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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to ___________

Commission File Number: 001-41160

ALLARITY THERAPEUTICS, INC.

(Exact name of registrant as specified in its charter)

Delaware	87-2147982
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

123 E Tarpon Ave, Tarpon Springs, FL 34689

(Address of principal executive offices and zip code)

(401) 426-4664

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, $0.0001 par value per share		ALLR		The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by checkmark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 13, 2025, there were 15,811,886 shares of the issuer’s common stock, par value $0.0001, outstanding.

Table of Contents

Table of Contents

		Page
	Cautionary Note Regarding Forward-Looking Statements	ii

PART I—FINANCIAL INFORMATION		1

Item 1.	Financial Statements	1
	Condensed Consolidated Balance Sheets as at September 30, 2025 (Unaudited) and December 31, 2024	1
	Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and nine months ended September 30, 2025 and 2024 (Unaudited)	2
	Condensed Consolidated Statements of Changes in Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit) for the three and nine months ended September 30, 2025 and 2024 (Unaudited)	3
	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2025 and 2024 (Unaudited)	4
	Notes to Condensed Consolidated Financial Statements (Unaudited)	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	12
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	17
Item 4.	Controls and Procedures	17

PART II—OTHER INFORMATION		19

Item 1.	Legal Proceedings	19
Item 1A.	Risk Factors	19
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	20
Item 3.	Defaults Upon Senior Securities	20
Item 4.	Mine Safety Disclosures	20
Item 5.	Other Information	20
Item 6.	Exhibits	21

	Signatures	22

Table of Contents

Unless the context indicates otherwise, references in this Quarterly Report on Form 10-Q (the “Quarterly Report”) to the “Company,” “Allarity,” “we,” “us,” “our” and similar terms refer to Allarity Therapeutics, Inc., Allarity Therapeutics A/S (as predecessor) and its respective consolidated subsidiaries. On April 9, 2024, we effected a 1-for-20 reverse stock split of the shares of our common stock. On September 11, 2024, we effected a 1-for-30 reverse stock split of the shares of our common stock. All historical share and per share amounts reflected throughout this Quarterly Report have been adjusted to reflect the Reverse Stock Splits (as defined in this Quarterly Report).

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report contains statements we believe are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Those forward-looking statements are intended to enjoy the protection of the safe harbor for forward-looking statements provided by that act as well as protections afforded by other federal securities laws. Generally, words such as “achieve,” “aim,” “ambitions,” “anticipate,” “believe,” “committed,” “continue,” “could,” “designed,” “estimate,” “expect,” “forecast,” “future,” “goals,” “grow,” “guidance,” “intend,” “likely,” “may,” “milestone,” “objective,” “on track,” “opportunity,” “outlook,” “pending,” “plan,” “position,” “possible,” “potential,” “predict,” “progress,” “roadmap,” “seek,” “should,” “strive,” “targets,” “to be,” “upcoming,” “will,” “would,” and variations of such words and similar expressions identify forward-looking statements, which are not historical in nature. Forward-looking statements may appear throughout this Quarterly Report and other documents we file with the Securities and Exchange Commission (the “SEC”). Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those anticipated by these forward-looking statements. These risks and uncertainties include, but are not limited to, the factors described in the section captioned “Risk Factors” in our Annual Report on Form 10-K (the “Form 10-K”), filed with the SEC on March 31, 2025.

We urge investors to consider all of the risks, uncertainties, and other factors disclosed in these filings carefully in evaluating the forward-looking statements contained in this Quarterly Report. We cannot assure you that the results or developments anticipated by us and reflected or implied by any forward-looking statement contained in this Quarterly Report will be realized or, even if substantially realized, that those results or developments will result in the forecasted or expected consequences for us or affect us, our operations or financial performance as we forecasted or expected. As a result of the matters discussed above and other matters, including changes in facts, assumptions not being realized, or other factors, the actual results relating to the subject matter of any forward-looking statement in this Quarterly Report may differ materially from the anticipated results expressed or implied in that forward-looking statement. The forward-looking statements included in this Quarterly Report are made only as of the date of this Quarterly Report, and we undertake no obligation to update any such statements to reflect subsequent events or circumstances.

Table of Contents

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

ALLARITY THERAPEUTICS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

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

	*September 30,*			*December 31,*
	*2025*			*2024*
		(Unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	16,895		$	19,533
Receivables from ATM sales		—			1,416
Other current assets		113			115
Prepaid expenses		1,796			507
Tax credit receivable		1,662			770
Total current assets		20,466			22,341
Non-current assets:
Property, plant and equipment, net		330			309
Total assets	$	20,796		$	22,650

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	4,602		$	4,182
Accrued expenses and other current liabilities		2,712			5,232
Warrant derivative liability		—			1
Income taxes payable		81			74
Convertible promissory notes and accrued interest, net of debt discount		1,390			1,350
Total current liabilities		8,785			10,839
Total liabilities		8,785			10,839

Commitments and contingencies (Note 9)

Stockholders’ equity
Common stock, $0.0001 par value (250,000,000 shares authorized); 18,712,224 and 7,302,797 shares issued and 16,111,461 and 7,302,797 outstanding at September 30, 2025, and December 31, 2024, respectively		3			1
Additional paid-in capital		143,841			131,130
Accumulated other comprehensive loss		(2,303	)		(354	)
Accumulated deficit		(126,824	)		(118,966	)
Treasury stock, at cost; 2,600,763 shares		(2,706	)		—
Total stockholders’ equity		12,011			11,811
Total liabilities and stockholders’ equity	$	20,796		$	22,650

* All common share data has been retroactively adjusted to effect reverse stock splits in 2024 (See Note 1).

See accompanying notes to condensed consolidated financial statements.

Table of Contents

ALLARITY THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(UNAUDITED)

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

	*Three Months Ended*						*Nine Months Ended*
	*September 30,*						*September 30,*
	*2025*			*2024*			*2025*			*2024*
Operating expenses:
Research and development	$	1,203		$	1,021		$	4,927		$	4,249
Impairment of Intangible Assets		—			9,703			—			9,703
General and administrative		1,315			1,589			4,760			5,972
Total operating expenses		2,518			12,313			9,687			19,924
Loss from operations		(2,518	)		(12,313	)		(9,687	)		(19,924	)
Other income (expense):
Interest income		187			261			646			314
Interest expense		(57	)		(50	)		(126	)		(578	)
Foreign exchange gains (losses)		(418	)		121			1,308			69
Change in fair value of derivative and warrant liabilities		—			14			1			2,676
Total other income, net		(288	)		346			1,829			2,481
Loss before income tax benefit		(2,806	)		(11,967	)		(7,858	)		(17,443	)
Income tax benefit		—			377			—			381
Net loss		(2,806	)		(11,590	)		(7,858	)		(17,062	)
Gain on extinguishment of Series A Convertible Preferred Stock		—			—			—			222
Deemed dividend on Series A Preferred Stock		—			—			—			(299	)
Deemed dividend on Series A Convertible Preferred Stock		—			(562	)		—			(562	)
Net loss attributable to common stockholders	$	(2,806	)	$	(12,152	)	$	(7,858	)	$	(17,701	)

Net loss per common share, basic and diluted	$	(0.19	)	$	(7.71	)	$	(0.57	)	$	(25.33	)
Weighted average common shares outstanding, basic and diluted		14,739,800			1,575,762			13,849,976			698,877

Other comprehensive loss
Net loss	$	(2,806	)	$	(11,590	)	$	(7,858	)	$	(17,062	)
Change in cumulative translation adjustment		158			(163	)		(1,949	)		(282	)
Total comprehensive loss	$	(2,648	)	$	(11,753	)	$	(9,807	)	$	(17,344	)

* All common share data has been retroactively adjusted to effect reverse stock splits in 2024 (See Note 1).

See accompanying notes to condensed consolidated financial statements.

Table of Contents

ALLARITY THERAPEUTICS, INC.

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

For the three and nine months ended September 30, 2025 and 2024

(UNAUDITED)

(in thousands, except for share data*)

	Series A						Series A Convertible															Accumulated						Total
	Convertible						Redeemable															Other						Stockholders’
	Preferred Stock						Preferred Stock						Common Stock						Paid in			Comprehensive			Accumulated			Equity
	Number			Value			Number			Value			Number			Value			Capital			Loss			Deficit			(Deficit)
Balance, December 31, 2023		1,417		$	1,742			—		$	—			9,812		$	—		$	90,369		$	(411	)	$	(94,451	)	$	(2,751	)
Conversion of Preferred Stock into common stock, net		(202	)		(269	)		—			—			904			—			269			—			—			—
Extinguishment of preferred stock		—			(191	)		—			—			—			—			191			—			—			—
Deemed dividend on preferred stock		—			228			—			—			—			—			(228	)		—			—			—
Shares issued for compensation		—			—			—			—			484			—			90			—			—			90
Sale of common shares, net		—			—			—			—			227			—			40			—			—			40
Reverse split (1-30) rounding adjustment		—			—			—			—			(1	)		—			—			—			—			—
Stock based compensation (recoveries)		—			—			—			—			—			—			(32	)		—			—			(32	)
Currency translation adjustment		—			—			—			—			—			—			—			25			—			25
Loss for the period		—			—			—			—			—			—			—			—			(3,843	)		(3,843	)
Balance, March 31, 2024		1,215			1,510			—			—			11,426			—			90,699			(386	)		(98,294	)		(6,471	)
Conversion of Preferred Stock into common stock, net		(1,215	)		(1,550	)		—			—			15,072			—			1,550			—			—			—
Extinguishment of preferred stock		—			(31	)		—			—			—			—			31			—			—			—
Deemed dividend on preferred stock		—			71			—			—			—			—			(71	)		—			—			—
Cashless exercise of 3i Exchange Warrants		—			—			—			—			78,655			—			405			—			—			405
Sale of common shares, net		—			—			—			—			1,062,822			3			27,649			—			—			27,652
Reverse split (1-30) rounding adjustment		—			—			—			—			(1	)		—			—			—			—			—
Stock based compensation (recoveries)		—			—			—			—			—			—			22			—			—			22
Currency translation adjustment		—			—			—			—			—			—			—			(144	)		—			(144	)
Loss for the period		—			—			—			—			—			—			—			—			(1,629	)		(1,629	)
Balance, June 30, 2024		—			—			—			—			1,167,974			3			120,285			(530	)		(99,923	)		19,835
Issuance of convertible redeemable preferred stock		—			—			35,000			2,938			—			—			—			—			—			2,938
Redemption of convertible redeemable preferred stock		—			—			(35,000	)		(3,500	)		—			—			—			—			—			(3,500	)
Deemed dividend on redeemable preferred stock		—			—			—			562			—			—			(562	)		—			—			—
Issuance of common stock, net of offering costs under open market sales agreement (ATM)		—			—			—			—			1,493,878			—			5,427			—			—			5,427
Reverse split (1-30) rounding adjustment		—			—			—			—			97,218			(3	)		3			—			—			—
Stock based compensation		—			—			—			—			—			—			17			—			—			17
Currency translation adjustment		—			—			—			—			—			—			—			(163	)		—			(163	)
Loss for the period		—			—			—			—			—			—			—			—			(11,590	)		(11,590	)
Balance, September 30, 2024		—		$	—			—		$	—			2,759,070		$	—			125,170		$	(693	)		(111,513	)	$	12,964

												Accumulated
					*Additional*							*Other*						*Total*
	*Common Stock*				*Paid in*		*Treasury Stock*					*Comprehensive*			*Accumulated*			*Stockholders’*
	*Number*		*Value*		*Capital*		*Number*		*Value*			*Loss*			*Deficit*			*Equity*
Balance, December 31, 2024		7,302,797	$	1	$	131,130		—	$	—		$	(354	)	$	(118,966	)	$	11,811
Stock-based compensation		—		—		139		—		—			—			—			139
Issuance of common stock, net of offering costs under open market sales agreement (ATM)		9,719,173		1		9,726		—		—			—			—			9,727
Currency translation adjustment		—		—		—		—		—			(276	)		—			(276	)
Loss for the period		—		—		—				—			—			(2,732	)		(2,732	)
Balance, March 31, 2025		17,021,970		2		140,995		—		—			(630	)		(121,698	)		18,669
Stock-based compensation		—		—		164		—		—			—			—			164
Issuance of common stock for service		53,368		—		50		—		—			—			—			50
Repurchase of common stock		—		—		—		2,455,702		(2,565	)		—			—			(2,565	)
Currency translation adjustment		—		—		—		—		—			(1,831	)		—			(1,831	)
Loss for the period		—		—		—		—		—			—			(2,320	)		(2,320	)
Balance, June 30, 2025		17,075,338		2		141,209		2,455,702		(2,565	)		(2,461	)		(124,018	)		12,167
Stock-based compensation		24,881		—		132		—		—			—			—			132
Issuance of common stock for service		49,505		—		50		—		—			—			—			50
Repurchase of common stock		—		—		—		145,061		(141	)		—			—			(141	)
Issuance of common stock, net of costs		1,562,500		1		2,450		—		—			—			—			2,451
Currency translation adjustment		—		—		—		—		—			158			—			158
Loss for the period		—		—		—		—		—			—			(2,806	)		(2,806	)
Balance, September 30, 2025		18,712,224	$	3		143,841	$	2,600,763	$	(2,706	)	$	(2,303	)	$	(126,824	)	$	12,011

* All common share data has been retroactively adjusted to effect reverse stock splits in 2024 (See Note 1).

See accompanying notes to condensed consolidated financial statements.

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ALLARITY THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(in thousands)

	*Nine Months Ended*
	*September 30,*
	*2025*			*2024*
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(7,858	)	$	(17,062	)
Reconciliation of net loss to net cash used in operating activities:
Depreciation and amortization		(21	)		8
Common stock issued for services		100			—
Stock-based compensation		435			7
Impairment of intangible assets		—			9,703
Unrealized foreign exchange gains		(13	)		(10	)
Non-cash interest expense		166			173
Change in fair value of warrant and derivative liabilities		(1	)		(2,676	)
Changes in operating assets and liabilities:
Deferred income taxes		—			(446	)
Other current assets		2			109
Tax credit receivable		(892	)		(837	)
Prepaid expenses		(1,289	)		630
Accounts payable		433			(3,623	)
Accrued expenses and other liabilities		(2,646	)		(123	)
Income taxes payable		7			1
Net cash used in operating activities		(11,577	)		(14,146	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from ATM sales of common stock, net of issuance costs		11,143			33,119
Net proceeds from sale of common stock and pre-funded warrant issuance		2,451			—
Proceeds from issuance of Convertible Redeemable Series A Preferred Stock		—			2,938
Redemption of Convertible Redeemable Series A Preferred Stock		—			(3,500	)
Proceeds from convertible promissory notes and accrued interest, net of discount		—			1,340
Repayment of debt and promissory notes		—			(1,340	)
Common stock repurchase		(2,706	)		—
Net cash provided by financing activities		10,888			32,557
Net increase in cash and cash equivalents		(689	)		18,411
Effect of exchange rate changes on cash and cash equivalents		(1,949	)		(114	)
Cash and cash equivalents, beginning of period		19,533			166
Cash and cash equivalents, end of period	$	16,895		$	18,463

Supplemental information
Cash paid for interest		—			408

Supplemental disclosure of non-cash financing and investing activities:
Conversion of Series A Convertible Preferred stock to equity, net		—			1,819
Deemed dividend on Series A Convertible Preferred Stock		—			(299	)
Gain on extinguishment of Series A Convertible Preferred Stock		—			222
Stock issued in conjunction with consulting agreement		—			90
Issuance of 2,359,650 common shares on conversion of 3,632,366 3i Exchange Warrants		—			405
Deemed dividend on Convertible Redeemable Series A Preferred Stock		—			562

See accompanying notes to condensed consolidated financial statements.

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ALLARITY THERAPEUTICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1. Organization, Principal Activities and Basis of Presentation

Background

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 accompanying unaudited condensed interim consolidated financial statements (the “Financial Statements”) have been prepared on the basis of continuity of operations, realization of assets and the satisfaction of liabilities and commitments in the ordinary course of business.

Pursuant to the requirements of Accounting Standard Codification (“ASC”) 205-40, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, the Company has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date the accompanying Financial Statements are issued. The Company had an accumulated deficit of $126.8 million as of September 30, 2025. Further, the Company incurred a net loss of $7.7 million and experienced negative cash flows from operations of $11.6 million for the nine months ended September 30, 2025. Based on the Company’s current operating plan, it estimates that its existing cash, cash equivalents and restricted cash of $16.9 million as of September 30, 2025 will be sufficient to enable the Company to fund its operating expenses and capital requirements through at least the next 12 months from the issuance of these Financial Statements.

While the Company believes its capital resources are sufficient to fund the Company’s on-going operations for the next 12 months from the issuance date of the Financial Statements, the Company’s liquidity could be materially affected over this period by: (1) its ability to raise additional capital through equity offerings, debt financings, or other non-dilutive third-party funding; (2) costs associated with new or existing strategic alliances, or licensing and collaboration arrangements; (3) negative regulatory events or unanticipated costs related to the DRP or stenoparib; (4) any other unanticipated material negative events or costs. One or more of these events or costs could materially affect the Company’s liquidity. If the Company is unable to meet its obligations when they become due, the Company may have to delay expenditures, reduce the scope of its research and development programs, or make significant changes to its operating plan.

Reverse Stock Splits

On April 9, 2024, and September 11, 2024, the Company effected a 1-for-20 reverse stock split and 1-for-30 reverse stock split, respectively, of the shares of common stock of the Company (collectively, the “Reverse Stock Splits”). All share and per share information has been retroactively adjusted to give effect to the Reverse Stock Splits for all periods presented, unless otherwise indicated. Proportionate adjustments were made to the per share exercise price and/or the number of shares issuable upon the exercise or vesting of all stock options, restricted stock, preferred stock and warrants outstanding on September 12, 2024, which resulted in a proportional decrease in the number of shares of the Company’s common stock reserved for issuance upon exercise or vesting of such stock options, restricted stock and warrants, and, in the case of stock options and warrants, a proportional increase in the exercise price of all such stock options and warrants. No fractional shares were issued in connection with the Reverse Stock Splits. If, as a result of the Reverse Stock Splits, a stockholder would otherwise have been entitled to a fractional share, each fractional share was rounded up to the next whole number.

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2. Summary of Significant Accounting Policies

There have been no new or material changes to the significant accounting policies discussed in Form 10-K for the year ended December 31, 2024, that are of significance, or potential significance, to the Company.

Basis of Presentation and Principles of Consolidation

The accompanying unaudited condensed 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 unaudited condensed consolidated financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of our management, reflect all adjustments, which include only normal recurring adjustments, necessary to fairly state our financial position as of September 30, 2025, our results of operations and stockholders’ equity for the three, six, and nine months ended September 30, 2025 and 2024, and cash flows for the nine months ended September 30, 2025 and 2024. The financial data and the other financial information disclosed in these notes to the condensed consolidated financial statements related to the three and nine month periods are also unaudited. The results of operations for the three and nine months ended September 30, 2025 are not necessarily indicative of the results to be expected for the year ending December 31, 2025 or for any other future annual or interim period. The condensed consolidated balance sheet data as of December 31, 2024 was derived from our audited financial statements, but does not include all disclosures required by GAAP. The condensed consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2024 that was filed with the Securities and Exchange Commission (“SEC”), on March 31, 2025.

The unaudited condensed 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 Europe ApS (formerly Oncology Venture Product Development ApS)		Denmark
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 on the balance sheet date. Revenues and expenses are translated at the average exchange rate in effect during each monthly period. Unrealized translation gains and losses are recorded as a cumulative translation adjustment, which is included in the condensed consolidated statements of changes in stockholders’ equity (deficit) as a component of accumulated other comprehensive loss.

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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. During the three months ended September 30, 2025 and 2024, the Company recorded foreign exchange gains (losses) of ($0.2) million and $0.2 million, respectively. During the nine months ended September 30, 2025 and 2024, the Company recorded foreign exchange gains (losses) of ($2.1) million and $0.3 million, respectively.

Concentrations of credit risk and of significant suppliers

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents. The Company maintains its cash and cash equivalents in financial institutions in amounts that could exceed government-insured limits. The Company does not believe it is subject to additional credit risks beyond those normally associated with commercial banking relationships. The Company has not experienced losses on its cash and cash equivalents accounts and management believes, based upon the quality of the financial institutions, that the credit risk regarding these deposits is not significant. The Company is dependent on third-party manufacturers to supply products for research and development activities in its programs. In particular, the Company relies and expects to continue to rely on a small number of manufacturers to supply its requirements for supplies and raw materials related to these programs. These programs could be adversely affected by a significant interruption in these manufacturing services or the availability of raw materials.

Cash and cash equivalents

The Company maintains deposits primarily in financial institutions, which may at times exceed amounts covered by insurance provided by the U.S. Federal Deposit Insurance Corporation (“FDIC”). The Company has not experienced any losses related to amounts in excess of FDIC limits. The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. The Company had no cash equivalents on September 30, 2025 and December 31, 2024.

Property, plant and equipment

Property, plant, and equipment are stated at cost, less accumulated depreciation. Depreciation is recognized using the straight-line method over the estimated useful lives of the respective assets as follows:

		*Estimated*
		*Useful*
		*Economic*
		*Life (in years)*
Laboratory equipment		5
Furniture and office equipment		3

Accumulated other comprehensive loss

Accumulated other comprehensive loss includes net loss as well as other changes in stockholders’ equity (deficit) that result from transactions and economic events other than those with shareholders. The Company records unrealized gains and losses related to foreign currency translation and instrument specific credit risk as components of other accumulated comprehensive loss in the condensed consolidated statements of operations and comprehensive loss. During the three and nine months ended September 30, 2025 and 2024, the Company’s other comprehensive (loss) and gain was comprised of currency translation adjustments.

Recently Issued Accounting Pronouncements

There have been no new pronouncements to date that are currently expected to be applicable, or currently expected to have a material impact to the Company’s condensed consolidated financial position and results of operations.

Accounting Standards Not Yet Adopted

In November 2024, the FASB issued ASU No. 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires new financial statement disclosures in tabular format, in the notes to financial statements, of specified information about certain costs and expenses. The amendments in this update do not change or remove current expense disclosure requirements. The amendments in this update are effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of the new standard on its financial statement disclosures.

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3. Accrued liabilities

The Company’s accrued expenses and other current liabilities are comprised of the following:

	*September 30,*		*December 31,*
($ in thousands)		*2025*		*2024*
Development cost liability	$	22	$	152
Accrued interest on milestone liabilities		416		281
Payroll accruals		44		458
Accrued audit and legal		1,626		1,567
Accrued SEC settlement		—		2,500
Other		604		274
Total accrued expenses and other current liabilities	$	2,712	$	5,232

4. Convertible promissory note due to Novartis

On January 26, 2024, the Company 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, the Company ceased all development and commercialization activities with respect to all licensed products, all rights and licenses granted by Novartis to the Company 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. As of September 30, 2025, the liability is recorded as a current liability on the Company’s condensed unaudited consolidated balance sheets as follows: $3.6 million in accounts payable, $1.4 million convertible promissory notes and accrued interest, net of debt discount, and $0.4 million in accrued liabilities.

5. Warrant liability

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC 480, Distinguishing Liabilities from Equity and ASC 815-40, Derivatives and Hedging - Contracts in Entity’s Own Equity. For warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter.

Warrant liabilities are categorized within Level 3 of the fair value hierarchy and are measured at fair value on a recurring basis.

The warrants issued in April 2023, July 2023, and September 2023 (the “2023 Warrants”) are measured at fair value at each reporting period and the reconciliation of changes in fair value during the nine months ended September 30, 2025 is presented in the following table:

	*Common Share*
	*Purchase*
($ in thousands)	*Warrants*
Balance at January 1, 2025	$	1
Change in fair value of warrant derivative liability		(1	)
Balance at September 30, 2025	$	—

On September 30, 2025, the Company used the Black-Scholes Merton model to estimate the fair value of the 2023 Warrants derivative liability at approximately $0, using the following inputs:

							*September 2023*
	*April 2023*			*July 2023*			*Inducement*
	*Warrants*			*Warrants*			*Warrants*
Initial exercise price	$	600.00		$	600.00		$	600.00
Stock price on valuation date	$	1.58		$	1.58		$	1.58
Risk-free rate		3.68	%		3.68	%		3.68	%
Term (in years)		2.5			2.8			3.4
Rounded annual volatility		124	%		124	%		124	%

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6. Stockholders’ Equity

Share Repurchase Plan

On March 3, 2025, the board of directors approved a share repurchase program, with authorization to purchase up to $5 million of the Company’s outstanding shares of common stock. For the three months ended September 30, 2025, the Company repurchased 145,061 shares at a cost of $140,038. For the nine months ended September 30, 2025, the Company purchased 2,600,763 shares for an aggregate cost of $2,705,550, inclusive of $52,015 in transaction fees. For the nine months ended September 30, 2025 and 2024, the total proceeds used to repurchase shares were $2,705,550 and $0, respectively. As of September 30, 2025, there is $2,294,450 remaining for share repurchases under the share repurchase program.

Share Issuance for Services

On July 7, 2025, the Company issued 49,505 restricted shares to a vendor in exchange for services rendered. For the nine months ended September 30, 2025, the Company issued 102,873 restricted shares for services rendered.

Sale of Common Stock

On September 22, 2025, the Company entered into a Securities Purchase Agreement with a certain accredited investor, pursuant to which the Company agreed to sell the shares and/or prefunded warrants to the investor, in a private placement transaction. The Company agreed to issue and sell 1,562,500 shares of the Company’s common stock for $1.60 per Share, and/or prefunded warrants to purchase one share of common stock per prefunded warrant, at an offering price of $1.60 per prefunded warrant, for gross proceeds to the Company of approximately $2.5 million, before deducting $0.05 million in legal fees and expenses.

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 the 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 is 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 the 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 the Ascendiant may each terminate the Sales Agreement at any time upon specified prior written notice. The Sales Agreement was fully utilized and terminated on March 31, 2025.

For the three months ended September 30, 2025 and 2024, the amount of proceeds generated from the sale of common stock under the Sales Agreement was $0.0 and $5.4 million from the sale of 0 and 1,493,878 shares, respectively.

For the nine months ended September 30, 2025, the Company sold an aggregate of 9,719,173 shares of its common stock pursuant to the Sales Agreement, resulting in net proceeds of $9.7 million. For the nine months ended September 30, 2024, the Company sold an aggregate of $33.1 million pursuant to the Sales Agreement from the sale of 2,556,927 shares.

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Equity Incentive Plan

The Company has in effect the Allarity Therapeutics, Inc. 2021 Incentive Plan (as amended, the “2021 Incentive Plan”). Under the 2021 Incentive Plan, the compensation committee of the Company’s board of directors is authorized to grant stock-based awards to employees, directors, consultants, independent contractors and advisors. The 2021 Incentive Plan authorizes grants to issue up to 717,941 shares of authorized but unissued common stock and expires 10 years from adoption and limits the term of each option to no more than 10 years from the date of grant.

The number of shares available for grant and issuance under the 2021 Incentive Plan will be increased on January 1^st of each of 2022 through 2031, by the lesser of (a) 5% of the number of shares of all classes of the Company’s common stock issued and outstanding on each December 31 immediately prior to the date of increase or (b) such number of shares determined by the Board. In January 2025, Board approved a 5% increase to the authorized shares in the 2021 Incentive Plan from 353,163 to 717,941.

Total shares available for the issuance of stock-based awards under the Company’s 2021 Incentive Plan was 85,051 shares at September 30, 2025.

Stock-based compensation expense has been reported in the Company’s condensed consolidated statements of operations as follows:

	*Three Months Ended*				*Nine Months Ended*
	*September 30,*				*September 30,*
($ in thousands)	*2025*		*2024*		*2025*		*2024*
Research and development	$	76	$	11	$	217	$	8
General and administrative		56		6		218		(1	)
Total stock-based compensation expense	$	132	$	17	$	435	$	7

Restricted Stock Units

The following table summarizes the restricted stock unit activity during the nine months ended September 30, 2025:

				*Weighted*
	*Number of*			*Average Grant*
	*Units*			*Date Fair Value*
Unvested balance at December 31, 2024		174,038		$	2.36
Granted		570,671		$	1.01
Vested		(39,494	)	$	2.11
Forfeited		(85,051	)	$	2.23
Unvested balance at September 30, 2025		620,164		$	1.15

At September 30, 2025, the Company had unrecognized stock-based compensation expense related to restricted stock awards of $0.41 million, which is expected to be recognized over the remaining weighted-average vesting period of 1.3 years. The expense is recognized over the vesting period of the award.

Stock Options

The following table summarizes stock option activity during the nine months ended September 30, 2025:

						*Weighted*
						*Average*
				*Weighted*		*Remaining*		*Aggregate*
	*Number*			*Average*		*Contractual*		*Intrinsic Value*
	*of Options*			*Exercise Price*		*Term (years)*		*(in thousands)*
Outstanding at December 31, 2024		—		$	—		—	$	—
Issued		75,000			1.01		9.3		—
Forfeited		(25,000	)		1.01		9.3		—
Outstanding at September 30, 2025		50,000		$	1.01		9.3	$	—
Exercisable		—		$	—		—	$	—

The aggregate intrinsic value of options is calculated as the difference between the exercise price of the underlying options and the fair value of the Company’s common stock for those options that had exercise prices lower than the fair value of the Company’s common stock. As of September 30, 2025, the total compensation cost related to non-vested options awards not yet recognized is $11,915 with a weighted average remaining vesting period of 0.3 years.

The Company estimated the fair value of stock options granted in the period presented using a Black-Scholes option-pricing model utilizing the following assumptions:


	*As of September 30,*
	*2025*			*2024*
Volatility		135	%		—
Expected term (in years)		5.6			—
Risk-free rate		3.7	%		—
Expected dividend yield		—			—

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7. License and Development Agreements

License Agreement with Novartis for Dovitinib

On January 26, 2024, the Company received a termination notice from Novartis due to a material breach of the License Agreement. Accordingly, under the terms of the License Agreement, the Company ceased all development and commercialization activities with respect to all licensed products, all rights and licenses granted by Novartis to the Company 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. As of September 30, 2025, the liability is recorded as a current liability on the Company’s condensed unaudited consolidated balance sheets as follows: $3.6 million in accounts payable, $1.4 million convertible promissory notes and accrued interest, net of debt discount, and $0.4 million in accrued liabilities.

8. Loss per share of common stock

Basic loss per share is derived by dividing net loss applicable to common stockholders by the weighted average number of shares of common stock outstanding during each period. Diluted loss per share includes the effect, if any, of the potential exercise or conversion of securities, such as warrants and stock options, which would result in the issuance of incremental shares of common stock unless such effect is anti-dilutive. In calculating the basic and diluted net loss per share applicable to common stockholders, the weighted average number of shares remained the same for both calculations because when a net loss exists, dilutive shares are not included in the calculation. Potentially dilutive securities outstanding, as determined by the latest applicable conversion price, that have been excluded from diluted loss per share due to being anti-dilutive include the following:

	*As of September 30,*
	*2025*		*2024*
Warrants		8,557		8,557
Options		50,000		7
Unvested restricted stock units		620,164		174,038
		678,721		182,602

9. Commitments and Contingencies

Indemnification

In accordance with its certificate of incorporation, bylaws, and indemnification agreements, the Company has indemnification obligations to its officers and directors for certain events or occurrences, subject to certain limits, while they are serving at the Company’s request in such capacity.

SEC Investigation

On July 19, 2024, the Company received a “Wells Notice” from the Staff of the SEC relating to the Company’s previously disclosed SEC investigation. The Wells Notice related to the Company’s disclosures regarding meetings with the United States Food and Drug Administration (the “FDA”) regarding the Company’s NDA for Dovitinib or Dovitinib-DRP, which was submitted to the FDA in 2021. On March 13, 2025, the Company issued a press release announcing that the Company had reached a final settlement with the SEC relating to the Company’s previously disclosed SEC investigation, and as part of the settlement, the Company agreed to pay a one-time civil penalty of $2.5 million. The Company made a cash payment of $2.5 million to the SEC on April 2, 2025.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Forward-Looking Statements

You should read the following discussion and analysis of our financial condition and results of operations together with “Cautionary Note Regarding Forward-Looking Statements” and our condensed consolidated financial statements and related notes included under Item 1 of this Quarterly Report as well as our most recent Annual Report on Form 10-K for the year ended December 31, 2024, including Part 1, Item 1A “Risk Factors.”

The forward-looking statements contained in this report reflect our views and assumptions as of the effective date of this report. New risks and uncertainties arise from time to time, and it is impossible for us to predict these events or how they may affect us. Except as required by law, we assume no responsibility for updating any forward-looking statements to reflect events or circumstances that may arise after the date of this report, except as required by applicable law.

We qualify all of our forward-looking statements by these cautionary statements. In addition, with respect to all of our forward-looking statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

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.

Recent Developments

Share Repurchase Plan

On March 3, 2025, the board of directors approved a share repurchase program, with authorization to purchase up to $5 million of the Company’s outstanding shares of common stock. For the three months ended September 30, 2025, the Company repurchased 145,061 shares for an aggregate cost of $140,038 inclusive of all transaction fees. For the nine months ended September 30, 2025 and 2024, the total proceeds used to repurchase 2,600,763 and 0 shares were $2,705,550 inclusive of $52,015 in fees and $0, respectively. As of September 30, 2025, there is $2,294,450 remaining for share repurchases under the share repurchase program.

Changes in Leadership

On July 1, 2025, Jeffrey S. Ervin was appointed to the office of Chief Financial Officer of the Company, replacing Alexander Epshinsky upon his resignation on June 30, 2025.

FDA Fast Track Designation

On August 26, 2025, the Company announced the FDA granted Fast Track designation status for Stenoparib for the treatment of advanced ovarian cancer. The FDA's Fast Track designation is intended to expedite the development and review of drugs that treat serious conditions and fill an unmet medical need. This designation enables more frequent interactions with the FDA throughout the drug development process and potentially provides eligibility for accelerated approval, priority review, and rolling review if relevant criteria are met.

PIPE Investment

On September 22, 2025, the Company entered into a Securities Purchase Agreement with a certain accredited investor, pursuant to which the Company agreed to sell the shares and/or prefunded warrants to the investor, in a private placement transaction. The Company agreed to issue and sell 1,562,500 shares of the Company’s common stock for $1.60 per Share, and/or prefunded warrants to purchase one share of common stock per prefunded warrant, at an offering price of $1.60 per prefunded warrant, for gross proceeds to the Company of approximately $2.5 million, before deducting $0.05 million in legal fees and expenses.

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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 we may identify and develop, the need to successfully commercialize and gain market acceptance of our product candidate, 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. Our product candidate 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.

Recently Issued Accounting Pronouncements

See Note 2, “Summary of Significant Accounting Policies”, to our unaudited condensed consolidated financial statements contained in Part I, Item 1 of this Quarterly Report for a discussion of recent accounting pronouncements.

Financial Operations Overview

Since our inception in September 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.

We have incurred net losses in each year since inception. Our net losses were $7.7 million and $17.1 million for the nine months ended September 30, 2025 and 2024, respectively. As of September 30, 2025, we had an accumulated deficit of $126.8 million and cash and cash equivalents of $16.9 million. Substantially all our net losses have resulted from costs incurred in connection with our research and development programs and from general and administrative costs associated with our operations. 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.

Components of Operating Expenses

Research and Development Expenses

Research and development expenses include:

	●	expenses incurred under agreements with third-party contract organizations, and consultants;

	●	costs related to production of drug substance, including fees paid to contract manufacturers;

	●	laboratory and vendor expenses related to the execution of preclinical trials; and

	●	employee-related expenses, which include salaries, benefits, and stock-based compensation

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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 our research and development expenses on stenoparib to increase substantially for the foreseeable future as we continue to invest to accelerate stenoparib in clinical trials designed to attain regulatory approval. 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 our drug candidate 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, travel, insurance 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 as a result of operating as a public company, including expenses related to compliance with the rules and regulations of the SEC, Nasdaq, additional insurance expenses, investor relations activities and other administrative and professional services.

Results of Operations

Comparison of the Three and Nine Months Ended September 30, 2025 and 2024 (unaudited)

	Three Months Ended									Nine Months Ended
	September 30,						Increase/			September 30,						Increase/
*($ in thousands)*	2025			2024			(Decrease)			2025			2024			(Decrease)
Operating expenses:
Research and development	$	1,203		$	1,021		$	182		$	4,927		$	4,249		$	678
Impairment of Intangible Assets		—			9,703			(9,703	)		—			9,703			(9,703	)
General and administrative		1,315			1,589			(274	)		4,760			5,972			(1,212	)
Total operating expenses		2,518			12,313			(9,795	)		9,687			19,924			(10,237	)
Loss from operations		(2,518	)		(12,313	)		9,795			(9,687	)		(19,924	)		10,237
Other income (expense):
Interest income		187			261			(74	)		646			314			332
Interest expense		(57	)		(50	)		(7	)		(126	)		(578	)		452
Foreign exchange gains (losses)		(418	)		121			(539	)		1,308			69			1,239
Change in fair value of derivative and warrant liabilities		—			14			(14	)		1			2,676			(2,675	)
Total other income, net	$	(288	)	$	346		$	(634	)	$	1,829		$	2,481		$	(652	)
Loss before income tax benefit		(2,806	)		(11,967	)		9,161			(7,858	)		(17,443	)		9,585
Income tax benefit		—			377			(377	)		—			381			(381	)
Net loss	$	(2,806	)	$	(11,590	)	$	8,784		$	(7,858	)	$	(17,062	)	$	9,204

Research and Development Expenses

For the three months ended September 30, 2025, compared to September 30, 2024

Research and development expenses increased $0.2 million primarily due to implementation costs and supplies of the Phase II clinical trial of stenoparib. These expenses are recognized at the time of purchase.

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For the nine months ended September 30, 2025, compared to September 30, 2024

Research and development expenses increased over $0.7 million with the launch and expansion of the Phase II clinical trial to accelerate development of stenoparib in Advanced Ovarian Cancer. The increase in research and development expenses was primarily related to an increase in study costs of $0.3 million. A staffing increase of $0.8 million was partially offset by a $0.5 million reduction of contractor and consulting costs.

General and Administrative Expenses

For the three months ended September 30, 2025, compared to September 30, 2024

General and administrative expenses decreased by $0.3 million for the three months ended September 30, 2025, compared to September 30, 2024. The decrease was primarily due to a decrease of $0.3 million in professional services.

For the nine months ended September 30, 2025, compared to September 30, 2024

General and administrative expenses decreased by $1.2 million for the nine months ended September 30, 2025, compared to September 30, 2024. The decrease was primarily due to a $1.6 million decrease in professional services and an increase in $0.6 million of staffing and other administrative charges including non-cash equity compensation.

Other income (expense)

For the three months ended September 30, 2025, compared to September 30, 2024

For the three months ended September 30, 2025, net other income decreased $0.6 million from the comparable quarter. Interest income decreased $0.1 million and the foreign exchange impact was $0.5 million.

For the nine months ended September 30, 2025, compared to September 30, 2024

Other income was $1.8 million for the nine months ended September 30, 2025, consisting primarily of $1.3 million in foreign exchange gains. Other income for the nine months ended September 30, 2024 was $2.5 million, when $2.7 million was recognized in a change in fair value adjustment of derivative and warrant liabilities. The remaining difference for the comparable period was the $0.3 million increase of interest income and $0.4 million decrease in interest expense.

Liquidity, Capital Resources and Plan of Operations

Since our inception through September 30, 2025, our operations have been financed primarily by the sale of convertible promissory notes and the sale and issuance of our securities. As of September 30, 2025, we had $16.9 million in cash and cash equivalents and an accumulated deficit of $126.8 million.

Our primary use of cash is to fund operating expenses, which consist of research and development as well as regulatory expenses clinical programs for stenoparib, and to a lesser extent, 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.

On March 21, 2024, we commenced an at the market offering of shares of our common stock. During the nine months ended September 30, 2025, we sold 9,719,173 shares of our common stock for net proceeds of $9.7 million. The at-the-market offering was terminated as of March 31, 2025. We believe that our current cash balance is sufficient to fund operations through at least the next 12 months from the date of this Quarterly Report. We may need to seek additional capital through the sale of our securities or other sources to carry out all of our planned research and development and potential commercialization activities. There are no assurances, however, that we will be successful in raising additional working capital, or if we are able to raise additional working capital, we may be unable to do so on commercially favorable terms. Our failure to raise capital or enter into other such arrangements if and when needed would have a negative impact on our business, results of operations and financial condition and our ability to develop stenoparib.

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We expect to incur substantial expenses in the foreseeable future for the development and potential commercialization of our drug candidate and ongoing internal research and development programs. At this time, we cannot reasonably estimate the nature, timing, or aggregate amount of costs for our development, potential commercialization, and internal research and development programs. However, to complete our current and future preclinical studies and clinical trials, and to complete the process of obtaining regulatory approval for stenoparib, as well as to build the sales, marketing, and distribution infrastructure that we believe will be necessary to commercialize stenoparib, if approved, we may require substantial additional funding in the future.

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. We have not included these payments in a table of contractual obligations since 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.

Cash Flows

	Nine Months Ended
	September 30,
($ in thousands)	2025			2024
Total cash and cash equivalents provided by (used in):
Operating activities, net	$	(11,577	)	$	(14,146	)
Financing activities, net		10,888			32,557
Effect of foreign exchange rates on cash		(1,949	)		(114	)
Net increase (decrease) in cash and cash equivalents	$	(2,638	)	$	18,297

Operating Activities

Net cash and cash equivalents used in operating activities was $11.6 million for the nine months ended September 30, 2025, primarily derived from our $7.9 million net loss, a $2.5 million settlement payment to the Securities and Exchange Commission, and a $1.1 million decrease in operating assets and liabilities.

Net cash and cash equivalents used in operating activities was $14.1 million for the nine months ended September 30, 2024, primarily comprised of our $17.1 million net loss, $3.8 million increase in operating assets and liabilities, $2.7 million change in fair value of warrant liability and $0.4 million in deferred income taxes, partially offset by a $9.7 million impairment of intangible assets and $0.2 million in non-cash interest expense.

Financing Activities

Net cash and cash equivalents provided by financing activities was $10.9 million for the nine months ended September 30, 2025. The Company sold an aggregate of 9,719,173 shares of its common stock from the ATM resulting in net proceeds of $9.7 million, received an ATM receivable balance of $1.4 million, and sold shares and prefunded warrants representing 1,562,500 shares of our common stock for proceeds of $2.5 million. However, the Company repurchased 2,600,763 common shares as part of a share repurchase program for $2.7 million.

Net cash and cash equivalents provided by financing activities was $32.6 million for the nine months ended September 30, 2024, due to net proceeds from the sale of 2,556,927 shares of stock.

Operating Capital and Capital Expenditure Requirements

We believe that our existing cash and cash equivalents will be sufficient to fund our anticipated expenditures and commitments for the next twelve months. Our estimate as to how long we expect our cash to be able to continue to fund our operations is based on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect. Further, changing circumstances, some of which may be beyond our control, could cause us to consume capital significantly faster than we currently anticipate, and we may need to seek additional funds sooner than planned.

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Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

Critical Accounting Policies and Use of Estimates

Our management’s discussion and analysis of financial condition and results of operations is based upon our unaudited condensed interim consolidated financial statements for the three and nine months ended September 30, 2025 and 2024, and our audited consolidated financial statements for the years ended December 31, 2024 and 2023, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, and expenses. On an on-going basis, we evaluate our critical accounting policies and estimates. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable in the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions and conditions.

Our significant accounting policies are described in the notes to our consolidated financial statements for the year ended December 31, 2024 included in the Form 10-K, and there have been no significant changes to our significant accounting policies during the nine months ended September 30, 2025. These unaudited condensed interim consolidated financial statements should be read in conjunction with our audited financial statements and accompanying notes.

Recently Issued Accounting Standards Not Yet Effective or Adopted

See Note 2 to our Financial Statements for a discussion of recently issued accounting standards not yet effective of adopted.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act of 1934, as amended (the “Exchange Act”) and are not required to provide the information under this item.

Item 4. Controls and Procedures.

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 Financial 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 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 concluded there to be a material weakness in internal control over financial reporting as of June 30, 2025 due to the material weaknesses described below.

Plan to Remediate Material Weakness

Management has identified material weaknesses in its internal control over financial reporting. A material weakness is a deficiency, or combination of deficiencies, in a company’s internal control over financial reporting such that there is a reasonable possibility that a material misstatement of its annual or interim financial statements will not be prevented or detected on a timely basis. 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 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:

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●

The Company plans to update our internal controls and implement new policy and procedures measures to improve internal controls over financial reporting.

●

The Company is in process of implementing enhanced review processes to ensure timely identification of appropriate accounting related to all contractual agreements.

Such material weaknesses and control deficiencies will not be remediated until the Company’s remediation plan has been fully implemented, and it has concluded that its internal controls are operating effectively for a sufficient period of time.

We can offer no assurance that these initiatives will ultimately have the intended effects.

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.

Changes in Internal Control Over Financial Reporting

Other than the material weakness determination described above and the commencement of the Company’s remediation activities in connection therewith, there have been no changes in our internal control over financial reporting during the most recent fiscal quarter, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

From time to time in the future, we may become involved in litigation or other legal proceedings that arise in the ordinary course of business. We are not currently party to any legal proceedings, and we are not aware of any pending or threatened litigation against us that we believe could have a material adverse effect on our business, operating results or financial condition. In the event we are subject to a legal proceeding, it could have a material adverse impact on us because of litigation costs and diversion of management resources.

Item 1A. Risk Factors.

The risk factors set forth in Part I, Item 1A, Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2024, and in Part II, Item 1A Risk Factor in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025 and our Quarterly Report on Form 10-Q for the quarter ended June 30, 2025, except as set forth below.

We have identified material weaknesses in our internal control over financial reporting, which could affect our ability to ensure timely and reliable financial reports and weaken investor confidence in our financial reporting.

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of June 30, 2025. Based on such evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures contained a material weakness as of June 30, 2025, due to the Company having inadequate internal control over financial reporting. We may also identify material weaknesses or other deficiencies in our disclosure controls and procedures in the future.

A material weakness in internal control over financial reporting is a deficiency, or a combination of deficiencies, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented, or detected and corrected on a timely basis. Material weaknesses in internal control over financial reporting could limit our ability to prevent or detect a misstatement of our accounts or disclosures that could result in a material misstatement of our annual or interim financial statements. In such case, we may be unable to maintain compliance with securities law requirements regarding timely filing of periodic reports in addition to applicable stock exchange listing requirements, investors may lose confidence in our financial reporting and our stock price may decline as a result. We cannot assure you that the measures we have taken to date, or any measures we may take in the future, will be sufficient to avoid potential future material weaknesses.

To address this material weakness, management plans to devote significant effort and resources to the remediation and improvement of its internal controls over financial reporting by updating internal controls and implement new policy and procedures measures to improve internal controls and financial reporting. We will also implement enhanced review processes to ensure timely identification of appropriate accounting related to all contractual arrangements. These material weaknesses will not be considered remediated until our controls are effectively designed and operational for a sufficient period of time, tested, and management concludes that these controls are operating effectively.

Failing to develop or maintain effective internal control over financial reporting may result in a misstatement of our financial statements or cause investors to lose confidence in us, which could have a material adverse effect on our business, financial condition or results of operations. These remediation measures may be time consuming and costly, and we can offer no assurance that these initiatives will ultimately have the intended effects.

Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud.

We must design our disclosure controls and procedures to reasonably assure that information we must disclose in reports we file or submit under the Exchange Act is accumulated and communicated to management, and recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. We believe that any disclosure controls and procedures or internal controls and procedures, no matter how well-conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of 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 an unauthorized override of the controls.

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

(c) Issuer Purchases of Equity Securities

The following table provides information with respect to repurchases of shares of common stock by the Company during the three months ended September 30, 2025

Period	Total Number of Shares Purchased		Average Price Paid per Share		Cumulative Shares Purchased as Part of Publicly Announced Plans		Dollar Value of Shares That May Yet Be Purchased Under the Plan
July, 2025		—	$	—		2,455,702	$	2,434,489
August, 2025		145,061	$	0.97		2,600,763	$	2,294,450
September, 2025		—	$	—		2,600,763	$	2,294,450
Total		145,061

On March 3, 2025, the Company’s board of directors approved the share repurchase program (the “Share Repurchase Program”), with authorization to purchase up to $5 million of the Company’s outstanding shares of common stock. Pursuant to the Share Repurchase Program, repurchases of the Company’s common stock were made through open market transactions or other methods as permitted by securities laws and regulations, including Rule 10b-18 under the Securities Exchange Act of 1934, as amended. The Share Repurchase Program is authorized through February 28, 2026; however, the Company is not obligated to acquire any specific number of shares and may be modified, suspended, or discontinued at any time at the Company’s discretion.

Item 3. Defaults Upon Senior Securities.

Not applicable.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None of our directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement (as defined in Item 408(c) of Regulation S-K) during the third quarter of 2025.

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Item 6. Exhibits.

See the Exhibit Index to this Quarterly Report immediately below and before the signature page hereto, which Exhibit Index is incorporated by reference as if fully set forth herein.

Incorporated by Reference

Exhibit Number

Exhibit Description

Form

File No.

Exhibit

Filing Date

Filed Herewith

3.1

Certificate of Incorporation

S-4

333-258968

3.1

August 20, 2021

3.2

Certificate of Amendment to the Certificate of Incorporation of Allarity Therapeutics, Inc.

S-4/A

333-259484

3.3

September 29, 2021

3.3

Second Certificate of Amendment to Certificate of Incorporation of Allarity Therapeutics, Inc.

8-K

001-41160

3.1

March 20, 2023

3.4

Third Certificate of Amendment to Certificate of Incorporation of Allarity Therapeutics, Inc.

8-K

001-41160

3.1

March 24, 2023

3.5

Fourth Certificate of Amendment to Certificate of Incorporation of Allarity Therapeutics, Inc.

8-K

001-41160

3.1

June 28, 2023

3.6

Fifth Certificate of Amendment to Certificate of Incorporation of Allarity Therapeutics, Inc.

8-K

001-41160

3.1

April 4, 2024

3.7

Specimen Common Stock Certificate of Allarity Therapeutics, Inc.

S-4/A

333-259484

4.1

September 29, 2021

3.8

Amended and Restated Bylaws of Allarity Therapeutics, Inc.

S-4/A

333-259484

3.4

October 18, 2021

3.9

Amendment No. 1 to Amended and Restated Bylaws of Allarity Therapeutics, Inc.

8-K

001-41160

3.1

July 11, 2022

3.10

Sixth Certificate of Amendment to Certificate of Incorporation of Allarity Therapeutics, Inc.

8-K

001-41160

3.1

September 9, 2024

3.11

Seventh Certificate of Amendment to Certificate of Incorporation of Allarity Therapeutics, Inc.

8-K

001-41160

3.2

September 9, 2024

3.12

Certificate of Correction to the Seventh Certificate of Amendment to the Certificate of Incorporation of Allarity Therapeutics, Inc.

8-K/A

001-41160

3.3

September 10, 2024

31.1

Certifications of the Chief Executive Officer under Section 302 of the Sarbanes-Oxley Act

31.2

Certifications of the Chief Financial Officer under Section 302 of the Sarbanes-Oxley Act

32*

Section 1350 Certifications of Chief Executive Officer and Chief Financial Officer

—

101.INS

Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL 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

101PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document

104*

The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2025, formatted in Inline XBRL (included in Exhibit 101)

—

*	Furnished herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	ALLARITY THERAPEUTICS, INC.,

Date: November 14, 2025	By:	/s/ Thomas H. Jensen
		Thomas H. Jensen
		Chief Executive Officer (Principal Executive Officer)

Date: November 14, 2025	By:	/s/ Jeffrey S. Ervin
		Jeffrey S. Ervin
		Chief Financial Officer (Principal Financial Officer)

Allarity Therapeutics, Inc. 10-Q