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Item 9A. Controls and Procedures

2025-03-31 compared with 2024-03-08 · 1145 added, 2208 removed, 202 unchanged (94% of the section changed)

Controls And Procedures.

of Disclosure Controls and Procedures

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 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 Act of 1934.

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, 2023.

Report on Internal Control over Financial Reporting

of the Company 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, 2023, management assessed the effectiveness of the Company’s

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

(the “COSO criteria”).

A material weakness is a control deficiency (within the meaning of Public Company Accounting Oversight

Board (United States) Auditing Standard No.

5) or a combination of control deficiencies that result in more than a remote likelihood

that a material misstatement of the annual or interim financial statements will not be prevented or detected.

Based on such assessment,

management concluded that as of December 31, 2023, our internal control over financial reporting was effective.

have implemented and are continuing to implement various measures to address the material weaknesses identified;

these measures include:

as of June 30, 2022, our

Director of Financial Reporting, a CPA (Illinois) who is experienced with public company reporting and is conversant in GAAP and SEC

accounting issues, was promoted to Interim Chief Financial Officer.

Effective January 1, 2023, our Interim Chief Financial Officer was

promoted to our full time Chief Financial Officer;

retaining independent GAAP

consulting services to assist with the accounting treatment of complex financial instruments;

engaged an independent

based tax consulting firm.

plan to continue to assess our internal controls and procedures and intend to take further action as necessary or appropriate to address

any other matters we identify or are brought to our attention.

We are continuously improving the effectiveness of our internal controls

and disclosure controls.

The actions that we are taking are subject to ongoing senior management review, as well as audit committee oversight.

Annual Report on Form 10-K does not include an attestation report of the Company’s independent registered public accounting firm

regarding the effectiveness of the Company’s internal control over financial reporting, as such report is not required due to the

Company’s status as a smaller reporting company.

in Internal Control over Financial Reporting

Except as discussed above, there have been no changes in the Company’s

internal controls over financial reporting during the quarter ended December 31, 2023, other than as noted above, that have materially

affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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, 2024.

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, 2024, 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, 2024.

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

There have been no changes in our internal controls over financial reporting, as such term is defined in Rules 13a-15(f) and 15(d)-15(f) promulgated under the Exchange Act, during the fourth quarter of 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Other Information.

As of March 7, 2024, we entered

into a Settlement Agreement and General Release (“Settlement Agreement”) with James Cullem, our former CEO and director.

to the terms and conditions outlined in the Settlement Agreement and in exchange for Mr.

Cullem’s commitments therein, including

his general release of claims against us, among other considerations, we agreed to provide Mr.

Cullem with an initial settlement payment

totaling $70,000 on April 1, 2024.

Additionally, we committed to making an installment payment of $179,155, divided equally into 5 monthly

Furthermore, we agreed to issue Mr.

Cullem 290,000 settlement shares on April 1, 2024.

Should the initial settlement payment

and issuance of shares not be made to Mr.

Cullem in full on April 1, 2024, the Settlement Agreement will be rendered null and void, releasing

both parties from any further obligations under the Settlement Agreement unless otherwise mandated by a prior binding contract or agreement.

Both parties will retain any and all rights, claims, and causes of action that would have otherwise been released by the Settlement Agreement.

Additionally, Mr.

agreed to act as our consultant and entered into a consulting agreement (the “Consulting Agreement”) with us, effective as

of March 7, 2024.

For the avoidance of doubt, no additional consideration is being paid to Mr.

Cullem under the Consulting Agreement.

Copies of the Settlement Agreement and Consulting Agreement will be included as exhibits to our Quarterly Report on Form 10-Q for the

quarter ending March 31, 2024.

Disclosure Regarding Foreign Jurisdiction that Prevents Inspections.

Not applicable.

Directors, Executive Officers and Corporate Governance.

information required by this Item 10 of Form 10-K will be included in our 2024 Proxy Statement to be filed with the Securities and Exchange

Commission in connection with the solicitation of proxies for our 2024 Annual Meeting of Stockholders and is incorporated herein by reference.

The 2024 Proxy Statement will be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year to

which this report relates.

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.

The remaining information required by this Item will be included in the Company’s definitive proxy statement to be filed with the SEC within 120 days after December 31, 2024, in connection with the solicitation of proxies for the Company’s 2025 annual meeting of stockholders (the “2025 Proxy Statement”), and is incorporated herein by reference.

Executive Compensation.

information required by this Item 11 of Form 10-K will be included in our 2024 Proxy Statement and is incorporated herein by reference.

The information required by this Item will be included in the 2025 Proxy Statement, and is incorporated herein by reference.

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

information required by this Item 12 of Form 10-K will be included in our 2024 Proxy Statement and is incorporated herein by reference.

The information required by this Item will be included in the 2025 Proxy Statement, and is incorporated herein by reference.

Certain Relationships and Related Transactions and Director Independence.

information required by this Item 13 of Form 10-K will be included in our 2024 Proxy Statement and is incorporated herein by reference.

The information required by this Item will be included in the 2025 Proxy Statement, and is incorporated herein by reference.

Principal Accountant Fees and Services.

information required by this Item 14 of Form 10-K will be included in our 2024 Proxy Statement and is incorporated herein by reference.

The information required by this Item will be included in the 2025 Proxy Statement, and is incorporated herein by reference.

Exhibits and Financial Statement Schedules.

The following documents

are filed as part of this annual report on Form 10-K:

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

(1) Financial Statements

following financial statements of Allarity, and the Reports of Independent Registered Public Accounting Firms, are included at the end

of this report beginning on page F-1:

(2) Financial

Statement Schedules

schedules have been omitted because the required information is included in the financial statements or notes thereto or because they

are not required.

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

following exhibits are filed as part of this Annual Report.

and Restated Plan of Reorganization and Asset Purchase Agreement by and among Allarity Therapeutics, Inc.

a Delaware corporation,

Allarity Acquisition Subsidiary, a Delaware corporation and Allarity Therapeutics A/S, an Aktieselskab organized under the laws of

Denmark, dated as of September 23, 2021

of Incorporation of Allarity Therapeutics, Inc.

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

and Restated Bylaws of Allarity Therapeutics, Inc.

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.

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.

Amended and Restated Plan of Reorganization and Asset Purchase Agreement by and among Allarity Therapeutics, Inc.

a Delaware corporation, Allarity Acquisition Subsidiary, a Delaware corporation and Allarity Therapeutics A/S, an Aktieselskab organized under the laws of Denmark, dated as of September 23, 2021

Certificate of Incorporation of Allarity Therapeutics, Inc.

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

Amended and Restated Bylaws of Allarity Therapeutics, Inc.

Amendment No.

1 to Amended and Restated Bylaws of Allarity Therapeutics, Inc.

of Designations of Allarity Therapeutics, Inc.

Certificate of Designations of Allarity Therapeutics, Inc.

relating to the Series A Convertible Preferred Stock

to Certificate of Designation of the Series A Convertible Preferred Stock

of Designation of the Series B Preferred Stock

of Designation of the Series C Preferred Stock

of Amendment to Certificate of Designation of Series C Preferred Stock

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

and Restated Certificate of Designations of Series A Convertible Preferred Stock of Allarity Therapeutics, Inc.

Certificate of Amendment to Amended and Restated Certificate of Designations of Series A Convertible Preferred Stock

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

Amendment to Certificate of Designation (Series A Preferred Stock)

Certificate of Amendment to Certificate of Designation (Series A Preferred Stock)

Certificate of Amendment (Series A Preferred Stock)

Common Stock Certificate of Allarity Therapeutics, Inc.

to Purchase Common Stock (3i, LP)

of Pre-Funded Warrant (April 2023)

of Common Warrant (April 2023)

and Exchange Warrant

of Pre-Funded Warrant (July 2023)

of Common Warrant (July 2023)

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

of New Warrant

of Pre-Funded Warrant

of Series A Common Warrant

of Series B Common Warrant

Convertible Note

Convertible Note, dated as of February 13, 2024

Therapeutics, Inc.

Amendment to Certificate of Designation of the Series A Convertible Preferred Stock

Certificate of Designation of the Series B Preferred Stock

Certificate of Designation of the Series C Preferred Stock

Certificate of Amendment to Certificate of Designation of Series C Preferred Stock

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

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

Amended and Restated Certificate of Designations of Series A Convertible Preferred Stock of Allarity Therapeutics, Inc.

First Certificate of Amendment to Amended and Restated Certificate of Designations of Series A Convertible Preferred Stock

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

Second Amendment to Certificate of Designation (Series A Preferred Stock)

Third Certificate of Amendment to Certificate of Designation (Series A Preferred Stock)

Fourth Certificate of Amendment (Series A Preferred Stock)

Fifth Certificate of Amendment (Series A Preferred Stock)

Sixth Certificate of Amendment (Series A Preferred Stock)

Form of Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible Redeemable Preferred Stock

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

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

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

Warrant to Purchase Common Stock (3i, LP)

Form of Pre-Funded Warrant (April 2023)

Form of Common Warrant (April 2023)

Modification and Exchange Warrant

Form of Pre-Funded Warrant (July 2023)

Form of Common Warrant (July 2023)

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

Form of New Warrant

Form of Pre-Funded Warrant

Form of Series A Common Warrant

Form of Series B Common Warrant

Senior Convertible Note

Senior Convertible Note, dated as of February 13, 2024

Allarity Therapeutics, Inc.

2021 Equity Incentive Plan

License Agreement between Oncology Venture A/S and Smerud Medical Research International As Dated as of June 26, 2020

and Restated License Agreement between Allarity Therapeutics A/S and LiPlasome Pharma ApS, dated January 2021

License Agreement between Oncology Venture, APS and 2-BBB Medicines BV, dated as of March 27, 2017

Option and License Agreement between Oncology Venture ApS and R-Pharm US Operating LLC, dated March 1, 2019

License Agreement between Oncology Venture, ApS and Eisai, Inc., dated as of July 6, 2017

Agreement between Novartis Pharma Ag and Oncology Venture, ApS, dated April 6, 2018

Purchase Agreement dated May 20, 2021 between Allarity Therapeutics, Inc.

Rights Agreement dated May 20, 2021 between Allarity Therapeutics, Inc.

Purchase Agreement dated July 23, 2021 between Allarity Therapeutics A/S and Lantern Pharma Inc.

Amendment to the Exclusive License Agreement between Eisai and Allarity Therapeutics A/S dated December 20, 2020.

Amendment to Exclusive License Agreement between Oncology Venture, ApS and Eisai, Inc.

Exclusive License Agreement between Oncology Venture A/S and Smerud Medical Research International As Dated as of June 26, 2020

Amended and Restated License Agreement between Allarity Therapeutics A/S and LiPlasome Pharma ApS, dated January 2021

Exclusive License Agreement between Oncology Venture, APS and 2-BBB Medicines BV, dated as of March 27, 2017

Development, Option and License Agreement between Oncology Venture ApS and R-Pharm US Operating LLC, dated March 1, 2019

Exclusive License Agreement between Oncology Venture, ApS and Eisai, Inc., dated as of July 6, 2017

License Agreement between Novartis Pharma Ag and Oncology Venture, ApS, dated April 6, 2018

Securities Purchase Agreement dated May 20, 2021 between Allarity Therapeutics, Inc.

Registration Rights Agreement dated May 20, 2021 between Allarity Therapeutics, Inc.

Asset Purchase Agreement dated July 23, 2021 between Allarity Therapeutics A/S and Lantern Pharma Inc.

First Amendment to the Exclusive License Agreement between Eisai and Allarity Therapeutics A/S dated December 20, 2020.

Second Amendment to Exclusive License Agreement between Oncology Venture, ApS and Eisai, Inc.

dated as of August 3, 2021.

Agreement by and between Allarity Therapeutics, Inc.

Employment Agreement by and between Allarity Therapeutics, Inc.

and Marie Foegh, M.D.

Purchase Agreement between Allarity Therapeutics, Inc.

Asset Purchase Agreement between Allarity Therapeutics, Inc.

and Allarity Therapeutics A/S dated December 17, 2021

and Assumption Agreement between Allarity Therapeutics, Inc.

Assignment and Assumption Agreement between Allarity Therapeutics, Inc.

and Allarity A/S

License Agreement with Oncoheroes Bioscience, Inc.

Exclusive License Agreement with Oncoheroes Bioscience, Inc.

dated January 2, 2022 (Stenoparib)

License Agreement with Oncoheroes Bioscience, Inc.

dated January 2, 2022 (Dovitnib)

and Restated License Agreement among Allarity Therapeutics Europe ApS, LiPlasome Pharma ApS, and Chosa ApS dated March

Agreement between Allarity Therapeutics A/S and LiPlasome Pharma ApS, dated March 28, 2022

Amendment to License Agreement between Novartis Pharma Ag and Allarity Therapeutics Europe ApS

Promissory Note

Agreement and Waiver

Amendment to Forbearance and Waiver

Agreement with Steve Carchedi

Agreement with Jens Knudsen

Amendment to Development Option & License Agreement

Amendment to License Agreement with Novartis Pharma AG

Note Purchase Agreement

of Secured Promissory Note

Agreement with James G.

Agreement with Joan Brown

Agreement with 3i, LP dated December 8, 2022

Agreement with 3i, LP dated January 23, 2023

of Securities Purchase Agreement Series C Preferred Stock

of Registration Rights Agreement

Waiver Agreement

of Securities Purchase Agreement (April Offering)

of Lock- Up Agreement (April Offering)

Amendment to Secured Note Purchase Agreement

Amendment to Security Agreement

of Secured Promissory Note (2023)

Promissory Note

and Exchange Agreement

of Debt Agreement

Amendment to Registration Rights Agreement

Waiver Agreement

to Modification and Exchange Agreement

of Securities Purchase Agreement

Amendment to the Exclusive License Agreement with Eisai, Inc.

of Limited Waiver and Amendment Agreement

LP – Limited Waiver and Amendment Agreement

Exclusive License Agreement with Oncoheroes Bioscience, Inc.

dated January 2, 2022 (Dovitinib)

Amended and Restated License Agreement among Allarity Therapeutics Europe ApS, LiPlasome Pharma ApS, and Chosa ApS dated March 28, 2022

Support Agreement between Allarity Therapeutics A/S and LiPlasome Pharma ApS, dated March 28, 2022

First Amendment to License Agreement between Novartis Pharma Ag and Allarity Therapeutics Europe ApS

Convertible Promissory Note

Forbearance Agreement and Waiver

First Amendment to Forbearance and Waiver

Separation Agreement with Steve Carchedi

Separation Agreement with Jens Knudsen

Second Amendment to Development Option & License Agreement

Second Amendment to License Agreement with Novartis Pharma AG

Secured Note Purchase Agreement

Promissory Note

of Lock-Up Agreement

of Inducement Letter

Waiver between the Company and 3i, LP

of Securities Purchase Agreement

of Lock Up Agreement

Employment Agreement (Steen Knudsen)

Purchase Agreement, dated as of January 18, 2024, by and between the Company and the Purchaser listed on the signature page attached

to Securities Purchase Agreement, dated as of January 25, 2024, by and between the Company and the Purchaser listed on the signature

page attached thereto

Waiver Agreement, dated as of February 13, 2024, by and between the Company and the Purchaser listed on the signature page attached

Form of Secured Promissory Note

Security Agreement

Employment Agreement with James G.

Employment Agreement with Joan Brown

Letter Agreement with 3i, LP dated December 8, 2022

Letter Agreement with 3i, LP dated January 23, 2023

Form of Securities Purchase Agreement Series C Preferred Stock

Form of Registration Rights Agreement

Limited Waiver Agreement

Form of Securities Purchase Agreement (April Offering)

Form of Lock-Up Agreement (April Offering)

First Amendment to Secured Note Purchase Agreement

First Amendment to Security Agreement

Form of Secured Promissory Note (2023)

Secured Promissory Note

Modification and Exchange Agreement

Cancellation of Debt Agreement

First Amendment to Registration Rights Agreement

Limited Waiver Agreement

Amendment to Modification and Exchange Agreement

Form of Securities Purchase Agreement

Fourth Amendment to the Exclusive License Agreement with Eisai, Inc.

Third Amendment to the Exclusive License Agreement with Eisai, Inc.

Form of Limited Waiver and Amendment Agreement

3i, LP – Limited Waiver and Amendment Agreement

June 2023 Secured Note Purchase Agreement

Security Agreement

Secured Promissory Note

Form of Lock-Up Agreement

Form of Inducement Letter

Limited Waiver between the Company and 3i, LP

Form of Securities Purchase Agreement

Form of Lock-Up Agreement

Securities Purchase Agreement, dated as of January 18, 2024, by and between the Company and the Purchaser listed on the signature page attached thereto

Amendment to Securities Purchase Agreement, dated as of January 25, 2024, by and between the Company and the Purchaser listed on the signature page attached thereto

Limited Waiver Agreement, dated as of February 13, 2024, by and between the Company and the Purchaser listed on the signature page attached thereto

Amendment to Senior Convertible Notes

from Marcum, LLP dated August 23, 2022, regarding Change in Independent Registered Public Accounting Firm

Consulting Agreement (James G.

Confidential Settlement Agreement and General Release (James G.

First Comprehensive Amendment to At-The-Market Issuance Sales Agreement, dated May 17, 2024

Management Services Agreement, effective as of June 1, 2024

Form of Securities Purchase Agreement between the Company and the investors thereto, dated August 19, 2024

Form of Registration Rights Agreement by and among the Company and the investors named therein, dated August 19, 2024

Fifth Amendment to Exclusive License Agreement with Eisai, Inc.

Sixth Amendment to Exclusive License Agreement with Eisai, Inc.

Second Amendment to At-The-Market Issuance Sales Agreement, dated September 9, 2024

Employment Agreement, dated as of September 12, 2024, by and between Allarity Therapeutics, Inc., and Alexander Epshinsky.

Employment Agreement, dated as of September 30, 2024, by and between Allarity Therapeutics, Inc., and Jeremy R.

Letter from Marcum, LLP dated August 23, 2022, regarding Change in Independent Registered Public Accounting Firm

Policy on Insider Trading

Subsidiaries of the Registrant

6 unchanged sentences

Inline XBRL Instance Document

Inline XBRL Taxonomy Extension

Schema Document

Inline XBRL Taxonomy Extension

Calculation Linkbase Document

Inline XBRL Taxonomy Extension

Definition Linkbase Document

Inline XBRL Taxonomy Extension

Label Linkbase Document

Inline XBRL Taxonomy Extension

Presentation Linkbase Document

Cover Page Interactive

Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101)

Incorporated by reference

from the Registration Statement on Form S-4 filed with the SEC on August 20, 2021.

Incorporated by reference

from Amendment No.

Inline XBRL Taxonomy Extension Schema Document

Inline XBRL Taxonomy Extension Calculation Linkbase Document

Inline XBRL Taxonomy Extension Definition Linkbase Document

Inline XBRL Taxonomy Extension Label Linkbase Document

Inline XBRL Taxonomy Extension Presentation Linkbase Document

Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101)

Incorporated by reference from the Registration Statement on Form S-4 filed with the SEC on August 20, 2021.

Incorporated by reference from Amendment No.

1 to Registration Statement on Form S-4 refiled with the SEC on October 20, 2021.

Incorporated by reference

from Amendment No.

Incorporated by reference from Amendment No.

2 to Registration Statement on Form S-4 refiled with the SEC on October 20, 2021.

Incorporated by reference

from Amendment No.

Incorporated by reference from Amendment No.

4 to Registration Statement on Form S-4 filed with the SEC on November 2, 2021.

Incorporated by reference

from Amendment No.

Incorporated by reference from Amendment No.

2 to Registration Statement on Form S-1 filed with the SEC on December 6, 2021.

Incorporated by reference

from Form 8-K filed with the SEC on December 10, 2021.

Incorporated by reference

from Form 8-K filed with the SEC on December 20, 2021.

Incorporated by reference

from Form 8-K filed with the SEC on December 22, 2021.

Incorporated by reference

from Form 8-K filed with the SEC on April 18, 2022.

Incorporated by reference

from Form 8-K filed with the SEC on May 6, 2022.

Incorporate by reference

from Form 10-K filed with the SEC on May 17, 2022.

Incorporated by reference

from Form 8-K filed with the SEC on June 10, 2022.

Incorporated by reference

from Form 8-K filed with the SEC on July 11, 2022.

Incorporated by reference

from Form 8-K filed with the SEC on August 12, 2022, as amended on August 24, 2022.

Incorporated by reference from Form 10-Q filed with

the SEC on October 7, 2022.

Incorporated by reference from Form 8-K filed with

the SEC on September 30, 2022.

Incorporated by reference from Form 8-K filed with

the SEC on November 25, 2022.

Incorporated by reference from Form 8-K filed with

the SEC on January 19, 2023.

Incorporated by reference from Form 8-K filed with

the SEC on February 28, 2023.

Incorporated by reference from Form 10-K filed with

the SEC on March 13, 2023.

Incorporated by reference from Form 8-K filed with

the SEC on March 20, 2023.

Incorporated by reference from Form 8-K filed with

the SEC on March 24, 2023.

Incorporated by reference from Form S-1 filed with

the SEC on March 14, 2023.

Incorporated by reference from Form S-1 filed with

the SEC on March 28, 2023.

Incorporated by reference from Form 8-K filed with

the SEC on April 12, 2023.

Incorporated by reference from Form 8-K filed with

the SEC on April 25, 2023.

Incorporated by reference from Form 8-K filed with

the SEC on June 1, 2023.

Incorporated by reference from Form 8-K filed with

the SEC on June 28, 2023.

Incorporated by reference from Form 8-K filed with

the SEC on June 30, 2023.

Incorporated by reference from Form 8-K filed with the SEC on December 10, 2021.

Incorporated by reference from Form 8-K filed with the SEC on December 20, 2021.

Incorporated by reference from Form 8-K filed with the SEC on December 22, 2021.

Incorporated by reference from Form 8-K filed with the SEC on April 18, 2022.

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

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

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

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

Incorporated by reference from Form 8-K filed with the SEC on August 12, 2022, as amended on August 24, 2022.

Incorporated by reference from Form 10-Q filed with the SEC on October 7, 2022.

Incorporated by reference from Form 8-K filed with the SEC on September 30, 2022.

Incorporated by reference from Form 8-K filed with the SEC on November 25, 2022.

Incorporated by reference from Form 8-K filed with the SEC on January 19, 2023.

Incorporated by reference from Form 8-K filed with the SEC on February 28, 2023.

Incorporated by reference from Form 10-K filed with the SEC on March 13, 2023.

Incorporated by reference from Form 8-K filed with the SEC on March 20, 2023.

Incorporated by reference from Form 8-K filed with the SEC on March 24, 2023.

Incorporated by reference from Form S-1 filed with the SEC on March 14, 2023.

Incorporated by reference from Form S-1 filed with the SEC on March 28, 2023.

Incorporated by reference from Form 8-K filed with the SEC on April 12, 2023.

Incorporated by reference from Form 8-K filed with the SEC on April 25, 2023.

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

Incorporated by reference from Form 8-K filed with the SEC on June 28, 2023.

Incorporated by reference from Form 8-K filed with the SEC on June 30, 2023.

Incorporated by reference from Amendment No.

1 to Registration

Statement on Form S-1 filed with the SEC on June 30, 2023.

Incorporated by reference from Form 8-K filed with

the SEC on July 11, 2023.

Incorporated by reference from Form 8-K filed with

the SEC on September 15, 2023.

Incorporated by reference to the Company’s Form

8-K filed on September 27, 2023.

Incorporated by reference to the Company’s Form

S-1 filed on October 30, 2023.

Incorporated by reference Form 8-K filed with the SEC

on January 19, 2024.

Incorporated by reference Form 8-K filed with the SEC

on January 25, 2024.

Incorporated by reference Form 8-K filed with the SEC

on February 14, 2024.

1 to Registration Statement on Form S-1 filed with the SEC on June 30, 2023.

Incorporated by reference from Form 8-K filed with the SEC on July 11, 2023.

Incorporated by reference from Form 8-K filed with the SEC on September 15, 2023.

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

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

Incorporated by reference from Form 8-K filed with the SEC on January 19, 2024.

Incorporated by reference from Form 8-K filed with the SEC on January 25, 2024.

Incorporated by reference from Form 8-K filed with the SEC on February 14, 2024.

Incorporated by reference from Amendment No.

3 to Registration

Statement on Form S-1 filed with the SEC on December 15, 2023.

3 to Registration Statement on Form S-1 filed with the SEC on December 15, 2023.

Incorporated by reference from Amendment No.

1 to Registration

Statement on Form S-1 filed with the SEC on December 5, 2023.

Incorporated by reference Form 8-K filed with the SEC on March 1, 2024.

Certain portions of this exhibit were omitted because

they are not material and would likely cause competitive harm to the registrant if disclosed.

1 to Registration Statement on Form S-1 filed with the SEC on December 5, 2023.

Incorporated by reference from Form 8-K filed with the SEC on March 1, 2024.

Incorporated by reference from Form 8-K filed with the SEC on August 21, 2024.

Incorporated by reference from Form 8-K filed with the SEC on September 9, 2024.

Incorporated by reference from Form 8-K filed with the SEC on September 10, 2024.

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

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

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

Incorporated by reference from Form 8-K filed with the SEC on September 13, 2024.

Incorporated by reference from Form 8-K filed with the SEC on October 4, 2024.

Incorporated by reference from Form 10-K filed with the SEC on March 8, 2024.

Furnished herewith.

Indicates a management contract or compensatory plan

or arrangement.

Certain of the exhibits and schedules to this Exhibit

have been omitted in accordance with Regulation S-K Item 601.

The Registrant agrees to furnish a copy of all omitted exhibits and

schedules to the SEC upon its request.

Certain portions of this exhibit were omitted because they are not material and would likely cause competitive harm to the registrant if disclosed.

Indicates a management contract or compensatory plan or arrangement.

Certain of the exhibits and schedules to this Exhibit have been omitted in accordance with Regulation S-K Item 601.

The Registrant agrees to furnish a copy of all omitted exhibits and schedules to the SEC upon its request.

Form 10-K Summary.

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.

THERAPEUTICS, INC.

Thomas Jensen

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.

/s/ Thomas H.

Chief Executive Officer

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.

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.

/s/ Thomas H.

Chief Executive Officer and Director

March 31, 2025

Thomas Jensen

( Principal Executive

/s/ Joan Brown

( Principal Executive Officer )

/s/ Alexander Epshinsky

Chief Financial Officer

March 31, 2025

( Principal Financial

and Accounting Officer )

Alexander Epshinsky

( Principal Financial Officer )

/s/ Gerald W.

Chairman of the Board

March 31, 2025

Gerald McLaughlin

/s/ Joseph W.

March 31, 2025

Laura Benjamin

TO CONSOLIDATED FINANCIAL STATEMENTS

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Financial Statements

For the years ended December 31, 2024 and 2023

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 Changes in Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit) F-5 – F-6

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

Notes to Consolidated Financial Statements F-9 – F-48

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders

and Board of Directors of Allarity Therapeutics, Inc.:

on the Financial Statements

have audited the accompanying consolidated balance sheets of Allarity Therapeutics, Inc.

(the “Company”) as of December 31,

2023 and 2022, 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, 2023 and 2022, 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.

of a Matter Regarding Going Concern

accompanying financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note

1 to the financial statements, the Company has recurring losses from operations and accumulated deficit that raise substantial doubt

about the Company’s ability to continue as a going concern.

Management’s plans in regard to these matters are also described

The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

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 audit.

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 the U.S.

securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

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.

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.

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

Consolidated Balance Sheets

Consolidated Statements of Operations and Comprehensive Loss

Consolidated Statements of Changes in Redeemable Convertible Preferred Stock and Stockholders ’ Equity (Deficit)

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and 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, 2024 and 2023, 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, 2024 and 2023, 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 audit.

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 the 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.

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.

& Company, P.C .

We have served

as the Company’s auditor since 2022.

THERAPEUTICS, INC.

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.

March 31, 2025

ALLARITY THERAPEUTICS, INC.

CONSOLIDATED BALANCE SHEETS

As of December 31, 2024 and 2023

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

Current assets:

current assets

credit receivable

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

Current assets:

plant and equipment, net

lease right of use assets

AND STOCKHOLDERS’ (DEFICIT) EQUITY

derivative liability

taxes payable

promissory note and accrued interest, net of debt discount

promissory notes

lease liabilities, current

$ 19,533 $ 166

Receivables from ATM sales

Other current assets

Prepaid expenses

Tax credit receivable

Total current assets

Non-current assets:

Property, plant and equipment, net

Intangible assets

$ 22,650 $ 11,862

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

Current liabilities:

promissory note and accrued interest, net of debt discount

and contingencies (Note 17)

Redeemable preferred stock ( 500,000 shares authorized)

Series A Preferred Stock $ 0.0001 par value ( 20,000 shares designated) shares issued and outstanding at December 31, 2023 and 2022, were 1,417 and 13,586 , respectively (liquidation preference of $ 17.54 at December 31, 2023)

Series B Preferred Stock $ 0.0001 par value ( 200,000 shares designated);

shares issued at December 31, 2023 and 2022, were 0 and 190,786 , respectively (liquidation preference of $ 0 at December 31, 2023)

Series C Convertible Preferred stock $ 0.0001 par value ( 50,000 and 0 shares designated at December 31, 2023 and 2022, respectively);

shares issued and outstanding at December 31, 2023 were 0

redeemable preferred stock

Stockholders’

(deficit) equity

Series A Preferred stock $ 0.0001 par value ( 20,000 shares designated) shares issued and outstanding at December 31, 2023 and 2022, were 1,417 and 13,586 , respectively (liquidation preference of $ 17.54 at December 31, 2023)

Accounts payable

$ 4,182 $ 8,416

Accrued expenses and other current liabilities

Warrant derivative liability

Income taxes payable

Convertible promissory note and accrued interest

Total current liabilities

10,839 14,167

Non-current liabilities:

Total liabilities

10,839 14,613

Commitments and contingencies (Note 16)

Stockholders’ equity (deficit)

Series A Preferred stock, $ 0.0001 par value, 500,000 authorized, 20,000 designated Series A shares, 0 and 1,417 shares issued and outstanding at December 31, 2024 and 2023, respectively (liquidation preference of $17.54 at December 31, 2023)

Common Stock, $ 0.0001 par value, 250,000,000 and 750,000,000 shares authorized, at December 31, 2024 and 2023, respectively;

shares issued and outstanding at December 31, 2023 and 2022, were 5,886,934 and 11,356 , respectively

paid-in capital

other comprehensive loss

stockholders’ deficit

liabilities, preferred stock and stockholders’ (deficit) equity

common share data has been retroactively adjusted to effect reverse stock splits in 2023

(see Notes 1 and 10.)

report of independent registered public accounting firm and accompanying notes to consolidated financial statements.

THERAPEUTICS, INC.

7,302,797 and 9,812 shares issued and outstanding at December 31, 2024 and 2023, respectively

Additional paid-in capital

131,130 90,369

Accumulated other comprehensive loss

( 354 ) ( 411 )

Accumulated deficit

( 118,966 ) ( 94,451 )

Total stockholders’ equity (deficit)

11,811 ( 2,751 )

Total liabilities and stockholders’ equity (deficit)

$ 22,650 $ 11,862

All common share data has been retroactively adjusted to effect reverse stock splits in 2023 and 2024 (see Note 1).

See accompanying notes to the consolidated financial statements.

ALLARITY THERAPEUTICS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

For the years ended December 31, 2024 and 2023

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

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

Operating expenses:

and development

Impairment of intangible

and administrative

Research and development

Impairment of intangible assets

General and administrative

Total operating expenses

from operations

Other income (expenses)

Income from the sale

Loss from operations

Other income (expense)

Interest income

Interest expenses

Loss on investment

Foreign exchange gains

Fair value of inducement

Loss on modification

Change in fair value

adjustment of warrant derivative liabilities

on Series A Preferred stock liability

other income, net

Net loss before tax recovery (expense)

Deferred income tax

(expense) benefit

Cash payable on converted Series A Preferred

Foreign exchange gains (losses)

Fair value of inducement warrants

Loss on modification of warrants

Change in fair value adjustment of warrant derivative liabilities

Total other income

Loss before income tax expense (benefit)

Income tax expense (benefit)

Deemed dividends on Series A Preferred Stock

Deemed dividend of

on Series C Preferred Stock

loss attributable to common stockholders

Basic and diluted net loss per common stock

$ ( 3,093.42 )

Weighted average number of common stock outstanding, basic and diluted

Deemed dividend on Series A Convertible Preferred Stock

Gain on extinguishment of Series A Convertible Preferred Stock

Deemed dividend of on Series C Preferred Stock

Net loss attributable to common stockholders

Net loss per common share, basic and diluted

Weighted average common shares outstanding, basic and diluted

Other comprehensive loss

in cumulative translation adjustment

Comprehensive

loss attributable to common stockholders

common share data has been retroactively adjusted to effect reverse stock splits in 2023

(see Notes 1 and 10.)

report of independent registered public accounting firm and accompanying notes to consolidated financial statements.

THERAPEUTICS, INC.

Change in cumulative translation adjustment

Total comprehensive loss

All common share data has been retroactively adjusted to effect reverse stock splits in 2023 and 2024 (see Note 1).

See accompanying notes to the consolidated financial statements.

ALLARITY THERAPEUTICS, INC.

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

For the years ended December 31, 2024 and 2023

dollars in thousands, except for share data*)

(in thousands, except for share data*)

Series C Convertible

Stockholders’

Preferred Stock

Comprehensive

Stockholders’

Balance, December 31, 2022

2021 carried forward

of Series A Preferred Stock into common stock, net

Floor price liability

Reclassification

of derivative liabilities related to converted preferred stock

Deemed dividend of 8 % on preferred stock

B preferred stock dividend

based compensation

translation adjustment

December 31, 2022

common share data has been retroactively adjusted to effect reverse stock splits in 2023

(see Notes 1 and 10.)

report of independent registered public accounting firm and accompanying notes to consolidated financial statements.

THERAPEUTICS, INC.

13,586 $ 2,001 190,786 $ 2 — $ — — — 19 $ — $ 83,158 $ ( 721 ) $ ( 82,550 ) $ ( 113 )

Issuance of Series C Convertible Preferred Stock, net

— — — — 50,000 1,160 — — — — — — — —

Deemed dividend of 5 % and accretion of Series C Convertible Preferred Stock to redemption value

— — — — — 164 — — — — ( 164 ) — — ( 164 )

Round up of common shares issued as a result of 1-for-35 and 1-for-40 reverse stock splits

— — — — — — — — 1 — — — — —

Conversion of Series A Preferred Stock into common stock, net

( 9,347 ) ( 1,377 ) — — — — ( 2,705 ) ( 2,522 ) 403 — 3,899 — — 1,377

Redemption of Series B Preferred Stock

— — ( 190,786 ) ( 2 ) — — — — — — 2 — — 2

Issuance of common stock, net, April 2023 Financing

— — — — — — — — 417 — 6,815 — — 6,815

Fair value of April Warrants allocated to liabilities, net of financing costs

— — — — — — — — — — ( 3,772 ) — — ( 3,772 )

Deemed dividends on Series C Preferred Stock

— — — — — 123 — — — — ( 123 ) — — ( 123 )

Elimination of Series A redemption rights

( 4,239 ) ( 624 ) — — 4,239 3,952 — — ( 3,328 ) — — 624

Issuance of Series A Preferred Stock as repayment of debt

— — — — — — 486 453 — — — — — 453

Deemed dividend on redemption of Series A Preferred Stock and cancellation of debt in conjunction with April 2023 financing

— — — — — — ( 1,550 ) ( 1,445 ) — — ( 207 ) — — ( 1,652 )

Deemed dividend on exchange of Series C Preferred stock for Series A Preferred stock

— — — — ( 50,000 ) ( 1,447 ) 5,577 5,199 — — ( 3,752 ) — — 1,447

Deemed dividend on July 10, 2023 modification of Series A Preferred stock

— — — — — — — 206 — — ( 206 ) — — —

Issuance of common stock, net July 2023 financing

— — — — — — — — 4,074 — 10,080 — — 10,080

Fair value of July Warrants allocated to liabilities, net of financing costs

— — — — — — — — — ( 6,254 ) — — ( 6,254 )

Deemed dividend on redemption of Series A Preferred Stock in conjunction with July 2023 financing

— — — — ( 4,630 ) ( 4,474 ) — — ( 526 ) — — ( 5,000 )

September 2023 warrants exercised on inducement, net

— — — — — — — — 4,065 — 2,962 — — 2,962

Reclassification of derivative liabilities related to September 2023 warrants exercised

— — — — — — — — — — 1,056 — — 1,056

Cashless exercise of Exchange Warrants

— — — — — — — — 833 — 1,031 — — 1,031

Deemed dividend on September 2023 modification of Series A Preferred shares

— — — — — — — 373 — — ( 373 ) — — —

Stock-based compensation expense

— — — — — — — — — — 71 — — 71

Currency translation adjustment

— — — — — — — — — — — 310 — 310

— — — — — — — — — — — — ( 11,901 ) ( 11,901 )

Balance, December 31, 2023

— $ — — $ — — $ — 1,417 $ 1,742 9,812 $ — $ 90,369 $ ( 411 ) $ ( 94,451 ) $ ( 2,751 )

All common share data has been retroactively adjusted to effect reverse stock splits in 2023 and 2024 (see Note 1).

See accompanying notes to the consolidated financial statements.

ALLARITY THERAPEUTICS, INC.

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

For the years ended December 31, 2024 and 2023

dollars in thousands, except for share data*)

A Preferred Stock

B Preferred Stock

C Convertible Preferred Stock

A Preferred Stock

Comprehensive

(in thousands, except for share data*)

Series A Convertible

Stockholders’

December 31, 2022

of Series C Convertible Preferred Stock, net

Deemed dividend of 5 % and accretion of Series C Convertible Preferred Stock to redemption value

Round up of common shares issued as a result of 1-for-35 and 1-for-40 reverse stock splits

of Series A Preferred Stock into common stock, net

of Series B Preferred Stock

of common stock, net, April 2023 Financing

value of April Warrants allocated to liabilities, net of financing costs

dividends on Series C Preferred Stock

of Series A redemption rights

of Series A Preferred Stock as repayment of debt

dividend on redemption of Series A Preferred Stock and cancellation of debt in conjunction with April 2023 financing

dividend on exchange of Series C Preferred stock for Series A Preferred stock

dividend on July 10, 2023 modification of Series A Preferred stock

of common stock, net July 2023 financing

value of July Warrants allocated to liabilities, net of financing costs

dividend on redemption of Series A Preferred Stock in conjunction with July 2023 financing

2023 warrants exercised on inducement, net

Reclassification

of derivative liabilities related to September 2023 warrants exercised

exercise of Exchange Warrants

dividend on September 2023 modification of Series A Preferred shares

based compensation

translation adjustment

December 31, 2023

common share data has been retroactively adjusted to effect reverse stock splits in 2023

(see Notes 1 and 10.)

report of independent registered public accounting firm and accompanying notes to consolidated financial statements.

THERAPEUTICS, INC.

STATEMENTS OF CASH FLOWS

years ended December 31, 2023 and 2022

dollars in thousands*)

CASH FLOWS FROM OPERATING

Adjustments to reconcile net loss to net

cash used in operating activities:

Gain from the sale of

Preferred Stock

Comprehensive

Balance, December 31, 2023

Conversion of preferred stock into common stock, net

Extinguishment of preferred stock

Deemed dividend on preferred stock

Common stock issued for services

Issuance of common stock, net of offering costs under open market sales agreement (ATM)

Reverse split (1-for-30) rounding adjustment

Stock-based compensation expense (recoveries)

Cashless exercise of 3i Exchange Warrants

Issuance of convertible redeemable preferred stock, net of offering costs

Redemption of convertible redeemable preferred stock

Deemed dividend on redeemable preferred stock

Currency translation adjustment

Balance, December 31, 2024

All common share data has been retroactively adjusted to effect reverse stock splits in 2023 and 2024 (see Note 1).

See accompanying notes to the consolidated financial statements.

ALLARITY THERAPEUTICS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the years ended December 31, 2024 and 2023

(in thousands)

CASH FLOWS FROM OPERATING ACTIVITIES:

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

Depreciation and amortization

Intangible asset impairment

Stock-based compensation

Unrealized foreign exchange

Common stock issued for services

Stock-based compensation expense (recovery)

Unrealized foreign exchange gain

Non-cash interest expense

Non-cash finance expense

Fair value of inducement

Loss on modification

Loss on investment

Change in fair value

of warrant derivative liabilities

Fair value of inducement warrants

Loss on modification of warrants

Change in fair value of warrant derivative liabilities

Deferred income taxes

1 unchanged sentence

Other current assets

Unearned revenue

Tax credit receivable

3 unchanged sentences

Income taxes payable

lease liability

cash used in operating activities

CASH FLOWS FROM INVESTING

Proceeds from the sale

of property and equipment

cash provided by investing activities

CASH FLOWS FROM FINANCING

Proceeds from Series

C Convertible Preferred Stock issuance, net

Proceeds from 3i promissory

Operating lease liability

Net cash used in operating activities

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchase of property and equipment

Net cash used in investing activities

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from Series C Convertible Preferred Stock issuance, net

Proceeds from 3i promissory notes

Repayment of 3i debt

Net proceeds from common

stock and pre-funded warrant issuance

Net proceeds from warrants

exercised in conjunction with price & warrant inducement

Redemption of Series

A Preferred Stock

Redemption of Series

B Preferred Stock

Cash paid in connection

with conversion of Series A Preferred Stock

on Series A Preferred Stock liability

cash provided by (used in) financing activities

Net decrease in cash

Proceeds from ATM sales of common stock, net of issuance costs

Net proceeds from common stock and pre-funded warrant issuance

Net proceeds from warrants exercised in conjunction with price & warrant inducement

Redemption of Series A Preferred Stock

Redemption of Series B Preferred Stock

Proceeds from issuance of Convertible Redeemable Series A Preferred Stock

Redemption of Convertible Redeemable Series A Preferred Stock

Net cash provided by financing activities

Net increase (decrease) in cash

Effect of exchange rate changes on cash

Cash, beginning of

common share data has been retroactively adjusted to effect reverse stock splits in 2023

(see Notes 1 and 10.)

report of independent registered public accounting firm and accompanying notes to consolidated financial statements.

THERAPEUTICS, INC.

Cash, beginning of year

Cash, end of year

See accompanying notes to the consolidated financial statements.

ALLARITY THERAPEUTICS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (cont.)

For the years ended December 31, 2024 and 2023

dollars in thousands)

Supplemental disclosure

of cash flow information

for income taxes

(in thousands)

Supplemental disclosure of cash flow information

Cash paid for income taxes

Cash paid for interest

Supplemental disclosure

of non-cash investing and financing activities:

Offset of payable against

receivable from sale of IP

Conversion of Series

A Redeemable Preferred Stock to equity

Issuance of Series A

Preferred Stock in Exchange for Series C Preferred Stock

Issuance of Series A

Preferred Stock to extinguish 3i Promissory Note

Redemption of Series

A Preferred Stock as repayment of debt

Deemed dividends on Series

A Preferred Stock

dividend on Series C Convertible Preferred Stock, and accretion of Series C Preferred Stock to redemption value

Cashless exercise of

3i LP Exchange Warrants in exchange for common stock

Deemed dividend on redemption

of Series B Preferred Stock

Conversion of floor price

liability to convertible debt

Reclassification of derivative

liabilities related to converted Preferred Stock

report of independent registered public accounting firm and accompanying notes to consolidated financial statements.

THERAPEUTICS, INC.

TO FINANCIAL STATEMENTS

years ended December 31, 2023 and 2022

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

Organization, Principal Activities, and Basis of Presentation

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,

Additionally, the Company, through its Danish subsidiary, Allarity Denmark (previously Oncology Venture ApS), specializes

in the research and development of anti-cancer drugs.

Company’s principal operations are located at Venlighedsvej 1, 2970 Horsholm, Denmark.

The Company’s business address in

the Unites States is located at 24 School Street, 2 nd Floor, Boston, MA 02108.

Supplemental disclosure of non-cash investing and financing activities:

Stock issued in conjunction with consulting agreement

Issuance of common shares on conversion of 3i Exchange Warrants

Conversion of Series A Redeemable Preferred Stock to common stock

Issuance of Series A Preferred Stock in Exchange for Series C Preferred Stock

Issuance of Series A Preferred Stock to extinguish 3i Promissory Note

Redemption of Series A Preferred Stock as repayment of debt

Deemed dividends on Series A Preferred Stock

Gain on extinguishment of Series A Preferred Stock

Deemed dividend on Series C Convertible Preferred Stock, and accretion of Series C Preferred Stock to redemption value

Cashless exercise of 3i LP Exchange Warrants in exchange for common stock

Deemed dividend on Convertible Redeemable Series A Preferred Stock

See accompanying notes to the consolidated financial statements.

ALLARITY THERAPEUTICS, INC.

NOTES TO FINANCIAL STATEMENTS

For the years ended December 31, 2024 and 2023

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

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 Unites States is located at 24 School Street, 2nd Floor, Boston, MA 02108.

The Company has incurred significant losses and has an accumulated deficit of $ 119.0 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 $ 19.5 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.

Reverse Stock Splits

June 28 and March 24, 2023, the Company effected a 1-for-40 reverse stock split and a 1-for-35 reverse stock split, respectively, of

the shares of common stock of the Company (collectively, the “Reverse Stock Splits”).

All historical share and per share

amounts reflected throughout the financial statements (as defined below in 1(b) and these notes to the financial statements have been

adjusted to reflect both of the Reverse Stock Splits.

See Note 10(a).

Liquidity and Going Concern

accompanying consolidated 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.

The accompanying consolidated financial statements

do not reflect any adjustments relating to the recoverability and reclassification of assets and liabilities that might be necessary

if the Company is unable to continue as a going concern.

to the requirements of Accounting Standard Codification (ASC) 205-40, Disclosure of Uncertainties about an Entity’s Ability to

Continue as a Going Concern, management must evaluate whether there are conditions or 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 that the financial

statements are issued.

This evaluation initially does not take into consideration the potential mitigating effect of management’s

plans that have not been fully implemented as of the date of these financial statements, and (1) is probable that the plan will

be effectively implemented within one year after the date the financial statements are issued, and (2) it is probable that the plan,

when implemented, will mitigate the relevant condition or events that raise substantial doubt about the entity’s ability to continue

as a going concern within one year after the date the financials are issued.

Certain elements of the Company’s operating plan to

alleviate the conditions that raise substantial doubt are outside of the Company’s control and cannot be included in the management’s

evaluation under the requirements of ASC 205-40.

inception, the Company has devoted substantially all its efforts to business planning, research and development, clinical expenses, recruiting

management and technical staff, and securing funding via collaborations.

The Company has historically funded its operations with proceeds

received from its collaboration arrangements, sale of equity capital and proceeds from sales of convertible notes.

Company has incurred significant losses and has an accumulated deficit of $ 94.5 million as of December 31, 2023.

As of December

31, 2023, our cash deposits of $ 166 are insufficient to fund our current operating plan and planned capital expenditures for the next

These conditions give rise to substantial doubt over the Company’s ability to continue as a going concern.

Organization, Principal Activities, and Basis of Presentation (cont.)

plans to mitigate the conditions or events that raise substantial doubt include additional funding through public equity, private equity,

debt financing, collaboration partnerships, or other sources.

the Company’s cash position as of March 7, 2024, the Company does not have sufficient funds for its current operations and planned

capital expenditures.

As discussed above the Company intends to seek capital through the sale of its securities or other sources.

are no assurances, however, that the Company will be successful in raising additional working capital, or if it is able to raise additional

working capital, it may be unable to do so on commercially favorable terms.

The Company’s failure to raise capital or enter other

such arrangements if and when needed would have a negative impact on its business, results of operations and financial condition and

its ability to develop its product candidates.

management continues to pursue its funding plans, there is no assurance that the Company will be successful in obtaining sufficient funding

to fund continuing operations on terms acceptable to the Company, if at all.

Accordingly, based upon cash on hand at the issuance date

of these financial statements the Company does not have sufficient funds to finance its operations for at least twelve months from the

issuance date and therefore has concluded that substantial doubt exists about the Company’s ability to continue as a going concern.

Risks and Uncertainties

Company is 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 the Company’s research and development efforts are successful, it is uncertain when, if ever, the Company will realize

significant revenue from product sales.

Growth Companies

Section 102(b)(1)

of the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) exempts emerging growth companies from being required

to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act

registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply

with the new or revised financial accounting standards.

The JOBS Act provides that an emerging growth company can elect to opt out of

the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to

opt out is irrevocable.

The Company has chosen not to make an election to opt out of new or revised accounting standards.

of Significant Accounting Policies

of Presentation

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”).

of Significant Accounting Policies (cont.)

Organization and Principles of Consolidation

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

of Incorporation

Acquisition Subsidiary Inc.

On March 24, 2023, June 28, 2023, April 9, 2024, and September 11, 2024, the Company effected a 1 -for- 40 reverse stock split, 1 -for- 35 reverse stock split, 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.

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:

Country of Incorporation

Allarity Acquisition Subsidiary Inc.

United States

Therapeutics Europe ApS (formerly Oncology Venture Product Development ApS)

Therapeutics Denmark ApS (formerly OV-SPV2 ApS)

Allarity Therapeutics Europe ApS (formerly Oncology Venture Product Development ApS)

Allarity Therapeutics Denmark ApS (formerly OV- SPV2 ApS)

United States

1 unchanged sentence

In the process of being dissolved because inactive.

** OV US Inc.

was dissolved effective November 15, 2023.

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

preparation of consolidated 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 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, fair values of acquired intangible assets

and impairment review of those assets, share based compensation expense, and income tax uncertainties and valuation allowances.

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.

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

Use of Estimates

The preparation of consolidated 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 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, fair values of acquired intangible assets and impairment review of those assets, 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.

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.

currency and currency translation

functional currency is the currency of the primary economic environment in which an entity’s operations are conducted.

and its subsidiaries operate mainly in Denmark and the United States.

The functional currencies of the Company’s subsidiaries

are their local currency.

Company’s reporting currency is the U.S.

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 consolidated statements of changes in redeemable convertible preferred stock and stockholders’ equity

as a component of accumulated other comprehensive loss.

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.

that arise from exchange rate translations are included in other comprehensive income (loss) in the consolidated statements of operations

and comprehensive loss as incurred.

The Company recorded a foreign exchange translation gain (loss) of $ 309 and ($ 121 ), included in accumulated

other comprehensive loss for the years ended December 31, 2023 and 2022, respectively.

of Significant Accounting Policies (cont.)

(e) Concentrations

of credit risk and of significant suppliers

instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash.

The Company maintains its

cash 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 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.

consists primarily of highly liquid investments with original maturities of three months or less at the date of purchase to be cash equivalents.

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.

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 gain of $ 0.1 million and $ 0.3 million, included in accumulated other comprehensive loss for the years ended December 31, 2024 and 2023 , respectively.

Concentrations of credit risk and of significant suppliers

Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash.

The Company maintains its cash 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 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.

The company considers cash equivalents as highly liquid investments with original maturities of three months or less at the date of purchase.

The Company had no cash equivalents or restricted cash on December 31, 2024 and 2023 .

(g) Property,

plant and equipment

plant, and equipment are stated at cost, less accumulated depreciation.

Depreciation expense is recognized using the straight-line method

over the estimated useful lives of the respective assets as follows:

Property, plant and equipment

Property, plant, and equipment are stated at cost, less accumulated depreciation.

Depreciation expense is recognized using the straight-line method over the estimated useful lives of the respective assets as follows:

Life (in years)

Laboratory equipment

Furniture and office equipment

retirement or sale, the cost of assets disposed of, and the related accumulated depreciation are removed from the accounts and any resulting

gain or loss is included in loss from operations.

As of December 31, 2023 and 2022, there have been no significant asset retirements

Expenditures for repairs and maintenance that do not improve or extend the lives of the respective assets are charged to expense

Upon retirement or sale, the cost of assets disposed of, and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is included in loss from operations.

As of December 31, 2024 and 2023 , there have been no significant asset retirements to date.

Expenditures for repairs and maintenance that do not improve or extend the lives of the respective assets are charged to expense as incurred.

Impairment of long-lived assets

assets consist of property, plant and equipment, and intangible assets.

Long-lived assets to be held and used are tested for recoverability

whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable.

that the Company considers in deciding when to perform an impairment review include significant underperformance of the business in relation

to expectations, significant negative industry or economic trends and significant changes or planned changes in the use of the assets.

An impairment loss would be recognized as a loss from operations when estimated undiscounted future cash flows expected to result from

the use of an asset group or the estimated return on investment are less than its carrying amount.

The impairment loss would be based

on the excess of the carrying value of the impaired asset group over its fair value, determined based on discounted cash flow or return

on investment calculations.

patents are measured in the balance sheet at the lower of cost less accumulated amortization and impairment charges, if any.

costs incurred to renew or extend the term of the acquired patents are expensed as incurred.

Cost comprises the acquisition price and

the depreciation period are estimated at approximately 5 years with no residual value.

Depreciation methods, useful lives and residual

values are reviewed every year .

of Significant Accounting Policies (cont.)

in-process research and development (IPR&D)

IPR&D represents the fair value assigned to research and development assets that the Company acquired as part of a business combination

and have not been completed at the acquisition date.

The fair value of IPR&D acquired in a business combination is recorded on the

consolidated balance sheets at the acquisition-date fair value and is determined by estimating the costs to develop the technology into

commercially viable products, estimating the resulting revenue from the projects, and discounting the projected net cash flows to present

IPR&D is not amortized, but rather is reviewed for impairment on an annual basis or more frequently if indicators of impairment

are present, until the project is completed, abandoned, or transferred to a third-party.

Management assesses its acquired IPR&D for

impairment at year end date as well as when events and circumstances indicate there is a potential impairment.

Significant quantitative

indicators considered are the Company’s market capitalization, market share, length of remaining clinical trials, and projected

revenue per treatment.

The projected discounted cash flow models used to estimate the fair value of partnered assets and cost approach

model used to estimate proprietary assets as part of the Company’s IPR&D reflect significant assumptions regarding the estimates

a market participant would make to evaluate a drug development asset, including the following:

of obsolescence of development expenditure;

● Probability

of successfully completing clinical trials and obtaining regulatory approval;

of future cash flows from potential milestone payments and royalties related to out-licensed

product sales;

discount rate reflecting the Company’s weighted average cost of capital and specific

risk inherent in the underlying assets.

brought into use, intangible assets are amortized over their estimated useful economic lives using the economic consumption method if

anticipated future revenues can be reasonably estimated.

Long-lived assets consist of property, plant and equipment, and intangible assets.

Long-lived assets to be held and used are tested for recoverability whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable.

Factors that the Company considers in deciding when to perform an impairment review include significant underperformance of the business in relation to expectations, significant negative industry or economic trends and significant changes or planned changes in the use of the assets.

An impairment loss would be recognized as a loss from operations when estimated undiscounted future cash flows expected to result from the use of an asset group or the estimated return on investment are less than its carrying amount.

The impairment loss would be based on the excess of the carrying value of the impaired asset group over its fair value, determined based on discounted cash flow or return on investment calculations.

Acquired in-process research and development ("IPR&D")

Acquired IPR&D represents the fair value assigned to research and development assets that the Company acquired as part of a business combination and have not been completed at the acquisition date.

The fair value of IPR&D acquired in a business combination is recorded on the consolidated balance sheets at the acquisition-date fair value and is determined by estimating the costs to develop the technology into commercially viable products, estimating the resulting revenue from the projects, and discounting the projected net cash flows to present value.

IPR&D is not amortized, but rather is reviewed for impairment on an annual basis or more frequently if indicators of impairment are present, until the project is completed, abandoned, or transferred to a third -party.

Management assesses its acquired IPR&D for impairment at year end date as well as when events and circumstances indicate there is a potential impairment.

Significant quantitative indicators considered are the Company’s market capitalization, market share, length of remaining clinical trials, and projected revenue per treatment.

The projected discounted cash flow models used to estimate the fair value of partnered assets and cost approach model used to estimate proprietary assets as part of the Company’s IPR&D reflect significant assumptions regarding the estimates a market participant would make to evaluate a drug development asset, including the following:

Estimates of obsolescence of development expenditure;

Probability of successfully completing clinical trials and obtaining regulatory approval;

Estimates of future cash flows from potential milestone payments and royalties related to out-licensed product sales;

A discount rate reflecting the Company’s weighted average cost of capital and specific risk inherent in the underlying assets.

Once brought into use, intangible assets are amortized over their estimated useful economic lives using the economic consumption method if anticipated future revenues can be reasonably estimated.

The straight-line method is used when revenues cannot be reasonably estimated.

In the years ended December 31, 2023 and 2022, the Company has recorded impairment losses of $ 0 and $ 17,571 respectively on its intangible

value measurements of financial instruments

carrying value of the Company’s financial instruments of cash, other current assets, accounts payable and accrued liabilities,

approximate their fair value due to their short-term nature.

The Company’s other financial instruments include an equity investment,

preferred shares, convertible debt, and warrant derivative liabilities.

The equity investment is adjusted to fair market value at the

end of every period based upon unadjusted quoted prices.

The convertible debt and derivative liabilities that are freestanding equity-linked

financial instruments are fair valued at the end of every period using level 3 inputs.

value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal

or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

ASC Topic 820, Fair Value Measurement (“ASC 820”), establishes a fair value hierarchy for instruments measured at fair value

that distinguishes between assumptions based on market data (observable inputs) and the Company’s own assumptions (unobservable

Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained

from sources independent of the Company.

Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs

that market participants would use in pricing the asset or liability and are developed based on the best information available in the

circumstances.

ASC 820 identifies fair value as the exchange price, or exit price, representing the amount that would be received to

sell an asset or paid to transfer a liability in an orderly transaction between market participants.

As a basis for considering market

participant assumptions in fair value measurements, ASC 820 establishes a three-tier fair value hierarchy that distinguishes between

the following:

1 — defined as observable inputs such as quoted prices (unadjusted) in active

markets for identical assets or liabilities.

of Significant Accounting Policies (cont.)

2 — defined as inputs other than quoted prices in active markets that are either

directly or indirectly observable such as quoted prices for similar instruments in active

markets or quoted prices for identical or similar instruments in markets that are not active;

3 — defined as unobservable inputs in which little or no market data exists, therefore

requiring an entity to develop its own assumptions, such as valuations derived from valuation

techniques in which one or more significant inputs or significant value drivers are unobservable.

some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy.

those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input

that is significant to the fair value measurement.

and geographic information

segments are defined as components of a business for which separate discrete financial information is available for evaluation by the

chief operating decision maker in deciding how to allocate resources and assess performance.

The Company and its chief operating decision

maker, the Company’s Chief Executive Officer, view the Company’s operations and manage its business as a single operating

For the years ended December 31, 2024 and 2023 , the Company has recorded impairment losses of $ 9.7 million and $ 0 respectively on its intangible assets.

As of December 31, 2024, the IPR&D intangible assets have been fully amortized and have a $ 0 balance.

Fair value measurements of financial instruments

The carrying value of the Company’s financial instruments of cash, other current assets, accounts payable and accrued liabilities, approximate their fair value due to their short-term nature.

The Company’s other financial instruments include preferred shares, convertible debt, warrant liabilities, and warrant derivative liabilities.

The warrant liabilities and derivative liabilities that are freestanding equity-linked financial instruments are fair valued at the end of every period using level 3 inputs.

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

ASC Topic 820, Fair Value Measurement (“ASC 820” ), establishes a fair value hierarchy for instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company’s own assumptions (unobservable inputs).

Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company.

Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances.

ASC 820 identifies fair value as the exchange price, or exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants.

As a basis for considering market participant assumptions in fair value measurements, ASC 820 establishes a three -tier fair value hierarchy that distinguishes between the following:

Level 1 — defined as observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 — defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active;

Level 3 — defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy.

In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement.

Segment and geographic information

Operating segments are defined as components of a business for which separate discrete financial information is available for evaluation by the chief operating decision maker in deciding how to allocate resources and assess performance.

The Company operates as a single operating and reporting segment, reflecting our sole focus in developing a treatment for ovarian cancer.

Our Chief Executive Officer serves as the Chief Operating Decision Maker (CODM), responsible for assessing the Company's performance and making resource allocation decisions.

The CODM evaluates financial information on a consolidated basis, focusing on key metrics such as research and development expense, general and administrative expenses, and other income/expenses.

The CODM allocates resources based on the Company's available cash resources, forecasted cash flow, and expenditures on a consolidated basis, as well as an assessment of the probability of success of its research and development activities.

Resource allocation decisions are informed by budgeted and forecasted expense information, along with actual expenses incurred to date.

The measure of segment assets is reported on the balance sheet as total assets.

Disaggregated profit or loss information at the program or functional level is not regularly provided to or relied upon by the CODM, as our integrated operating model emphasizes shared resources and centralized decision-making.

The Company operates in two geographic areas:

Denmark and the United States.

contract costs and accruals

and development costs are expensed as incurred.

Research and development expenses are comprised of costs incurred in performing research

and development activities, including salaries, share-based compensation and benefits, facilities costs and laboratory supplies, depreciation,

amortization and impairment expense, manufacturing expenses and external costs of outside vendors engaged to conduct preclinical development

activities and clinical trials.

Typically, upfront payments and milestone payments made for the licensing of technology are expensed

as research and development in the period in which they are incurred.

Company has entered into various research and development contracts with companies in Europe, the United States, and other countries.

These agreements are generally cancellable, and related payments are recorded as research and development expenses as incurred.

records accruals for estimated ongoing research costs.

When evaluating the adequacy of the accrued liabilities, the Company analyzes

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 the Company’s

The Company’s historical accrual estimates have not been materially different from the actual costs.

and development incentives and receivable

Tax Incentives

allows loss making companies the opportunity to apply for a payment equal to the tax value ( 22 %) of negative taxable income related to

Research and development expenses

Research and development ("R&D") costs are expensed as incurred.

R&D expenses primarily consist of costs associated with preclinical studies and clinical trials as well as salaries, stock-based compensation and benefits, facilities costs and laboratory supplies, manufacturing expenses and external costs of outside vendors engaged to conduct preclinical development activities and clinical trials.

Typically, upfront payments and milestone payments made for the licensing of technology are expensed as research and development in the period in which they are incurred.

The Company has entered into various research and development contracts with companies in Europe, the United States, and other countries.

General and administrative expenses

General and administrative ("G&A") expenses consist primarily of employee-related expenses, such as salaries, stock-based compensation, and benefits for employees engaged in G&A activities.

G&A also consists of marketing, advertising, legal and accounting fees, consulting services, and other operating costs relating to corporate matters and daily operations.

R&D incentives and receivable

Denmark Tax Incentives

Denmark allows loss making companies the opportunity to apply for a payment equal to the tax value ( 22% ) of negative taxable income related to R&D costs.

The negative taxable income is calculated on the total negative income of the companies participating in the joint taxation.

Tax payment according to this rule cannot exceed an amount of DKK 5.5 million, corresponding to a tax loss relating to R&D expenditure

of DKK 25 million.

Tax payment according to this rule cannot exceed an amount of DKK 5.5 million, corresponding to a tax loss relating to R&D expenditure of DKK 25 million.

The tax credit is recorded as tax receivable and other income within research and development expenses.

ended December 31, 2023 and 2022, the Company recorded $ 800 and $ 711 in tax credits, respectively, thereby reducing research and development

of Significant Accounting Policies (cont.)

Agency Grants

Company, through its subsidiaries in Denmark, from time-to-time receives reimbursements of certain research and development expenditures

as part of a European agency’s research and development cost relief program.

Management has assessed the Company’s research

and development activities and expenditures to determine which activities and expenditures are likely to be eligible under the research

and development incentive program described above.

At each period end, management estimates the reimbursement available to the Company

based on available information at the time.

The Company records these research and development expense reimbursements as a reduction

to research and development expenses in the consolidated statements of operations and comprehensive loss, as the research and development

cost reimbursements are not dependent on the Company generating future taxable income, the Company’s ongoing tax status, or tax

The Company recognizes a receivable for the research and development incentives when the relevant expenditure has been incurred,

the associated conditions have been satisfied and there is reasonable assurance that the reimbursement will be received.

During the years

ended December 31, 2023 and 2022, the Company has not received or recorded government grants receivable.

(o) Convertible

debt instruments

Company follows ASC 480-10, Distinguishing Liabilities from Equity in its evaluation of the accounting for a hybrid

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:

In each of the years ended December 31, 2024 and 2023 , research and development expenses include refundable tax credits of $ 0.8 million.

Convertible debt instruments

The Company follows 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 Consolidated

Statements of Operations and Comprehensive Loss.

Additionally,

the Company accounts 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 (loss) on

extinguishment.

the Company issues warrants it evaluates 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”), the Company classifies a warrant as equity so long as it is “indexed to the

Company’s equity” and several specific conditions for equity classification are met.

A warrant is not considered indexed

to the Company’s equity, in general, when it contains certain types of exercise contingencies or adjustments to exercise price.

If a warrant is not indexed to the Company’s 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, 2023 and 2022, the Company had warrants outstanding for share-based compensation

that were classified as equity, and outstanding investor warrants that were classified as derivative liabilities and classified as “Warrant

liabilities” in the Consolidated Balance Sheets.

of Significant Accounting Policies (cont.)

(q) Derivative

financial instruments

Company does not use derivative instruments to hedge exposures to interest rate, market, or foreign currency risks.

The Company evaluates

all its financial instruments to determine if such instruments contain features that qualify as embedded derivatives.

Embedded derivatives

must be separately measured from the host contract if all the requirements for bifurcation are met.

The assessment of the conditions

surrounding the bifurcation of embedded derivatives depends on the nature of the host contract.

Bifurcated embedded derivatives are recognized

at fair value, with changes in fair value recognized in the Consolidated Statements of Operations and Comprehensive Loss each reporting

(s) Share-based

Company accounts for share-based compensation in accordance with ASC 718, Compensation — Stock Compensation (“ASC 718”).

(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 Consolidated Statements of Operations and Comprehensive Loss.

Additionally, the Company accounts 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 (loss) on extinguishment.

When the Company issues warrants it evaluates 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” ), the Company classifies a warrant as equity so long as it is “indexed to the Company’s equity” and several specific conditions for equity classification are met.

A warrant is not considered indexed to the Company’s equity, in general, when it contains certain types of exercise contingencies or adjustments to exercise price.

If a warrant is not indexed to the Company’s 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.

Derivative financial instruments

The Company does not use derivative instruments to hedge exposures to interest rate, market, or foreign currency risks.

The Company evaluates all its financial instruments to determine if such instruments contain features that qualify as embedded derivatives.

Embedded derivatives must be separately measured from the host contract if all the requirements for bifurcation are met.

The assessment of the conditions surrounding the bifurcation of embedded derivatives depends on the nature of the host contract.

Bifurcated embedded derivatives are recognized at fair value, with changes in fair value recognized in the Consolidated Statements of Operations and Comprehensive Loss each reporting period.

Stock-based compensation

The Company accounts 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 the Company’s Consolidated

Statements of Operations and Comprehensive Loss.

Company records the expense for option awards using either a graded or straight-line method.

The Company accounts for forfeitures as

For share-based awards granted to both employee and non-employee consultants, the measurement date for non-employee awards

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.

Company reviews all stock award modifications including when there is an exchange of original award for a new award.

In the case of stock

award modifications, the Company calculates for 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.

The Company immediately recognizes 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

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.

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.

term of options granted is calculated using the simplified method being the average between the vesting period and the contractual term

to the expected term of the options in effect at the time of grant.

The Company has historically not paid dividends and has no foreseeable

plans to pay dividends 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.

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 the Company’s Consolidated Statements of Operations and Comprehensive Loss.

The Company records the expense for option awards using either a graded or straight-line method.

The Company accounts for forfeitures as they occur.

For stock-based awards, 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.

The Company reviews all stock award modifications including when there is an exchange of original award for a new award.

In the case of stock award modifications, the Company calculates for 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.

The Company immediately recognizes 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.

Company classifies share-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.

of Significant Accounting Policies (cont.)

(t) Accumulated

other comprehensive loss

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 Consolidated Statements of Operations

and Comprehensive Loss.

For the years ended December 31, 2023 and 2022, the Company’s other comprehensive loss was comprised of

currency translation adjustments and fair value adjustments attributable to instrument specific credit risk.

(u) Contingencies

for loss contingencies arising from claims, assessments, litigation, fines, penalties, and other sources are recorded when it is probable

that a liability has been incurred and the amount can be reasonably estimated.

At each reporting date, the Company evaluates whether

a potential loss amount or a potential loss range is probable and reasonably estimable under the provisions of the authoritative guidelines

that address accounting for contingencies.

The Company expenses costs as incurred in relation to such legal proceedings as general and

administrative expense within the Consolidated Statements of Operations and Comprehensive Loss.

Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities

for the expected future tax consequences of events that have been recognized in the consolidated financial statements or in the Company’s

Deferred tax assets and liabilities are determined based on the differences between the consolidated financial statements

and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.

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 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.

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 Consolidated Statements of Operations and Comprehensive Loss.

For the years ended December 31, 2024 and 2023 , the Company’s other comprehensive loss was comprised of currency translation adjustments.

The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the consolidated financial statements or in the Company’s tax returns.

Deferred tax assets and liabilities are determined based on the differences between the consolidated financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.

Changes in deferred tax assets and liabilities are recorded in the provision for income taxes.

The Company assesses the likelihood that

its deferred tax assets will be recovered from future taxable income and, to the extent it believes, based upon the weight of available

evidence, that it is more likely than not that all or a portion of the deferred tax assets will not be realized, a valuation allowance

is established through a charge to income tax expense.

Potential for recovery of deferred tax assets is evaluated by estimating the future

taxable profits expected and considering prudent and feasible tax planning strategies.

Company accounts for uncertainty the consolidated financial statements by applying a two-step process to determine the amount of tax

benefit to be recognized.

First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external

examination by the taxing authorities.

If the tax position is deemed more-likely-than-not-to be sustained, the tax position is then assessed

to determine the amount of benefit to recognize in the consolidated financial statements.

The amount of the benefit that may be recognized

is the largest amount that will more likely than not be realized upon ultimate settlement.

Any provision for income taxes includes the

effects of any resulting tax reserves, or unrecognized tax benefits that are considered appropriate.

The Company recognizes interest

and penalties related to uncertain tax positions in other (income) expenses.

(w) Computation

of loss per share

net loss per common share is determined by dividing net loss attributable to common stockholders by the weighted-average number of common

shares outstanding during the period, without consideration of common stock equivalents.

Diluted net loss per share is computed by dividing

net loss attributable to common stockholders by the weighted-average number of common stock and common stock equivalents outstanding

for the period.

The Company adjusts net loss to arrive at the net loss attributable to common stockholders to reflect the amount of dividends

accumulated during the period on the Company’s redeemable convertible preferred stock, if any.

The treasury stock method is used

to determine the dilutive effect of the Company’s stock option grants and warrants and the if-converted method is used

to determine the dilutive effect of the Company’s redeemable convertible preferred stock and Convertible Notes.

For the years ended

December 31, 2023 and 2022, the Company had a net loss attributable to common stockholders, and as such, all outstanding stock options,

shares of redeemable convertible preferred stock, and warrants were excluded from the calculation of diluted loss per share.

if-converted method, convertible instruments that are in the money, are assumed to have been converted as of the beginning of the period

or when issued, if later.

of Significant Accounting Policies (cont.)

issued accounting pronouncements

to GAAP are established by the FASB in the form of ASUs to the FASB’s Accounting Standards Codification.

The Company considers

the applicability and impact of all ASUs.

All other ASUs issued through the date of these financial statements were assessed and determined

not to be applicable or are expected to have minimal impact on the Company’s consolidated financial position and results of operations.

The Company assesses the likelihood that its deferred tax assets will be recovered from future taxable income and, to the extent it believes, based upon the weight of available evidence, that it is more likely than not that all or a portion of the deferred tax assets will not be realized, a valuation allowance is established through a charge to income tax expense.

Potential for recovery of deferred tax assets is evaluated by estimating the future taxable profits expected and considering prudent and feasible tax planning strategies.

The Company accounts for uncertainty the consolidated financial statements by applying a two -step process to determine the amount of tax benefit to be recognized.

First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination by the taxing authorities.

If the tax position is deemed more-likely-than- not -to be sustained, the tax position is then assessed to determine the amount of benefit to recognize in the consolidated financial statements.

The amount of the benefit that may be recognized is the largest amount that will more likely than not be realized upon ultimate settlement.

Any provision for income taxes includes the effects of any resulting tax reserves, or unrecognized tax benefits that are considered appropriate.

The Company recognizes interest and penalties related to uncertain tax positions in other (income) expenses.

Net Loss Per Share

Basic net loss per common share is determined by dividing net loss attributable to common stockholders by the weighted-average number of common shares outstanding during the period, without consideration of common stock equivalents.

Diluted net loss per share is computed by dividing net loss attributable to common stockholders by the weighted-average number of common stock and common stock equivalents outstanding for the period.

The Company adjusts net loss to arrive at the net loss attributable to common stockholders to reflect the amount of dividends accumulated during the period on the Company’s redeemable convertible preferred stock, if any.

The treasury stock method is used to determine the dilutive effect of the Company’s stock option grants, restricted stock units, and warrants and the if-converted method is used to determine the dilutive effect of the Company’s redeemable convertible preferred stock and convertible notes.

For the years ended December 31, 2024 and 2023 , the Company had a net loss attributable to common stockholders, and as such, all outstanding stock options, unvested restricted stock units, convertible notes, shares of redeemable convertible preferred stock, and warrants were excluded from the calculation of diluted loss per share.

Unvested restricted stock units

Series A Convertible Preferred stock

182,595 18,453

Recently Adopted Accounting Standards

In November 2023, the FASB issued ASU No.

2023 - 07, Segment Reporting (Topic 280 ):

Improvements to Reportable Segment Disclosures, which requires that an entity report segment information in accordance with Topic 280, Segment Reporting.

The amendment in the ASU is intended to improve reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses.

The Company adopted ASU 2023 - 07 for the year ended December 31, 2024 retrospectively to all periods presented in the consolidated financial statements.

The adoption of this ASU had no impact on reportable segments identified and had no effect on the Company’s consolidated financial position, results of operations, or cash flows.

Accounting Standards Not Yet Adopted

In December 2023, the FASB issued ASU No.

2023 - 09, Income Taxes (Topic 740 ):

Improvements to Income Tax Disclosures, which expands disclosures in an entity’s income tax rate reconciliation table and disclosures regarding cash taxes paid both in the U.S.

and foreign jurisdictions.

The update will be effective for annual periods beginning after December 15, 2024.

The Company is currently evaluating the impact that this guidance will have on its financial statement disclosures.

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.

Other Current Assets

Company’s other current assets are comprised of the following:

The Company’s other current assets are comprised of the following:

Salary deposit

Value added tax (“VAT”) receivable

Deferred consulting costs

Deferred Directors

& Officers insurance expense

assets, impairment charges and adjustments are summarized as follows:

Intangible assets

Intangible assets, impairment charges and adjustments are summarized as follows:

Opening balance

$ 9,871 $ 9,549

Impairment recognized during the period

Foreign translation

Foreign translation adjustment

Ending balance

of the year ended December 31, 2023, because of continuing downward pressure on the Company’s common stock, we performed an impairment

assessment and determined that no further impairment of our intangible assets is required as of December 31, 2023.

a result of both the Company’s February 15, 2022, receipt of a Refusal to File (“RTF”) from the U.S.

Food and Drug

Administration regarding the Company’s new drug application (“NDA”) for Dovitinib, and the current depressed state

of the Company’s stock price, the Company has performed an impairment assessment on its individual intangible assets utilizing

a discounted cash flow model with a weighted average cost of capital (“WACC”) of 16 %, and recognized an impairment charge

of $ 14,007 during the quarter ended March 31, 2022.

During the quarter ended December 31, 2022, because of continued downward pressure

on the Company’s common stock, we performed a further impairment assessment on the Company’s individual intangible asset

utilizing a discounted cash flow model with a WACC of 26 % and recognized a further impairment charge of $ 3,564 .

Company’s IPR&D assets have been classified as indefinite-lived intangible assets.

Our individual material development project

in progress, Stenoparib, is recorded at $ 9,871 and $ 9,549 on December 31, 2023 and 2022, respectively.

Company’s accrued liabilities are comprised of the following:

As of the year ended December 31, 2024 , as a result of continued downward pressure on the Company’s common stock and updated clinical development plan, the Company performed an impairment assessment on the individual intangible assets utilizing a discounted cash flow model with a weighted average cost of capital of 26 %, and recognized a full impairment charge of $ 9.7 million during the year ended December 31, 2024 .

There was no impairment charge in 2023.

Accrued liabilities

The Company’s accrued liabilities are comprised of the following:

Development cost liability

4 unchanged sentences

Accrued audit and legal

promissory note and accrued interest, net

April 12, 2022, Allarity Denmark re-issued a Convertible Promissory Note (the “Promissory Note”) to Novartis Pharma AG, a

company organized under the laws of Switzerland (“Novartis,” and together with Allarity Therapeutics Europe ApS (“Allarity

Europe”), the “License Parties”) in the principal amount of $ 1,000 .

The Promissory Note was re-issued pursuant to the

First Amendment to License Agreement, with an effective date of March 30, 2022 (the “First Amendment”), entered into by and

between the License Parties, which amended the License Agreement dated April 6, 2018 (the “Original Agreement”) previously

entered into by the License Parties relating to the Compound (as defined in the Original Agreement).

The First Amendment amends and restates

Section 11.7 of the Original Agreement to add the revised Note to the list of enforceable claims in the second paragraph of Section 11.7

making the revised Note enforceable under New York law as a legal obligation of Allarity Denmark ApS (formerly OV-SPV2 ApS).

provisions of the Original Agreement and Promissory Note were unchanged and remain in full force and effect.

The Promissory Note pays

simple interest on the outstanding principal amount from the date until payment in full, which interest shall be payable at the rate

of 5 % per annum.

Accrued SEC settlement

$ 5,232 $ 1,309

Convertible promissory note due to Novartis

On April 12, 2022, Allarity Denmark re-issued a Convertible Promissory Note (the “Novartis Promissory Note”) to Novartis Pharma AG, a company organized under the laws of Switzerland (“Novartis,” and together with Allarity Therapeutics Europe ApS (“Allarity Europe”), the “License Parties”) in the principal amount of $ 1.0 million.

The Novartis Promissory Note was re-issued pursuant to an amendment of the license agreement, with an effective date of March 30, 2022 ( the “First Amendment”), entered into by and between the License Parties, which amended the License Agreement dated April 6, 2018 (the “Original Agreement”) previously entered into by the License Parties relating to the Compound (as defined in the Original Agreement).

The First Amendment amends and restates Section 11.7 of the Original Agreement to add the revised Note to the list of enforceable claims in the second paragraph of Section 11.7 making the revised Note enforceable under New York law as a legal obligation of Allarity Denmark ApS (formerly OV- SPV2 ApS).

All other provisions of the Original Agreement and Novartis Promissory Note were unchanged and remain in full force and effect.

The Novartis Promissory Note pays simple interest on the outstanding principal amount from the date until payment in full, which interest shall be payable at the rate of 5 % per annum.

Interest shall be calculated on the basis of a 360 -day year for the actual number of days elapsed.

Due to the Company’s

inability to meet its milestone payment commitments to Novartis, effective January 26, 2024, the Company has received a Termination Notice

of all agreements with Novartis resulting in the promissory note and accrued interest in the amount of $ 300 becoming immediately due

Accordingly, $ 1.3 million has been recorded as a current liability as of December 31, 2023.

the years ended December 31, 2023 and 2022, the Company recorded $ 217 and $ 104 , respectively, to interest expense and increased the convertible

promissory note liability by the same amount.

The roll forward of the Promissory Note as of December 31, 2023 and 2022, is as follows:

Convertible promissory note

Less debt discount,

accretion of debt discount, interest expense

Convertible promissory

note, net of discount

Interest accretion,

accrual, expense

Convertible promissory

note – net, ending balance

Promissory Notes

November 22, 2022, the Company entered into a Secured Note Purchase Agreement (“Purchase Agreement”) with 3i, LP (“Holder”,

or “3i”), whereby the Company authorized the sale and issuance of three Secured Promissory Notes (each a “Note”

and collectively, the “Notes”).

The roll forward of the Novartis Promissory Note as of December 31, 2024 and 2023 is as follows:

Convertible promissory note, opening balance

$ 1,300 $ 1,083

Less debt discount, opening

Plus, accretion of debt discount, interest expense

Convertible promissory note, net of discount

Interest accretion, opening

Interest accrual, expense

Convertible promissory note, ending balance

$ 1,350 $ 1,300

On January 26, 2024, the Company received a termination notice from Novartis due to a material breach of the Original Agreement.

Accordingly, under the terms of the Original 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 December 31, 2024, the liability is recorded as a current liability on the Company's condensed consolidated balance sheets as follows:

$ 3.6 million in accounts payable and $ 1.6 million in convertible promissory notes and accrued interest.

During the years ended December 31, 2024 and 2023 , the Company recorded $ 0.2 million and $ 0.2 million, respectively, to interest expense.

Promissory Notes due to 3i, LP ( "3i" )

3i Convertible Senior Promissory Notes ( 2024 ) (collectively the "2024 Notes")

On January 18, 2024, the Company entered into a Securities Purchase Agreement (the "SPA"), as amended, with 3i, pursuant to which three senior convertible promissory notes were issued as follows:

On January 18, 2024, in an aggregate principal amount of $ 440,000 due on January 18, 2025, and with a set conversion price of $ 268.50 per share, for an aggregate purchase price of $ 400,000 , representing an approximate 10 % original issue discount (the “First Note”).

On February 13, 2024, in an aggregate principal amount of $ 440,0000 due on February 13, 2025, and with a set conversion price of $ 243.00 per share, for an aggregate purchase price of $ 400,000 , representing an approximately 10 % original issue discount (the “Second Note”).

On March 14, 2024, in an aggregate principal amount of $ 660,000 due on March 14, 2025, and with a set conversion price of $ 210.00 per share, for an aggregate purchase price of $ 600,000 , representing an approximately 10 % original issue discount (the “Third Note”).

The Company 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 the initial receipt of net proceeds.

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

3i Convertible Secured Promissory Notes ( 2023 )

On November 22, 2022, the Company entered into a Secured Note Purchase Agreement (“Purchase Agreement”) with 3i, LP (“Holder”, or “3i” ), whereby the Company authorized the sale and issuance of three Secured Promissory Notes (each a “Note” and collectively, the “2023 Notes”).

Effective November 28, 2022, the Company issued:

(1) a Note in the principal amount of $ 1,667

as payment of $ 1,667 due to 3i, LP in Alternative Conversion Floor Amounts that began to accrue on July 14, 2022;

and (2) a Note in the

principal amount of $ 350 in exchange for cash.

Effective December 30, 2022, the Company issued an additional Note in the principal amount

of $ 650 in exchange for cash.

Each Note matures on January 1, 2024 , carries an interest rate of 5 % per annum, and is secured by all of

the Company’s assets pursuant to a security agreement (the “Security Agreement”).

In addition, the Holder may exchange

the Notes for the Company’s common stock at an exchange price equal to the lowest price per share of the equity security sold to

other purchasers, rounded down to the nearest whole share, if the Company concludes a future equity financing prior to the maturity date

or other repayment of such promissory note.

Lastly, each Note and interest earned thereon may be redeemed by the Company at its option

at any time or the holder may demand redemption if a) the Company obtains gross proceeds of at least $ 5 million in a financing in an

amount of up to 35 % of the gross proceeds of the financing or b) there is an Event of Default (as defined in the Note agreement).

April 19, 2023, 3i, provided the Company with a loan for $ 350 , which was evidenced by a Secured Promissory Note dated April 19, 2023

(the “April Note”).

April 20, 2023, the Company entered into a Cancellation of Debt Agreement with 3i, which became effective as of the April Offering Closing.

Upon the closing, pursuant to the terms of the Cancellation of Debt Agreement, all of the Company’s outstanding indebtedness under

the Notes (as defined therein) and the Alternative Conversion Amount (as defined therein) due by the Company to 3i were paid in full.

Accordingly, any and all obligations in connection therewith were extinguished without any additional further action on the part of 3i

upon payment of $ 3,348 in cash from a portion of the proceeds from the April Offering.

June 29, 2023, the Company entered into a Secured Note Purchase Agreement with 3i, (the “June 2023 Purchase Agreement”),

pursuant to which, on June 30, 2023, 3i purchased a secured promissory note for a principal amount of $ 350 (the “June Note”).

Such note matured on July 31, 2023, and carried an interest rate of 5 % per annum, and is secured by all of the Company’s assets

pursuant to that certain security agreement dated June 29, 2023 (the “Security Agreement”).

As contemplated by the June

2023 Purchase Agreement, the Company filed the Second Certificate of Amendment with the Delaware Secretary of State on June 30, 2023.

From the proceeds of the July Offering, on July 10, 2023, the Company redeemed the June Note for $ 351 in cash.

The roll forward of, the April Note and the June Note as of December

31, 2023 and 2022, is as follows:

( 1 ) a Note in the principal amount of $ 1.7 million as payment of $ 1.7 million due to 3i, LP in Alternative Conversion Floor Amounts that began to accrue on July 14, 2022;

and ( 2 ) a Note in the principal amount of $ 0.4 million in exchange for cash.

Effective December 30, 2022, the Company issued an additional Note in the principal amount of $ 0.7 million in exchange for cash.

Each Note was due to mature on January 1, 2024, carried an interest rate of 5 % per annum, and was secured by all of the Company’s assets pursuant to a security agreement (the “Security Agreement”).

On April 19, 2023, 3i provided the Company with a loan for $ 0.4 million, which was evidenced by a Secured Promissory Note dated April 19, 2023 ( the “April Note”).

On April 20, 2023, the Company entered into a Cancellation of Debt Agreement with 3i, which became effective as of the April Offering Closing.

Upon the closing, pursuant to the terms of the Cancellation of Debt Agreement, all of the Company’s outstanding indebtedness under the Notes (as defined therein) and the Alternative Conversion Amount (as defined therein) due by the Company to 3i were paid in full.

Accordingly, any and all obligations in connection therewith were extinguished without any additional further action on the part of 3i upon payment of $ 3.3 million in cash from a portion of the proceeds from the April Offering.

On June 29, 2023, the Company entered into a Secured Note Purchase Agreement with 3i, (the “June 2023 Purchase Agreement”), pursuant to which, on June 30, 2023, 3i purchased a secured promissory note for a principal amount of $ 0.4 million (the “June Note”).

Such note matured on July 31, 2023, and carried an interest rate of 5 % per annum, and was secured by all of the Company’s assets pursuant to that certain security agreement dated June 29, 2023 (the “Security Agreement”).

As contemplated by the June 2023 Purchase Agreement, the Company filed the Second Certificate of Amendment with the Delaware Secretary of State on June 30, 2023.

From the proceeds of the July Offering, on July 10, 2023, the Company redeemed the June Note for $ 0.4 million in cash.

The roll forward of the April Note and the June Note for the twelve months ended December 31, 2023 is as follows:

Secured promissory notes

Less debt discount,

accretion of debt discount, interest expense

Less debt discount, opening

Plus, accretion of debt discount, interest expense

Carrying value of the Notes

Interest accretion,

accrual, expense

Interest accretion, opening

Interest accrual, expense

repayment April 10, 2023

June 2023 Promissory Note proceeds

July 10, 2023

Secured promissory

note, ending balance

Series A Preferred Stock and Common Stock Purchase

(a) Amendments

to Series A Preferred Stock

November 22, 2022, the Company amended Section 12 of the Certificate of Designation of Series A Convertible Preferred Stock (“Series

A Preferred Stock”) to provide for voting rights.

Subject to a 9.99 % beneficial ownership limitation, the holders of Series A Preferred

Stock shall have the right to vote on all matters presented to the stockholders for approval together with the shares of common stock,

voting together as a single class, on an “as converted” basis using the “Conversion Price” (initially $ 9.906

per share before any adjustment) (rounded down to the nearest whole number and using the record date for determining the stockholders

of the Company eligible to vote on such matters), except as required by law (including without limitation, the DGCL) or as otherwise

expressly provided in the Company’s Certificate of Incorporation or the Certificate of Designations of Series A Convertible Preferred

The voting rights described above expired on February 28, 2023, and thereafter holders of preferred stock shall not have voting

rights except as required by law.

December 9, 2022, the Company and 3i entered into a letter agreement which provided that pursuant to Section 8(g) of the Certificate

of Designations for the Series A Preferred Stock, the parties agreed that the Conversion Price was modified to mean the lower of:

the Closing Sale Price on the trading date immediately preceding the Conversion Date and (ii) the average Closing Sale Price of the common

stock for the five trading days immediately preceding the Conversion Date, for the Trading Days through and inclusive of January 19,

Any conversion which occurs shall be voluntary at the election of the Holder, which shall evidence its election as to the Series

A being converted in writing on a conversion notice setting forth the then Minimum Price.

Management determined that the adjustment made

to the Conversion Price is not a modification of the COD which allows for adjustments to the Conversion Price at any time by the Company

and the other terms of the Certificate of Designations remained unchanged.

January 23, 2023, we and 3i amended the letter agreement entered into on December 8, 2022, to provide that the modification of the term

Series A Preferred Stock Conversion Price (“Series A Preferred Stock Conversion Price”) to mean the lower of:

(i) the Closing

Sale Price (as defined in the Certificate of Designations of Series A Preferred Stock (“Series A Certificate of Designations”))

on the trading date immediately preceding the Conversion Date (as defined in the Series A Certificate of Designations and (ii) the average

Closing Sale Price of the common stock for the five trading days immediately preceding the Conversion Date, for the Trading Days (as

defined in the Series A Certificate of Designations) will be in effect until terminated by us and 3i.

April 20, 2023, the Company entered into a certain Modification and Exchange Agreement (the “Exchange Agreement”) with 3i

pursuant to which the parties agreed to, among other things, subject to the April Offering Closing, (i) amend the Certificate of Designations

for the Series A Convertible Preferred Stock (the “Amended COD”), which among other things, eliminates the Series A Preferred

Stock redemption right and dividend (except for certain exceptions as specified in the Amended COD), and provides for the conversion

of Series A Preferred Stock into Common Stock at a conversion price of $ 0.75 which is equal to the price for a share of Common Stock

sold in the April Offering, (ii) exchange 50,000 shares of Series C Preferred Stock (the “Series C Shares”) beneficially

owned by 3i for 5,577 shares of Series A Preferred Stock (the “Exchange Shares”), (iii) exchange a warrant to purchase common

stock issued on December 20, 2021 to 3i (the “Original Warrant”) for a new warrant (the “Exchange Warrant”),

which reflects an exercise price of $ 30.00 (the “New Exercise Price”) and represents a right to acquire 315,085 shares of

Common Stock (the “New Warrant Shares”).

In addition to the satisfaction or waiver of customary and additional closing conditions

set forth in the Exchange Agreement, the transactions contemplated by the Exchange Agreement were subject to (a) the occurrence of the

closing of the Offering and (b) the filing of the Amended COD with the Delaware Secretary of State.

On April 21, 2023, the closing of

the transactions contemplated by the Exchange Agreement occurred and the Exchange Warrant and the Exchange Shares were issued to 3i,

and the Original Warrant and the Series C Shares were cancelled.

In addition, on April 21, 2023, the Amended COD was filed with the Delaware

Secretary of State.

Stock (cont.)

April 20, 2023, the Company also entered into a Cancellation of Debt Agreement as described in Note 7.

Pursuant to such agreement, 1,550

shares of Series A Preferred Stock (the “Redemption Shares”) beneficially owned by 3i were redeemed in full for a purchase

price of $ 1,652 , which redemption price was paid in cash from the portion of the proceeds from the April Offering.

The Company also entered

into the First Amendment to the Registration Rights Agreement dated May 20, 2023 (the “RRA”), which became effective upon

the April Offering Closing, to amend certain defined terms under the RRA to include the Exchange Shares, the New Warrant Shares and the

Note Conversion Shares.

April 21, 2023, in connection with the transactions contemplated under the Exchange Agreement, the Company filed an Amended and Restated

Certificate of Designations of Series A Convertible Preferred Stock of the Company (the “Amended and Restated Series A COD”) with

the Delaware Secretary of State.

The Amended and Restated Series A COD eliminates the Series A Preferred Stock redemption right

and dividend (except for certain exceptions as specified therein) and provides for the conversion of Series A Preferred Stock into Common

Stock at a conversion price equal to the price for a share of Common Stock sold in the April Offering, $ 30.00 per share, and based on

a stated value of $ 1,080 per share.

As a result of the Amended and Restated Series A COD, the Company determined that the Series A Preferred

Stock met the definition of equity and reclassified it from mezzanine equity.

May 30, 2023, the Company filed an amendment to the Amended and Restated Certificate of Designations for the Series A Preferred Stock

with the Delaware Secretary of State (the “Amended COD”) to amend the voting rights of the Series A Preferred Stock which

among other things provided additional voting rights to the Series A Preferred Stock.

the Amended COD, holders of the Series A Preferred Stock have the following voting rights:

(1) holders of the Series A Preferred Stock

have a right to vote on all matters presented at the Special Meeting together with the Common Stock as a single class on an “as

converted” basis using the conversion price of $ 30.00 and based on stated value of $ 1,080 subject to a beneficial ownership limitation

of 9.99 %, and (2), in addition, holders of Series A Preferred Stock have granted the Board the right to vote, solely for the purpose

of satisfying quorum and casting the votes necessary to adopt a reverse stock split of the Company’s issued and outstanding shares

of Common Stock (the “Reverse Stock Split Proposal”) and to adjourn any meeting of stockholders called for the purpose of

voting on reverse stock split (the “Adjournment Proposal”) under Delaware law, that will “mirror” the votes cast

by the holders of shares of Common Stock and Series A Preferred Stock, voting together as a single class, with respect to the Reverse

Stock Split Proposal and the Adjournment Proposal.

number of votes per each share of Series A Preferred Stock that may be voted by the Board shall be equal to the quotient of (x) the sum

of (1) the original aggregated stated value of the Series A Preferred Stock when originally issued on December 20, 2021 (calculated based

on the original stated value of $ 1,000 of the Series A Preferred Stock multiplied by 20,000 shares of Series A Preferred Stock) and (2)

$ 1,200 , which represents the purchase price of the Series C Preferred Stock when originally issued;

divided by (y) the conversion price

If the Board decides to cast the vote, it must vote all votes created by the Amended COD in the same manner and proportion

as votes cast by the holders of Common Stock and Series A Preferred Stock, voting as single class.

The Series A Preferred Stock voting

rights granted to the holders thereof relating to the Reverse Stock Split Proposal and the Adjournment Proposal 2 expired automatically

on July 31, 2023.

addition, among other things, the Reverse Stock Split Proposal, the effectuation of the June Reverse Stock Split, and the amendment to

the Company’s Certificate of Incorporation, are subject to the consent by the holders of a majority of the then outstanding shares

of Series A Preferred Stock.

Such consent was received on June 27, 2023.

Series A Preferred Stock has a liquidation preference equal to an amount per Series A Preferred Stock equal to the sum of (i) the Black

Scholes Value (as defined in the Warrants, which was sold concurrent with the Series A Preferred Stock) with respect to the outstanding

portion of all Warrants held by such holder (without regard to any limitations on the exercise thereof) as of the date of such event

and (ii) the greater of (A) 125 % of the Conversion Amount of such Series A Preferred Stock on the date of such payment and (B) the amount

per share such holder would receive if such holder converted such Series A Preferred Stock into Common Stock immediately prior to the

date of such payment, and will be entitled to convert into shares of Common Stock at an initial fixed conversion price of $ 30.00 per

share, subject to a beneficial ownership limitation of 9.99 %.

Stock (cont.)

certain defined “triggering events” defined in the Series A COD, as amended and restated and further amended, occur, or our

failure to convert the Series A Preferred Stock into Common Stock when a conversion right is exercised, failure to issue our Common Stock

when the Exchange Warrant is exercised, failure to declare and pay to any holder any dividend on any dividend date, then we may be required

to pay a dividend on the stated value on the Series A Preferred Stock in the amount of 18 % per annum, but paid quarterly in cash, so

long as the triggering event is continuing.

June 6, 2023, 3i and the Company entered into a separate limited waiver and amendment agreement whereby 3i (“3i Waiver Agreement”)

agreed to waive certain rights granted under a Series A Preferred Stock securities purchase agreement dated December 20, 2021, the Exchange

Agreement, and the securities purchase agreement related to the April Offering in exchange for, among other things, amending the conversion

price of the Series A Preferred Stock to equal the public offering price of the shares of Common Stock in the July Offering.

consummation of the July Offering, the conversion price of the Series A Preferred Stock was reduced to $ 4.50 .

On July 10, 2023, the Company

filed a Third Certificate of Amendment to the Amended and Restated Certificate of Designations of Series A Preferred Stock (“Third

Amendment”) to effect the change to conversion price.

connection with the September 2023 Inducement Letter and the transactions contemplated therein, the Company and 3i, LP entered into a

limited waiver agreement (the “Waiver”) pursuant to which 3i, LP agreed to allow the filing of the Resale Registration Statement

not otherwise permitted under certain agreements with 3i, LP.

In consideration of entering in the Waiver, the Company agreed to amend

the “Conversion Price” of the Series A Convertible Preferred Stock to equal $ 1.00 as soon as practicable.

On September 22,

2023, the Company filed the Fourth Certificate of Amendment to the Amended and Restated Certificate of Designations of Series A Convertible

Preferred Stock (“Fourth Amendment”) with the Secretary of State of the State of Delaware to reflect the new conversion price

of the Series A Preferred Stock of $ 1.00 .

Subsequent to December 31, 2023, the Series A Preferred Stock conversion price was reduced

(see Note 18(c)).

A Preferred Stock Triggering Event

more specifically discussed below, a “Triggering Event” under the COD occurred on April 29, 2022, under Section 5(a)(ii)

of the COD, which would have resulted in the following unless 3i, agreed to forebear and/or waive its rights under the COD:

An 18 % per annum dividend will start to accrue on the stated value of all outstanding Preferred Shares and will continue to accrue until

the Triggering Event has been cured.

The accrued dividend is added to the stated value prior to the Dividend Payment Date and paid in

cash on the first trading day of the Company’s next fiscal quarter.

A “Late Charge” in the amount of 18 % per annum

will accrue on any amounts due to be paid to holders of the Preferred Shares if not paid when due, including payments that may be owed

under Section (e) of the Registration Rights Agreement (“RRA”).

A “Triggering Event Redemption Right” will commence and remain open for a period of 20 trading days from the later of the

date either the Triggering Event is cured or the receipt by 3i of the Triggering Event Notice.

Under the Triggering Event Redemption

Right, if elected by the holder of the Preferred Shares, the Company would be obligated to redeem all or a portion of the Preferred Shares

for a minimum of 125 % of the stated value of the Preferred Shares.

Concurrently, under the provisions of the PIPE Warrant, if elected

by 3i, the Company would be obligated to redeem the PIPE Warrant for the Black Sholes Triggering Event Value as defined in the warrant

A “Registration Delay Payment” will accrue on April 22, 2022 (the expiration of the Allowable Grace Period under the RRA)

in the amount of 2 % of 3i’s “Purchase Price” as defined in the Securities Purchase Agreement which is approximately

2 % of $ 20 million, or $ 400 and will continue to accrue at 2 % every 30 days thereafter.

Additionally, a late charge of 2 % per month will

accrue on any payments that are not paid when due.

The Registration Delay Payments will stop accruing when the post-effective amendment

is declared effective by the SEC at which time the registration statement and its prospectus will again be available for the resale of

common stock.

Stock (cont.)

a result of the Company’s delay in filing its periodic reports with the SEC in 2022, a “triggering event” under Section

5(a)(ii) of the Original Series A COD, occurred on or about April 29, 2022, and because of the delay the Company was obligated to pay

(i) registration delay payments under the RRA, (ii) additional amounts under the Original Series A COD, and (iii) legal fees incurred

in the preparation of the Forbearance Agreement and Waiver to 3i in an aggregate amount of $ 539 which was paid pursuant to that certain

Forbearance Agreement and Waiver with 3i.

May 4, 2022, the Company and 3i entered into a Forbearance Agreement and Waiver, dated April 27, 2022, wherein 3i confirmed that

no Triggering Event as defined under the COD has occurred prior to April 27, 2022, that a Triggering Event under Section 5(a)(ii) will

and has occurred on April 29, 2022, and that in consideration for the Registration Delay Payments the Company is obligated to pay under

the RRA, and additional amounts the Company is obligated to pay under the COD and 3i’s legal fees incurred in the preparation of

the Forbearance Agreement and Waiver in the aggregate of $ 539 paid upon execution of the Forbearance Agreement and Waiver, and so long

as the Company pays the Registration Delay Payments that become due and payable under the RRA after the execution of the Forbearance

Agreement and Waiver, 3i has agreed to forbear exercising any rights or remedies that it may have under the COD that arises as a result

of a Triggering Event under Section 5(a)(ii) of the COD and Section 4(c)(ii) of the PIPE Warrant until the earlier to occur of (i) the

date immediately prior to the date of occurrence of a Bankruptcy Triggering Event, (ii) the date of occurrence of any other Triggering

Event under Section 5(a) of the COD (excluding any Triggering Event arising solely as a result of Section 5(a)(ii) of the COD and Section

4(c)(ii) of the PIPE Warrant), (iii) the time of any breach by the Company under the Forbearance Agreement and Waiver, (iv) the Resale

Availability Date as defined therein and (v) June 4, 2022 (such period, the “Forbearance Period”).

Provided that the Company

is not in breach of its obligations under Forbearance Agreement and Waiver, effective as of the Trading Day immediately following the

date the Company cures the Triggering Event under Section 5(a)(ii) of the COD, 3i agrees to waive any rights or remedies that it may

have under the COD that arises as a result of a Triggering Event under Section 5(a) of the COD and Section 4(c)(ii) of the PIPE Warrant

that may have arisen prior to the date of the Forbearance Agreement and Waiver.

April 21, 2023, pursuant to the terms of an Exchange Agreement, the PIPE Warrant was exchanged for an Exchange Warrant representing

a right to acquire 315,085 shares of Common Stock, exercisable at $ 30.00 per share.

The number of shares exercisable under the Exchange

Warrant and the exercise price was subsequently adjusted in July 2023 to the right to acquire 9,452,667 shares of Common Stock, exercisable

at $ 1.00 per share.

July 10, 2023, upon the closing of the July Offering, the number of shares exercisable under the Exchange Warrant and the exercise price

was adjusted to 2,100,565 shares of Common Stock and $ 4.50 per share, respectively.

Subsequently on July 26, 2023, pursuant to Section

2(e) of the Exchange Warrant, due to the event market price on the 16th day after the June Reverse Stock Split being less than the exercise

price of the Exchange Warrant then in effect, the number of shares exercisable under such Warrant and the exercise price was further

adjusted to 3,134,693 shares and $ 3.0155 per share, respectively.

September 14, 2023, the date of the September Induced Warrant offering, the number of shares exercisable under the Exchange Warrant and

the exercise price was adjusted to 9,452,667 shares of Common Stock and $ 1.00 per share, respectively.

On December 5, 2023, 3i exercised

5,045,466 Exchange Warrants on a cashless basis in exchange for 500,000 common shares.

As of December 31, 2023, there were 4,407,201

Exchange Warrants, exercisable at $ 1.00 , outstanding.

After December 31, 2023, the exercise price of the Exchange Warrants was reduced

(see Note 18(c)).

(d) Accounting

June 2023 Promissory Note proceeds and interest

July 10, 2023 repayment

Secured promissory note, ending balance

The April Note and June Note were repaid in full in 2023.

Preferred Stock

Series A Preferred Stock and Common Stock Purchase Warrants

Amendments to Series A Preferred Stock

On November 22, 2022, the Company amended Section 12 of the Certificate of Designation of Series A Convertible Preferred Stock (“Series A Preferred Stock”) to provide for voting rights.

Subject to a 9.99 % beneficial ownership limitation, the holders of Series A Preferred Stock had the right to vote on all matters presented to the stockholders for approval together with the shares of common stock, voting together as a single class, on an “as converted” basis using the “Conversion Price” (initially $ 9.906 per share before any adjustment) (rounded down to the nearest whole number and using the record date for determining the stockholders of the Company eligible to vote on such matters), except as required by law (including without limitation, the DGCL) or as otherwise expressly provided in the Company’s Certificate of Incorporation or the Certificate of Designations of Series A Convertible Preferred Stock.

The voting rights described above expired on February 28, 2023, and thereafter holders of preferred stock shall not have voting rights except as required by law.

On December 9, 2022, the Company and 3i entered into a letter agreement which provided that pursuant to Section 8 (g) of the Certificate of Designations for the Series A Preferred Stock, the parties agreed that the Conversion Price was modified to mean the lower of:

(i) the Closing Sale Price on the trading date immediately preceding the Conversion Date and (ii) the average Closing Sale Price of the common stock for the five trading days immediately preceding the Conversion Date, for the Trading Days through and inclusive of January 19, 2023.

Any conversion which occurs shall be voluntary at the election of the Holder, which shall evidence its election as to the Series A being converted in writing on a conversion notice setting forth the then Minimum Price.

Management determined that the adjustment made to the Conversion Price is not a modification of the COD which allows for adjustments to the Conversion Price at any time by the Company and the other terms of the Certificate of Designations remained unchanged.

On January 23, 2023, the Company and 3i amended the letter agreement entered into on December 8, 2022, to provide that the modification of the term Series A Preferred Stock Conversion Price (“Series A Preferred Stock Conversion Price”) to mean the lower of:

(i) the Closing Sale Price (as defined in the Certificate of Designations of Series A Preferred Stock (“Series A Certificate of Designations”)) on the trading date immediately preceding the Conversion Date (as defined in the Series A Certificate of Designations and (ii) the average Closing Sale Price of the common stock for the five trading days immediately preceding the Conversion Date, for the Trading Days (as defined in the Series A Certificate of Designations) will be in effect until terminated by us and 3i.

On April 20, 2023, the Company entered into a certain Modification and Exchange Agreement (the “Exchange Agreement”) with 3i pursuant to which the parties agreed to, among other things, subject to the April Offering Closing, (i) amend the Certificate of Designations for the Series A Convertible Preferred Stock (the “Amended COD”), which among other things, eliminates the Series A Preferred Stock redemption right and dividend (except for certain exceptions as specified in the Amended COD), and provides for the conversion of Series A Preferred Stock into common stock at a conversion price of $ 450.00 which is equal to the price for a share of common stock sold in the April Offering, (ii) exchange 50,000 shares of Series C Preferred Stock (the “Series C Shares”) beneficially owned by 3i for 5,577 shares of Series A Preferred Stock (the “Exchange Shares”), (iii) exchange a warrant to purchase common stock issued on December 20, 2021 to 3i (the “Original Warrant”) for a new warrant (the “Exchange Warrant”), which reflects an exercise price of $ 18,000.00 (the “New Exercise Price”) and represents a right to acquire 526 shares of common stock (the “New Warrant Shares”).

In addition to the satisfaction or waiver of customary and additional closing conditions set forth in the Exchange Agreement, the transactions contemplated by the Exchange Agreement were subject to (a) the occurrence of the closing of the Offering and (b) the filing of the Amended COD with the Delaware Secretary of State.

On April 21, 2023, the closing of the transactions contemplated by the Exchange Agreement occurred and the Exchange Warrant and the Exchange Shares were issued to 3i, and the Original Warrant and the Series C Shares were cancelled.

In addition, on April 21, 2023, the Amended COD was filed with the Delaware Secretary of State.

On April 20, 2023, the Company also entered into a Cancellation of Debt Agreement as described in Note 7.

Pursuant to such agreement, 1,550 shares of Series A Preferred Stock (the “Redemption Shares”) beneficially owned by 3i were redeemed in full for a purchase price of $ 1,652 , which redemption price was paid in cash from the portion of the proceeds from the April Offering.

The Company also entered into the First Amendment to the Registration Rights Agreement dated May 20, 2023 ( the “RRA”), which became effective upon the April Offering Closing, to amend certain defined terms under the RRA to include the Exchange Shares, the New Warrant Shares and the Note Conversion Shares.

On April 21, 2023, in connection with the transactions contemplated under the Exchange Agreement, the Company filed an Amended and Restated Certificate of Designations of Series A Convertible Preferred Stock of the Company (the “Amended and Restated Series A COD”) with the Delaware Secretary of State.

The Amended and Restated Series A COD eliminates the Series A Preferred Stock redemption right and dividend (except for certain exceptions as specified therein) and provides for the conversion of Series A Preferred Stock into Common Stock at a conversion price equal to the price for a share of Common Stock sold in the April Offering, $ 18,000.00 per share, and based on a stated value of $ 1,080 per share.

As a result of the Amended and Restated Series A COD, the Company determined that the Series A Preferred Stock met the definition of equity and reclassified it from mezzanine equity.

On May 30, 2023, the Company filed an amendment to the Amended and Restated Certificate of Designations for the Series A Preferred Stock with the Delaware Secretary of State (the “Amended COD”) to amend the voting rights of the Series A Preferred Stock which among other things provided additional voting rights to the Series A Preferred Stock.

Under the Amended COD, holders of the Series A Preferred Stock have the following voting rights:

( 1 ) holders of the Series A Preferred Stock have a right to vote on all matters presented at the Special Meeting together with the common stock as a single class on an “as converted” basis using the conversion price of $ 18,000.00 and based on stated value of $ 1,080 subject to a beneficial ownership limitation of 9.99 %, and ( 2 ), in addition, holders of Series A Preferred Stock have granted the Board the right to vote, solely for the purpose of satisfying quorum and casting the votes necessary to adopt a reverse stock split of the Company’s issued and outstanding shares of common stock (the “Reverse Stock Split Proposal”) and to adjourn any meeting of stockholders called for the purpose of voting on reverse stock split (the “Adjournment Proposal”) under Delaware law, that will “mirror” the votes cast by the holders of shares of common stock and Series A Preferred Stock, voting together as a single class, with respect to the Reverse Stock Split Proposal and the Adjournment Proposal.

The number of votes per each share of Series A Preferred Stock that may be voted by the Board shall be equal to the quotient of ( x ) the sum of ( 1 ) the original aggregated stated value of the Series A Preferred Stock when originally issued on December 20, 2021 ( calculated based on the original stated value of $ 1,000 of the Series A Preferred Stock multiplied by 20,000 shares of Series A Preferred Stock) and ( 2 ) $ 1,200 , which represents the purchase price of the Series C Preferred Stock when originally issued;

divided by (y) the conversion price of $ 30.00 .

If the Board decides to cast the vote, it must vote all votes created by the Amended COD in the same manner and proportion as votes cast by the holders of Common Stock and Series A Preferred Stock, voting as single class.

The Series A Preferred Stock voting rights granted to the holders thereof relating to the Reverse Stock Split Proposal and the Adjournment Proposal 2 expired automatically on July 31, 2023.

On June 6, 2023, 3i and the Company entered into a separate limited waiver and amendment agreement whereby 3i ( “3i Waiver Agreement”) agreed to waive certain rights granted under a Series A Preferred Stock securities purchase agreement dated December 20, 2021, the Exchange Agreement, and the securities purchase agreement related to the April Offering in exchange for, among other things, amending the conversion price of the Series A Preferred Stock to equal the public offering price of the shares of common stock in the July Offering.

Upon the consummation of the July Offering, the conversion price of the Series A Preferred Stock was reduced to $ 2,700.00 .

On July 10, 2023, the Company filed a Third Certificate of Amendment to the Amended and Restated Certificate of Designations of Series A Preferred Stock (“Third Amendment”) to effect the change to conversion price.

In connection with the September 2023 Inducement Letter and the transactions contemplated therein, the Company and 3i, LP entered into a limited waiver agreement (the “Waiver”) pursuant to which 3i, LP agreed to allow the filing of the Resale Registration Statement not otherwise permitted under certain agreements with 3i, LP.

In consideration of entering in the Waiver, the Company agreed to amend the “Conversion Price” of the Series A Convertible Preferred Stock to equal $ 600.00 as soon as practicable.

On September 22, 2023, the Company filed the Fourth Certificate of Amendment to the Amended and Restated Certificate of Designations of Series A Convertible Preferred Stock (“Fourth Amendment”) with the Secretary of State of the State of Delaware to reflect the new conversion price of the Series A Preferred Stock of $ 600.00 .

On January 14, 2024, pursuant to the terms of the January 14th, 2024, 3i LP Bridge Loan, the Company 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 Certificate of Designations of Series A Convertible Preferred Stock (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 .

At a stated value of $ 1,080 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 common shares as of January 14, 2024.

On February 13, 2024, pursuant to the terms of the February 13, 2024, Bridge Loan, the Company 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.

The Company also agreed to amend the conversion price of the Series A Preferred Stock to equal $ 243.00 as soon as practicable.

We filed the Sixth Certificate of Amendment to Amended and Restated Certificate of Designations of Series A Convertible Preferred Stock (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 .

At a stated value of $ 1,080 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 5,760 common shares.

On March 14, 2024, pursuant to the terms of the Third Note, the Company modified the conversion price of the 3i Exchange Warrants from $ 4,860.00 to $ 4,200.00 and thereby increased the number of Exchange Warrants outstanding from 907 on February 13, 2024, to 1,383 on March 14, 2024.

The Company 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 $ 4,200.00 .

As of March 14, 2024, the Company 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 $ 1,080 for each share of Series A Preferred Stock, the revised price of $ 4,200.00 per share results in the 1,215 shares being convertible into 893 shares of common stock.

During the period April 1, 2024, through May 2, 2024, the Company amended the conversion prices of the Series A Convertible Preferred Stock, the Exchange Warrants and the 2024 Notes to equal the current last sale price of its shares of Common Stock of $ 34.50 as of May 1, 2024.

Effective April 21, 2023, pursuant to the terms of an Exchange Agreement, the PIPE Warrant was exchanged for an Exchange Warrant representing a right to acquire 526 shares of common stock, exercisable at $ 18,000.00 per share.

The number of shares exercisable under the Exchange Warrant and the exercise price was subsequently adjusted in July 2023 to the right to acquire 15,755 shares of common stock, exercisable at $ 600.00 per share.

Effective July 10, 2023, upon the closing of the July Offering, the number of shares exercisable under the Exchange Warrant and the exercise price was adjusted to 3,501 shares of Common Stock and $ 2,700.00 per share, respectively.

Subsequently on July 26, 2023, pursuant to Section 2 (e) of the Exchange Warrant, due to the event market price on the 16th day after the June Reverse Stock Split being less than the exercise price of the Exchange Warrant then in effect, the number of shares exercisable under such Warrant and the exercise price was further adjusted to 5,225 shares and $ 1,809.30 per share, respectively.

Effective September 14, 2023, the date of the September Induced Warrant offering, the number of shares exercisable under the Exchange Warrant and the exercise price was adjusted to 15,755 shares of common stock and $ 600.00 per share, respectively.

On December 5, 2023, 3i exercised 8,410 Exchange Warrants on a cashless basis in exchange for 833 common shares.

Series A Preferred Stock

Company evaluated the Series A Preferred Stock under ASC 480-10 to determine whether it represents an obligation that would require the

Company to classify the instrument as a liability and determined that the Series A Preferred Stock is not a liability pursuant to ASC

Management then evaluated the instrument pursuant to ASC 815 and determined that because the holders of the Series A Preferred

Stock may be entitled to receive cash, the Series A Preferred stock should be recorded as mezzanine equity given the cash redemption

right that is within the holder’s control.

Stock (cont.)

preferred stock that are currently redeemable should be adjusted to their redemption amount at each balance sheet date.

If it is probable

that the equity instrument will become redeemable, the Company has the option to either accrete changes in the redemption value over

the period from the date of issuance (or from the date that it becomes probable that the instrument will become redeemable, if later)

to the earliest redemption date of the instrument or to recognize changes in the redemption value immediately as they

occur and adjust the carrying amount of the instrument to equal the redemption value at the end of

each reporting period.

The Company evaluated the Series A Preferred Stock under ASC 480 - 10 to determine whether it represents an obligation that would require the Company to classify the instrument as a liability and determined that the Series A Preferred Stock is not a liability pursuant to ASC 480 - 10.

Management then evaluated the instrument and determined that because the holders of the Series A Preferred Stock may be entitled to receive cash, the Series A Preferred stock should be recorded as mezzanine equity given the cash redemption right that is within the holder’s control.

Generally, preferred stock that are currently redeemable should be adjusted to their redemption amount at each balance sheet date.

If it is probable that the equity instrument will become redeemable, the Company has the option to either accrete changes in the redemption value over the period from the date of issuance (or from the date that it becomes probable that the instrument will become redeemable, if later) to the earliest redemption date of the instrument or to recognize changes in the redemption value immediately as they occur and adjust the carrying amount of the instrument to equal the redemption value at the end of each reporting period.

The Company recognizes changes in redemption value when redemption becomes probable to occur.

December 9, 2022, the derivative scope exception under ASC 815 was not met because a settlement contingency was not indexed to the Company’s

Therefore, the redemption feature (derivative liability) was bifurcated from the Series A Preferred Stock and recorded as a derivative

The fair value of the Series A Preferred Stock Redemption Feature (the “Redemption Feature”) derivative is the

difference between the fair value of the Series A Preferred Stock with the Redemption Feature and the Series A Preferred Stock without

the Redemption Feature.

The Series A Preferred Stock Redemption Feature has been valued with a Monte Carlo Simulation model, using the

inputs as described in Note 9(b).

to December 9, 2022, because of the agreed conversion price adjustment, although bifurcation of the conversion feature is still required,

the value of the derivative has been determined to be immaterial since the conversion price will always be at market.

Additionally, because

the Series A redemption terms were amended to be entirely within the Company’s control, they have now been classified as permanent

Management has fair valued the Series A Preferred Stock prior to and after its modification and because the change in fair value

was greater than 10 %, has made a policy election to treat the amendment as an extinguishment.

Accordingly, the difference in fair value

has been recorded as a deemed dividend and reduction in additional paid in capital.

the year ended December 31, 2023, the Company, has recorded $ 8,392 in deemed dividends resulting from using the Black-Scholes model to

determine the fair value the Company’s Series A Preferred shares as follows:

$ 3,328 on the elimination of Series A redemption rights as of April 21, 2023,

$ 3,959 on the Exchange of 50,000 Series C Preferred Stock for 5,577 Series A Preferred Stock;

$ 206 on the July 10, 2023, modification of Series A Preferred Stock;

$ 526 on the redemption of Series A Preferred Stock;

$ 373 on the September 14, 2023 modification of Series A Preferred Stock.

of the dates noted below, the Company used the Black-Scholes option pricing model to determine the fair values using the following inputs:

Through December 9, 2022, the derivative scope exception under ASC 815 was not met because a settlement contingency was not indexed to the Company’s stock.

Therefore, the redemption feature (derivative liability) was bifurcated from the Series A Preferred Stock, valued with a Monte Carlo Simulation model and recorded as a derivative liability.

Subsequent to December 9, 2022, because of the agreed conversion price adjustment, although bifurcation of the conversion feature is still required, the value of the derivative has been determined to be immaterial since the conversion price will always be at market.

Additionally, because the Series A redemption terms were amended to be entirely within the Company’s control, they have now been classified as permanent equity.

Management has fair valued the Series A Preferred Stock prior to and after its modification and because the change in fair value was greater than 10%, has made a policy election to treat the amendment as an extinguishment.

Accordingly, the difference in fair value has been recorded as a deemed dividend and reduction in additional paid in capital.

Deemed Dividends

In the year ended December 31, 2023, the Company, has recorded $ 8.4 million in deemed dividends resulting from using the Black-Scholes model to determine the fair value the Company’s Series A Preferred shares as follows:

$ 3.3 million on the elimination of Series A redemption rights as of April 21, 2023,

$ 4.0 million on the Exchange of 50,000 Series C Preferred Stock for 5,577 Series A Preferred Stock;

$ 0.2 million on the July 10, 2023, modification of Series A Preferred Stock;

$ 0.5 million on the redemption of Series A Preferred Stock;

$ 0.4 million on the September 14, 2023 modification of Series A Preferred Stock.

As a result of fair value adjustments during the twelve months ended December 31, 2024, the Company recognized a deemed dividend of $ 0.3 million on the Series A Preferred Stock.

Inputs used in the Black-Scholes valuation models utilized to fair value the modification to the Series A Preferred Stock during the year ended December 31, 2024, are as follows:

January 14 - March 14,

April 5 - May 2,

Initial exercise price

0.67 7 - 0.27 27

0.23 3 - 0.04 04

Stock price on valuation date

0.30 0 - 0.24 24

0.15 5 - 0.04 04

Risk-free rate

5.10 % - 4.82 %

5.47 % - 5.49 %

Term (in years)

Rounded annual volatility

145 % - 130 %

As of the dates noted below, the Company used the Black-Scholes option pricing model to determine the fair values using the following inputs:

September 14,

Number of shares valued

$ 1.00 $ 3.40

Exercise price pre-modification

$ 4.50 $ 8.00

Exercise price post-modification

$ 1.00 $ 4.50

Risk fee rate

Preferred Stock (cont.)

the year ended December 31, 2023, the Company used the Black-Scholes option pricing model to determine the fair values using the following

Preferred Shares

5.37 % 5.28 %

During the year ended December 31, 2023, the Company used the Black-Scholes option pricing model to determine the fair values using the following inputs:

Number of shares valued

Stock Price at April 21, 2023 post 40 to 1

4,239 5,577 486

Stock Price at April 21, 2023 post 40 to 1 split

$ 20.40 $ 20.40 $ 20.40

Exercise price

$ 30.00 $ 30.00 $ 30.00

Risk fee rate

5.1 % 5.1 % 5.1 %

Expected liquidity event

September 15, 2023

3i Warrants were identified as a freestanding financial instrument and meet the criteria for derivative liability classification, initially

measured at fair value.

Subsequent changes in fair value are recognized through earnings for as long as the contracts continue to be

classified as a liability.

The measurement of fair value is determined utilizing an appropriate valuation model considering all relevant

assumptions current at the date of issuance and at each reporting period (i.e., share price, exercise price, term, volatility, risk-free

rate and expected dividend rate).

A Preferred Stock Conversions

Year ended December 31, 2023

the year ended December 31, 2023, 3i exercised its option to convert 12,052 shares of Series A Preferred stock for 241,893 shares

of common stock at the fair value of $ 3,899 .

From the proceeds of the July Offering, on July 10, 2023, the Company redeemed (i) 4,630

shares of Series A Preferred Stock held by 3i, for $ 5,000 , and (ii) the 3i June Promissory Note (as defined below) for $ 351 in cash.

September 15, 2023 September 15, 2023 September 15, 2023

156 % 156 % 156 %

The 3i Warrants were identified as a freestanding financial instrument and meet the criteria for derivative liability classification, initially measured at fair value.

Subsequent changes in fair value are recognized through earnings for as long as the contracts continue to be classified as a liability.

The measurement of fair value is determined utilizing an appropriate valuation model considering all relevant assumptions current at the date of issuance and at each reporting period (i.e., share price, exercise price, term, volatility, risk-free rate and expected dividend rate).

Series A Preferred Stock Conversions

During the year ended December 31, 2023, 3i exercised its option to convert 12,052 shares of Series A Preferred stock for 404 shares of common stock at the fair value of $ 3.9 million.

From the proceeds of the July Offering, on July 10, 2023, the Company redeemed (i) 4,630 shares of Series A Preferred Stock held by 3i, for $ 5.0 million, and (ii) the 3i June Promissory Note (as defined below) for $ 0.4 million in cash.

As a result of the payment, the 3i June Promissory Note was paid in full on July 10, 2023.

As of December 31, 2023, the Company had 1,417

shares of Series A Preferred Stock issued and outstanding.

(See Note 18(b).)

Year ended December 31, 2022

the year ended December 31, 2022, 3i exercised its option to convert 6,214 shares of Series A Preferred stock for 5,573 shares of common

As of December 31, 2022, we had 13,586 shares of Series A Preferred Stock issued and outstanding.

The fair value of the derivative

liability associated with the Series A Preferred Stock converted during the year ended December 31, 2022, as determined by Monte Carlo

simulations, was $ 954 .

the latest nine conversions in the period January 1, 2022, through December 9, 2022, were completed at less than the agreed floor price,

we recorded a floor price liability and recognized a corresponding reduction of additional paid in capital, as follows:

During the six months ended June 30, 2022, $ 1,511 (paid in cash prior to June 30, 2022);

During the three months ended September 30, 2022, $ 1,646 (see Note 9(b));

On December 9, 2022, we issued 86 shares of Common Stock to the Investor upon the conversion of 222 Conversion Shares and recorded a floor price liability of $ 264 .

Stock (cont.)

Additionally,

because the Company’s average daily dollar volume of stock trading was less than $ 2.5 million during a ten-day period in January 2022,

the Company has recorded a one-time deemed dividend of 8 % in the amount of $ 1,572 on preferred stock converted between February 1, 2022

and March 31, 2022 and the balance of Series A Preferred Stock outstanding as at March 31, 2022 as an increase to the value of the Series

A Preferred Stock and a reduction of additional paid in capital.

In addition, under the terms of the Registration Rights Agreement (“RRA”),

during the year ended December 31, 2022, the Company has also paid 3i an additional $ 800 in Registration Delay Payments.

accounting for the Series A Preferred Stock and 3i Exchange Warrants is illustrated in the table below:

Balance Sheets

Comprehensive

adjustment to

derivative and

December 31, 2022

Conversion of 9,247 Series A Preferred Stock, net

Elimination of redemption rights on Series A Preferred stock;

deemed dividend of $ 3,328

Redemption of 6,180 Series A Preferred Stock, deemed dividend of $ 526

Issuance of 486 Series A Preferred stock as repayment of $ 350 debt;

$ 103 charged to interest expense

Exchange of 50,000 Series C Preferred Stock for 5,577 Series A Preferred Stock;

deemed dividend of $ 3,959

dividend on July 10, 2023 modification

dividend on September 14, 2023 modification

Cashless redemption of 5,045,446 Exchange Warrants for 500,000 common shares

value adjustment

December 31, 2023

Stock (cont.)

accounting for the Series A Preferred Stock and 3i Exchange Warrants is illustrated in the table below:

Balance Sheets

Comprehensive

adjustment to

derivative and

December 31, 2021

Conversion of 6,214 shares of Series A Preferred stock into common stock

Reclassification

of derivative liability relating to converted Series A Preferred Stock

price adjustment on conversion of shares of Series A Preferred Stock

8 % deemed dividend on Preferred Stock

value adjustment

December 31, 2022

of the Series A Preferred Derivative Liability is discussed in Note 9(b).

Series C Convertible

Preferred Stock

February 28, 2023, the Company entered into a Securities Purchase Agreement (the “SPA”) with 3i, L.P.

for the purchase and

sale of 50,000 shares of Series C Convertible Redeemable Preferred Stock (“Series C Preferred Stock”) at a purchase price

of $ 24.00 per share, for a subscription receivable in the aggregate amount equal to the total purchase price of $ 1.2 million (the “Offering”).

The 50,000 shares of Series C Preferred Stock (the “Shares”) are convertible into shares of the Company’s common stock,

subject to the terms of the COD.

During the year ended December 31, 2024, 3i exercised its option to convert 202 shares of Series A Preferred Stock for 904 shares of common stock at the fair value of $ 0.3 million.

3i exercised its option to convert 1,215 shares of Series A Preferred Stock for 15,072 shares of common stock at the fair value of $ 1.5 million.

As of December 31, 2024, there were no shares of Series A Preferred Stock issued and outstanding.

Series C Convertible Preferred Stock

On February 28, 2023, the Company entered into a Securities Purchase Agreement (the “SPA”) with 3i, L.P.

for the purchase and sale of 50,000 shares of Series C Convertible Redeemable Preferred Stock (“Series C Preferred Stock”) at a purchase price of $ 24.00 per share, for a subscription receivable in the aggregate amount equal to the total purchase price of $ 1.2 million (the “Offering”).

The 50,000 shares of Series C Preferred Stock (the “Shares”) are convertible into shares of the Company’s common stock, subject to the terms of the COD.

The conversion price for the Series C Preferred Stock is initially equal the lower of:

(i) $ 0.182 ($ 6.37

post reverse stock split), which is the official closing price of the Common Stock on the Nasdaq Global Market (as reflected on Nasdaq.com)

on the Trading Day (as defined in the COD) immediately preceding the Original Issuance Date (as defined in the COD);

and (ii) the lower

(x) the official closing price of the Common Stock on the Nasdaq Global Market (as reflected on Nasdaq.com) on the Trading Day immediately

preceding the Conversion Date or such other date of determination;

and (y) the average of the official closing prices of the Common Stock

on the Nasdaq Global Market (as reflected on Nasdaq.com) for the five Trading Days immediately preceding the Conversion Date (as defined

in the COD) or such other date of determination, subject to adjustment (the “Conversion Price”).

In no event will the Conversion

Price be less than $ 0.0370 ($ 1.295 post reverse stock split) (the “Floor Price”).

Preferred Stock (cont.)

the event that the Conversion Price on a Conversion Date would have been less than the applicable Floor Price if not for the immediately

preceding sentence, then on any such Conversion Date the Company will pay the Holder an amount in cash, to be delivered by wire transfer

out of funds legally and immediately available therefor pursuant to wire instructions delivered to the Company by the Holder in writing,

equal to the product obtained by multiplying (A) the higher of (I) the highest price that the Common Stock trades at on the Trading Day

immediately preceding such Conversion Date and (II) the applicable Conversion Price and (B) the difference obtained by subtracting (I)

the number of shares of Common Stock delivered (or to be delivered) to the Holder on the applicable Share Delivery Date with respect

to such conversion of Series C Preferred Stock from (II) the quotient obtained by dividing (x) the applicable Conversion Amount that

the Holder has elected to be the subject of the applicable conversion of Series C Preferred Stock, by (y) the applicable Conversion Price

without giving effect to clause (x) of such definition.

(i) $ 0.182 ($ 6.37 post reverse stock split), which is the official closing price of the Common Stock on the Nasdaq Global Market (as reflected on Nasdaq.com) on the Trading Day (as defined in the COD) immediately preceding the Original Issuance Date (as defined in the COD);

and (ii) the lower of:

( x ) the official closing price of the Common Stock on the Nasdaq Global Market (as reflected on Nasdaq.com) on the Trading Day immediately preceding the Conversion Date or such other date of determination;

and (y) the average of the official closing prices of the Common Stock on the Nasdaq Global Market (as reflected on Nasdaq.com) for the five Trading Days immediately preceding the Conversion Date (as defined in the COD) or such other date of determination, subject to adjustment (the “Conversion Price”).

In no event will the Conversion Price be less than $ 0.0370 ($ 1.295 post reverse stock split) (the “Floor Price”).

In the event that the Conversion Price on a Conversion Date would have been less than the applicable Floor Price if not for the immediately preceding sentence, then on any such Conversion Date the Company will pay the Holder an amount in cash, to be delivered by wire transfer out of funds legally and immediately available therefor pursuant to wire instructions delivered to the Company by the Holder in writing, equal to the product obtained by multiplying (A) the higher of (I) the highest price that the Common Stock trades at on the Trading Day immediately preceding such Conversion Date and (II) the applicable Conversion Price and (B) the difference obtained by subtracting (I) the number of shares of Common Stock delivered (or to be delivered) to the Holder on the applicable Share Delivery Date with respect to such conversion of Series C Preferred Stock from (II) the quotient obtained by dividing ( x ) the applicable Conversion Amount that the Holder has elected to be the subject of the applicable conversion of Series C Preferred Stock, by (y) the applicable Conversion Price without giving effect to clause ( x ) of such definition.

The Offering closed on February 28, 2023.

connection with the Offering, concurrently with the SPA, the Company entered into a registration rights agreement with 3i (the “RRA”)

pursuant to which the Company is required to file a registration statement with the SEC to register for resale the shares of Common Stock

that are issued upon the potential conversion of the Shares.

Under the terms of the RRA, if the Company fails to file an Initial Registration

Statement (as defined in the RRA) on or prior to its Filing Date (as defined in the RRA), or fail to maintain the effectiveness of the

registration statement beyond defined allowable grace periods set forth in the RRA, we will incur certain registration delay payments,

in cash and as partial liquidated damages and not as a penalty, equal to 2.0 % of 3i’s subscription amount of the Shares pursuant

In addition, if we fail to pay any partial liquidated damages in full within seven days after the date payment, we will have

to pay interest at a rate of 18.0 % per annum, accruing daily from the date such partial liquidated damages are due until such amounts,

plus all such interest thereon, are paid in full.

The Company has also agreed to pay all fees and expenses incident to the performance

of the RRA, except for any broker or similar commissions.

In connection with the Offering, the Company and 3i entered into a limited

waiver agreement (the “Waiver”) pursuant to which 3i confirmed that the sale and issuance of the Shares will not give rise

to any, or trigger any, rights of termination, defaults, amendment, anti-dilution or similar adjustments, acceleration or cancellation

under agreements with 3i.

Company has evaluated the terms of the Series C Preferred Stock as required pursuant to ASC 570, 480, 815 and ASU 2020-06, and concluded

the Series C Preferred Stock will be recorded at fair value of $ 1,200 , net of share issuance costs of $ 40 , and accreted dividends at

5 % to redemption value of $ 1,446 on April 21, 2023, using the effective interest method.

Effective April 21, 2023, all of the 50,000

shares of Series C Preferred stock were exchanged for 5,577 shares of Series A Preferred Stock at an agreed value of $ 1,652 .

Company has treated the exchange of Series C Preferred Stock for Series A Preferred Stock as an extinguishment as there has been a fundamental

change in the nature of the instrument and has applied the derecognition accounting model in ASC 260-10-S99-2.

Accordingly, the Company

has recognized the difference between (1) the fair value of the consideration transferred to the holders of the preferred shares of $ 5,200 ,

and (2) the carrying amount of the preferred shares (net of issuance costs), of $ 1,240 as a deemed dividend of $ 3,959 that is deducted

from additional paid in capital and subtracted from net income to arrive at income available to common stockholders in the calculation

of loss per common share.

roll forward of the Series C Preferred Stock as of December 31, 2023, is as follows:

In connection with the Offering, concurrently with the SPA, the Company entered into a registration rights agreement with 3i (the “RRA”) pursuant to which the Company is required to file a registration statement with the SEC to register for resale the shares of Common Stock that are issued upon the potential conversion of the Shares.

Under the terms of the RRA, if the Company fails to file an Initial Registration Statement (as defined in the RRA) on or prior to its Filing Date (as defined in the RRA), or fail to maintain the effectiveness of the registration statement beyond defined allowable grace periods set forth in the RRA, we will incur certain registration delay payments, in cash and as partial liquidated damages and not as a penalty, equal to 2.0 % of 3i’s subscription amount of the Shares pursuant to the SPA.

In addition, if we fail to pay any partial liquidated damages in full within seven days after the date payment, we will have to pay interest at a rate of 18.0 % per annum, accruing daily from the date such partial liquidated damages are due until such amounts, plus all such interest thereon, are paid in full.

The Company has also agreed to pay all fees and expenses incident to the performance of the RRA, except for any broker or similar commissions.

In connection with the Offering, the Company and 3i entered into a limited waiver agreement (the “Waiver”) pursuant to which 3i confirmed that the sale and issuance of the Shares will not give rise to any, or trigger any, rights of termination, defaults, amendment, anti-dilution or similar adjustments, acceleration or cancellation under agreements with 3i.

The Company has evaluated the terms of the Series C Preferred Stock as required pursuant to ASC 570, 480, 815 and ASU 2020 - 06, and concluded the Series C Preferred Stock will be recorded at fair value of $ 1,200 , net of share issuance costs of $ 40 , and accreted dividends at 5 % to redemption value of $ 1,446 on April 21, 2023, using the effective interest method.

Effective April 21, 2023, all of the 50,000 shares of Series C Preferred stock were exchanged for 5,577 shares of Series A Preferred Stock at an agreed value of $ 1,652 .

The Company has treated the exchange of Series C Preferred Stock for Series A Preferred Stock as an extinguishment as there has been a fundamental change in the nature of the instrument and has applied the derecognition accounting model in ASC 260 - 10 - S99 - 2.

Accordingly, the Company has recognized the difference between ( 1 ) the fair value of the consideration transferred to the holders of the preferred shares of $ 5,200 , and ( 2 ) the carrying amount of the preferred shares (net of issuance costs), of $ 1,240 as a deemed dividend of $ 3,959 that is deducted from additional paid in capital and subtracted from net income to arrive at income available to common stockholders in the calculation of loss per common share.

The roll forward of the Series C Preferred Stock as of December 31, 2023, is as follows:

Opening balance at January 1, 2023

Series C Preferred Stock, cash

Less debt discount,

Series C Preferred Stock, cash received

Less debt discount, opening

Plus, 5% dividend and accretion

Exchange of Series C

Preferred stock for Series A Preferred stock

Series C Preferred Stock

– net, ending balance

(a) Continuity

of Warrant Derivative Liabilities

derivative liabilities are measured at fair value at each reporting period and the reconciliation of changes in fair value in the years

ended December 31, 2023 and 2022, is presented in the following tables:

December 20, 2021

as of January 1, 2022

in fair value

transferred to Equity

as of December 31, 2022

value per 3i Warrant / Series A Preferred share issuable at period end

Balance as of January

date fair value of April, July & September 2023 Common share purchase warrants

Modifications

to fair value upon exercise

Exchange of Series C Preferred stock for Series A Preferred stock

Series C Preferred Stock – net, ending balance

August 2024 Series A Convertible Redeemable Preferred Stock

On August 19, 2024 ( the "August Closing Date"), the Company entered into a Securities Purchase Agreement (the “August 2024 SPA”) with certain purchasers (the “August 2024 Purchasers”), pursuant to which the Company issued and sold, in a private placement (the “August 2024 Offering”), 35,000 shares of the Company’s Convertible Redeemable Series A 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.

In connection with the August 2024 Offering, the Company paid $ 0.2 million to Ascendiant Capital Markets, LLC, the Company’s placement agent.

On the August Closing Date, the Company 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 the Company at which the August 2024 Preferred Stock were entitled to vote and the voting power of the August 2024 Preferred Stock, each holder of the August 2024 Preferred Stock was entitled to a number of votes equal to shares of the Company’s 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 were 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 were 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 was convertible, at the option of the holders and, in certain circumstances, by the Company, 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 August Closing Date, the Company and the August 2024 Purchasers also entered into a Registration Rights Agreement (the “August 2024 RRA”), pursuant to which the Company 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.

All of the August 2024 Preferred Stock was redeemed in September 2024.

As a result of the redemption of the August 2024 Preferred Stock, the Company recognized a deemed dividend of $ 0.6 million.

Derivative Liabilities

The derivative liabilities are measured at fair value at each reporting period and the reconciliation of changes in fair value in the years ended December 31, 2024 and 2023 , is presented in the following tables:

Balance as of December 31, 2022

Issuance date fair value of April, July & September 2023 Common share purchase warrants

Modifications to fair value upon exercise

Fair value adjustments

transferred to Equity

as of December 31, 2023

value per Common warrant / 3i Warrant / Series A Preferred share issuable at period end

A Preferred Stock Conversion Feature – Valuation Inputs

following inputs were used for the Series A Preferred Stock conversions recorded in the year ended December 31, 2022, and the fair

value of the Series A Preferred derivative liability determined at September 30, 2022:

( 11,911 ) 1,477

Amount transferred to Equity

( 1,579 ) ( 1,031 )

Balance as of December 31, 2023

$ 2,263 $ 820

Change in fair value adjustment of derivative and warrant liabilities

( 2,262 ) ( 415 )

Cashless conversion of 3i Exchange Warrants

Balance as of December 31, 2024

Fair value per Common warrant / 3i Warrant / Series A Preferred share issuable at year end

On December 31, 2024, the Company used the Black-Scholes Merton model to estimate the fair value of the Common Share Purchase Warrants derivative liability at approximately $ 1,000 , using the following inputs:

September 2023

5 unchanged sentences

4.38 % 4.38 % 4.38 %

Time to exercise (years)

Equity volatility

Probability of volume failure

Rounded 10-day average daily volume (in 1,000’s)

Term (in years)

3.52 3.52 4.2

* The agreed conversion price adjustment (see Note 8(d) i.) resulted in the Series A Preferred liability value derivative being valued at zero at December 9, 2022.

Consequently, there were no conversions subsequent to September 30, 2022, which impacted the Series A derivative liability.

Warrants – Valuation Inputs

December 5, 2023, 3i converted 5,045,446 Exchange Warrants on a cashless basis for 500,000 shares of our Common Stock.

Therefore, we

utilized the reset strike options Type 2 model by Espen Garder Haug and Black-Scholes Merton models to estimate the fair value of the

outstanding 9,452,667 Exchange Warrants immediately before 3i’s conversion to be approximately $ 1,931 as of December 5, 2023.

we recorded a $ 2,015 reduction in the fair value of the 9,452,667 Exchange Warrants as a credit to change in fair value of warrants in

our consolidated statement of comprehensive loss and $ 1,031 , being the fair value of the 5,045,446 converted Exchange Warrants, was recorded

as a credit to additional paid in capital.

Derivative Liabilities (cont.)

December 31, 2023 and 2022, the Company utilized the reset strike options Type 2 model by Espen Garder Haug and Black-Scholes Merton

models to estimate the fair value of the 3i Exchange Warrants to be approximately $ 820 and $ 374 , respectively.

3i Exchange Warrants were valued at December 31, 2023, December 5, 2023, and December 31, 2022, using the following inputs:

Rounded annual volatility

123.7 % 123.7 % 123.7 %

See Note 10 for the inputs used for the Black-Scholes Merton model to estimate the fair value of the Common Share Purchase Warrants derivative liability in 2023.

3i Exchange Warrants – Valuation Inputs

On December 5, 2023, 3i converted 8,410 Exchange Warrants on a cashless basis for 833 shares of our common stock.

Therefore, we utilized the reset strike options Type 2 model by Espen Garder Haug and Black-Scholes Merton models to estimate the fair value of the outstanding 15,755 Exchange Warrants immediately before 3i’s conversion to be approximately $ 1.9 million as of December 5, 2023.

Accordingly, we recorded a $ 2.0 million reduction in the fair value of the 15,755 Exchange Warrants as a credit to change in fair value of warrants in our consolidated statement of comprehensive loss and $ 1.0 million, being the fair value of the 8,410 converted Exchange Warrants, was recorded as a credit to additional paid in capital.

On December 31, 2023 the Company utilized the reset strike options Type 2 model by Espen Garder Haug and Black-Scholes Merton models to estimate the fair value of the 3i Exchange Warrants to be approximately $ 0.8 million and $ 0.4 million, respectively.

The 3i Exchange Warrants were valued at December 31, 2023 and December 5, 2023 using the following inputs:

Exercise price

$ 600.00 $ 600.00

Stock price on valuation date

$ 330.00 $ 348.00

Risk-free rate

Expected life of the Warrant to convert (years)

4.71 % 4.92 %

Expected life of the Warrant to convert (in years)

Rounded annual volatility

of liquidity event

March 31, 2024

Timing of liquidity event

March 31, 2024

1 unchanged sentence

Stockholders ’ Equity

(a) Amendments

to Certificate of Incorporation and Reverse Stock Splits

March 20, 2023, an amendment to Allarity Therapeutics, Inc.’s Certificate of Incorporation, as amended (the “Certificate

of Incorporation”), to increase the number of authorized shares from 30,500,000 to 750,500,000 , and to increase the number of shares

of common stock (the “Common Stock”) from 30,000,000 to 750,000,000 (the “Share Increase”) was approved by the

stockholders of record entitled to vote in person or by proxy at the Special Meeting of Stockholders on March 20, 2023 (the “2023

Special Meeting”).

Upon receipt of the required stockholder approval, on March 20, 2023, Allarity Therapeutics, Inc.

(the “Company”),

filed a Third Certificate of Amendment to the Certificate of Incorporation (the “Certificate of Amendment”) with the Secretary

of State of the State of Delaware (the “Delaware Secretary of State”) to effect the Share Increase.

On March 23, 2023, the

Company filed a Third Certificate of to the Certificate of Incorporation with the Delaware Secretary of State to effect a 1-for-35 share

consolidation of our common stock on March 24, 2023 (“March Reverse Stock Split”).

No fractional shares were issued in connection

with the March Reverse Stock Split.

If, as a result of the March Reverse Stock Split, a stockholder would otherwise have been entitled

to a fractional share, each fractional share was rounded up to the next whole number.

The March Reverse Stock Split resulted in a reduction

of our outstanding shares of common stock from 34,294,582 to 979,846 .

a result of the filing of the Certificate of Amendment, the Company is authorized to issue 750,500,000 shares, consisting of (i) 750,000,000

shares of common stock, par value $ 0.0001 per share, and (ii) 500,000 shares of preferred stock, par value of $ 0.0001 per share.

June 23, 2023, we held a Special Meeting of Stockholders (the “Special Meeting”) for our stockholders of record of our outstanding

shares of Common Stock and Series A Preferred Stock.

At the Special Meeting, the stockholders of Common Stock and Series A Preferred

Stock approved an amendment to our Certificate of Incorporation, to, at the discretion of the board, effect a reverse stock split with

respect to our issued and outstanding Common Stock at a ratio between 1-for-15 and 1-for-50 (the “June Reverse Stock Split Proposal”).

Upon stockholder approval, the Board of Directors determined a ratio of 1-for-40 for the reverse stock split (the “June Reverse

Stock Split”).

On June 28, 2023, the Company filed a Fourth Certificate of Amendment of the Certificate of Incorporation to effect

the June Reverse Stock Split on June 28 2023 (the “June Share Consolidation”).

No fractional shares were issued in connection

with the June Share Consolidation.

If, as a result of the June Share Consolidation, a stockholder would otherwise have been entitled

to a fractional share, each fractional share was rounded up to the next whole number.

The June Share Consolidation resulted in a reduction

of our outstanding shares of Common Stock from 20,142,633 to approximately 503,566 .

The par value of our authorized stock remained unchanged

at $ 0.0001 .

of the date of these financial statements all references to our common stock have been retrospectively adjusted to reflect both the March

Share Consolidation and the June Share Consolidation (the “Share Consolidations”), unless otherwise noted.

Stockholders’ Equity (cont.)

(b) Redemption

of Series B Preferred Stock

conclusion of the 2023 Annual Meeting of Stockholders on February 3, 2023, all the 190,786 shares of Series B Preferred Stock outstanding

were automatically redeemed, with the holders of the Series B Preferred Stock only having a right to receive the purchase price for the

redemption, which was $ 0.01 per share of Series B Preferred Stock.

C Preferred Stock

February 24, 2023, the Company filed a Certificate of Designation of Preferences, Rights and Limitations of Series C Convertible Redeemable

Preferred Stock (the “Series C COD”) with the Delaware Secretary of State designating 50,000 shares of its authorized and

unissued preferred stock as Series C Preferred Stock with a stated value of $ 27.00 per share.

On February 28, 2023, the Company filed

a Certificate of Amendment to the Series C COD (the “COD Amendment”) to clarify the terms of conversion price and floor price

based on definitions provided in the Series C COD (the COD Amendment, together with the Series C COD, the “COD”).

of Series C Preferred Stock has 620 votes and is subject to certain redemption rights and voting limitations.

to the terms of a Modification and Exchange Agreement dated April 20, 2023, by and between 3i and the Company, effective April 21, 2023,

3i exchanged 50,000 shares of Series C Preferred Stock (the “Series C Shares”) beneficially owned by 3i for 5,577 shares

of Series A Preferred Stock.

Share, Pre-Funded Warrant and Common Share Purchase Warrant issuances

April 2023, the Company issued 71,734 shares of our Common Stock and 71,734 common stock purchase warrants, each exercisable for one

share of Common Stock, at a combined public offering price of $ 30.00 , and 178,267 pre-funded warrants, each exercisable for one share

of Common Stock, and 178,267 common stock purchase warrants, each exercisable for one share of common stock only (the common stock purchase

warrants sold in the public offing hereinafter referred to as the “April 2023 Common Warrants”) at a combined public offering

price of $ 30.00 less the $ 0.001 for the pre-funded warrants, for aggregate gross proceeds of approximately $ 7.5 million, before deducting

placement agents fees and offering expenses payable by the Company, or the April Offering.

The Common Stock, pre-funded warrant and April

2023 Common Warrants were sold pursuant to a securities purchase agreement with the purchaser signatory thereto or pursuant to the prospectus

which was part of an effective registration statement on Form S-1 filed with the SEC.

The Common Stock, pre-funded warrants and April

2023 Common Warrants are immediately separable and were issued separately in the offering.

As of June 30, 2023, all pre-funded warrants

from the April Offering were exercised in exchange for 178,267 common shares.

July 2023, the Company issued 357,223 shares of our Common Stock pre-funded warrants to purchase up to 2,087,222 shares of common stock

(the “July Pre-Funded Warrants”), and common warrants to purchase up to 2,444,445 shares of Common Stock (the “2023

July Common Warrants”) at an effective combined purchase price of $ 4.50 per share and related common stock purchase warrants for

aggregate gross proceeds of approximately $ 11 million, before deducting placement agent fees and offering expenses payable by the Company

of approximately $ 920 on July 10, 2023 (“July Offering”).

The securities in the July Offering were registered pursuant to

the registration statement on Form S-1, as amended (File No.

The purchase price of each July Pre-Funded Warrant and 2023

July Common Warrant was equal to $ 4.50 less the $ 0.001 per share exercise price of each Pre-Funded Warrant.

Such securities were sold

pursuant to a securities purchase agreement with the purchaser signatory thereto or pursuant to the prospectus which was part of an effective

registration statement on Form S-1 filed with the SEC.

As of September 30, 2023, all July Pre-Funded Warrants were exercised prior

in exchange for 2,087,222 common shares.

Stockholders’ Equity (cont.)

September 2023, the Company entered into an Inducement Letter dated September 14, 2023 (the “Inducement Letter”) with each

of Armistice Capital Master Fund Ltd.

On September 3, 2024, the stockholders of the Company voted at the Company's 2024 annual meeting of stockholders to approve an amendment to the Company's Fifth Amended and Restated Certificate of Incorporation, to decrease the number of authorized shares of common stock by 500,000,000 shares of common stock, bringing the total number of authorized shares of common stock to 250,000,000 shares with a par value of $ 0.0001 , of which 7,302,797 shares of common stock are outstanding as of December 31, 2024.

As of December 31, 2023, 750,000,000 shares were authorized and 9,812 shares of common stock were outstanding.

On November 2, 2023, the Company filed a shelf registration statement (File No.

333 - 275282 ) on Form S- 3, which was declared effective on November 29, 2023 ( the "Shelf").

Approximately $ 10.0 million of securities remain available for sale under the Shelf as of December 31, 2024.

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 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 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, 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.

There were no sales of common stock pursuant to the Sales Agreement in 2023.

As of December 31, 2024, $ 10.0 million remained available for the sale of the Company's common stock under the ATM program.

Series B Preferred Stock

On November 22, 2022, the Company’s Board of Directors established the Series B Preferred Stock, par value $ 0.0001 per share (“Series B Preferred Stock”).

Following is a summary of the terms of the Series B Preferred Stock:

The number of shares designated as Series B Preferred Stock is 200,000;

The holders of Series B Preferred Stock shall not be entitled to receive dividends of any kind;

Each outstanding share of Series B Preferred Stock shall have 400 votes per share;

The Series B Preferred Stock shall rank senior to the Common Stock, but junior to the Series A Preferred stock, as to any distribution of assets upon a liquidation, dissolution or winding up of the Company, whether voluntarily or involuntarily.

All shares of Series B Preferred Stock outstanding were automatically redeemed in 2023, with the holders of the Series B Preferred Stock only having a right to receive the purchase price for the redemption, which was $ 0.01 per share of Series B Preferred Stock.

Series C Preferred Stock

On February 24, 2023, the Company filed a Certificate of Designation of Preferences, Rights and Limitations of Series C Convertible Redeemable Preferred Stock (the “Series C COD”) with the Delaware Secretary of State designating 50,000 shares of its authorized and unissued preferred stock as Series C Preferred Stock (the "Series C Shares") with a stated value of $ 27.00 per share.

On February 28, 2023, the Company filed a Certificate of Amendment to the Series C COD (the “COD Amendment”) to clarify the terms of conversion price and floor price based on definitions provided in the Series C COD (the COD Amendment, together with the Series C COD, the “COD”).

Each share of Series C Preferred Stock had 620 votes and was subject to certain redemption rights and voting limitations.

Pursuant to the terms of a Modification and Exchange Agreement dated April 20, 2023, by and between 3i and the Company, effective April 21, 2023, 3i exchanged 50,000 Series C Shares beneficially owned by 3i for 5,577 shares of Series A Preferred Stock.

Common Share Purchase Warrant, Pre-Funded Warrant and 3i Warrant Derivative Liabilities

In April 2023, the Company issued 119 shares of our common stock and 119 common stock purchase warrants, each exercisable for one share of common stock, at a combined public offering price of $ 18,000.00 , and 297 pre-funded warrants, each exercisable for one share of common stock, and 297 common stock purchase warrants, each exercisable for one share of common stock only (the common stock purchase warrants sold in the public offering hereinafter referred to as the “April 2023 Common Warrants”) at a combined public offering price of $ 18,000.00 less the $ 0.001 for the pre-funded warrants, for aggregate net proceeds of approximately $ 6.8 million, after deducting placement agents fees and offering expenses payable by the Company, or the April Offering.

The Common Stock, pre-funded warrant and April 2023 Common Warrants were sold pursuant to a securities purchase agreement with the purchaser signatory thereto or pursuant to the prospectus which was part of an effective registration statement on Form S- 1 filed with the SEC.

The Common Stock, pre-funded warrants and April 2023 Common Warrants are immediately separable and were issued separately in the offering.

As of June 30, 2023, all pre-funded warrants from the April Offering were exercised in exchange for 297 common shares.

In July 2023, the Company issued 596 shares of our common stock pre-funded warrants to purchase up to 3,478 shares of common stock (the “July Pre-Funded Warrants”), and common warrants to purchase up to 4,075 shares of common stock (the “July 2023 Common Warrants”) at an effective combined purchase price of $ 2,700.00 per share and related common stock purchase warrants for aggregate net proceeds of approximately $ 10 million, after deducting placement agent fees and offering expenses payable by the Company of approximately $ 0.9 million on July 10, 2023 ( “July Offering”).

The securities in the July Offering were registered pursuant to the registration statement on Form S- 1, as amended (File No.

333 - 272469 ).

The purchase price of each July Pre-Funded Warrant and July 2023 Common Warrant was equal to $ 2,700.00 less the $ 0.001 per share exercise price of each Pre-Funded Warrant.

Such securities were sold pursuant to a securities purchase agreement with the purchaser signatory thereto or pursuant to the prospectus which was part of an effective registration statement on Form S- 1 filed with the SEC.

As of September 30, 2023, all July Pre-Funded Warrants were exercised prior in exchange for 3,478 common shares.

In September 2023, the Company entered into an Inducement Letter dated September 14, 2023 ( the “Inducement Letter”) with each of Armistice Capital Master Fund Ltd.

and Sabby Volatility Warrant Master Fund, Ltd.

(“September Investors”) who were the

holders of existing common stock purchase warrants issued (i) in the April Offering (the “April Warrants”) and (ii) in the

July Offering (the “July Warrants” and together with the April Warrants, the “Existing Warrants”).

the Inducement Letter, the September Investors agreed to exercise for cash their respective Existing Warrants to purchase an aggregate

of up to 2,438,889 shares of the Company’s Common Stock (the “Existing Warrant Shares”), at a reduced exercise price

of $ 1.00 per share, in consideration for the Company’s agreement to issue a new unregistered common stock purchase warrant to purchase

up to a number of shares of Common Stock equal to 200 % of the number of Existing Warrant Shares issued, or the Inducement Warrants, pursuant

to each Existing Warrant exercise (the “Inducement Warrant Shares”), exercisable for 5 years and six months from the issue

date, at an exercise price of $ 1.00 , subject to adjustment.

Upon execution of the Inducement Letter by each of the September Investors

the Company issued the Inducement Warrants to the September Investors pursuant to a private placement (the “September Private Placement”).

As of December 31, 2023, the Company received approximately $ 2,962 million, net of costs in exchange for the exercise of 2,438,889 Existing

2023, July 2023 and September 2023 Common Warrants

to certain ownership limitations, the April 2023 Common Warrants are exercisable immediately from the date of issuance.

The April 2023

Common Warrants have an exercise price of $ 34.00 per share and expire on the 5 year anniversary of the date of issuance, April 21,

2023, unless otherwise agreed upon by us and holder of the warrant.

The exercise price of the April 2023 Common Warrants is subject to

certain adjustments, including stock dividends, stock splits, combinations and reclassifications of the Company’s Common Stock.

In the event of a fundamental transaction, as described in the April 2023 Common Warrants, each of the holders of the April 2023 Common

Warrants will have the right to exercise its April 2023 Common Warrant and receive the same amount and kind of securities, cash or property

as such holder would have been entitled to receive upon the occurrence of such fundamental transaction if such holder had been, immediately

prior to such fundamental transaction, the holder of shares of the Company’s Common Stock issuable upon the exercise of its April

2023 Common Warrant.

Additionally, in the event of a fundamental transaction within the Company’s control, as described in the

April 2023 Common Warrants, each holder of the April 2023 Common Warrants will have the right to require the Company to repurchase the

unexercised portion of its April 2023 Common Warrant at its fair value using a variant of the Black Scholes option pricing formula.

the event of a fundamental transaction that is not within the Company’s control, each holder of the April 2023 Common Warrants

will have the right to require the Company or a successor entity to redeem the unexercised portion of its April 2023 Common Warrant for

the same consideration paid to the holders of the Company’s Common Stock in the fundamental transaction at the unexercised April

2023 Common Warrant’s fair value using a variant of the Black Scholes option pricing formula.

to a securities purchase agreement entered into with certain investors in the April Offering, we agreed that for a period of 90 days

from the close of the April Offering, that we would not issue, enter into any agreement to issue or announce the issuance or proposed

issuance of any shares of Common Stock or securities convertible or exercisable into Common Stock or file a registration statement with

the SEC to register our securities, subject to certain exceptions.

The investors to the securities purchase agreement in the April Offering,

excluding 3i, have agreed to waive that provision and permit the July offering of our Common Stock, pre-funded warrants and common warrants

(“Offering Waiver”) in exchange for (i) the repricing of the exercise price of the April 2023 Common Warrant to the exercise

price of the common warrant offered in the July Offering if the exercise price of the common warrant is lower than the then-current April

2023 Common Warrant exercise price;

and (ii) extending the termination date of the April 2023 Common Warrant to the date of termination

of the common warrants offered in the July Offering As a result of the July Offering, investors to the securities purchase agreement

in the April Offering, excluding 3i, had the exercise price of their April 2023 Common Warrant reduced to $ 4.50 per share and the exercise

period extended to on or around July 10, 2028.

3i and the Company entered into a separate limited waiver and amendment agreement, as

discussed above.

We used the Black-Scholes option pricing model to fair value the April Common Warrants as of July 10, 2023, using the

Black-Scholes option pricing model and recorded the incremental value of $ 202 as a fair value modification cost in other income (expenses).

Stockholders’ Equity (cont.)

considered the September, July and April Common Warrants, which do not represent outstanding shares, and determined that they contain

certain contingent redemption features, outside of the Company’s control and at the election of the Holder, which may require the

Company to repurchase the September, July and April Common Warrants or Warrant Shares in exchange for cash (i.e., puttable) in an amount

as defined in the Warrant Agreements.

The Company concluded that the September, July, and April Common Warrants represent liabilities

under ASC 480.

Accordingly, the September, July and April Common Warrants have been initially recorded at their fair value of $ 4,189 ,

$ 6,824 , and $ 4,148 respectively using the Black-Scholes option pricing model and as a reduction of additional paid in capital.

Additionally,

the total July financing cost of $ 902 has been proportionately allocated to financing costs and additional paid in capital in the amounts

of the amount of $ 571 and $ 349 , respectively;

and the total April financing cost of $ 679 has been proportionately allocated to the finance

expense and additional paid in capital in the amounts of $ 376 and $ 303 , respectively.

The September financing cost of $ 198 has been allocated

to a finance expense in general and administration costs.

September 14, 2023, the exercise prices of the July and April Common Warrants were reduced to $ 1.00 per share and the exercise period

extended to on or about September 14, 2028.

We used the Black-Scholes option pricing model to fair value the July and April Common Warrants

as of September 14, 2023, using the Black-Scholes option pricing model and recorded the incremental value of $ 389 as a fair value modification

cost in other income (expenses).

November 8, December 1, and December 5, 2023, a total of 373,000 , 266,000 and 1,373,534 July warrants were exercised, respectively, and

we used the Black-Scholes option pricing model to fair value the July warrants at $ 143 , $ 124 , and $ 233 , respectively.

On December 5,

2023, a total of 83,333 April warrants were exercised, and we used the Black-Scholes option pricing model to fair value the April warrants

As of December 31, 2023, we used the Black-Scholes option pricing model to fair value the outstanding September, July, and April

Common share purchase warrants of 4,877,778 , 222,223 , and 33,333 , respectively, at $ 2,154 , $ 95 and $ 14 , respectively.

used in the above noted Black-Scholes valuation models for the April, July and September Common Warrants are as follows:

( “September Investors”) who were the holders of existing common stock purchase warrants issued (i) in the April 2023 Offering (the “April 2023 Warrants”) and (ii) in the July Offering (the “July 2023 Warrants” and together with the April 2023 Warrants, the “Existing 2023 Warrants”).

Pursuant to the Inducement Letter, the September Investors agreed to exercise for cash their respective Existing 2023 Warrants to purchase an aggregate of up to 4,065 shares of the Company’s common stock (the “Existing Warrant Shares”), at a reduced exercise price of $ 600.00 per share, in consideration for the Company’s agreement to issue a new unregistered common stock purchase warrant to purchase up to a number of shares of common stock equal to 200 % of the number of Existing 2023 Warrant Shares issued (the "Inducement Warrants"), pursuant to each Existing Warrant exercise, exercisable for 5 years and six months from the issue date, at an exercise price of $ 600.00 , subject to adjustment.

Upon execution of the Inducement Letter by each of the September Investors the Company issued the Inducement Warrants to the September Investors pursuant to a private placement (the “September Private Placement”).

As of December 31, 2023, the Company received approximately $ 3.0 million, net of costs in exchange for the exercise of 4,065 Existing Warrants.

April 2023, July 2023 and September 2023 Common Warrants

Subject to certain ownership limitations, the April 2023 Common Warrants are exercisable immediately from the date of issuance.

The April 2023 Common Warrants have an exercise price of $ 20,400.00 per share and expire on the 5 -year anniversary of the date of issuance, April 21, 2023, unless otherwise agreed upon by the Company and holder of the warrant.

The exercise price of the April 2023 Common Warrants is subject to certain adjustments, including stock dividends, stock splits, combinations and reclassifications of the Company’s common stock.

In the event of a fundamental transaction, as described in the April 2023 Common Warrants, each of the holders of the April 2023 Common Warrants will have the right to exercise its April 2023 Common Warrant and receive the same amount and kind of securities, cash or property as such holder would have been entitled to receive upon the occurrence of such fundamental transaction if such holder had been, immediately prior to such fundamental transaction, the holder of shares of the Company’s common stock issuable upon the exercise of its April 2023 Common Warrant.

Additionally, in the event of a fundamental transaction within the Company’s control, as described in the April 2023 Common Warrants, each holder of the April 2023 Common Warrants will have the right to require the Company to repurchase the unexercised portion of its April 2023 Common Warrant at its fair value using a variant of the Black Scholes option pricing formula.

In the event of a fundamental transaction that is not within the Company’s control, each holder of the April 2023 Common Warrants will have the right to require the Company or a successor entity to redeem the unexercised portion of its April 2023 Common Warrant for the same consideration paid to the holders of the Company’s common stock in the fundamental transaction at the unexercised April 2023 Common Warrant’s fair value using a variant of the Black Scholes option pricing formula.

Pursuant to a securities purchase agreement entered into with certain investors in the April Offering, the Company agreed that for a period of 90 days from the close of the April Offering, that the Company would not issue, enter into any agreement to issue or announce the issuance or proposed issuance of any shares of common stock or securities convertible or exercisable into common stock or file a registration statement with the SEC to register its securities, subject to certain exceptions.

The investors to the securities purchase agreement in the April Offering, excluding 3i, have agreed to waive that provision and permit the July offering of the Company's common stock, pre-funded warrants and common warrants (“Offering Waiver”) in exchange for (i) the repricing of the exercise price of the April 2023 Common Warrant to the exercise price of the common warrants offered in the July Offering if the exercise price of the common warrant is lower than the then-current April 2023 Common Warrant exercise price;

and (ii) extending the termination date of the April 2023 Common Warrant to the date of termination of the common warrants offered in the July Offering.

As a result of the July Offering, investors to the securities purchase agreement in the April Offering, excluding 3i, had the exercise price of their April 2023 Common Warrant reduced to $ 2,700.00 per share and the exercise period extended to on or around July 10, 2028.

3i and the Company entered into a separate limited waiver and amendment agreement, as discussed above.

We used the Black-Scholes option pricing model to fair value the April Common Warrants as of July 10, 2023, using the Black-Scholes option pricing model and recorded the incremental value of $ 0.2 million as a fair value modification cost in other income (expenses).

Management considered the April 2023 Common Warrants, July 2023 Common Warrants, and Inducement Warrant Shares, which do not represent outstanding shares, and determined that they contain certain contingent redemption features, outside of the Company’s control and at the election of the Holder, which may require the Company to repurchase the September, July and April Common Warrants or Warrant Shares in exchange for cash (i.e., puttable) in an amount as defined in the Warrant Agreements.

The Company concluded that the September, July, and April Common Warrants represent liabilities under ASC 480.

Accordingly, the September, July and April Common Warrants have been initially recorded at their fair value of $ 4.2 million, $ 6.8 million, and $ 4.1 million, respectively, using the Black-Scholes option pricing model and as a reduction of additional paid in capital.

Additionally, the total July financing cost of $ 0.9 million has been proportionately allocated to financing costs and additional paid in capital in the amounts of the amount of $ 0.6 million and $ 0.3 million, respectively;

and the total April financing cost of $ 0.7 million has been proportionately allocated to the finance expense and additional paid in capital in the amounts of $ 0.4 million and $ 0.3 million, respectively.

The September financing cost of $ 0.2 million has been allocated to a finance expense in general and administration costs.

On September 14, 2023, the exercise prices of the April 2023 Common Warrants and July 2023 Common Warrants were reduced to $ 600.00 per share and the exercise period extended to on or about September 14, 2028.

We used the Black-Scholes option pricing model to fair value the April 2023 Common Warrants and July 2023 Common Warrants as of September 14, 2023, using the Black-Scholes option pricing model and recorded the incremental value of $ 0.4 million as a fair value modification cost in other income (expenses).

Inputs used in the above noted Black-Scholes valuation models for the April 2023 Common Warrants, July 2023 Common Warrants and Inducement Warrants are as follows:

September 14,

Initial exercise price

$ 1.00 $ 1.00 - 4.50 $ 4.50 - 34.00 $ 34.00

Stock price on valuation date

$ 0.55 $ 1.00 $ 3.40 $ 20.40

Risk-free rate

of Warrant (in years)

3.84 % 4.32 % - 4.35 % 4.16 % - 4.19 % 3.70 %

Term of Warrant (in years)

4.53 - 5.20 4.82 4.78 - 5.00 5.00

Rounded annual volatility

September 14,

125 % 127 % 122 % - 140 % 126 %

On November 8, December 1, and December 5, 2023, a total of 622 , 444 , and 2,290 July 2023 Common Warrants were exercised, respectively, and we used the Black-Scholes option pricing model to fair value the July 2023 Common Warrants at $ 0.1 million, $ 0.1 million, and $ 0.2 million, respectively.

On December 5, 2023, a total of 139 April 2023 Common Warrants were exercised, and we used the Black-Scholes option pricing model to fair value the April 2023 Common Warrants at $ 22 thousand.

Inputs used in the above noted Black-Scholes valuation models for the exercise of the April 2023 Common Warrants and July 2023 Common Warrants are as follows:

Initial exercise price

$ 1.00 $ 1.00 $ 1.00

Stock price on valuation date

$ 0.58 $ 0.59 $ 0.50

Stock price on valuation

Risk-free rate

4.14 % 4.14 % 4.14 %

4.16 % - 4.19 %

Term of Warrant (in years)

4.60 4.61 4.67

Rounded annual volatility

123 % 122 % 122 %

Stockholders’ Equity (cont.)

Establishment

of Series B Preferred Stock

November 22, 2022, the Company’s Board of Directors established the Series B Preferred Stock, par value $ 0.0001 per share (“Series

B Preferred Stock”).

Following is a summary of the terms of the Series B Preferred Stock:

The number of shares designated as Series B Preferred Stock is 200,000 ;

The holders of Series B Preferred Stock shall not be entitled to receive dividends of any kind;

Each outstanding share of Series B Preferred Stock shall have 400 votes per share;

Series B Preferred Stock shall rank senior to the Common Stock, but junior to the Series A Preferred stock, as to any distribution of

assets upon a liquidation, dissolution or winding up of the Company, whether voluntarily or involuntarily.

shares of Series B Preferred Stock that are not present in person or by proxy through the presence of such holder’s shares of Common

Stock or Series A Preferred Stock, in person or by proxy, at any meeting of stockholders held to vote on the Reverse Stock Split, the

Share Increase Proposal and the Adjournment Proposal as of immediately prior to the opening of the polls at such meeting (the “Initial

Redemption Time”) shall automatically be redeemed by the Company at the Initial Redemption Time without further action on the part

of the Company or the holder thereof (the “Initial Redemption”);

outstanding shares of Series B Preferred Stock that have not been redeemed pursuant to an Initial Redemption shall be redeemed in whole,

but not in part, (i) if such redemption is ordered by the Board of Directors in its sole discretion, automatically and effective on such

time and date specified by the Board of Directors in its sole discretion or (ii) automatically upon the approval by the Company’s

stockholders of the Reverse Stock Split and the Share Increase Proposal at any meeting of stockholders held for the purpose of voting

on such proposals;

share of Series B Preferred Stock redeemed in any Redemption shall be redeemed in consideration for the right to receive an amount equal

to $ 0.01 in cash for each one whole share of Series B Preferred Stock as of the applicable Redemption Time.

of Series B Preferred Stock Dividend

December 5, 2022, the Company issued a stock dividend to be distributed as follows to stockholders of record as of close of business

on December 5, 2022:

(i) 0.016 shares of Series B Preferred Stock for each outstanding share of common stock;

and (ii) 1.744 shares of

Series B Preferred Stock for each outstanding share of Series A Preferred Stock.

Effective February 3, 2023, the Company redeemed 190,786

shares of Series B Preferred stock in exchange for $ 0.01 per share.

the year ended December 31, 2023, the Company issued 241,893 shares of common stock valued at $ 3,899 upon the conversion of 9,347 shares

of Series A Preferred Stock;

250,000 shares of Common Stock as a result of its April Public Offering of 71,733 shares of common stock

and the exercise of 178,267 pre-funded warrants, described above in exchange for $ 6,815 , net of costs;

2,444,445 shares of Common Stock,

net of costs as a result of its July Public Offering of 357,223 shares of common stock and the exercise of 2,087,222 pre-funded warrants,

described above in exchange for $ 10,080 ;

2,438,889 shares of Common Stock as a result of its September Inducement Letter, as described

above in exchange for $ 2,962 , net of costs, and 500,000 common shares as a result of a cashless exercise of 5,045,446 3i Exchange Warrants.

the year ended December 31, 2022, the Company issued 5,573 common shares valued at $ 1,156 gross and ($ 2,265 ) net of the $ 3,421 floor

price adjustments upon the conversion of 6,214 shares of Series A Preferred Stock.

of December 31, 2023 and 2022, the Company’s total issued and outstanding common shares were 5,886,934 and 11,356 , respectively,

with a par value of $ 0.0001 .

The shares are fully paid in.

The shares are not divided into classes, and no shares enjoy special rights.

Incentive Plan

2021 Equity Incentive Plan became effective on December 20, 2021.

It was approved by shareholders in connection with the Recapitalization

Share Exchange.

Our 2021 Plan authorizes the award of stock options, Restricted Stock Awards (“RSAs”), Stock Appreciation

Rights (“SARs”), Restricted Stock Units (“RSUs”), cash awards, performance awards and stock bonus awards.

initially reserved 1,211,374 shares of our common stock under the 2021 Plan.

The number of shares reserved for issuance under our 2021

Plan will increase automatically on January 1 of each of 2022 through 2031 by the number of shares equal to the lesser of 5 % of

the aggregate number of outstanding shares of our common stock as of the immediately preceding December 31, or a number as may be determined

by our board of directors.

the years ended December 31, 2023, and 2022, the total charge to profit or loss amounted to $ 71 and $ 1,752 , respectively of which $ 47

and $ 1,156 , respectively, are recognized as general and administrative expenses and $ 24 and $ 596 , respectively, are recognized as research

and development expenses.

As of December 31, 2023, total unrecognized compensation cost relating to unvested options granted was $ 72

and is expected to be realized over a period of 1.75 years.

The Company will issue shares upon exercise of options from shares reserved

under our 2021 Plan.

table below summarizes the number of options that were outstanding, their weighted average exercise price and contractual term as of

December 31, 2023, as well as the movements during the period.

Term (in years)

Balance on January 1, 2023

Outstanding as of

December 31, 2023

Options exercisable

at December 31, 2023

total of 101 options were forfeited and no options expired or were exercised in the year ended December 31, 2023.

In the year ended

December 31, 2022, 389 options were forfeited and none expired or were exercised.

The intrinsic value of all stock options outstanding

at December 31, 2023 and 2022, was $ 0 .

The weighted average exercise price for options outstanding at the end of 2023 is $ 7,876 .

total fair value of options vested during the year ended December 31, 2023, was $ 845 .

options were granted in the year ended December 31, 2023.

The weighted average grant date fair value per share of options granted in

2022 was $ 1.19 .

The estimate of the grant date fair value of each option issued is based on a Black-Scholes model.

The assumptions used

in our valuations for the year ended December 31, 2022, are summarized as follows:

Stock-based Compensation

2021 Equity Incentive Plan

The Company has in effect the Allarity Therapeutics, Inc.

2021 Incentive Plan (as amended, the "2021 Incentive Plan").

The 2021 Incentive Plan was approved by shareholders in connection with the Recapitalization Share Exchange and became effective on December 20, 2021.

The 2021 Incentive Plan authorizes the award of stock options, Restricted Stock Awards (“RSAs”), Stock Appreciation Rights (“SARs”), Restricted Stock Units (“RSUs”), cash awards, performance awards and stock bonus awards.

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 the issuance of up to 353,163 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 the grant.

Total shares available for the issuance of stock-based awards under the Company's 2021 Incentive Plan as of December 31, 2024 was 353,163 .

The number of shares reserved for issuance under our 2021 Plan will increase automatically on January 1 of each of 2022 through 2031 by the number of shares equal to the lesser of 5 % of the aggregate number of outstanding shares of our common stock as of the immediately preceding December 31, or a number as may be determined by our board of directors.

In January 2025, the Board approved an increase of 5 % of the outstanding shares of common stock, or 364,778 shares, increasing the total shares authorized to 717,941 .

Restricted Stock Units

The following table summarizes restricted stock unit activity for the year ended December 31, 2024:

Average Grant

Number of Units

Unvested balance at December 31, 2023

Unvested balance at December 31, 2024

For the years ended December 31, 2024 and 2023, stock-based compensation expenses associated with the restricted stock units for employees were approximately $ 68 thousand and $ 0 , respectively.

At December 31, 2024, the Company had unrecognized stock-based compensation expense related to restricted stock units of $ 0.3 million, which is expected to be recognized over the remaining weighted-average vesting period of 1.7 years.

This expense is recognized over the vesting period of the award.

Stock Options

The following table summarizes the stock option activity for the years ended December 31, 2024 and 2023:

(in thousands)

Outstanding as of December 31, 2022

10 $ 5,504,400 4.2 $ —

Weighted average

Expected life (in years)

Expected dividend yield

Risk-free interest rate

( 1 ) 8,397,600 —

payments (cont.)

Term — The expected term is based upon the historical exercise patterns of options.

Volatility — Was determined based upon the expected term of the options which is based upon the historical exercise patterns

Interest Rate — The risk-free interest rate is based on the 5 years government bond yield rate of Denmark at the date of grant

maturities approximately equal to the options’ expected term.

Rate — The expected dividend is zero as the Company has not paid nor does it anticipate paying any dividends on its common

stock in the foreseeable future.

Value of Common Stock — The quoted prices of the Company’s common stock is used to estimate the fair value of the

share-based awards at grant date.

and Development Agreements

(a) License Agreement with Novartis for Dovitinib

January 26, 2024, we received a Termination Notice from Novartis due to a material breach of our license agreement.

Accordingly, under

the terms of the Agreement (i) we shall cease all development and commercialization activities with respect to all licensed products;

(ii) all rights and licenses granted by Novartis to Allarity shall revert to Novartis;

and all liabilities due to Novartis became immediately

due and payable in the amount of $ 5,001 inclusive of interest which is continuing to accrue at 5 % per annum.

As of December 31, 2023,

the liability is recorded as a current liability on our Consolidated Balance Sheets as follows:

$ 3,600 in accounts payable, $ 1,300 convertible

promissory note and accrued interest, net of discount, and $ 101 in accrued liabilities.

(b) License Agreement with Eisai Inc.

Outstanding as of December 31, 2023

9 $ 4,725,600 3.2 $ —

( 9 ) $ 4,725,600 —

Outstanding as of December 31, 2024

The aggregate intrinsic value of options is calculated as the difference between the exercise price of the stock options and the fair value of common stock for those options that had exercise prices lower than the fair value of common stock.

Upon exercise of stock options, the Company will issue new shares of its common stock.

For the years ended December 31, 2024 and 2023, stock-based compensation expenses (recoveries) associated with the options awards for employees and non-employees were approximately $ 3 thousand and ($ 71 ) thousand, respectively.

As of December 31, 2024, there was no unrecognized compensation cost for options issued since all outstanding options were forfeited in December 2024.

Stock-Based Compensation

The following table summarizes stock-based compensation for the years ended December 31, 2024 and 2023 (in thousands):

Year ended December 31,

($ in thousands)

Research and development

General and administrative

Total stock-based compensation expense (forfeiture)

License and Development Agreements

License Agreement with Eisai Inc.

for Stenoparib

hold the exclusive worldwide rights to all preventative, therapeutic and/or diagnostic uses related to cancer in humans and by amendment

to the agreement on December 11, 2020, viral infections in humans (including, but not limited to, coronaviruses) for stenoparib from

(“Eisai”) pursuant to a license agreement.

Pursuant to the license agreement, we are solely responsible for the

development of stenoparib during the term of the agreement.

The agreement also provides for a joint development committee consisting

of six members, three appointed by us and three appointed by Eisai.

One of our members of the joint development committee is designated

chair of the committee and has the power to break any deadlock in decisions by the committee that must be made by a majority vote with

each representative having one vote.

The purpose of the committee is to implement and oversee development activities for stenoparib pursuant

to the clinical development plan, serving as a forum for exchanging data, information and development strategy.

July 12, 2022, the Company’s July 6, 2017 Exclusive License Agreement with Eisai Inc.

(the “Third Amendment”), the

terms of the original exclusive license were further amended in order to (1) further postpone the due date of the Extension Payment and

extend the deadline for the Company’s successful completion of its first Phase 1b or Phase 2 clinical trial for Stenoparib (the

“Product”) beyond December 31, 2022;

The Company holds the exclusive worldwide rights to all preventative, therapeutic and/or diagnostic uses related to cancer in humans and by amendment to the agreement on December 11, 2020, viral infections in humans (including, but not limited to, coronaviruses) for stenoparib from Eisai, Inc.

(“Eisai”) pursuant to a license agreement (the “Eisai License Agreement”).

Pursuant to the Eisai License Agreement, the Company is solely responsible for the development of stenoparib during the term of the Eisai License Agreement.

Eisai License Agreement also provides for a joint development committee consisting of six members, three appointed by the Company and three appointed by Eisai.

One of the Company’s members of the joint development committee is designated chair of the committee and has the power to break any deadlock in decisions by the committee that must be made by a majority vote with each representative having one vote.

The purpose of the committee is to implement and oversee development activities for stenoparib pursuant to the clinical development plan, serving as a forum for exchanging data, information and development strategy.

Effective July 12, 2022, the Company’s July 6, 2017 Exclusive License Agreement with Eisai Inc.

(the “Third Amendment”), the terms of the original exclusive license were further amended in order to ( 1 ) further postpone the due date of the extension payment and extend the deadline for the Company’s successful completion of its first Phase 1b or Phase 2 clinical trial for stenoparib beyond December 31, 2022;

and ( 2 ) amend terms related to Eisai’s right of termination of development.

On May 26, 2023, the Company and Eisai entered into a fourth amendment

to the Exclusive License Agreement with an effective date of May 16, 2023, to postpone the extension payment, restructure the payment

schedule and extend the deadline to complete enrollment in a further Phase 1b or Phase 2 Clinical Trial for the Stenoparib (the “Product”).

On May 26, 2023, the Company and Eisai entered into a fourth amendment to the Exclusive License Agreement with an effective date of May 16, 2023, to postpone the extension payment, restructure the payment schedule and extend the deadline to complete enrollment in a further Phase 1b or Phase 2 Clinical Trial for the stenoparib.

The Company agreed to pay Eisai in periodic payments as follows:

(i) $ 100,000 , which has been paid;

(ii) $50 within 10 days of execution of

the fourth amendment which has been paid;

(iii) $100 upon completion of a capital raise (paid on July 18, 2023);

and (iv) $850 on or before

March 1, 2024.

As of the date of this filing, the Company is currently negotiating a fifth amendment to the extend the timeframe of periodic

payments due.

and Development Agreements (cont.)

the extension payment is paid in full, the Company shall have until April 1, 2024, to complete enrollment in a further Phase 1b or Phase

2 Clinical Trial of the Product.

If the Company has not achieved successful completion of a further Phase 1b or Phase 2 Clinical Trial

of the Product prior to April 1, 2024, Eisai may terminate this Agreement in its entirety, in its sole discretion on at least 120 days

prior written notice.

Milestone Payments

to the agreement, we have agreed to make milestone payments to Eisai in connection with the development of stenoparib by us or our affiliates,

or by a third-party Program Acquirer that assumes control of the stenoparib development program from us corresponding to:

(i) successful

completion of a Phase 2 clinical trial;

(ii) $ 50,000 within 10 days of execution of the fourth amendment, which has been paid;

(iii) $ 100,000 upon completion of a capital raise, which has been paid;

and (iv) $ 850,000 on or before March 1, 2024.

On February 26, 2024, in exchange for an additional $ 0.2 million, paid as of May 1, 2024, the Company and Eisai entered into a fifth amendment to the Exclusive License Agreement to postpone the payment of $ 850,000 .

The Company agreed to make a one -time payment to Eisai of $ 850,000 upon completion of a ten -million dollar capital raising campaign, no later than September 1, 2024.

The Company paid Eisai $ 850,000 on August 20, 2024 and no payments are currently outstanding.

On August 2, 2024, the Company and Eisai entered into a sixth amendment to the Exclusive License Agreement with an effective date of August 2, 2024.

The terms of the amended exclusive license were further amended in order to ( 1 ) amend the definition of a successful completion and ( 2 ) amend the terms related to Eisai's right of termination for development.

Development Milestone Payments

The Company has agreed to make milestone payments to Eisai in connection with the development of stenoparib by the Company or its affiliates, or by a third -party program acquirer that assumes control of the stenoparib development program from the Company corresponding to:

(i) successful completion of a Phase 2 clinical trial;

(ii) upon dosing of the first patient in the first Phase 3 clinical trial;

submission of the first NDA with the FDA;

(iii) upon submission of the first NDA with the FDA;

(iv) submission of an MAA to the EMA;

1 unchanged sentence

(vi) upon receipt of authorization by the FDA to market and sell a licensed product;

(vii) upon receipt of approval of an MAA

by the EMA for a licensed product;

(vii) upon receipt of approval of an MAA by the EMA for a licensed product;

and (viii) upon receipt of approval by the MHLW in Japan for a licensed product.

If all milestones

have been achieved, we may be obligated to pay Eisai up to a maximum of $ 94 million.

In addition, we have agreed to pay Eisai a one-time

sales milestone payment in the amount of $ 50 million the first time our annual sales of licensed product is $ 1 billion or more.

addition to the milestone payments described above, we have agreed to pay Eisai royalties based on annual incremental sales of product

derived from stenoparib in an amount between 5 % and 10 % of annual sales of between $ 0 and $ 100 million, between 6 % and 10 % of annual

sales between $ 100 million and $ 250 million, between 7 % and 11 % of annual sales between $ 250 million and $ 500 million, and between 11 %

and 15 % of annual sales in excess of $ 500 million.

are obligated to pay royalties under the agreement on a country-by-country and product-by-product basis for a period that commences with

the first commercial sale of a product until the later of (i) the expiration of the last to expire valid claim of any licensed patent

covering such licensed product in such country;

or, (ii) the expiration of regulatory-based exclusivity for such licensed product

in such country or (iii) the 15 year anniversary of the date of first commercial sale of such licensed product in such country.

However, the agreement may be terminated sooner without cause by us upon 120 days prior written notice, or upon written notice of

a material breach of the agreement by Eisai that is not cured within 90 days (30 days for a payment default).

Eisai also has

the right to terminate the agreement upon written notice of a material breach of the agreement by us that is not cured within 90 days

(30 days for a payment default) or if we file for bankruptcy.

By an amendment effective as of August 3, 2021, and executed by Eisai

on August 23, 2021, Eisai also has the right to terminate the agreement if we do not complete a Phase 2 clinical trial before December

31, 2022, unless we elect to pay a $ 1,000 extension payment (“Extension Payment”).

Notwithstanding the foregoing, in the

event we fail to enroll and dose at least 30 patients with the first dose of cancer drug in the ongoing Phase 2 Ovarian Cancer Clinical

Trial by July 1, 2022, then the Extension Payment will be due and payable in fully by July 30, 2022.

In addition, if we fail to achieve

successful completion of first Phase 2 Clinical Trial prior to December 31, 2022, and do not elect to pay the Extension Payment then

Eisai may terminate the agreement in its sole discretion pursuant to the terms of the amendment.

and Development Agreements (cont.)

to Reacquire Rights to Stenoparib

the period commencing with enrollment of the first five patients in a Phase 2 clinical trial pursuant to the clinical development plan

and ending 90 days following successful completion of such Phase 2 clinical trial, Eisai has the option to reacquire our licensed rights

to develop stenoparib for a purchase price equal to the fair market value of our rights, giving effect to the stage of development of

stenoparib that we have completed under the agreement.

We commenced a Phase 2 clinical trial April 15, 2019, and as of the date of these

consolidated financial statements, Eisai has not indicated an intention to exercise its repurchase option.

Option and License Agreement with R-Pharm for IXEMPRA®

On March 1, 2019, the Company

entered into an option to in-license the rights to any and all therapeutic and/or diagnostic uses in humans for IXEMPRA ®

in the European Union (Great Britain but excluding Switzerland and Lichtenstein) (the “Territory”) from R-Pharm U.S.

LLC (“R-Pharm”), pursuant to a Development, Option and License Agreement (the “Option”).

By an amendment to the

agreement dated August 4, 2022, for no consideration, the term of the option will expire on September 1, 2023, if not exercised by us

The agreement provides a right of extension, should we elect, for an additional $ 250 .

As of the date of this filing, we

have not extended the option with R-Pharm.

(d) Development

costs and Out-License Agreement with Smerud

June of 2020 (the “June 2020 Out-License Agreement”), as amended March 28, 2022 (the “Amended License Agreement”),

the Company out-licensed its secondary LiPlaCis ® and 2X-111 programs to Smerud Medical Research International, the Company’s

long-time CRO partner in Europe, for further Phase 2 clinical development of each program together with its DRP ® companion

Pursuant to the terms of the Amended License Agreement, Chosa ApS, a company organized under the laws of Denmark (“Chosa”),

replaced us as the exclusive licensee to the LiPlaCis ® technology.

In addition, we also granted Chosa an exclusive, royalty-free,

transferable and sublicensable license for (i) our DRP ® Companion Diagnostics that are specific for Cisplatin or LiPlaCis ®

(a liposomal formulation of Cisplatin) for the research and development of LiPlaCis ® products, and (ii) the use

of any and all know-how and intellectual property rights owned by us for Chosa’s use of our DRP ® Companion Diagnostics

that are specific for Cisplatin or LiPlaCis ® (a liposomal formulation of Cisplatin) for the development and commercialization

of LiPlaCis ® products, as contemplated in the Amended License Agreement.

and Development Agreements (cont.)

Support Agreement with Smerud, Chosa and LiPlasome

March 28, 2022, concurrent with the entry into the Amended License Agreement, we entered into the LiPlaCis Support Agreement with Allarity

Europe, Smerud, Chosa and LiPlasome (the “Support Agreement”).

Pursuant to the terms of the Support Agreement, we agreed

(i) to pay to LiPlasome a certain percentage of the Commercialization Proceeds received from Smerud by way of debt cancellation relating

to prior work on LiPlaCis ® by Smerud, which obligation was to be satisfied by the payment of $ 338 to LiPlasome upon execution

of the Support Agreement, (ii) to equally share the milestone payments under the terms of the License Agreement, pursuant to which it

was contemplated that upon the achievement of all the milestones, our pro rata share of the Milestone Payments would be up to $ 3.5 million,

(iii) to amend and restate the Original License Agreement, and (iv) to terminate the 2020 Sublicense Agreement as contemplated by the

parties pursuant to the terms of the Support Agreement.

the terms of the June 2020 Sublicense agreement (the “2020 Sublicense Agreement”) between the Company and Smerud Medical

Research International AS (Norway) (“Smerud”), the Company is liable for development costs incurred by Smerud in the approximate

amount of $ 1,264 , which has been accrued as of December 31, 2021, as payable to Smerud.

However, effective March 28, 2022,

the Company terminated its LiPlasome rights through the following agreements:

Letter Agreement between Chosa Oncology Ltd.

(England), Chosa ApS (Denmark) (collectively “Chosa”), Smerud, and the Company,

which references the following agreements:

The 2022 Amended and Restated License Agreement between LiPlasome Pharma Aps (Denmark) (“LiPlasome”), Chosa, and the Company’s subsidiary Allarity Therapeutics ApS, which amended the original February 15, 2016, LiPlasome License Agreement (as amended January 27, 2021), whereby Chosa replaced the Company as licensee of LiPlasome in exchange for Smerud’s cancellation of the Company’s $ 1,309 liability to Smerud and the Company’s agreement to pay $ 338 to LiPlasome.

Consequently, in 2022, the Company recorded a balance due to LiPlasome of $ 338 in accrued liabilities (paid on April 1, 2022) and recorded other income of $ 971 , which was recognized as a gain on sale of IP.

LiPlacis Support Agreement between Allarity Therapeutics Europe, Smerud, Chosa and LiPlasome.

Terms of the Support Agreement provide that each of Smerud and the Company agreed that the

2022 Sublicense Agreement is terminated in its entirety.

and Development Agreements (cont.)

(e) Oncoheroes

January 2, 2022, the Company entered into an Exclusive License Agreement with Oncoheroes Biosciences Inc.

(the “Oncoheroes Agreement”)

to grant Oncoheroes an exclusive royalty-bearing global license to both dovitinib and stenoparib in pediatric cancers.

Oncoheroes will

take responsibility for pediatric cancer clinical development activities for both clinical-stage therapeutics.

The Company will support

Oncoheroes’ pediatric clinical trials by providing clinical-grade drug inventory at cost and by facilitating DRP ®

companion diagnostic screening of pediatric patients for each drug.

Under the licenses, Oncoheroes will receive commercialization rights

for pediatric cancers, subject to the Company’s first buy-back option for each program, and the Company will receive an upfront

license fee and regulatory milestones for for stenoparib, as follows:

A one-time upfront payment of $ 250 for stenoparib, within 5 business days after January 2, 2022 ($ 350 received as of April 4, 2022) and recorded in other income as a gain on sale of IP;

two milestone payments of $ 1 million each due and payable upon receipt of regulatory approval of a product in the United States, and of a product in Europe, respectively.

to the Oncoheroes Agreement the Company is also entitled to tiered royalties on aggregate net product sales (“Sales”) of

between 7% and 12% on net sales of products as follows:

7% on Sales less than $100 million;

10% on Sales of greater than $100 million

and less than $200 million;

and 12% on Sales greater than $200 million.

– Irofulven Agreement

July 23, 2021, we entered into an Asset Purchase Agreement with Lantern Pharma, Inc.

relating to our inventory of Irofulven active pharmaceutical

ingredients, our clinical research data relating to Irofulven developed by us during the drug development program under the May 2015

Drug License and Development Agreement for Irofulven and terminated our obligation to further advance the development of Irofulven under

the May 2015 agreement.

Under the Asset Purchase Agreement, Lantern Pharma agreed to pay us $ 1 million on closing of the transaction,

and additional amounts:

when the inventory of Irofulven

API is recertified with a longer shelf life;

upon the initiation of

treatment of the first patient in an investigator-led “compassionate use” ERCC2/3 mutation subgroup study using Irofulven

in certain agreed upon investigators;

upon the initiation of

treatment of the first patient within twenty-four months after the closing of the transaction in any human clinical trial of Irofulven

initiated by Lantern Pharma;

upon the initiation of

treatment of the second patient within an agreed upon time period after the closing of the transaction in any human clinical trial

of Irofulven initiated by Lantern Pharma.

addition to the sale of our inventory of Irofulven API and Data to Lantern Pharma, we also granted Lantern Pharma a non-exclusive, worldwide

license to use our putative Irofulven DRP ® companion diagnostic to advance the development and commercialization of Irofulven

and other Illudins (sesquiterpenes with anti-tumor properties produced by some mushrooms).

We have also agreed not to engage in any drug

development program for Illudins or any of its analogues or any use thereof for a period of five years.

March 18, 2022, pursuant to clause (i) the inventory was recertified with a longer shelf life and as of March 31, 2022, we received $ 459

which was recorded in other income as a gain on sale of IP.

reconciliation of the statutory rate to the effective tax rate is as follows:

Reconciliation

of effective tax rate:

If all milestones have been achieved, the Company may be obligated to pay Eisai up to a maximum of $ 94 million.

In addition, the Company has agreed to pay Eisai a one -time sales milestone payment in the amount of $ 50 million the first time the Company’s annual sales of licensed product is $ 1 billion or more.

Royalty Payments

In addition to the milestone payments described above, the Company has agreed to pay Eisai royalties based on annual incremental sales of product derived from stenoparib in an amount between 5 % and 10 % of annual sales of between $ 0 and $ 100 million, between 6 % and 10 % of annual sales between $ 100 million and $ 250 million, between 7 % and 11 % of annual sales between $ 250 million and $ 500 million, and between 11 % and 15 % of annual sales in excess of $ 500 million.

The Company is obligated to pay royalties under the agreement on a country-by-country and product-by-product basis for a period that commences with the first commercial sale of a product in such country and expiring on the later of (i) the expiration of the last valid claim of any and all Eisai patents, Company patents and joint patents covering such product in such country;

or, (ii) the 15 year anniversary of the date of first commercial sale of such licensed product in such country.

However, the agreement may be terminated sooner without cause by the Company upon 120 days prior written notice, or upon written notice of a material breach of the agreement by Eisai that is not cured within 90 days ( 30 days for a payment default).

Eisai also has the right to terminate the agreement upon written notice of a material breach of the agreement by the Company that is not cured within 90 days ( 30 days for a payment default) or if the Company files for bankruptcy.

Option to Reacquire Rights to Stenoparib

For the period commencing with enrollment of the first five patients in a Phase 2 clinical trial pursuant to the clinical development plan and ending 90 days following successful completion of such Phase 2 clinical trial, Eisai has the option to reacquire the Company's licensed rights to develop stenoparib for a purchase price equal to the fair market value of the Company's rights, giving effect to the stage of development of stenoparib that the Company has completed under the agreement.

The Company commenced a Phase 2 clinical trial April 15, 2019, and as of the date of the Financial Statements, Eisai has not indicated an intention to exercise its repurchase option.

License Agreement with Novartis for Dovitinib

On January 26, 2024, we received a Termination Notice from Novartis due to a material breach of our license agreement.

Accordingly, under the terms of the Agreement (i) we shall cease all development and commercialization activities with respect to all licensed products;

(ii) all rights and licenses granted by Novartis to Allarity shall revert to Novartis;

and all liabilities due to Novartis became immediately due and payable in the amount of $ 5.0 million inclusive of interest which is continuing to accrue at 5 % per annum.

As of December 31, 2024 , the liability is recorded as a current liability on our Consolidated Balance Sheets as follows:

$ 3.6 million in accounts payable and $ 1.4 million convertible promissory note and accrued interest.

Development costs and Out-License Agreement with Smerud

Pursuant to the terms of the amendment on March 28, 2022 to the out-license agreement with Smerud Medical Research International (the "Amended License Agreement"), Chosa ApS, a company organized under the laws of Denmark (“Chosa”), replaced us as the exclusive licensee to the LiPlaCis ® technology.

In addition, we also granted Chosa an exclusive, royalty-free, transferable and sublicensable license for (i) our DRP ® Companion Diagnostics that are specific for Cisplatin or LiPlaCis ® (a liposomal formulation of Cisplatin) for the research and development of LiPlaCis ® products, and (ii) the use of any and all know-how and intellectual property rights owned by us for Chosa’s use of our DRP ® Companion Diagnostics that are specific for Cisplatin or LiPlaCis ® (a liposomal formulation of Cisplatin) for the development and commercialization of LiPlaCis ® products, as contemplated in the Amended License Agreement.

In 2024, the Company signed service agreements with external biotech clients for both DRP® analysis and gene expression services.

Leveraging its gene expression and diagnostic capabilities, its laboratory will provide the services to the external clients.

The Company received down payments in 2024 totaling approximately $ 0.2 million, is actively preparing the laboratory and required samples, and expects to start recognizing revenue in 2025.

The reconciliation of the statutory rate to the effective tax rate is as follows:

Tax computed on the loss before tax at a tax rate of 21.0 % for the years ended December 31, 2024 and 2023

$ ( 5,228 ) $ ( 2,482 )

Foreign rate differential

Non-deductible expenses, other

( 164 ) ( 73 )

Tax value of derivative warrants

Special tax deduction on research and development

Loss offset to research and development

( 562 ) ( 1,187 )

Special tax deduction on research and development expenses

( 645 ) ( 559 )

Loss offset to research and development incentive

Other adjustments

Adjustment of tax concerning previous years

Change in valuation

Effective tax rate

components of net loss before income taxes were as follows:

Change in valuation allowance

$ ( 381 ) $ 83

The components of net loss before income taxes were as follows:

$ ( 16,376 ) $ ( 6,234 )

United States

components of the provision for income taxes from operations were as follows:

tax comprises:

( 8,520 ) ( 5,584 )

$ ( 24,896 ) $ ( 11,818 )

The components of the provision for income taxes from operations were as follows:

United States

$ ( 381 ) $ 83

Deferred tax comprises:

Property, plant and equipment

$ ( 24 ) $ ( 25 )

Intangible assets

719 ( 1,405 )

Stock compensation

Other accruals

Capitalized R&E costs

Net operating losses

19,325 16,952

Total deferred tax

21,078 16,328

Valuation allowance

( 21,078 ) ( 16,774 )

Net deferred tax liabilities

on profit/loss for the year:

Current income tax (benefit) expense

$ — $ ( 446 )

Tax on profit/loss for the year:

Change in deferred tax

Adjustment of tax

concerning previous years

$ ( 381 ) $ 83

Tax (benefit) expense

losses carried forward of approximately $ 78.1 million can be carried forward indefinitely.

Deferred tax has been provided corresponding

to the statutory tax rate applied.

statute of limitations for re-assessment of tax returns in Denmark is three years and five years for transfer pricing.

As of December

31, 2023, the tax years that remain subject to examination by the major tax jurisdictions, under the statute of limitations, are from

the year ended December 31, 2018, forward.

The Company does not believe it has any uncertain tax positions that would result in the Company

having a liability to the taxing authorities.

Related parties

the years ended December 31, 2023 and 2022, a Director of the Company was paid $ 127 and $ 269 , respectively, in fees as a consultant.

and diluted net loss per share

and diluted net loss per share attributable to common shareholders was as follows:

loss attributable to common shareholders

Weighted average common shares outstanding – basic and diluted

Net loss per share attributable to common shareholders – basic and diluted

$ ( 381 ) $ 83

and diluted net loss per share (cont.)

Company’s potentially dilutive securities, which include warrants and shares issuable upon conversion of convertible debt, have

been excluded from the computation of diluted net loss per share attributable to common shareholders as the effect would be to reduce

the net loss per share attributable to common shareholders.

Therefore, the weighted average number of common shares outstanding used

to calculate both basic and diluted net loss per share attributable to common shareholders is the same.

The Company excluded the following

potential common shares, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share

attributable to common shareholders for the periods indicated because including them would have had an anti-dilutive effect:

of December 31,

Warrants and stock options

Series A Convertible Preferred stock

Convertible debt*

* Estimated based on $ 2,667 at $ 0.1825 per share.

following tables present information about the Company’s financial instruments measured at fair value on a recurring basis and

indicate the level of the fair value hierarchy used to determine such fair values:

Value Measurements as of December 31, 2023,

Warrant liability

Tax losses carried forward of approximately $ 89.4 million can be carried forward indefinitely.

Deferred tax has been provided corresponding to the statutory tax rate applied.

The statute of limitations for re-assessment of tax returns in Denmark is three years and five years for transfer pricing.

As of December 31, 2024 , the tax years that remain subject to examination by the major tax jurisdictions, under the statute of limitations, are from the year ended December 31, 2019 , forward.

The Company does not believe it has any uncertain tax positions that would result in the Company having a liability to the taxing authorities.

Related parties

During the year ended December 31, 2023, Thomas H.

Jensen, a director of the Company, was paid $ 0.1 million in fees as a consultant.

Effective December 12, 2023, the Company announced the appointment of Thomas H.

Jensen as CEO.

Financial Instruments

The following tables present information about the Company’s financial instruments measured at fair value on a recurring basis and indicate the level of the fair value hierarchy used to determine such fair values:

Fair Value Measurements as of December 31, 2024,

Warrant liability

Value Measurements as of December 31, 2022,

$ — $ — $ ( 1 ) $ ( 1 )

Derivative warrant liability

$ — $ — $ ( 1 ) $ ( 1 )

Fair Value Measurements as of December 31, 2023,

Warrant liability

used to estimate the fair values of our financial instruments, not disclosed elsewhere in these consolidated financial statements, are

available, our marketable securities are valued using quoted prices for identical instruments in active markets.

If we are unable to

value our marketable securities using quoted prices for identical instruments in active markets, we value our investments using broker

reports that utilize quoted market prices for comparable instruments.

Accordingly, our investment is considered a Level 1 financial

We have no financial assets or liabilities measured using Level 2 inputs.

Financial assets and liabilities are considered Level

3 when their fair values are determined using pricing models, discounted cash flow methodologies, or similar techniques, and at least

one significant model assumption or input is unobservable.

Instruments (cont.)

Company recognizes its derivative liabilities as level 3 and values its derivatives using the methods discussed below.

While the Company

believes that its valuation methods are appropriate and consistent with other market participants, it recognizes that the use of different

methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair

value at the reporting date.

The primary assumptions that would significantly affect the fair values using terms in the notes that are

subject to volatility and market price of the underlying common stock of the Company.

The Company reviews the fair value hierarchy classification on a quarterly

Changes in the ability to observe valuation inputs may result in a reclassification of levels for certain securities within the

fair value hierarchy.

The Company’s policy is to recognize transfers into and out of levels within the fair value hierarchy at the

date the actual event or change in circumstances that caused the transfer occurs.

When a determination is made to classify an asset or

liability within Level 3, the determination is based upon the significance of the unobservable inputs to the overall fair value measurement.

$ — $ — $ ( 2,263 ) $ ( 2,263 )

Derivative warrant liability

— — ( 820 ) ( 820 )

$ — $ — $ ( 3,083 ) $ ( 3,083 )

Methods used to estimate the fair values of our financial instruments, not disclosed elsewhere in these consolidated financial statements, are as follows:

When available, the Company's marketable securities are valued using quoted prices for identical instruments in active markets.

If the Company is unable to value its marketable securities using quoted prices for identical instruments in active markets, the Company values its investments using broker reports that utilize quoted market prices for comparable instruments.

Accordingly, its investment is considered a Level 1 financial asset.

The Company has no financial assets or liabilities measured using Level 2 inputs.

Financial assets and liabilities are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies, or similar techniques, and at least one significant model assumption or input is unobservable.

The Company recognizes its derivative liabilities as level 3 and values its derivatives using the methods discussed below.

While the Company believes that its valuation methods are appropriate and consistent with other market participants, it recognizes that the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.

The primary assumptions that would significantly affect the fair values using terms in the notes that are subject to volatility and market price of the underlying common stock of the Company.

The Company reviews the fair value hierarchy classification on a quarterly basis.

Changes in the ability to observe valuation inputs may result in a reclassification of levels for certain securities within the fair value hierarchy.

The Company’s policy is to recognize transfers into and out of levels within the fair value hierarchy at the date the actual event or change in circumstances that caused the transfer occurs.

When a determination is made to classify an asset or liability within Level 3, the determination is based upon the significance of the unobservable inputs to the overall fair value measurement.

There were no transfers between level 1 or level 2 during the years ended December 31, 2024 , or 2023 .

During the years ended December 31, 2023, and 2022, the Company utilized

the reset strike options Type 2 model by Espen Garder Haug and Black-Scholes Merton models to measure the fair value of the 3i Exchange

Warrant derivative liability at $ 820 and $ 374 , respectively.

All changes in fair value were recorded in the Consolidated Statements of

Operation and Comprehensive Loss during the corresponding period.

Fluctuations in the Company’s stock price are a primary driver

for the changes in the derivative valuations during each reporting period.

During the years ended December 31, 2023, and 2022, the Company’s

stock price decreased from its initial valuation.

As the stock price decreases for each of the related derivative instruments, the value

to the holder of the instrument generally decreases.

Stock price is one of the significant unobservable inputs used in the fair value

measurement of each of the Company’s derivative instruments.

and Contingencies

Agreement with 2-BBB Medicines B.V.

for Stenoparib (“2X-111”)

March 27, 2017, we in-licensed the exclusive worldwide rights to the central nervous system (“CNS”) and/or cerebrocardiovascular

drug application, including the (preventive) treatment of peripheral effects of agents causing CNS disease or symptoms, including cancer,

for 2X-111 from 2-BBB Medicines B.V.

(“2-BBB”) pursuant to a license agreement.

Upon execution of the agreement, we paid

2-BBB a one-time, non-refundable, non-creditable payment of $ 500 .

Pursuant to the agreement, we are solely responsible for the development

of 2X-111 during the term of the agreement.

and Sales Milestone Payments

to the agreement, we have agreed to make milestone payments to 2-BBB in connection with the development of 2X-111 by us or our affiliates,

or by a third-party (a “Program Acquirer”) that assumes control of the 2X-111 development program from us corresponding to:

(i) upon enrollment of the first ten patients required in a Phase 2 clinical trial;

(ii) upon the successful completion of a Phase 2

clinical trial;

(iii) upon dosing of the first patient in the first Phase 3 clinical trial;

(iv) upon submission of the first NDA with

(v) submission of an MAA to the EMA in the European Union;

(vi) upon submission of an NDA in the first of either China or India;

(vii) upon receipt of the first authorization by the FDA to market and sell a licensed product;

(viii) upon receipt of a MAA for a licensed

product in the European Union;

and (ix) upon receipt of regulatory approval in the first of either China or India.

If all development

milestones have been achieved, we may be obligated to pay 2-BBB up to a maximum of $ 27.75 million which could increase to $ 55.5 million

if 2-BBB successfully expands the field of our license agreement to include all preventative, therapeutic and/or diagnostic uses related

to cancer in humans.

In addition to the development milestones described above, we have agreed to make a mid-level seven figure one-time

payment upon our sales of a licensed product reaching $ 500 million annually and a low eight figure payment upon the first and second

time our sales of a licensed product reaches $ 1 Billion annual.

If all sales milestones have been achieved, we would be obligated to

pay 2-BBB up to a maximum of $ 22.5 million which could increase to $ 45 million if 2-BBB successfully expands the field of our license

agreement to include all preventative, therapeutic and/or diagnostic uses related to cancer in humans.

and Contingencies (cont.)

addition to the milestone payments described above, we have agreed to pay 2-BBB royalties based on annual incremental sales of product

derived from 2X-111 in an amount between 5% and 10% of annual sales of between $ 0 and $ 100 million, between 6% and 13% of annual sales

between $ 100 million and $ 250 million, and between 7% and 13% of annual sales in excess of $ 250 million.

We are obligated to pay royalties

under the agreement on a product-by-product and country-by-country basis, from the period of time commencing on the first commercial

sale of any product in such country and expiring upon the latest of (a) the expiration of the last valid claim of a patent within (i)

the 2-BBB intellectual property and/or (ii) the joint intellectual property in such country (if, but only if, such joint intellectual

property arose from activities under the clinical development plan), or (b) the 10 th anniversary of the date of first commercial

sale of such product in such country.

However, the agreement may be sooner terminated without cause by us upon 120 days prior written

notice, or upon written notice of a material breach of the agreement by 2-BBB that is not cured within 90 days.

2-BBB also has the right

to terminate the agreement upon written notice of a material breach of the agreement by us that is not cured within 90 days (30 days

for a payment default) or if we file for bankruptcy.

2-BBB also has the right to terminate the agreement in the event we challenge a

2-BBB patent and we have the right to terminate the agreement upon 30 days’ notice for specified safety reasons.

3i LP Securities Purchase Agreement

January 18th, 2024, we entered into a Securities Purchase Agreement with 3i, pursuant to which we issued and sold 3i a senior convertible

promissory notes in an aggregate principal amount of $ 440 due on January 18, 2025 (the “First Note”, and together with the

Purchase Agreement, the “Transaction Documents”) for an aggregate purchase price of $ 400 , representing an approximate 10 %

original issue discount (the “Transaction”).

We agreed to use the net proceeds from the sale of the Note for accounts payable

and working capital purposes.

Unless the Transaction Documents state otherwise, we may not prepay any portion of the principal amount

of the Note without the Purchaser’s prior written consent.

February 13, 2024 (the “Second Closing”), the Parties entered into a Limited Waiver Agreement (the “Waiver Agreement”)

and agreed that the Second Closing can be consummated prior to the 30th calendar day following January 18, 2024.

The Parties further

waive any rights or remedies that they may have under Section 2.3 of the Purchase Agreement, solely in connection with the Second Closing,

including any rights of termination, defaults, amendment, acceleration or cancellation that be triggered under the Purchase Agreement

solely as a result of accelerating the Second Closing.

As of the Second Closing, we issued and sold to the Purchaser a senior convertible

promissory note in an aggregate principal amount of $ 440 (the “Principal Amount”) due on February 13, 2025 (the “Second

Note,” and together with the First Note dated January 18, 2024, and Purchase Agreement, the “Transaction Documents”)

for an aggregate purchase price of $ 400 , representing an approximately 10 % original issue discount (the “Transaction”).

agreed to use the net proceeds from the sale of the Second Note for accounts payable and working capital purposes.

Unless the Transaction

Documents state otherwise, we may not prepay any portion of the principal amount of the Second Note without the Purchaser’s prior

written consent.

to the satisfaction (or express waiver) of the conditions set forth in the Purchase Agreement, the Purchaser shall also have the right

to require us to consummate one or more additional closings of up to an additional $ 600 of notes in the aggregate.

Events (cont.)

agreed to pay interest to 3i on the aggregate unconverted and then outstanding principal amount of the First and Second Notes at the

rate of 8 % per annum.

The first interest payment on the First Note is due on February 1, 2024, and has been deferred to March 1,

2024, with subsequent payments on the 1 st of each month, starting from March 1, 2024, until the First Note is fully redeemed.

The first interest payment on the Second Note is due on March 1, 2024, with subsequent payments on the 1 st of each month,

starting from April 1, 2024, until the Second Note is fully redeemed.

The interest on each of the First and Second Notes is payable in

cash or, at the Purchaser’s option, in shares of our common stock, par value $ 0.0001 (the “Common Stock”), at the 90 %

of the lowest VWAP during the previous ten trading days that is immediately prior to the interest payment dates.

Under the terms of the

Note, 3i has the exclusive right to choose whether to receive interest payments in cash or as shares of our Common Stock.

of the First and Second Notes

the First Closing Date until the First Note is fully paid off, it can be converted, partially or entirely, into Common Stock at 3i’s

discretion (subject to limits specified in the Note).

We have committed to keeping enough of our authorized but unissued shares of Common

Stock available exclusively for conversion of the Note.

The set conversion price is $ 0.4476 per share.

The number of shares to be issued

upon conversion of the Note will be calculated by dividing the outstanding principal amount of the Note to be converted by $ 0.4476 .

the Second Closing until the Second Note is fully paid off, it can be converted, partially or entirely, into Common Stock at the Purchaser’s

discretion (subject to limits specified in the Second Note).

We have committed to keeping enough of our authorized but unissued shares

of Common Stock available exclusively for conversion of the Second Note.

The set conversion price is $ 0.405 per share.

The number of

shares to be issued upon conversion of the Second Note will be calculated by dividing the outstanding principal amount of the Second

Note to be converted by $ 0.405 .

ownership percentage of our Common Stock is limited to no more than 4.99 %, as determined according to Section 13(d) of the Securities

Exchange Act of 1934, as amended, and its accompanying rules.

Additionally, we cannot issue shares of our Common Stock in relation to

the Transaction, including shares due upon the First and Second Note conversion or otherwise, that exceed 19.99 % of our total outstanding

shares of Common Stock, unless otherwise permitted by the Transaction documents.

to the provisions of the First and Second Notes, if, at any time while the First and Second Notes are outstanding, we engage in one or

more subsequent financings, 3i may require us to first use up to 100 % of the gross proceeds of such financing to redeem all or a portion

of the First and Second Notes.

However, if we raise capital in an ATM offering, 3i may request up to 20 % of the proceeds to redeem the

Series A Convertible Preferred Stock (the “Series A Preferred Stock”) at the stated value.

First and Second Notes include customary event of default provisions and provide for a mandatory default provision.

Upon the occurrence

of an event of default, the Purchaser may require us to pay in cash the “Mandatory Default Amount” which is defined in the

Note to mean the sum of (a) the greater of (i) the outstanding principal amount of the First and Second Note, plus all accrued and unpaid

interest hereon, divided by the lesser of (i) 0.4476 in the case of the First Note and $ 0.405 in the case of the Second Note, or (ii)

85 % of the average of the three lowest VWAPs during the 10 trading days ending on the trading day that is immediately prior to the applicable

date the Mandatory Default Amount is either (A) demanded or otherwise due or (B) paid in full, whichever has a lower conversion price,

multiplied by the highest closing price for our shares of Common Stock on the trading market during the period beginning on the date

of first occurrence of the event of default and ending on the date the Mandatory Default Amount is paid in full, or (ii) 130 % of the

sum of the outstanding principal amount of the First and Second Note, plus accrued and unpaid interest hereon, and (b) all other amounts,

costs, expenses and liquidated damages due in respect of the First and Second Note.

Subsequent Events (cont.)

any part of the First and Second Notes are outstanding, without prior written consent from the Purchaser and holders of at least 50.01 %

of the outstanding Second Note, we are restricted from (i) incurring any debt exceeding $ 250 in total;

(ii) creating any liens on their

property, except for permitted ones;

(iii) making amendments to their charter documents that adversely affect the Purchaser’s rights;

(iv) repurchasing our Common Stock or equivalents, except under specific conditions related to conversion shares under the Second Note

and equity incentives for departing officers and directors, capped at $ 50 in total;

(v) repurchasing or acquiring any indebtedness other

than the First and Second Note, unless it is done pro-rata;

(vi) paying cash dividends or distributions on their equity securities;

engaging in transactions with any affiliates or related parties, unless permitted by the Purchase Agreement;

and (viii) entering into

agreements related to the above restrictions.

agreed to register with the Securities and Exchange Commission the resale of our shares of the Common Stock issuable upon conversion

of the First and Second Note pursuant to the Purchase Agreement.

We agreed to reimburse the Purchaser of reasonable attorneys’

fees and expenses incurred by the Purchaser for significant work in connection with the First and Second Closing.

The Purchase Agreement

also provides for indemnification of the Purchaser if it incurs losses, liabilities, obligations, claims, contingencies, damages, costs

and expenses related to, among other things, a breach by us of any of our representations, warranties or covenants under the Purchase

Series A Preferred Stock Conversions

February 8, 2024, pursuant to the exercise of conversion by the 3i, we issued 291,958 shares of Common Stock to 3i upon the conversion

of 121 shares of Series A Preferred Stock based on a conversion price of $ 0.4476 .

No proceeds were received by the Company upon such

As of the date of these financial statements, we had 1,296 shares of Series A Preferred Stock issued and outstanding.

Modification to Conversion Price of Series A Preferred Stock and 3i Exchange Warrants

January 14, 2024, pursuant to the terms of the January 14th, 2024, 3i LP Bridge Loan, the Company 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 Certificate of Amendment to Amended and Restated Certificate

of Designations of Series A Convertible Preferred Stock (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.

February 13, 2024, pursuant to the terms of the February 13, 2024, Bridge Loan, the Company 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.

The Company 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 Certificate of Amendment to Amended and Restated Certificate of Designations of Series A Convertible

Preferred Stock (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.

Nasdaq Hearing

February 1, 2024 we attended a de-listing appeal hearing with Nasdaq, the outcome of which is pending as of the date of this filing.

Settlement Agreement (with J.Cullem)

As of March 7, 2024, we entered

into a Settlement Agreement and General Release (“Settlement Agreement”) with James Cullem, our former CEO and director.

to the terms and conditions outlined in the Settlement Agreement and in exchange for Mr.

Cullem’s commitments therein, including

his general release of claims against us, among other considerations, we agreed to provide Mr.

Cullem with an initial settlement payment

totaling $ 70,000 on April 1, 2024.

Additionally, we committed to making an installment payment of $ 179,155 , divided equally into 5 monthly

Furthermore, we agreed to issue Mr.

Cullem 290,000 settlement shares on April 1, 2024.

Should the initial settlement payment

and issuance of shares not be made to Mr.

Cullem in full on April 1, 2024, the Settlement Agreement will be rendered null and void, releasing

both parties from any further obligations under the Settlement Agreement unless otherwise mandated by a prior binding contract or agreement.

Both parties will retain any and all rights, claims, and causes of action that would have otherwise been released by the Settlement Agreement.

Additionally, Mr.

agreed to act as our consultant and entered into a consulting agreement (the “Consulting Agreement”) with us, effective as

of March 7, 2024.

For the avoidance of doubt, no additional consideration is being paid to Mr.

Cullem under the Consulting Agreement.

Copies of the Settlement Agreement and Consulting Agreement will be included as exhibits to our Quarterly Report on Form 10-Q for the

quarter ending March 31, 2024.

During the year ended December 31, 2023 the Company utilized the reset strike options Type 2 model by Espen Garder Haug and Black-Scholes Merton models to measure the fair value of the 3i Exchange Warrant derivative liability at $ 0.8 million.

All changes in fair value were recorded in the Consolidated Statements of Operation and Comprehensive Loss during the corresponding period.

Fluctuations in the Company’s stock price are a primary driver for the changes in the derivative valuations during each reporting period.

During the years ended December 31, 2024 and 2023, the Company’s stock price decreased from its initial valuation.

As the stock price decreases for each of the related derivative instruments, the value to the holder of the instrument generally decreases.

Stock price is one of the significant unobservable inputs used in the fair value measurement of each of the Company’s derivative instruments.

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.

The Company understands that all conduct relating to the SEC Wells Notice occurred during or prior to fiscal year 2022.

The Company also understands that three of its 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 the Company that the SEC Staff has made a preliminary determination to recommend that the SEC file an enforcement action against the Company that would allege certain violations of the federal securities laws.

Nasdaq Delisting Notifications

On June 18, 2024, the Company received a letter from the Nasdaq Listing Qualifications Staff (the “Staff”) of Nasdaq indicating that the Company has not complied with the Nasdaq Listing Rule 5550 (a)( 2 ) (the “Bid Price Rule”) which is the requirement that for 30 consecutive business days the bid price for the Company’s common stock close above the $1 per share minimum bid price requirement for continued inclusion on Nasdaq.

On July 30, 2024, the Company attended a hearing before a Nasdaq Hearings Panel (the “Panel”), and by decision date August 15, 2024, the Panel granted the Company’s request for an extension through September 6, 2024 to obtain shareholder approval for a reverse split at a ratio that will allow the Company to demonstrate compliance with the Bid Price Rule.

This approval was granted by Allarity’s shareholders at the Company’s Annual Meeting of Stockholders on September 3, 2024.

On October 9, 2024, the Company was formally notified by the Staff that the Company has evidenced compliance with the Bid Price Requirement for continued listing on the Nasdaq, as set forth in Nasdaq Listing Rule 5550 (a)( 2 ).

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 the Company and certain of its 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 Securities Exchange Act of 1934, as amended, against the individual defendants.

Subsequent Events

On February 26, 2025, the Company issued a press release announcing the dismissal of the aforementioned class action lawsuit.

SEC Investigation

On March 13, 2025, the Company issued a press release that the Company has reached a final settlement with the SEC relating to the Company's previously disclosed SEC investigation, and as part of the settlement, the Company has agreed to pay a one -time civil penalty of $ 2.5 million.

During the period January 1, 2025 through March 25, 2025, the Company had sold 9,719,173 shares of it's common stock for net proceeds of 9.7 million.

As of March 26, 2025, there were no more shares of the Company's common stock available for sale under the ATM program.

Share Buyback

On March 3, 2025, the Company’s board of directors authorized a share repurchase program, allowing for the repurchase of up to $ 5 million of the Company’s common stock through February 28, 2026.

The Company expects the purchases to be made from time to time 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.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures