, or any of their designees, to purchase financial instruments (including prepaid variable forward contracts, equity swaps, collars and exchange funds) or otherwise engage in transactions that hedge or offset, or are designed to hedge or offset, any decrease in the market value of our equity securities.

Clawback Policy

We have adopted a compensation recovery policy that requires the recovery of certain erroneously paid incentive compensation received by our Section 16 officers, as required by new SEC rules and Nasdaq implemented pursuant to the Dodd-Frank Act, and which can be recovered from time-vesting or performance-vesting equity compensation (in addition to other forms of compensation).

Stockholder Communications with Our Board

Our Board has adopted a formal process by which stockholders may communicate with our Board or any of its directors. Stockholders who wish to communicate with our Board may do so by sending written communications addressed to the Secretary of Allarity Therapeutics, Inc., 123 E Tarpon Ave, Tarpon Springs, FL 34689. These communications will be reviewed by the Secretary, who will determine whether the communication is appropriate for presentation to our Board or the relevant director. The purpose of this screening is to avoid having our Board consider irrelevant or inappropriate communications (such as advertisements, solicitations and hostile communications).

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Item 11. Executive Compensation.

The information required by this Item will be included in the 2026 Proxy Statement, and is incorporated herein by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The information required by this Item will be included in the 2026 Proxy Statement, and is incorporated herein by reference.

Item 13. Certain Relationships and Related Transactions and Director Independence.

The information required by this Item will be included in the 2026 Proxy Statement, and is incorporated herein by reference.

Item 14. Principal Accountant Fees and Services.

The information required by this Item will be included in the 2026 Proxy Statement, and is incorporated herein by reference.

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PART IV

Item 15. Exhibits and Financial Statement Schedules.

The following documents are filed as part of this Annual Report:

(1) Financial Statements

The following financial statements of Allarity, and the Report of Independent Registered Public Accounting Firm, is included at the end of this Annual Report beginning on page F-1:

(2) Financial Statement Schedules

All schedules have been omitted because the required information is included in the financial statements or notes thereto or because they are not required.

(3) Exhibits

The exhibits required by Item 601 of Regulation S-K are listed in subparagraph (b) below.

(b) Exhibits:

The following exhibits are filed as part of this Annual Report.

Exhibit No. Description

3.1(a) Certificate of Incorporation of Allarity Therapeutics, Inc.

3.3(c) Amended and Restated Bylaws of Allarity Therapeutics, Inc.

3.7(q) Certificate of Designation of the Series B Preferred Stock

3.8(s) Certificate of Designation of the Series C Preferred Stock

3.17(hh) Fourth Certificate of Amendment (Series A Preferred Stock)

3.18(jj) Fifth Certificate of Amendment (Series A Preferred Stock)

3.19(ll) Sixth Certificate of Amendment (Series A Preferred Stock)

4.2(aa) Warrant to Purchase Common Stock (3i, LP)

4.3(aa) Form of Pre-Funded Warrant (April 2023)

4.4(aa) Form of Common Warrant (April 2023)

4.5(aa) Modification and Exchange Warrant

4.6(ee) Form of Pre-Funded Warrant (July 2023)

4.7(ee) Form of Common Warrant (July 2023)

4.8(ff) Form of Amended and Restated Common Stock Purchase Warrant (July 2023)

4.9(gg) Form of New Warrant

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4.10(nn) Form of Pre-Funded Warrant

4.11(nn) Form of Series A Common Warrant

4.12(nn) Form of Series B Common Warrant

4.13(jj) Senior Convertible Note

4.14(ll) Senior Convertible Note, dated as of February 13, 2024

4.15(bbb) Secured Promissory Note A-1, dated March 2, 2026

4.16(bbb) Secured Promissory Note B, dated March 2, 2026

10.1#(e) Allarity Therapeutics, Inc. 2021 Equity Incentive Plan

10.22(i) Convertible Promissory Note

10.23(j) Forbearance Agreement and Waiver

10.24(l) First Amendment to Forbearance and Waiver

10.25†#(o) Separation Agreement with Steve Carchedi

10.26†#(o) Separation Agreement with Jens Knudsen

10.27(o) Second Amendment to Development Option & License Agreement

10.28†(p) Second Amendment to License Agreement with Novartis Pharma AG

10.29(q) Secured Note Purchase Agreement

10.30(q) Form of Secured Promissory Note

10.31(q) Security Agreement

10.32#(r) Employment Agreement with James G. Cullem

10.33#(r) Employment Agreement with Joan Brown

10.34(t) Letter Agreement with 3i, LP dated December 8, 2022

10.35(t) Letter Agreement with 3i, LP dated January 23, 2023

10.36+(s) Form of Securities Purchase Agreement Series C Preferred Stock

10.37(s) Form of Registration Rights Agreement

10.38(s) Limited Waiver Agreement

10.39(aa) Form of Securities Purchase Agreement (April Offering)

10.40(y) Form of Lock-Up Agreement (April Offering)

10.41(z) First Amendment to Secured Note Purchase Agreement

10.42(z) First Amendment to Security Agreement

10.43(z) Form of Secured Promissory Note (2023)

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10.44(aa) Secured Promissory Note

10.45(aa) Modification and Exchange Agreement

10.46(aa) Cancellation of Debt Agreement

10.47(aa) First Amendment to Registration Rights Agreement

10.48(aa) Limited Waiver Agreement

10.49(bb) Amendment to Modification and Exchange Agreement

10.50(ee) Form of Securities Purchase Agreement

10.51(bb) Fourth Amendment to the Exclusive License Agreement with Eisai, Inc.

10.52(ee) Third Amendment to the Exclusive License Agreement with Eisai, Inc.

10.53(ee) Form of Limited Waiver and Amendment Agreement

10.54(ee) 3i, LP – Limited Waiver and Amendment Agreement

10.55(dd) June 2023 Secured Note Purchase Agreement

10.56(dd) Security Agreement

10.57(dd) Secured Promissory Note

10.58(ee) Form of Lock-Up Agreement

10.59(gg) Form of Inducement Letter

10.60(gg) Limited Waiver between the Company and 3i, LP

10.61(nn) Form of Securities Purchase Agreement

10.62(mm) Form of Lock-Up Agreement

10.67(oo) Amendment to Senior Convertible Notes

10.68(ss) Consulting Agreement (James G. Cullem)

10.71(uu) Management Services Agreement, effective as of June 1, 2024

10.74(yy) Fifth Amendment to Exclusive License Agreement with Eisai, Inc.

10.75(pp) Sixth Amendment to Exclusive License Agreement with Eisai, Inc.

10.82 Note Purchase Agreement, dated March 2, 2026.

10.83 Deposit Account Control Agreement, dated March 2, 2026.

19 Policy on Insider Trading

21(xx) Subsidiaries of the Registrant

97(xx) Allarity Therapeutics, Inc. Clawback Policy

101.INS Inline XBRL Instance Document

101.SCH Inline XBRL Taxonomy Extension Schema Document

101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document

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(j) Incorporated by reference from Form 8-K filed with the SEC on May 6, 2022.

(k) Incorporated by reference from Form 10-K filed with the SEC on May 17, 2022.

(l) Incorporated by reference from Form 8-K filed with the SEC on June 10, 2022.

(m) Incorporated by reference from Form 8-K filed with the SEC on July 11, 2022.

(bb) Incorporated by reference from Form 8-K filed with the SEC on June 1, 2023.

(hh) Incorporated by reference from Form 8-K filed on September 27, 2023.

(ii) Incorporated by reference from Form S-1 filed on October 30, 2023.

(ss) Incorporated by reference from Form 8-K filed with the SEC on May 14, 2024.

(tt) Incorporated by reference from Form 8-K filed with the SEC on May 21, 2024.

(uu) Incorporated by reference from Form 8-K filed with the SEC on June 6, 2024.

* Furnished herewith.

# Indicates a management contract or compensatory plan or arrangement.

Item 16. Form 10-K Summary.

None.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

ALLARITY THERAPEUTICS, INC.

By: /s/ Thomas H. Jensen

Name: Thomas H. Jensen

Title: Chief Executive Officer

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.

Signature Title Date

/s/ Thomas H. Jensen Chief Executive Officer and Director March 30, 2026

Thomas H. Jensen (Principal Executive Officer)

/s/ Jeffrey S. Ervin Chief Financial Officer March 30, 2026

Jeffrey S. Ervin (Principal Financial Officer)

/s/ Gerald W. McLaughlin Chairman of the Board March 30, 2026

Gerald W. McLaughlin

/s/ Jesper Hoiland Director March 30, 2026

Jesper Hoiland

/s/ Laura E. Benjamin Director March 30, 2026

Laura E. Benjamin

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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Pages

Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm (PCAOB ID 392) F-2

Consolidated Balance Sheets F-3

Consolidated Statements of Operations and Comprehensive Loss F-4

Consolidated Statements of Cash Flows F-7 – F-8

Notes to Consolidated Financial Statements F-9 – F-9

F-1

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors of Allarity Therapeutics, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Allarity Therapeutics, Inc. (the “Company”) as of December 31, 2025 and 2024, the related consolidated statements of operations and comprehensive loss, changes in redeemable convertible preferred stock and stockholders’ equity (deficit) and cash flows for the years then ended, and the related notes to the consolidated financial statements (collectively, 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, 2025 and 2024, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. 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 U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits 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 audits 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 audits included performing procedures to assess the risks of material misstatement of the 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 financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Wolf & Company P.C.

We have served as the Company's auditor since 2022.

Boston, Massachusetts

March 30, 2026

F-2

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ALLARITY THERAPEUTICS, INC.

CONSOLIDATED BALANCE SHEETS

As of December 31, 2025 and 2024

(in thousands, except for share and per share data)

December 31, December 31,

ASSETS

Current assets:

Receivables from ATM sales — 1,416

Non-current assets:

Property, plant and equipment, net 330 309

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accrued expenses and other current liabilities 2,667 5,232

Warrant derivative liability — 1

Income taxes payable 81 74

Convertible promissory note and accrued interest 1,400 1,350

Commitments and contingencies (Note 14)

Stockholders’ equity

Accumulated other comprehensive loss (1,021 ) (354 )

Total liabilities and stockholders’ equity $ 18,258 $ 22,650

See accompanying notes to the consolidated financial statements.

F-3

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ALLARITY THERAPEUTICS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

For the years ended December 31, 2025 and 2024

(in thousands, except for share and per share data)

Revenue:

License Revenue $ 320 $ —

Total Revenue 320 —

Operating expenses:

Impairment of intangible assets — 9,703

Other income (expense)

Interest expenses (185 ) (653 )

Foreign exchange gains (losses) 757 (212 )

Change in fair value adjustment of warrant derivative liabilities 1 2,677

Loss before income tax expense (benefit) (11,231 ) (24,896 )

Income tax expense (benefit) — (381 )

Deemed dividends on Series A Preferred Stock — (299 )

Deemed dividend on Series A Convertible Redeemable Preferred Stock — (562 )

Gain on extinguishment of Series A Preferred Stock — 222

Net loss attributable to common stockholders $ (11,231 ) $ (25,154 )

Net loss per common share, basic and diluted $ (0.78 ) $ (15.65 )

Other comprehensive loss

Change in cumulative translation adjustment (667 ) 57

See accompanying notes to the consolidated financial statements.

F-4

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ALLARITY THERAPEUTICS, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)

For the years ended December 31, 2025 and 2024

(in thousands, except for share data)

Series A Convertible Series A Accumulated Total

Redeemable Convertible Additional Other Stockholders’

Number Value Number Value Number Value Capital Loss Deficit (Deficit)

Extinguishment of preferred stock — — — (222 ) — — 222 — — —

Deemed dividend on preferred stock — — — 299 — — (299 ) — — —

Common stock issued for services — — — — 147,878 — 336 — — 336

Reverse split (1-for-30) rounding adjustment — — — — 97,216 (3 ) 3 — — —

Stock-based compensation expense — — — — — — 71 — — 71

Cashless exercise of 3i Exchange Warrants — — — — 78,656 — 405 — — 405

Deemed dividend on redeemable preferred stock — 562 — — — — (562 ) — — —

Currency translation adjustment — — — — — — — 57 — 57

See accompanying notes to the consolidated financial statements.

F-5

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ALLARITY THERAPEUTICS, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)

For the years ended December 31, 2025 and 2024

(in thousands, except for share data)

Accumulated Total

Additional Other Stockholders’

Common Stock Paid in Treasury Stock Comprehensive Accumulated Equity

Number Value Capital Number Value Loss Deficit (Deficit)

Stock-based compensation expense 24,881 — 482 — — — — 482

Currency translation adjustment — — — — — (667 ) — (667 )

See accompanying notes to the consolidated financial statements.

F-6

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ALLARITY THERAPEUTICS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the years ended December 31, 2025 and 2024

(in thousands)

CASH FLOWS FROM OPERATING ACTIVITIES:

Reconciliation of net loss to net cash used in operating activities:

Depreciation and amortization (13 ) 9

Intangible asset impairment — 9,703

Common stock issued for services 200 336

Stock-based compensation expense 482 71

Unrealized foreign exchange gain 1,238 (126 )

Non-cash interest expense 185 230

Change in fair value of warrant derivative liabilities (1 ) (2,677 )

Deferred income taxes — (446 )

Changes in operating assets and liabilities:

Other current assets (150 ) 94

Unearned revenue — 207

Tax credit receivable (96 ) 45

Income taxes payable 7 15

Net cash used in operating activities (14,820 ) (17,352 )

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchase of property and equipment (8 ) (298 )

Net cash used in investing activities (8 ) (298 )

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from 3i promissory notes — 1,340

Repayment of 3i debt — (1,340 )

Proceeds from ATM sales of common stock, net of issuance costs 11,143 37,354

Net proceeds from common stock and pre-funded warrant issuance 2,695 —

Redemption of Convertible Redeemable Series A Preferred Stock — (3,500 )

Common stock repurchase (3,190 ) —

Net cash provided by financing activities 10,648 36,792

Net increase (decrease) in cash (4,180 ) 19,142

Effect of exchange rate changes on cash (667 ) 225

See accompanying notes to the consolidated financial statements.

F-7

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ALLARITY THERAPEUTICS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (cont.)

For the years ended December 31, 2025 and 2024

(in thousands)

Supplemental disclosure of cash flow information

Cash paid for interest $ — $ 423

Cash received for interest $ 801 $ 503

Supplemental disclosure of non-cash investing and financing activities:

Stock issued in conjunction with consulting agreement $ 200 $ 90

Issuance of common shares on conversion of 3i Exchange Warrants $ — $ 405

Conversion of Series A Redeemable Preferred Stock to common stock $ — $ 1,819

Deemed dividends on Series A Preferred Stock $ — $ 299

Gain on extinguishment of Series A Preferred Stock $ — $ 222

Deemed dividend on Convertible Redeemable Series A Preferred Stock $ — $ 562

See accompanying notes to the consolidated financial statements.

F-8

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ALLARITY THERAPEUTICS, INC.

NOTES TO FINANCIAL STATEMENTS

For the years ended December 31, 2025 and 2024

(in thousands, except for share and per share data and where otherwise noted)

1. Organization and Description of Business

Allarity Therapeutics, Inc. and Subsidiaries (the “Company”) is a clinical stage pharmaceutical company that develops drugs for the personalized treatment of cancer using drug specific companion diagnostics generated by its proprietary drug response predictor technology, DRP®. Additionally, the Company, through its Danish subsidiary, Allarity Denmark (previously Oncology Venture ApS), specializes in the research and development of anti-cancer drugs.

The Company’s principal operations are located at Venlighedsvej 1,2970 Horsholm, Denmark. The Company’s business address in the United States is located at 123 E. Tarpon Ave., Tarpon Springs, FL 34689.

Liquidity

The Company has incurred significant losses and has an accumulated deficit of $130.2 million. Since inception, the Company's operations have been funded primarily through proceeds received from its collaboration arrangements, sale of equity and debt securities, and the proceeds from the exercise of warrants. The Company has incurred losses from operations and negative cash flows from operating activities since inception and expects to continue to incur substantial losses for the next several years as it continues to fully develop and prepare regulatory filings and obtain regulatory approvals for its existing and new product candidates. The Company's estimates its current cash of $14.7 million, based on the Company's current operating plan, is sufficient to enable the Company to fund its activities through at least the next 12 months from the date of this report on Form 10-K.

The Company is subject to industry risks and the expenses associated with any company performing research and development. There is no guarantee that our research and development projects will succeed, that developed products will secure necessary regulatory approvals, or that any approved products will be commercially successful. Furthermore, our industry is characterized by rapid technological advancements, and we heavily rely on the expertise of our employees and consultants. If we fail to achieve profitability or sustain it over time, we may be unable to maintain our operations at current levels and could be forced to scale back our activities.

F-

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2. Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The accompanying consolidated financial statements have been prepared on an accrual basis of accounting, in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the ASC and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”).

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries:

Name Country of Incorporation

Allarity Acquisition Subsidiary Inc. United States

Allarity Therapeutics Denmark ApS (formerly OV-SPV2 ApS) Denmark

MPI Inc.* United States

* In the process of being dissolved because inactive.

All intercompany transactions and balances, including unrealized profits from intercompany sales, have been eliminated upon consolidation.

Use of Estimates

The preparation of Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting years. Significant estimates and assumptions reflected in these consolidated financial statements include, but are not limited to, the fair value of the Series A preferred shares, warrants, 3i Exchange Warrants, convertible debt, and the accrual for research and development expenses, share based compensation expense, and income tax uncertainties and valuation allowances. The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances. Estimates are periodically reviewed considering reasonable changes in circumstances, facts, and experience. Changes in estimates are recorded in the period in which they become known and if material, their effects are disclosed in the notes to the consolidated financial statements. Actual results could differ from those estimates or assumptions.

Risks and Uncertainties

The Company is subject to risks common to early-stage companies in the biopharmaceutical industry including, but not limited to, uncertainties related to clinical effectiveness of products, commercialization of products, regulatory approvals, dependence on key products, key personnel and third-party service providers such as contract research organizations (“CROs”), protection of intellectual property rights, the need and ability to obtain additional financing and the ability to make milestone, royalty or other payments due under any license, collaboration or supply agreements.

Foreign currency and currency translation

The functional currency is the currency of the primary economic environment in which an entity’s operations are conducted. The Company and its subsidiaries operate mainly in Denmark and the United States. The functional currencies of the Company’s subsidiaries are their local currency.

The Company’s reporting currency is the U.S. dollar. The Company translates the assets and liabilities of its Denmark subsidiaries into the U.S. dollar at the exchange rate in effect at the balance sheet date and the results of operations are translated using the average exchange rate for the year. Unrealized translation gains and losses are recorded as a cumulative translation adjustment, which is included in the consolidated statements of changes in redeemable convertible preferred stock and stockholders’ equity as a component of accumulated other comprehensive loss.

Monetary assets and liabilities denominated in currencies other than the functional currency are remeasured into the functional currency at rates of exchange prevailing at the balance sheet dates. Non-monetary assets and liabilities denominated in foreign currencies are re-measured into the functional currency at the exchange rates prevailing at the date of the transaction. Exchange gains or losses arising from foreign currency transactions are included in the determination of net loss for the respective periods.

Adjustments that arise from exchange rate translations are included in other comprehensive loss in the consolidated statements of operations and comprehensive loss as incurred. The Company recorded a foreign exchange translation loss of $0.9 million and gain of $0.1 million, included in accumulated other comprehensive loss for the years ended December 31, 2025 and 2024, respectively.

F-

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Concentrations of credit risk and of significant suppliers

ALLR US Equity

ALLR · 10-K · period ended 2025-12-31

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

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Item 8. Financial Statements and Supplementary Data.

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

Item 9A. Controls And Procedures.

Item 9B. Other Information.

Item 9C. Disclosure Regarding Foreign Jurisdiction that Prevents Inspections.

Item 10. Directors, Executive Officers and Corporate Governance.

Item 11. Executive Compensation.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Item 13. Certain Relationships and Related Transactions and Director Independence.

Item 14. Principal Accountant Fees and Services.

Item 15. Exhibits and Financial Statement Schedules.

Item 16. Form 10-K Summary.

ALLR US Equity☆

ALLR · 10-K · period ended 2025-12-31

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

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Item 8. Financial Statements and Supplementary Data.

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

Item 9A. Controls And Procedures.

Item 9B. Other Information.

Item 9C. Disclosure Regarding Foreign Jurisdiction that Prevents Inspections.

Item 10. Directors, Executive Officers and Corporate Governance.

Item 11. Executive Compensation.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Item 13. Certain Relationships and Related Transactions and Director Independence.

Item 14. Principal Accountant Fees and Services.

Item 15. Exhibits and Financial Statement Schedules.

Item 16. Form 10-K Summary.

ALLR US Equity