What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2026-03-30 compared with 2025-03-31 · 452 added, 477 removed, 870 unchanged (52% of the section changed)

10 unchanged sentences

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.

Upon the arrival of our current Chief Financial Officer during the third quarter, the company identified a material weakness in its internal controls related to the Company's accounting of the share repurchase plan that was initiated in the quarter ended June 30, 2025.

To address the material weakness, management, under the oversight of the audit committee, has devoted, and plans to continue to devote, significant effort and resources to the remediation and improvement of its internal control over financial reporting.

As a result, the company updated internal controls over financial reporting and implemented enhanced review processes to ensure timely identification of appropriate accounting related to all contractual agreements.

As a result of these initiatives, management concluded that our internal control over financial reporting was effective as of December 31, 2025.

Inherent Limitations of Controls

Management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all errors and all fraud.

Controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.

These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake.

Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls.

The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Over time, controls may become inadequate because of changes in conditions, or deterioration in the degree of compliance with the policies or procedures.

Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Other Information.

2 unchanged sentences

Directors, Executive Officers and Corporate Governance.

EXECUTIVE OFFICERS

Our executive officers are appointed by our Board in accordance with our Bylaws.

The table below identifies and sets forth certain biographical and other information regarding our executive officers as of March 20, 2026.

There are no family relationships among any of our executive officers or directors.

Chief Executive Officer

Chief Financial Officer

Steen Knudsen

Chief Scientific Officer

President and Chief Development Officer

Jensen has been the Chief Executive Officer of Allarity Therapeutics, Inc.

since December 2023, a director of ours since July 2022, and has been a part of the Company’s since its inception serving in a range of capacities.

Before becoming the CEO, Mr.

Jensen has been the Senior Vice President, Investor Relations since June 2022, and a director of ours since July 2022.

Previously, Mr.

Jensen served as Senior Vice President of information Technology of Allarity Therapeutics, Inc.

as well as of our predecessor, Allarity Therapeutics A/S, since June 2020.

Jensen previously served as the Chief Technology Officer of our predecessor from 2004 to June 2020.

Jensen co-founded Allarity Therapeutics A/S in 2004.

Jensen also established and currently leads our laboratories in Denmark.

Alongside nurturing our global laboratories, Mr.

Jensen is instrumental in building our investor relations operations, securing operational financing, and fostering the business growth of Allarity Therapeutics.

Jensen’s accolades are his inventions of molecular biological guidelines combined with techniques for high quality reproducible RNA extraction and downstream processing.

This allows for high resolution analysis of cancer patients’ biopsies.

Jensen’s inventions are an important foundation of the DRP® -Drug Response Prediction platform.

Jensen also currently serves on the Board of Cardeon AB, a Swedish company that invests in innovative Nordic companies and start-ups in medical technology and Life Science.

Jensen holds a Bachelor of Science degree in Biology from the Technical University of Denmark, and conducted further studies in Biology at the University of Copenhagen.

Ervin joined the Company on July 1, 2025 with over 25 years of financial and leadership experience.

Initially starting in a fractional capacity, Mr.

Ervin became the full-time Chief Financial Officer of the Company on November 1, 2025.

Prior to joining the Company, Mr.

Ervin served as founder and chief executive officer of Sanaregen Vision Therapeutics, Inc., a clinical-stage biopharmaceutical research and development company, in February 2025 to October, 2025 in a fractional capacity.

From June 2024 to January 2025, Mr.

Ervin served in a fractional capacity as co-chief financial officer of DDC Enterprise, Ltd (NYSE:

DDC), a consumer food company.

From February 2015 and May 2024, Mr.

Ervin served as chairman and chief executive officer of IMAC Holdings, Inc., a provider of innovative medical advancements and care specializing in regenerative rehabilitation orthopedic treatments.

Ervin was co-founder of IMAC Holdings, Inc.

and led an initial public offering in February 2019 ( Nasdaq:

Ervin earned his M.B.A.

from Vanderbilt University and a B.S.

in Finance from Miami University.

Ervin currently serves as an independent director of Cingulate, Inc.

CING), a biopharmaceutical company focused on the development of new product candidates for the central nervous system.

Steen Knudsen.

Knudsen has been our Chief Scientific Officer since July 2021.

Knudsen is a co-founder of our predecessor Allarity Therapeutics A/S and the inventor of DRP®, the Drug Response Prediction Platform, which is our core technology and companion diagnostics platform, and was the Chief Scientific Officer of Allarity Therapeutics A/S since 2006.

Knudsen is also a former Professor of Systems Biology with extensive expertise in mathematics, bioinformatics, biotechnology, and systems biology.

He co-founded our predecessor in 2004 and served as its Chief Executive Officer from 2004 to 2006.

Knudsen also previously served as a member on our predecessor’s board of directors from 2016 to 2020.

In addition, Dr.

Knudsen also currently serves as the Chief Executive Officer of MPI, Inc., our operating subsidiary in the U.S.

Knudsen holds an M.Sc.

degree in Engineering from the Technical University of Denmark and a Ph.D.

degree in Microbiology from the University of Copenhagen.

He received Postdoctoral training in computational biology from Harvard Medical School.

Graff has worked in the Biotech/Pharma industry for more than 25 years, garnering deep experience and expertise in the preclinical and clinical development of targeted small and large molecule therapeutics as well as novel immunotherapeutics.

Previously, Dr.

Graff held C-level and senior executive positions at various biotechnology companies.

Form November 2023 to September 2024, Dr.

Graff served as a consultant to the Company providing consulting and advisory services on the Company’s research and development programs in the field of small molecule inhibitors and their use in the treatment of cancer.

Since January of 2024, Dr.

Graff has also served as a C-Suite Executive Advisor and Consultant to a number of companies.

From June 2021 to January 2024, Dr.

Graff served as the Chief Scientific Officer at IMV, Inc., an early-stage Canadian biotechnology company.

Graff oversaw the company’s research programs and the development of its cutting-edge cancer vaccine platform.

From June 2020 to March 2021, Dr.

Graff served as the Chief Development Officer of HiberCell, a clinical stage oncology company.

From November 2018 to June 2020, Dr.

Graff served as President and Chief Scientific Officer of Biothera Pharmaceuticals, Inc.

(“Biothera”), a privately held clinical stage immuno-oncology company developing Biothera’s proprietary immunotherapy, Imprime PGG, in combination with immune checkpoint inhibitors, or CPIs, for multiple cancer indications.

Graff also served as CSO and Senior Vice President of Research at Biothera from November 2014 to November 2018.

From February 1998 to November 2014, Dr.

Graff held various positions at Eli Lilly and Company (“Eli Lilly”), an American pharmaceutical company that discovers, develops, and markets human pharmaceuticals worldwide.

During his nearly 17 -year tenure at Eli Lilly, Dr.

Graff identified and validated new molecular targets for advanced cancers, working alongside the clinical development team to establish and lead the translational oncology group.

This group supported and advanced the 31 clinical assets in Eli Lilly’s oncology portfolio at the time.

Graff currently serves on the Board of Directors of IN8bio, Inc., a clinical-stage biopharmaceutical company developing gamma-delta T cell-based immunotherapies for cancer patients.

Graff also serves as a member of the Board of Trustees for the Wood Hudson Cancer Research Laboratory, a non-profit research organization, and he is on the Scientific Advisory Board of Avicenna Biosciences, Inc., a drug development company using machine learning-enhanced medicinal chemistry to accelerate the lead-to-candidate optimization process for small molecule drug development.

Graff completed a post-doctoral fellowship at the Johns Hopkins University School of Medicine.

He holds a Ph.D.

from the University of Kentucky’s Markey Cancer Center, and a Bachelor of Arts degree in Biology and Chemistry from Thomas More College (now Thomas More University).

CORPORATE GOVERNANCE

Role of Our Board

Our Board oversees and provides guidance for our business and affairs.

Our Board oversees the development of our strategy and business planning process and management’s implementation of them and oversees management.

McLaughlin serves as Chairman of our Board.

The primary responsibilities of our Board is to provide oversight, strategic guidance, counseling, and direction to our management.

Our Board meets regularly in executive sessions of the directors without those directors who are also our executive officers.

In accordance with the terms of our Bylaws, subject to the rights of holders of any series of preferred stock, our Board may establish the authorized number of directors from time to time by resolution.

Our Board consists of four members and is divided into three classes, Class I, Class II and Class III, with members of each class serving staggered three -year terms.

Our Board is divided into the following classes:

Class I, consists of Mr.

Class II, consists of Mr.

McLaughlin and Dr.

Class III, consists of Mr.

Board Leadership Structure

The positions of Chairman of our Board and Chief Executive Officer are separate.

The Chairman of our Board has the authority, among other things, to call and preside over our Board meetings, to set meeting agendas and to determine materials to be distributed to our directors.

The Chairman has substantial ability to shape the work of our Board.

We believe that separation of the positions of Chairman and Chief Executive Officer reinforces the independence of our Board in its oversight of our business and affairs.

In addition, we believe that separation of the positions of Chairman and Chief Executive Officer creates an environment that is more conducive to objective evaluation and oversight of management’s performance, increasing management accountability and improving the ability of our Board to monitor whether management’s actions are in our best interests and in the best interests of our stockholders.

As a result, we believe that having the positions of Chairman and Chief Executive Officer separated can enhance the effectiveness of our Board as a whole.

In addition, we have a separate Chairman for each committee of our Board.

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

Director Independence

As required under the Nasdaq listing standards, a majority of the members of a listed company’s board of directors must qualify as “independent,” as affirmatively determined by the board of directors.

Our Board consults with our legal counsel to ensure that its determinations are consistent with relevant securities and other laws and regulations regarding the definition of “independent,” including those set forth in Nasdaq listing standards, as in effect from time to time.

Consistent with these considerations, after review of all relevant identified transactions or relationships between each of our directors, or any of his or her family members, and us, its senior management and its independent auditors, our Board affirmatively determined that all of our directors, except Mr.

Jensen who is not considered independent because he is our executive officer, is independent director as defined by Rule 5605 (a)( 2 ) of the Nasdaq Listing Rules.

Board Committees

Our Board has established an Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee comprised of the members identified below.

Our Board has also adopted charters for each of these committees, which comply with the applicable requirements of current SEC and Nasdaq rules.

Copies of the charters for each committee are available at www.allarity.com .

Our Board has determined that all committee members are independent under applicable Nasdaq and SEC rules for committee memberships.

Name and Position

and Governance

Director, Chairman of our Board

Director, Chief Executive Officer

Jesper Hoiland,

Compensation Committee

The Compensation Committee consists of Mr.

McLaughlin, Mr.

Hoiland and Dr.

The Chairman of the Compensation Committee is Mr.

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

The Compensation Committee operates pursuant to a charter which is reviewed annually by the Compensation Committee.

The Compensation Committee charter can be accessed online at https://allarity.com/governance-documents/ .

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

Specific responsibilities of the Compensation Committee are to:

Establish a compensation policy for executive officers designed to (i) enhance our profitability and increase stockholder value, (ii) reward executive officers for their contribution to our growth and profitability, (iii) recognize individual initiative, leadership, achievement, and other contributions and (iv) provide competitive compensation that will attract and retain qualified executives.

Subject to variation where appropriate, the compensation policy for executive officers shall include (i) base salary, which shall be set on an annual or other periodic basis, (ii) annual or other time or project based incentive compensation, which shall be awarded for the achievement of predetermined financial, project, research or other designated objectives applicable to us as a whole and of the executive officers individually and (iii) long-term incentive compensation in the forms of equity participation and other awards with the goal of aligning, where appropriate, the long-term interests of executive officers with those of our stockholders and otherwise encouraging the achievement of superior results over an extended time period.

Review competitive practices and trends to determine the adequacy of the executive compensation program.

Annually review and recommend to our Board corporate goals and objectives relevant to CEO compensation, evaluate the CEO’s performance in light of those goals and objectives, and recommend to our Board the CEO’s compensation levels based on this evaluation;

the CEO may not be present during any deliberations or voting with respect to the CEO’s compensation.

Annually review and approve compensation of our executive officers other than the CEO.

Annually review and approve compensation of our directors, including with respect to any equity-based plan.

As deemed necessary or appropriate, approve employment contracts, severance arrangements, change in control provisions and other agreements.

Approve and administer cash incentives and deferred compensation plans for executive officers (including any modification to such plans) and oversight of performance objectives and funding for executive incentive plans.

Approve and oversee reimbursement policies for directors and executive officers.

Periodically review and make recommendations to our Board with respect to equity-based plans that are subject to approval by our Board.

The Compensation Committee shall oversee our compliance with the requirement under Nasdaq rules that, with limited exceptions, stockholders approve equity compensation plans.

Subject to such stockholder approval, or as otherwise required by the Exchange Act, or other applicable law, the Compensation Committee shall have the power to manage all equity-based plans.

If we are required by applicable SEC rules to include a Compensation Discussion and Analysis (“CD&A”) in our SEC filings in the future, review the CD&A prepared by management, discuss the CD&A with management and, based on such review and discussions, recommend to our Board that the CD&A be included in our Annual Report on Form 10 -K, proxy statement, or any other applicable filing as required by the SEC.

Review all compensation policies and practices for all employees to determine whether such policies and practices create risks that are reasonably likely to have a material adverse effect on our business or financial condition.

Recommend to our Board that our stockholders approve, on an advisory basis, the compensation of our named executive officers, as disclosed in our Proxy Statement, if such proposal will be contained in the proxy statement.

Recommend to our Board the frequency of holding a vote on the compensation of our named executive officers, if such proposal will be contained in our Proxy Statement.

Periodically review executive supplementary benefits and, as appropriate, our retirement, benefit, and special compensation programs involving significant cost.

Make regular reports to our Board.

Annually review and reassess the adequacy of the Compensation Committee charter and recommend any proposed changes to our Board for approval.

Annually evaluate its own performance.

Oversee the annual process of performance evaluations of our management.

Fulfill such other duties and responsibilities as may be assigned to the Compensation Committee, from time to time, by our Board and/or the Chairman of our Board.

Nominating and Corporate Governance Committee

The Nominating and Corporate Governance Committee consists of Mr.

McLaughlin, Mr.

Hoiland and Dr.

The Chairman of the Nominating and Corporate Governance Committee is Mr.

Our Board has determined that each member of the Nominating and Corporate Governance Committee is independent under the Nasdaq listing standards.

The Nominating and Corporate Governance Committee operates pursuant to a charter which is reviewed annually by the Nominating and Corporate Governance Committee.

The Nominating and Corporate Governance Committee charter can be accessed online at https://allarity.com/governance-documents/ .

The primary purpose of the Nominating and Corporate Governance Committee is ( 1 ) to assist our Board by identifying qualified candidates for director, and to recommend to our Board the director nominee(s) for the next annual meeting of stockholders;

( 2 ) to lead our Board in its annual review of our Board’s performance;

( 3 ) to recommend to our Board director nominee(s) for each Board committee;

and ( 4 ) to develop and recommend to our Board our corporate governance guidelines.

Specific responsibilities of the Nominating and Corporate Governance Committee are to:

Evaluate the current composition, organization, and governance of our Board and its committees and make recommendations to our Board for approval.

Annually review for each director and nominee, the experience, qualifications, attributes, or skills that contribute to our Board’s conclusion that the person should serve or continue to serve as one of our directors, as well as how the directors’ skills and background enable them to function well together as a Board.

Determine desired member skills and attributes and conduct searches for prospective directors whose skills and attributes reflect those desired.

Evaluate and propose nominees for election to our Board.

At a minimum, nominees for service on our Board must meet the threshold requirements set forth in the Nominating and Corporate Governance Committee Policy Regarding Qualifications of Directors.

Each nominee will be considered both on his or her individual merits and in relation to existing or other potential members of our Board, with a view to establishing a well-rounded, diverse, knowledgeable, and experienced Board.

Administer the annual Board’s performance evaluation process, including conducting surveys of director observations, suggestions, and preferences.

Evaluate and make recommendations to our Board concerning the appointment of directors to our Board’s committees, the selection of our Board committee chairs, and proposal of the slate of directors for election to our Board.

Consider bona fide candidates recommended by stockholders for nomination for election to our Board in accordance with Section 2.12 of our Bylaws.

As necessary in the Nominating and Corporate Governance Committee’s judgment from time to time, retain and compensate third -party search firms to assist in identifying or evaluating potential nominees to our Board.

Evaluate and recommend termination of membership of individual directors in accordance with our Board’s governance principles, for cause or for other appropriate reasons.

Oversee the process of succession planning for the Chief Executive Officer and as warranted, other senior officers.

Develop, adopt and oversee the implementation of a Code of Business Conduct and Ethics for all directors, executive officers and employees.

Review and maintain oversight of matters relating to the independence of our Board and committee members, keeping in mind the independence standards of the Sarbanes-Oxley Act of 2002 and applicable Nasdaq rules.

Oversee and assess the effectiveness of the relationship between our Board and our management.

Form and delegate authority to subcommittees when appropriate, each subcommittee to consist of one or more members of the Nominating and Corporate Governance Committee.

Any such subcommittee, to the extent provided in the resolutions of the Nominating and Corporate Governance Committee and to the extent not limited by applicable law, shall have and may exercise all the powers and authority of the Nominating and Corporate Governance Committee.

Make regular reports to our Board concerning its activities.

Annually review and reassess the adequacy of the Nominating and Corporate Governance charter and the appendices thereto and recommend any proposed changes to our Board for approval.

Annually evaluate its own performance.

Maintain appropriate records regarding its process of identifying and evaluating candidates for election to our Board.

Fulfill such other duties and responsibilities as may be assigned to the Nominating and Corporate Governance Committee, from time to time, by our Board and/or the Chairman of our Board.

Audit Committee

The Audit Committee consists of Mr.

McLaughlin, Dr.

Benjamin, and Mr.

The chairman of the Audit Committee is Mr.

McLaughlin, who our Board has determined is an “audit committee financial expert” within the meaning of SEC regulations.

Our Board has determined that each member of the Audit Committee satisfies the independence requirements under Nasdaq listing standards and Rule 10A - 3 (b)( 1 ) of the Exchange Act.

Each member of the Audit Committee can read and understand fundamental financial statements in accordance with applicable requirements.

In arriving at these determinations, our Board has examined each Audit Committee member’s scope of experience and the nature of their employment in the corporate finance sector.

The Audit Committee operates pursuant to a charter which is reviewed annually by the Audit Committee.

The Audit Committee charter can be accessed online at https://allarity.com/governance-documents/ .

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

Specific responsibilities of the Audit Committee are to:

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

Resolve any disagreements between management and the independent auditor regarding financial reporting;

Pre-approve all audit and permitted non-audit services by the independent auditor;

Retain independent counsel, independent registered accounting firm, or other advisors or consultants to advise and assist the Audit Committee in carrying out its duties, without needing to seek approval for the retention of such advisors or consultants from our Board, and determine the appropriate compensation for any such advisors or consultants retained by the Audit Committee;

Seek any information it requires from our employees or any direct or indirect subsidiary of ours (each, a “Subsidiary”), all of whom are directed to cooperate with the Audit Committee’s requests, or external parties;

Meet with any of our officers or employees (or officers or employees of any Subsidiary), our independent auditor or outside counsel, as necessary, or request that any such persons meet with any members of, or advisors or consultants to, the Audit Committee;

Oversee that management has established and maintained processes to assure our compliance with applicable laws, regulations and corporate policy.

Meetings of our Board and its Committees

During the fiscal year ended December 31, 2025:

our Board held four ( 4 ) meetings;

our Audit Committee held four ( 4 ) meetings;

our Compensation Committee held two ( 2 ) meetings;

our Nominating and Corporate Governance Committee held no meetings.

Board Attendance at Annual Meeting of Stockholders

Our policy is to invite and encourage each member of our Board to be present at our annual meetings of stockholders.

All of our directors intend to attend the Annual Meeting.

Board Oversight of Risk

One of the key functions of our Board is informed oversight of our risk management process.

Our Board does not have a standing risk management committee, but rather administers this oversight function directly through our Board as a whole, as well as through various standing committees of our Board that address risks inherent in their respective areas of oversight.

In particular, our Board is responsible for monitoring and assessing strategic risk exposure, and our Audit Committee has the responsibility to consider and discuss our major financial risk exposures and the steps our management has taken to monitor and control these exposures, including guidelines and policies to govern the process by which risk assessment and management is undertaken.

The Audit Committee also monitors compliance with legal and regulatory requirements and reviews our information technology and data security policies and practices and assesses cybersecurity related risks.

The Nominating and Corporate Governance Committee monitors the effectiveness of our corporate governance practices, including oversight of processes and procedures designed to prevent illegal or improper conduct.

The Compensation Committee assesses and monitors whether any of our compensation policies and programs has the potential to encourage excessive risk-taking.

Code of Conduct and Ethics

Our Board has adopted a Code of Business Conduct and Ethics (the “Code of Conduct”), applicable to all of our employees, executive officers and directors.

We will provide any person, without charge, a copy of the Code of Conduct upon written request to Investor Relations, Allarity Therapeutics, Inc., 123 E Tarpon Ave, Tarpon Springs, FL 34689.

The Code of Conduct is available at the Investors section of our website at www.allarity.com .

Information contained on or accessible through this website is not a part of this report, and the inclusion of such website address in this report is an inactive textual reference only.

Any amendments to the Code of Conduct, or any waivers of its requirements, are expected to be disclosed on its website to the extent required by applicable SEC and Nasdaq rules and requirements.

Insider Trading Policy

The Company has an insider trading policy governing the purchase, sale and other dispositions of the Company’s securities that applies to all Company personnel, including directors, officers, employees, and other covered persons.

2 unchanged sentences

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.

Hedging Policy

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

Clawback Policy

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

Stockholder Communications with Our Board

Our Board has adopted a formal process by which stockholders may communicate with our Board or any of its directors.

Stockholders who wish to communicate with our Board may do so by sending written communications addressed to the Secretary of Allarity Therapeutics, Inc., 123 E Tarpon Ave, Tarpon Springs, FL 34689.

These communications will be reviewed by the Secretary, who will determine whether the communication is appropriate for presentation to our Board or the relevant director.

The purpose of this screening is to avoid having our Board consider irrelevant or inappropriate communications (such as advertisements, solicitations and hostile communications).

Executive Compensation.

55 unchanged sentences

Senior Convertible Note, dated as of February 13, 2024

Secured Promissory Note A-1, dated March 2, 2026

Secured Promissory Note B, dated March 2, 2026

Allarity Therapeutics, Inc.

82 unchanged sentences

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

Form of Securities Purchase Agreement, dated September 22, 2025, by and among the Company and the Investor.

Form of Registration Rights Agreement, dated September 22, 2025, by and among the Company and the Investor.

Common Stock Purchase Agreement, dated as of January 28, 2026 by and between the Company and Tumim Stone Capital, LLC.

Note Purchase Agreement, dated March 2, 2026.

Deposit Account Control Agreement, dated March 2, 2026.

Guaranty, dated March 2, 2026.

Pledge Agreement, dated March 2, 2026.

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

70 unchanged sentences

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

Incorporated by reference from Form 10-K filed with the SEC on March 31, 2025.

Incorporated by reference from Form 8-k filed with the SEC on September 22, 2025.

Incorporated by reference from Form 8-k filed with the SEC on January 29, 2026.

Incorporated by reference from Form 8-k filed with the SEC on March 6, 2026.

Furnished herewith.

13 unchanged sentences

( Principal Executive Officer )

/s/ Alexander Epshinsky

/s/ Jeffrey S.

Chief Financial Officer

March 30, 2026

Alexander Epshinsky

( Principal Financial Officer )

2 unchanged sentences

March 30, 2026

/s/ Joseph W.

/s/ Jesper Hoiland

March 30, 2026

Jesper Hoiland

March 30, 2026

5 unchanged sentences

Consolidated Statements of Operations and Comprehensive Loss

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

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

Consolidated Statements of Cash Flows

1 unchanged sentence

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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

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

Opinion on the Financial Statements

4 unchanged sentences

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.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with U.S.

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

10 unchanged sentences

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

Boston, Massachusetts

March 30, 2026

10 unchanged sentences

Total current assets

17,928 22,341

Non-current assets:

Property, plant and equipment, net

Intangible assets

$ 18,258 $ 22,650

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

6 unchanged sentences

Total current liabilities

10,839 14,167

Non-current liabilities:

Total liabilities

10,839 14,613

Commitments and contingencies (Note 14)

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;

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

Stockholders’ equity

Common stock, $ 0.0001 par value ( 250,000,000 shares authorized);

19,030,619 and 7,302,797 shares issued and 16,080,980 and 7,302,797 outstanding at December 31, 2025, and December 31, 2024, respectively

Additional paid-in capital

4 unchanged sentences

( 130,197 ) ( 118,966 )

Total stockholders’ equity (deficit)

11,811 ( 2,751 )

Total liabilities and stockholders’ equity (deficit)

Treasury stock, at cost;

2,949,639 shares

Total stockholders’ equity

Total liabilities and stockholders’ equity

$ 18,258 $ 22,650

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.

3 unchanged sentences

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

License Revenue

Total Revenue

Operating expenses:

3 unchanged sentences

Total operating expenses

12,925 27,241

Loss from operations

( 12,605 ) ( 27,241 )

Other income (expense)

1 unchanged sentence

Interest expenses

( 185 ) ( 653 )

Foreign exchange gains (losses)

Fair value of inducement warrants

Loss on modification of warrants

Change in fair value adjustment of warrant derivative liabilities

1 unchanged sentence

Loss before income tax expense (benefit)

( 11,231 ) ( 24,896 )

Income tax expense (benefit)

( 11,231 ) ( 24,515 )

Deemed dividends on Series A Preferred Stock

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

Deemed dividend on Series A Convertible Redeemable Preferred Stock

Gain on extinguishment of Series A Preferred Stock

Net loss attributable to common stockholders

$ ( 11,231 ) $ ( 25,154 )

Net loss per common share, basic and diluted

$ ( 0.78 ) $ ( 15.65 )

Weighted average common shares outstanding, basic and diluted

14,378,942 1,606,989

Other comprehensive loss

$ ( 11,231 ) $ ( 24,515 )

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).

$ ( 11,898 ) $ ( 24,458 )

See accompanying notes to the consolidated financial statements.

3 unchanged sentences

(in thousands, except for share data)

Series C Convertible

Series A Convertible

Stockholders’

1 unchanged sentence

Preferred Stock

Comprehensive

1 unchanged sentence

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

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

Conversion of preferred stock into common stock, net

— — ( 1,417 ) ( 1,819 ) 15,976 — 1,819 — — —

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

Extinguishment of preferred stock

— — — ( 222 ) — — 222 — — —

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

Deemed dividend on preferred stock

— — — 299 — — ( 299 ) — — —

Issuance of common stock, net July 2023 financing

Common stock issued for services

— — — — 147,878 — 336 — — 336

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

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

— — — — 6,953,259 4 38,766 — — 38,770

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

Reverse split (1-for-30) rounding adjustment

— — — — 97,216 ( 3 ) 3 — — —

September 2023 warrants exercised on inducement, net

Stock-based compensation expense

— — — — — — 71 — — 71

Reclassification of derivative liabilities related to September 2023 warrants exercised

Cashless exercise of 3i Exchange Warrants

— — — — 78,656 — 405 — — 405

Cashless exercise of Exchange Warrants

Issuance of convertible redeemable preferred stock, net of offering costs

35,000 2,938 — — — — — — 2,938

Deemed dividend on September 2023 modification of Series A Preferred shares

Redemption of convertible redeemable preferred stock

( 35,000 ) ( 3,500 ) — — — — — — — ( 3,500 )

Stock-based compensation expense

Deemed dividend on redeemable preferred stock

— 562 — — — — (562 ) — — —

4 unchanged sentences

— $ — — $ — 7,302,797 $ 1 $ 131,130 $ ( 354 ) $ ( 118,966 ) $ 11,811

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.

3 unchanged sentences

(in thousands, except for share data)

Series A Convertible

Stockholders’

Preferred Stock

Treasury Stock

Comprehensive

Balance, December 31, 2024

Conversion of preferred stock into common stock, net

Extinguishment of preferred stock

Deemed dividend on preferred stock

7,302,797 $ 1 $ 131,130 — $ — $ ( 354 ) $ ( 118,966 ) $ 11,811

Common stock issued for services

166,165 — 200 — — — — 200

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

9,719,173 1 9,726 — — — — 9,727

Issuance of common stock, net of offering costs, under PIPE sales agreement

1,817,603 1 2,695 — — — — 2,696

Stock-based compensation expense

24,881 — 482 — — — — 482

Repurchase of common stock

— — — 2,949,639 ( 3,190 ) — — ( 3,190 )

Currency translation adjustment

— — — — — ( 667 ) — ( 667 )

— — — — — — ( 11,231 ) ( 11,231 )

Balance, December 31, 2025

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

19,030,619 $ 3 $ 144,233 2,949,639 $ ( 3,190 ) $ ( 1,021 ) $ ( 130,197 ) $ 9,828

See accompanying notes to the consolidated financial statements.

4 unchanged sentences

CASH FLOWS FROM OPERATING ACTIVITIES:

$ ( 11,231 ) $ ( 24,515 )

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

2 unchanged sentences

Common stock issued for services

Stock-based compensation expense (recovery)

Stock-based compensation expense

Unrealized foreign exchange gain

1,238 ( 126 )

Non-cash interest expense

Non-cash finance expense

Fair value of inducement warrants

Loss on modification of warrants

Change in fair value of warrant derivative liabilities

( 1 ) ( 2,677 )

Deferred income taxes

4 unchanged sentences

Prepaid expenses

( 1,603 ) 274

Accounts payable

( 1,139 ) ( 4,108 )

Accrued liabilities

( 2,699 ) 3,536

Income taxes payable

Operating lease liability

Net cash used in operating activities

( 14,820 ) ( 17,352 )

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchase of property and equipment

( 8 ) ( 298 )

Net cash used in investing activities

( 8 ) ( 298 )

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from Series C Convertible Preferred Stock issuance, net

Proceeds from 3i promissory notes

1 unchanged sentence

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

11,143 37,354

Net proceeds from common stock and pre-funded warrant issuance

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

Common stock repurchase

Net cash provided by financing activities

10,648 36,792

Net increase (decrease) in cash

( 4,180 ) 19,142

Effect of exchange rate changes on cash

1 unchanged sentence

Cash, end of year

$ 14,687 $ 19,533

See accompanying notes to the consolidated financial statements.

4 unchanged sentences

Supplemental disclosure of cash flow information

Cash paid for income taxes

Cash paid for interest

Cash received for interest

Supplemental disclosure of non-cash investing and financing activities:

2 unchanged sentences

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

9 unchanged sentences

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’s business address in the United States is located at 123 E.

Tarpon Ave., Tarpon Springs, FL 34689.

The Company has incurred significant losses and has an accumulated deficit of $ 130.2 million.

6 unchanged sentences

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

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

9 unchanged sentences

United States

In the process of being dissolved because inactive.

was dissolved effective November 15, 2023.

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 preparation of Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting years.

Significant estimates and assumptions reflected in these consolidated financial statements include, but are not limited to, the fair value of the Series A preferred shares, warrants, 3i Exchange Warrants, convertible debt, and the accrual for research and development expenses, share based compensation expense, and income tax uncertainties and valuation allowances.

The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances.

16 unchanged sentences

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.

The Company recorded a foreign exchange translation loss of $ 0.9 million and gain of $ 0.1 million, included in accumulated other comprehensive loss for the years ended December 31, 2025 and 2024 , respectively.

Concentrations of credit risk and of significant suppliers

23 unchanged sentences

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.

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

24 unchanged sentences

Denmark and the United States.

The Company recognizes revenue in accordance with the guidance of Revenue From Contracts With Customers , Accounting Standards Codification Topic 606 (“ASC 606” ).

Under ASC 606, the Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration that the entity expects to receive in exchange for those goods or services.

To determine revenue recognition for arrangements the Company determines are within the scope of ASC 606, the Company performs the following five steps:

(i) identify the contract(s) with a customer;

(ii) identify the performance obligations in the contract;

(iii) determine the transaction price;

(iv) allocate the transaction price to the performance obligations in the contract;

and (v) recognize revenue when (or as) the Company satisfies a performance obligation.

The Company only applies the five -step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer.

At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations, and assesses whether each promised good or service is distinct.

The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

License and collaboration revenues - The Company’s license and collaboration revenues have been generated primarily through collaborative research, development, manufacturing and commercialization agreements.

The terms of these agreements generally include the license of intellectual property and associated know-how and the provision of other goods and services.

Payments to the Company under these arrangements typically include one or more of the following:

non-refundable, up-front license fees;

milestone payments;

and royalties on future product sales.

License of Intellectual Property - If a license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenue allocated to the license when the license is transferred to the customer and the customer is able to use and benefit from the license.

For licenses that are bundled with other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue associated with the bundled performance obligation.

Milestone Payments - At the inception of each arrangement that includes milestone payments based upon the achievement of specified clinical development, regulatory and/or sales milestones, the Company evaluates whether the milestones are considered probable of being achieved and estimates the amount to be included in the transaction price.

If it is probable that a significant revenue reversal would not occur, the associated milestone amount is included in the transaction price.

Milestone payments that are dependent on factors outside of the Company’s control, such as regulatory approvals, are not considered probable of being achieved until those approvals are received.

These payments are fully constrained and therefore are not included in the transaction price.

At the end of each reporting period, the Company re-evaluates the probability of achievement of each milestone and any related constraint and, if necessary, adjusts its estimate of the overall transaction price.

Any such adjustments are recorded on a cumulative catch-up basis, which would affect the reported amount of license and collaboration revenues in the period of adjustment.

For arrangements that include sales-based royalties, including milestone payments based on the level of sales, and the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied).

Revenue primarily consists of services performed using our novel DRP platform.

The revenue is recognized when the DRP gene expression signatures are assessed and delivered to the client.

Research and development expenses

12 unchanged sentences

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

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

In each of the years ended December 31, 2025 and 2024 , research and development expenses include refundable tax credits of $ 0.9 million and $ 0.8 million, respectively.

Convertible debt instruments

62 unchanged sentences

Unvested restricted stock units

Series A Convertible Preferred stock

620,164 174,038

678,721 182,595

Recently Adopted Accounting Standards

5 unchanged sentences

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.

3 unchanged sentences

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.

The Company adopted ASU 2023 - 07 as of January 1, 2025, and amendments were applied prospectively.

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

Accounting Standards Not Yet Adopted

In November 2024, the FASB issued ASU No.

12 unchanged sentences

Opening balance

$ 9,871 $ 9,549

Impairment recognized during the period

8 unchanged sentences

Payroll accruals

Accrued Board member fees

Accrued consulting fees

Accrued audit and legal

21 unchanged sentences

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.

As of December 31, 2025, the liability is recorded as a current liability on the Company's consolidated balance sheets as follows:

$ 3.6 million in accounts payable, $ 0.5 million of interest recorded as accrued expenses, and $ 1.4 million in convertible promissory notes and accrued interest.

The Company recorded $ 0.2 million to interest expense for the each of the years ended December 31, 2025 and 2024.

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

6 unchanged sentences

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 $ 1.7 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, opening

Plus, accretion of debt discount, interest expense

Carrying value of the Notes

Interest accretion, opening

Interest accrual, expense

repayment April 10, 2023

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.

As of January 1, 2024, the Company had 1,417 shares of Series A Convertible Preferred Stock outstanding, each with a stated value of $ 1,080 .

During 2024, the Company amended the conversion terms of the Series A Preferred Stock in connection with financing arrangements entered into with 3i, LP.

The Company also held Exchange Warrants originally issued to 3i, LP in April 2023 as part of an exchange transaction in which 3i surrendered previously issued warrants in return for new warrants reflecting revised exercise prices and share quantities under amended financing terms.

On January 14, 2024, pursuant to the terms of a bridge loan with 3i, LP, the Company reduced the conversion price of the Series A Preferred Stock and Exchange Warrants from $ 600.00 to $ 268.50 .

The company filed the Fifth Certificate of Amendment to Amended and Restated Certificate of Designations to reflect the revised Series A conversion price.

At that price, the 1,417 outstanding Series A Preferred shares became convertible into 5,699 shares of common stock.

On February 13, 2024, following a subsequent bridge loan with 3i, LP, the Company reduced the conversion price of the Series A Preferred Stock to $ 243.00 with the Sixth Certificate of Amendment filed to effect the change.

After this modification, 1,296 remaining Series A Preferred shares were convertible into 5,760 shares of common stock.

On March 14, 2024, in connection with the issuance of a Third Note, the conversion price of the Series A Preferred Stock was increased to $ 4,210.00 , and the Company filed a Seventh Certificate of Amendment accordingly.

At this conversion price, 1,215 Series A Preferred shares were converted into 17,843 shares of common stock.

The Company recognized a $ 0.1 million gain on extinguishment upon remeasurement using the Black-Scholes option pricing model.

Between April 1, 2024 and May 2, 2024, the Company further amended the conversion prices of the Series A Preferred Stock, as well as the the Exchange Warrants and the 2024 Notes, to equal the Company's last sale price of its common stock of $ 34.50 as of May 1, 2024.

Series A Preferred Stock

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.

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.

The Series A Preferred Stock continues to be classified as equity, consistent with the Company's assessment following the Amended and Restated Certificate of Designations filed in 2023, which eliminated redemption features and dividends other than for limited exceptions.

As of the date of these financial statements, no additional Series A transaction occurred in 2025.

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.

14 unchanged sentences

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

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

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 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.

3 unchanged sentences

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.

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.

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 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.

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 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

As of the years ended December 31, 2025 and 2024, there were no shares of Series A Preferred Stock issued and outstanding.

August 2024 Series A Convertible Redeemable Preferred Stock

10 unchanged sentences

As a result of the redemption of the August 2024 Preferred Stock, the Company recognized a deemed dividend of $ 0.6 million.

Derivative Liabilities

There was no deemed dividend for the year ended December 31, 2025.

Warrant Liability

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, 2025 and 2024 , is presented in the following tables:

Balance as of December 31, 2024

Issuance date fair value of April, July & September 2023 Common share purchase warrants

Modifications to fair value upon exercise

Fair value adjustments

( 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

Change in fair value of warrant derivative liability

Balance as of December 31, 2025

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

Initial exercise price

$ 600.00 $ 600.00 $ 600.00

Stock price on valuation date

$ 1.17 $ 1.17 $ 1.17

Risk-free rate

4.38 % 4.38 % 4.38 %

Term (in years)

3.52 3.52 4.2

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

4.71 % 4.92 %

Expected life of the Warrant to convert (in years)

Rounded annual volatility

Timing of liquidity event

March 31, 2024

Expected probability of event

On December 31, 2025, the fair value of the Common Share Purchase Warrants derivative liability was $ 0 .

Stockholders ’ Equity

1 unchanged sentence

As of December 31, 2024, 250,000,000 shares were authorized and 7,302,797 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.

1 unchanged sentence

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.

On May 2, 2024, the Company's public float increased above $75.0 million and, as a result, the Company was not subject to the limitations contained in General Instruction I.B.6 of Form S- 3.

Under the Sales Agreement, Ascendiant may sell shares by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415 (a)( 4 ) under the Securities Act.

3 unchanged sentences

The Company and Ascendiant may each terminate the Sales Agreement at any time upon specified prior written notice.

For the year ended December 31, 2025, the Company sold 9,719,173 shares of its common stock for net proceeds of $ 9.7 million.

For the year ended December 31, 2024, the Company sold an aggregate of 6,953,259 shares of its common stock pursuant to the Sales Agreement, resulting in net proceeds of approximately $ 38.8 million, after deducting underwriting discounts.

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 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

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

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

Risk-free rate

4.14 % 4.14 % 4.14 %

Term of Warrant (in years)

4.60 4.61 4.67

Rounded annual volatility

123 % 122 % 122 %

The Sales Agreement was fully utilized and terminated as of December 31, 2025.

PIPE and Prefunded Warrants

On September 22, 2025, the Company entered into a Securities Purchase Agreement with a certain accredited investor, pursuant to which the Company agreed to sell the shares and/or pre-funded warrants to the investor, in a private placement transaction.

The initial closing of the private placement occurred on September 23, 2025.

The Company agreed to issue and sell 760,916 shares of the Company’s common stock, par value $ 0.0001 per share for $ 1.60 per Share, and 801,584 pre-funded warrants to purchase one share of common stock per pre-funded warrant, at an offering price of $ 1.5999 per pre-funded warrant, for gross proceeds to the Company of approximately $ 2.5 million, before deducting fees and expenses.

Each pre-funded warrant is exercisable for one share of common stock for $ 0.0001 per share.

For a period of ninety ( 90 ) calendar days following the closing, the investor had the right, in their sole discretion, to purchase additional shares and/or pre-funded warrants for aggregate gross proceeds of $ 7.5 million (the “Additional Closing”), with the number of shares and/or pre-funded warrants to be issued at the additional closing determined based on the then-current minimum price (as defined in Nasdaq Stock Market Rule 5635 (d)).

An additional closing of the private placement occurred on December 23, 2025, when the Company agreed to issue and sell 255,103 shares of the Company’s common stock, for $ 0.98 per share, representing the minimum price under Nasdaq Rule 5635 (d), for gross proceeds to the Company of approximately $ 250,000 , before deducting fees and expenses.

For the year ended December 31, 2025, the Company sold 1,817,603 shares of common stock and pre-funded warrants for net proceeds of $ 2.6 million.

There were no private placement common stock sales during the year ended December 31, 2024.

Treasury Stock

On March 3, 2025, the board of directors approved a share repurchase program, with authorization to purchase up to $ 5 million of the Company’s outstanding shares of common stock.

For the year ended December 31, 2025, the company bought 2,949,639 shares in open market purchases for a total of $ 3,190,324 inclusive of transaction fees for a net purchase price of $ 1.08 per share.

There were no stock repurchases for the year ended December 31, 2024.

Stock-based Compensation

5 unchanged sentences

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.

The 2021 Incentive Plan 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 .

In January 2025 and 2026, the Board approved an increase of 5 % of the outstanding shares of common stock, or 364,778 and 804,049 shares, respectively.

The total shares authorized under the plan totaled 717,941 and 1,521,990 for 2025 and 2026, respectively.

Restricted Stock Units

3 unchanged sentences

Unvested balance at December 31, 2024

( 39,494 ) 2.11

( 85,051 ) 2.23

Unvested balance at December 31, 2025

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.

For the years ended December 31, 2025 and 2024, stock-based compensation expenses associated with the restricted stock units for employees were approximately $ 445 thousand and $ 68 thousand, respectively.

At December 31, 2025, the Company had unrecognized stock-based compensation expense related to restricted stock units of $ 312 thousand, which is expected to be recognized over the remaining weighted-average vesting period of 1.9 years.

This expense is recognized over the vesting period of the award.

9 unchanged sentences

Outstanding as of December 31, 2025

50,000 $ 1.01 9.0 $ 3,500

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.

For the years ended December 31, 2025 and 2024, stock-based compensation expenses (recoveries) associated with the options awards for employees and non-employees were approximately $ 36 thousand and $ 0 , respectively.

At December 31, 2025, the Company had unrecognized stock-based compensation expense related to stock options of $ 2 thousand, which is expected to be recognized over the remaining weighted-average vesting period of 1 month.

Stock-Based Compensation

The following table summarizes stock-based compensation for the years ended December 31, 2024 and 2023 (in thousands):

The following table summarizes stock-based compensation for the years ended December 31, 2025 and 2024:

Year ended December 31,

3 unchanged sentences

Total stock-based compensation expense (forfeiture)

Stock-based compensation is recorded as an expense based on the Nasdaq Official Closing Price on the incentive grant date.

The stock-based compensation uses the closing price for the amount of shares granted and is amortized equally over the vesting term of the grant.

License and Development Agreements

17 unchanged sentences

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.

The Company agreed to make a one -time payment to Eisai of $ 850,000 upon completion of a $10.0 million capital raising campaign, no later than September 1, 2024.

The Company paid Eisai $ 850,000 on August 20, 2024.

There is no balance due for the years ended December 31, 2025 and 2024, respectively.

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.

27 unchanged sentences

As of December 31, 2025 , the liability is recorded as a current liability on our consolidated balance sheets as follows:

$ 3.6 million in accounts payable and $ 1.4 million convertible promissory note and accrued interest.

$ 3.6 million in accounts payable, $ 0.5 million of interest recorded as accrued expense, and $ 1.4 million convertible promissory note and accrued interest.

Development costs and Out-License Agreement with Smerud

3 unchanged sentences

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 Company received down payments in 2024 totaling approximately $ 0.2 million.

For the year ended December 31, 2025, and December 31, 2024, the company recognized $ 0.3 and $ 0.0 million of revenue, respectively.

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 )

Tax computed on the loss before tax at a tax rate of 21.0% for the year ended December 31, 2024

Foreign rate differential

( 164 ) ( 73 )

Tax value of derivative warrants

( 562 ) ( 1,187 )

Special tax deduction on research and development expenses

( 645 ) ( 559 )

Loss offset to research and development incentive

2 unchanged sentences

Change in valuation allowance

As ASU 2023 - 09 has been prospectively adopted, the reconciliation of the statutory rate to the effective tax rate for 2025 is as follows:

Tax computed on the loss before tax at a tax rate of 21.0% for the year ended December 31, 2025

$ (2,359 ) 21.00 %

Foreign Taxes

Loss offset to research and development incentive

Other adjustments

Change in Denmark valuation allowance

Change in US valuation allowance

1,161 ( 10.33 )

Effective tax rate

The components of net loss before income taxes were as follows:

11 unchanged sentences

Intangible assets

719 ( 1,405 )

Stock compensation

8 unchanged sentences

Net deferred tax liabilities

$ — $ ( 446 )

Tax on profit/loss for the year:

3 unchanged sentences

$ — $ ( 381 )

Tax losses carried forward of approximately $ 89.4 million can be carried forward indefinitely.

As of December 2025, the Company has tax losses carried forward of approximately $ 38.9 million for US Federal income tax, and $ 65.3 million for Denmark income tax purposes.

$ 1.4 million of the US federal tax loss carryforwards can be forward for 20 years and will begin to expire in 2037, while the remaining $ 37.5 million can be carried forward indefinitely.

Our Denmark tax loss carryforwards can be carried forward indefinitely.

Deferred tax has been provided corresponding to the statutory tax rate applied.

2 unchanged sentences

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

$ — $ — $ ( 1 ) $ ( 1 )

Derivative warrant liability

$ — $ — $ ( 1 ) $ ( 1 )

Fair Value Measurements as of December 31, 2023,

Warrant liability

$ — $ — $ ( 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 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

8 unchanged sentences

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.

On March 13, 2025, we issued a press release that we have reached a final settlement with the SEC relating to our previously disclosed SEC investigation, and as part of the settlement, we paid a one -time civil penalty of $ 2.5 million in April 2025, and all regulatory/legal challenges related to those issues are now concluded.

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.

On January 28, 2026, the company announced a common stock purchase agreement with Tumim Stone Capital, LLC.

Pursuant to the purchase agreement, the company has the right, but not the obligation, to sell to the investor up to $ 6 million subject to the limitations imposed by General Instruction I.B.6 of Form S- 3.

On February 18, 2026, the company announced that the first patients have been dosed in a VA funded investigator-initiated Phase 2 trial evaluating Stenoparib for the treatment of relapsed small cell lung cancer.

The trial is being conducted in collaboration with the US Department of Veterans Affairs at 11 medical centers throughout the United States.

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

On March 2, 2026, the company issued non-convertible promissory notes to Streeterville Capital for net proceeds of $ 20.0 million.

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