What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2026-08-14 compared with 2026-05-15 · 187 added, 104 removed, 436 unchanged (40% of the section changed)

4 unchanged sentences

Current assets

Cash and cash equivalents

$ 16,982 $ 14,687

14 unchanged sentences

Income taxes payable

Promissory note - short term, net of discounts

Promissory note, net of discounts and accrued interest

Derivative liability

Convertible promissory notes and accrued interest

3 unchanged sentences

Stockholders’ equity

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

19,032,619 and 19,030,619 shares issued and 15,818,980 and 16,080,980 outstanding at March 31, 2026, and December 31, 2025, respectively

Common stock, $ 0.0001 par value:

250,000,000 shares authorized;

19,124,363 and 19,030,619 shares issued and 15,910,724 and 16,080,980 outstanding at June 30, 2026 and December 31, 2025, respectively

Additional paid-in capital

5 unchanged sentences

Treasury stock, at cost;

3,213,639 and 2,949,639 shares at March 31, 2026, and December 31, 2025, respectively

3,213,639 and 2,949,639 shares at June 30, 2026, and December 31, 2025, respectively

( 3,452 ) ( 3,190 )

7 unchanged sentences

Three Months Ended

Six Months Ended

License Revenue

$ — $ — $ 25 $ —

Total revenue

1 unchanged sentence

Research and development

1,345 2,321 2,642 3,724

General and administrative

1,326 1,812 2,742 3,445

Total operating expenses

2,671 4,133 5,384 7,169

Loss from operations

2 unchanged sentences

Interest income

217 237 380 459

Interest expense

( 719 ) ( 12 ) ( 948 ) ( 69 )

Foreign exchange gains

Foreign exchange gains (losses)

( 104 ) 1,588 ( 100 ) 1,726

Change in fair value of derivative and warrant liabilities

( 128 ) — ( 128 ) 1

Total other income (expense), net

( 734 ) 1,813 ( 796 ) 2,117

$ ( 3,405 ) $ ( 2,320 ) $ ( 6,155 ) $ ( 5,052 )

Net loss per common share, basic and diluted

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ALLARITY THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS ’ EQUITY

For the three months ended March 31, 2026 and 2025

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS ’ EQUITY (DEFICIT)

For the three and six months ended June 30, 2026 and 2025

(in thousands, except for share data)

16 unchanged sentences

19,032,619 3 144,395 3,213,639 ( 3,452 ) ( 1,079 ) ( 132,947 ) 6,920

Comprehensive

Stockholders’

Balance, December 31, 2024

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

Stock-based compensation

— — 188 — — — — 188

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

Issuance of common stock for service

91,744 — 100 — — — — 100

3 unchanged sentences

— — — — — — ( 3,405 ) ( 3,405 )

Balance, March 31, 2025

Balance, June 30, 2026

19,124,363 $ 3 $ 144,683 3,213,639 $ ( 3,452 ) $ ( 1,346 ) $ ( 136,352 ) $ 3,536

Treasury Stock

Comprehensive

Stockholders’

Balance, December 31, 2024

Stock-based compensation

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

Currency translation adjustment

Loss for the period

Balance, March 31, 2025

Stock based compensation

Issuance of common stock for service

Repurchase of common stock

Currency translation adjustment

Loss for the period

Balance, June 30, 2025

See accompanying notes to condensed consolidated financial statements.

2 unchanged sentences

(in thousands)

Three Months Ended

Six Months Ended

CASH FLOWS FROM OPERATING ACTIVITIES:

2 unchanged sentences

Depreciation and amortization

Common stock issued for services

Stock-based compensation

7 unchanged sentences

Prepaid expenses

( 1,267 ) ( 850 )

Accounts payable

12 unchanged sentences

Common stock repurchase

Net cash provided by financing activities

( 262 ) ( 2,565 )

Net increase in cash and cash equivalents

Net cash provided by financing activities

Effect of exchange rate changes on cash and cash equivalents

( 325 ) ( 2,143 )

Net increase in cash, cash equivalents, and restricted cash

12,294 ( 1,732 )

Cash, cash equivalents, and restricted cash, beginning of period

20 unchanged sentences

Pursuant to the requirements of Accounting Standard Codification (“ASC”) 205 - 40, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, the Company has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date the accompanying Financial Statements are issued.

The Company had an accumulated deficit of $ 132.9 million as of March 31, 2026 .

Further, the Company incurred a net loss of $ 2.8 million and experienced negative cash flows from operations of $ 4.5 million for the three months ended March 31, 2026 .

Based on the Company’s current operating plan, it estimates that its existing cash and restricted cash of $ 29.8 million as of March 31, 2026 will be sufficient to enable the Company to fund its operating expenses and capital requirements through at least the next twelve months from the issuance of these Financial Statements.

The Company's $ 10 million in restricted cash is part of a promissory note obtained in 2026, in which the cash is obtainable after meeting certain conditions of such promissory note.

The Company had an accumulated deficit of $ 136.4 million as of June 30, 2026 .

Further, the Company incurred a net loss of $ 6.2 million and experienced negative cash flows from operations of $ 7.1 million for the six months ended June 30, 2026 .

Based on the Company’s current operating plan, it estimates that its existing cash and restricted cash of $ 26.9 million as of June 30, 2026 will be sufficient to enable the Company to fund its operating expenses and capital requirements through at least the next twelve months from the issuance of these Financial Statements.

The Company's $ 10 million of restricted cash secures the B Note issued in March 2026 and is released only upon holder redemptions and repayment of the B Note.

While the Company believes its capital resources are sufficient to fund the Company’s on-going operations for the next twelve months from the issuance date of the Financial Statements, the Company’s liquidity could be materially affected over this period by:

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Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the ASC and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”).

The unaudited condensed consolidated financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of our management, reflect all adjustments, which include only normal recurring adjustments, necessary to fairly state our financial position as of March 31, 2026 , our results of operations and stockholders’ equity for the three months ended March 31, 2026 and 2025 , and cash flows for the three months ended March 31, 2026 and 2025 .

The financial data and the other financial information disclosed in these notes to the condensed consolidated financial statements related to the three month period are also unaudited.

The results of operations for the three months ended March 31, 2026 are not necessarily indicative of the results to be expected for the year ending December 31, 2026 or for any other future annual or interim period.

The unaudited condensed consolidated financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of our management, reflect all adjustments, which include only normal recurring adjustments, necessary to fairly state our financial position as of June 30, 2026 , our results of operations and stockholders’ equity for the three and six months ended June 30, 2026 and 2025 , and cash flows for the six months ended June 30, 2026 and 2025 .

The financial data and the other financial information disclosed in these notes to the condensed consolidated financial statements related to the three and six month period are also unaudited.

The results of operations for the three and six months ended June 30, 2026 are not necessarily indicative of the results to be expected for the year ending December 31, 2026 or for any other future annual or interim period.

The consolidated balance sheet data as of December 31, 2025 was derived from our audited financial statements, but does not include all disclosures required by GAAP.

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United States

ALLR Sponsor, LLC

United States

* In the process of being dissolved because inactive.

ALLR Holdings, LLC was formed in February, 2026, to be the designated entity for restricted cash proceeds from a promissory note.

ALLR Holdings, LLC was formed on February 11, 2026, to be the designated entity for restricted cash proceeds from a promissory note.

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

ALLR Sponsor, LLC was formed on April 10, 2026.

The Company is the Subsidiary’s sole managing member and has the power to direct the activities that most significantly affect the Subsidiary’s economic performance.

The Subsidiary was designed with insufficient equity at risk to finance its activities without additional subordinated financial support from the Company and therefore is a variable interest entity.

The Company is the Subsidiary’s primary beneficiary because the Company has the power to direct the Subsidiary’s significant activities and has the obligation to absorb losses and the right to receive benefits that could potentially be significant to the Subsidiary.

Accordingly, the accounts of the Subsidiary have been included in the Company’s condensed consolidated financial statements from the Subsidiary’s formation date, and all intercompany balances and transactions have been eliminated.

Use of Estimates

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

Derivative Financial Instruments

The Company evaluates financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815, “Derivatives and Hedging”.

Derivative instruments are initially recorded at fair value on the grant date and re-valued at each reporting date, with changes in the fair value reported in the condensed consolidated statements of operations.

Derivative assets and liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date.

The Company accounted for the stock‑price‑linked features contained in the unsecured promissory note A- 1, issued pursuant to the Note Purchase Agreement with Streeterville Capital, LLC, under the guidance at FASB ASC Topic 815.

Fair Value Measurement

The Company follows guidance in ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually.

The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date.

In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities).

The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:

Quoted prices in active markets for identical assets or liabilities.

An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

Observable inputs other than Level 1 inputs.

Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.

Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability.

Carrying amounts of certain of the Company’s financial instruments, including cash, cash equivalents and restricted cash, prepaid expenses and other current assets, accounts payable, accrued liabilities, and other short-term liabilities approximate fair value due to their relatively short maturities.

Non-financial assets such as property and equipment are evaluated for impairment and adjusted to fair value using Level 3 inputs only when impairment is recognized.

Fair values are considered Level 3 when management makes significant assumptions in developing a discounted cash flow model based upon a number of considerations including projections of revenues, earnings, and a discount rate.

To date, the Company has not recorded any adjustments to fair value related to impairment on property and equipment.

The unsecured promissory note A- 1 contains stock-price linked features, including (i) a limited redemption feature that may accelerate principal repayment upon the Company's stock meeting specified price thresholds and (ii) a monitoring fee forgiveness feature that may reduce amounts otherwise payable upon sustained low stock price or trading volume conditions.

Management determined these features are embedded derivatives that are not clearly and closely related to the debt host and therefore require bifurcation under ASC 815.

At issuance, the embedded derivatives were bifurcated and recorded at fair value, with a corresponding reduction to the carrying amount of the unsecured promissory note A- 1.

The embedded derivative liabilities are remeasured at fair value each reporting period, with changes in fair value recognized in earnings.

Fair value is estimated using valuation techniques that incorporate significant unobservable inputs, and, accordingly, the embedded derivatives are classified as Level 3 within the fair value hierarchy under ASC 820.

The embedded derivative liability arising under the A- 1 Note is valued using a probability-weighted discounted cash flow model and Monte Carlo simulation framework with significant unobservable inputs including 91.0 % expected equity volatility, a 30.5 % risk-adjusted discount rate, and management's estimated probability of stock-price-based acceleration events ( 90% limited redemption scenario and 10% maturity settlement scenario).

The fair value measurement incorporates projected stock-price paths, expected redemption activity, and the contractual monitoring fee forgiveness provisions.

As of June 30, 2026, the estimated fair value of the limited redemption embedded derivative liability was $ 160,482 , partially offset by a $ 32,814 monitoring fee forgiveness embedded derivative asset, resulting in a net embedded derivative liability of approximately $ 127,668 .

The change in the fair value measurement using significant inputs (Level 3 ) for the six months ended June 30, 2026, is summarized below:

($ in thousands)

Balance at March 2, 2026

Change in fair value of net derivative liability

Balance at June 30, 2026

Foreign currency and currency translation

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Adjustments that arise from exchange rate translations are included in other comprehensive loss in the consolidated statements of operations and comprehensive loss as incurred.

During the three months ended March 31, 2026 and 2025 , the Company recorded foreign exchange gains of $ 0.0 million and $ 0.1 million, respectively.

During the three months ended June 30, 2026 and 2025 , the Company recorded foreign exchange gains (losses) of ($ 0.1 ) million and $ 1.6 million, respectively.

During the six months ended June 30, 2026, and 2025, the Company recorded foreign exchange gains (losses) of ($ 0.1 ) million and $ 1.7 million, respectively.

Concentrations of credit risk and of significant suppliers

10 unchanged sentences

The Company has not experienced any losses related to amounts in excess of FDIC limits.

The Company had restricted cash of $ 10.0 million and none on March 31, 2026 and December 31, 2025 , respectively (see Note 4 ).

The Company had restricted cash of $ 10.0 million on June 30, 2026 and $ 0 million on December 31, 2025 (see Note 4 ).

Property, plant and equipment

7 unchanged sentences

The Company records unrealized gains and losses related to foreign currency translation and instrument specific credit risk as components of other accumulated comprehensive loss in the condensed consolidated statements of operations and comprehensive loss.

During the three months ended March 31, 2026 and 2025 , the Company’s other comprehensive loss was $ 0.1 million and $ 0.3 million, respectively, which was comprised of currency translation adjustments.

During the three and six months ended June 30, 2026 and 2025 , the Company’s other comprehensive loss was $ 0.3 million and $ 1.8 million, and $ 0.3 million and $ 2.1 million, respectively, which was comprised of currency translation adjustments.

Recently Issued Accounting Pronouncements

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

Accounting Standards Not Yet Adopted

In November 2024 , the FASB issued ASU No.

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The Company is currently evaluating the impact of the new standard on its financial statement disclosures.

In March 2026, the Company entered into a promissory note that will require reporting of potential embedded features of the debt instrument in accordance with FASB ASC 815 - 10 - 20.

Accrued liabilities

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Convertible and Non-Convertible Promissory Notes

Convertible Promissory Note - Novartis

On January 26, 2024, the Company received a termination notice from Novartis Pharma AG, a company organized under the laws of Switzerland (“Novartis”) due to a material breach of that certain license agreement dated April 6, 2018, as amended to date (the “License Agreement”).

Accordingly, under the terms of the License Agreement, the Company ceased all development and commercialization activities with respect to all licensed products, all rights and licenses granted by Novartis to the Company reverted to Novartis;

and all liabilities due to Novartis became immediately due and payable inclusive of interest which continued to accrue at 5 % per annum.

As of March 31, 2026 , the liability is recorded as a current liability on the Company’s condensed unaudited consolidated balance sheets as follows:

$ 3.6 million in accounts payable, $ 1.4 million in convertible promissory notes and accrued interest, net of debt discount, and $ 0.5 million in accrued liabilities.

Notes Purchase Agreement - Streeterville

On March 2, 2026, the Company entered into a Note Purchase Agreement with Streeterville Capital, LLC ("Streeterville"), pursuant to which the Company issued and sold (i) an unsecured promissory note (the "A- 1 Note"), and (ii) a secured promissory note (the "B Note") for aggregate gross proceeds of $ 20.0 million.

A- 1 Note (Unsecured):

The Company issued the A- 1 Note with a stated principal amount of $ 10.93 million, inclusive of an original issue discount ("OID") $ 0.9 million and a $ 30,000 transaction expense reimbursement to the lender to cover the lender’s legal, accounting and due diligence expenses.

The Company issued the A- 1 Note with a stated principal amount of $ 10.93 million, inclusive of an original issue discount ("OID") of $ 0.9 million and a $ 30,000 transaction expense reimbursement to the lender to cover the lender’s legal, accounting and due diligence expenses.

On the Closing Date, the net cash proceeds to the Company were $ 10 million.

1 unchanged sentence

The A- 1 Note is recorded at amortized cost, net of unamortized discount, which is amortized to interest expense over the term using the effective interest method in accordance with ASC 835 - 30.

Ninety days after issuance, the Company is charged a one -time fee for monitoring this Note equal to the outstanding balance divided by .85 less the outstanding balance.

On May 31, 2026, the monitoring fee was $ 1,972,708 .

This monitoring fee is added to the outstanding balance, accrues interest, and will be forgiven on a pro rata basis each time the Company makes a cash payment.

Beginning six months after issuance, the investor may require monthly cash redemptions of up to $ 250,000 , aggregated with any redemptions under the B Note.

1 unchanged sentence

The A- 1 Note includes customary affirmative and negative covenants and events of default, including payment defaults, covenant breaches, and insolvency events.

No redemptions, trigger events, covenant breaches, or defaults occurred through March 31, 2026.

The A- 1 Note contains stock-price linked features, including (i) a limited redemption feature that may accelerate principal repayment upon the Company's stock meeting specified price thresholds and (ii) a monitoring fee forgiveness feature that may reduce amounts otherwise payable upon sustained low stock price or trading volume conditions.

Management determined these features are embedded derivatives that are not clearly and closely related to the debt host and therefore require bifurcation under ASC 815.

At issuance, the embedded derivatives were bifurcated and recorded at fair value, with a corresponding reduction to the carrying amount of the A- 1 Note.

The embedded derivative liabilities are remeasured at fair value each reporting period, with changes in fair value recognized in earnings.

As of March 31, 2026, the embedded derivatives remained outstanding.

B Note (Secured):

No redemptions, trigger events, covenant breaches, or defaults occurred through June 30, 2026.

The Company issued the B Note in the principal amount of $ 10.0 million, bearing interest at 5 % per annum, compounded daily, and maturing on September 2, 2027.

The B Note was funded into a deposit account subject to a Deposit Account Control Agreement, and is secured by the cash held in that account and guaranteed by certain subsidiaries of the Company.

The B Note was funded into a deposit account subject to a Deposit Account Control Agreement, and is secured by the cash held in that account and guaranteed by ALLR Holdings, LLC.

The related cash is classified as restricted cash on the balance sheet.

1 unchanged sentence

The B Note was issued at par and is carried at amortized cost.

No redemptions or defaults occurred through March 31, 2026.

As of March 31, 2026, the A- 1 Note, B Note, and related embedded derivative liabilities are classified as current liabilities, as the notes are due within twelve months of the balance sheet date or are subject to redemption rights exercisable within that period.

The Company was in compliance with all material terms of the Note Purchase Agreement as of March 31, 2026.

For the three months ended March 31, 2026, the A- 1 Note and B Note incurred an interest expense of $ 131,975 , inclusive of original issue discount, and $ 41,667 , respectively.

No redemptions or defaults occurred through June 30, 2026.

As of June 30, 2026, the A- 1 Note, B Note, and related net embedded derivative liability (see Note 2 ) are classified as current liabilities, as the notes are due within twelve months of the balance sheet date or are subject to redemption rights exercisable within that period.

The Company was in compliance with all material terms of the Note Purchase Agreement as of June 30, 2026.

For the three and six months ended June 30, 2026, the A- 1 Note incurred an interest expense of $ 253,369 and $ 335,343 , respectively, inclusive of original issue discount.

The B Note incurred interest expense for the three and six months ended June 30, 2026 of $ 127,713 and $ 169,464 , respectively.

($ in thousands)

Principal balance and fees

Original issue discount (OID)

Unamortized OID

Accrued interest

Monitoring Fee

Unamortized discounts/deferred financing

Total outstanding debt

Convertible Promissory Note - Novartis

Stockholders ’ Equity

2 unchanged sentences

On February 26, 2026, the board of directors approved a new 2026 share repurchase program, with authorization to purchase up to $ 5 million of the Company's outstanding shares of common stock over a twelve month period ending March 1, 2027.

For the three months ended March 31, 2026 , the Company repurchased 264,000 shares at a cost of $ 262,036 .

Of the shares repurchased, 199,000 shares occurred under the initial repurchase plan and 65,000 shares were repurchased during March under the 2026 approved repurchase plan.

As of March 31, 2026 , there is $ 4,928,833 remaining for share repurchases under the 2026 share repurchase program.

There were no shares repurchased for the three months ended June 30, 2026.

For the six months ended June 30, 2026 , the Company repurchased 264,000 shares at a cost of $ 262,036 .

Of the shares repurchased, 199,000 shares occurred under the 2025 approved repurchase plan and 65,000 shares were repurchased under the 2026 approved repurchase plan.

As of June 30, 2026 , there is $ 4,928,833 remaining for share repurchases under the 2026 share repurchase program.

Sale of Common Stock

4 unchanged sentences

The agreement includes customary limitations on the Investor's beneficial ownership and is subject to Nasdaq listing rules, including a 19.99 % issuance limit.

During the three months ended March 31, 2026, the Company issued 2,000 shares of common stock under the agreement for gross proceeds of $ 2,000 .

As of March 31, 2026, $ 5.998 million remained available under the equity line of credit.

The Company issued no shares for the three months ended June 30, 2026.

During the six months ended June 30, 2026, the Company issued 2,000 shares of common stock under the agreement for gross proceeds of $ 2,000 .

As of June 30, 2026, $ 5.998 million remained available under the equity line of credit.

No liability or derivative instrument was recorded in connection with the arrangement, as settlement may occur only through issuance of the Company's common stock at the Company's election.

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The Sales Agreement was fully utilized and terminated on March 31, 2025.

For the three months ended March 31, 2026 and 2025 , the amount of proceeds generated from the sale of common stock under the Sales Agreement was $ 0.0 and $ 9.7 million from the sale of 0 and 9,719,173 shares, respectively.

The Company sold no shares for the three months ended June 30, 2026 and 2025 .

For the six months ended June 30, 2026 and 2025 , the amount of proceeds generated from the sale of common stock under the Sales Agreement was $ 0.0 and $ 9.7 million from the sale of 0 and 9,719,173 shares, respectively.

Equity Incentive Plan

5 unchanged sentences

In January 2026, the board approved a 5 % increase to the authorized shares in the 2021 Incentive Plan from 717,941 to 1,521,941 .

Total shares available for the issuance of stock-based awards under the Company’s 2021 Incentive Plan was 98,444 shares at March 31, 2026 .

Total shares available for the issuance of stock-based awards under the Company’s 2021 Incentive Plan was 98,444 shares at June 30, 2026 .

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

Three Months Ended

Six Months Ended

($ in thousands)

Research and development

$ 87 $ 75 $ 162 $ 141

General and administrative

101 89 186 162

Total stock-based compensation expense

$ 188 $ 164 $ 348 $ 303

Restricted Stock Units

The following table summarizes the restricted stock unit activity during the three months ended March 31, 2026 :

The following table summarizes the restricted stock unit activity during the six months ended June 30, 2026 :

Average Grant

3 unchanged sentences

753,333 $ 1.09

Unvested balance at March 31, 2026

Unvested balance at June 30, 2026

1,373,497 $ 1.12

At March 31, 2026 , the Company had unrecognized stock-based compensation expense related to restricted stock awards of $ 1.5 million, which is expected to be recognized over the remaining weighted-average vesting period of 1.4 years.

At June 30, 2026 , the Company had unrecognized stock-based compensation expense related to restricted stock awards of $ 0.8 million, which is expected to be recognized over the remaining weighted-average vesting period of 0.8 years.

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

Stock Options

The following table summarizes stock option activity during the three months ended March 31, 2026 :

The following table summarizes stock option activity during the six months ended June 30, 2026 :

Intrinsic Value

3 unchanged sentences

50,000 $ 1.01 9.0 $ 3,500

( 50,000 ) 1.01 — —

Outstanding at March 31, 2026

Exercised/Forfeited

Outstanding at June 30, 2026

50,000 $ 1.01 8.5 —

The aggregate intrinsic value of options is calculated as the difference between the exercise price of the underlying options and the fair value of the Company’s common stock for those options that had exercise prices lower than the fair value of the Company’s common stock.

As of March 31, 2026 , the total compensation cost related to non-vested options awards not yet recognized is $ 0 with a weighted average remaining vesting period of 0 years.

As of June 30, 2026 , all of the outstanding stock options have been fully vested.

License and Development Agreements

3 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 March 31, 2026 , the liability is recorded as a current liability on the Company’s condensed unaudited consolidated balance sheets as follows:

As of June 30, 2026 , the liability is recorded as a current liability on the Company’s condensed unaudited consolidated balance sheets as follows:

$ 3.6 million in accounts payable, $ 1.4 million convertible promissory notes and accrued interest, net of debt discount, and $ 0.6 million in accrued liabilities.

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Potentially dilutive securities outstanding, as determined by the latest applicable conversion price, that have been excluded from diluted loss per share due to being anti-dilutive include the following:

As of March 31,

Three and Six Months Ended

50,000 50,000

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

Subsequent Event

On July 7, we announced the Clinical Laboratory Improvement Amendments (CLIA) certification for our in-house laboratory.

With all equipment in place, our Horsholm, Denmark, laboratory is able to do all necessary testing in house to support the acceleration of stenoparib toward FDA registration.

With the lab already in place, the certification allows us to integrate our processes to reduce cost and turnaround times for DRP analyses and improve communication with clinical trial sites.

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

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Recent Developments

Share Repurchase Plan

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

On February 26, 2026, the board of directors approved a new share repurchase program, with authorization to purchase up to $5 million of the Company's outstanding shares of common stock over a twelve month period ending March 1, 2027.

For the three months ended March 31, 2026, the Company repurchased 264,000 shares at a cost of $262,036.

Of the shares repurchased, 199,000 shares occurred under the initial repurchase plan and 65,000 shares were repurchased during March under the 2026 approved repurchase plan.

As of March 31, 2026, there is $4,928,833 remaining for share repurchases under the 2026 share repurchase plan.

Patent Notice of Allowance

On April 27, 2026, the United States Patent and Trademark Office (USPTO) has issued a Notice of Allowance for its patent application covering the Company’s DRP® companion diagnostic specific to stenoparib.

CLIA Lab Certification

On July 7, we announced the Clinical Laboratory Improvement Amendments (CLIA) certification for our in-house laboratory.

With all equipment in place, our Horsholm, Denmark, laboratory is able to do all necessary testing in house to support the acceleration of stenoparib toward FDA registration.

With the lab already in place, the certification allows us to integrate our processes to reduce cost and turnaround times for DRP analyses and improve communication with clinical trial sites.

Risks and Uncertainties

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We have incurred net losses in each year since inception.

Our net losses were $2.8 million and $2.7 million for the three months ended March 31, 2026 and 2025, respectively.

As of March 31, 2026, we had an accumulated deficit of $132.9 million and cash and restricted cash of $29.8 million.

Our net losses were $6.2 million and $5.0 million for the six months ended June 30, 2026 and 2025, respectively.

As of June 30, 2026, we had an accumulated deficit of $136.4 million and cash and restricted cash of $26.9 million.

Substantially all our net losses have resulted from costs incurred in connection with our research and development programs and from general and administrative costs associated with our operations.

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Results of Operations

Comparison of the Three Months Ended March 31, 2026 and 2025 (unaudited)

Comparison of the Three and Six Months Ended June 30, 2026 and 2025 (unaudited)

Three Months Ended

Six Months Ended

($ in thousands)

9 unchanged sentences

Interest expense

Foreign exchange gains

Foreign exchange gains (losses)

Change in fair value of derivative and warrant liabilities

Total other income (expense), net

We generated $0.025 million of service revenue for the three months ended March 31, 2026 from the license of DRP testing services.

There was no revenue for the three months ended March 31, 2025.

We generated no revenue for the three months ended June 30, 2026.

We generated $0.025 million of service revenue for the six months ended June 30, 2026 from the license of DRP testing services.

There was no revenue for the three and six months ended June 30, 2025.

Research and Development Expenses

For the three months ended March 31, 2026, compared to March 31, 2025

For the three months ended June 30, 2026, compared to June 30, 2025

Research and development expenses decreased $1.0 million primarily due to reduced costs and supplies of the Phase II clinical trial of stenoparib.

A significant amount of these fees occurred in 2025 and were recognized at the time of purchase.

For the six months ended June 30, 2026, compared to June 30, 2025

Research and development expenses decreased $1.1 million primarily due to reduced costs and supplies of the Phase II clinical trial of stenoparib.

These expenses are recognized at the time of purchase.

General and Administrative Expenses

For the three months ended March 31, 2026 compared to March 31, 2025

General and administrative expenses decreased by $0.2 million for the three months ended March 31, 2026, compared to March 31, 2025.

For the three months ended June 30, 2026 compared to June 30, 2025

General and administrative expenses decreased by $0.5 million for the three months ended June 30, 2026, compared to June 30, 2025.

The decrease was primarily due to a reduction in legal fees.

For the six months ended June 30, 2026 compared to June 30, 2025

General and administrative expenses decreased by $0.7 million for the six months ended June 30, 2026, compared to June 30, 2025.

The decrease was primarily due to a reduction in legal fees.

Other income (expense)

For the three months ended March 31, 2026, compared to March 31, 2025

For the three months ended March 31, 2026, net other income decreased $0.4 million from the comparable quarter.

Interest income and foreign exchange decreased $0.1 million each while interest expense increased $0.2 million.

Liquidity, Capital Resources and Plan of Operations

Since our inception through March 31, 2026, our operations have been financed primarily by the sale of convertible promissory notes and the sale and issuance of our securities.

As of March 31, 2026, we had $29.8 million in cash and restricted cash and an accumulated deficit of $132.9 million.

For the three months ended March 31, 2026, we executed two financing transactions.

For the three months ended June 30, 2026, compared to June 30, 2025

For the three months ended June 30, 2026, net other income decreased $2.5 million from the comparable quarter.

Interest income was substantially consistent.

Foreign exchange gains decreased $1.7 million (moving from a $1.6 million gain in Q2 2025 to a $0.1 million loss in Q2 2026).

Interest expense increased $0.7 million and change in fair value of derivative liability was $0.1 million, both primarily driven by the March 2026 issuance of the Streeterville promissory notes..

For the six months ended June 30, 2026, compared to June 30, 2025

For the six months ended June 30, 2026, net other income decreased $2.9 million from the comparable period.

Foreign exchange decreased $1.8 million while interest expense and derivative liability increased $1 million with the March promissory note.

Liquidity, Capital Resources and Plan of Operation

Since our inception through June 30, 2026, our operations have been financed primarily by the sale of convertible promissory notes and the sale and issuance of our securities.

As of June 30, 2026, we had $26.9 million in cash and restricted cash and an accumulated deficit of $136.4 million.

For the three months ended June 30, 2026, and 2025, there were no sales of equity or financing transactions.

For the six months ended June 30, 2026, we executed two financing transactions.

On January 28, 2026, we entered into a Common Stock Purchase Agreement with Tumim Stone Capital LLC.

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Beginning six months after issuance, Streeterville may require monthly cash redemptions of up to $250,000 and also permits additional early redemptions upon the occurrence of specified stock-price based conditions.

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

Our primary use of cash is to fund operating activities, primarily research and development, regulatory activities, and clinical programs for stenoparib, as well as, to a lesser extent, general and administrative costs.

Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable and accrued expenses.

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We have not included these payments in a table of contractual obligations since these contracts are generally cancellable at any time by us following a certain period after notice and therefore, we believe that our non-cancellable obligations under these agreements are not material.

Three Months Ended

Six Months Ended

($ in thousands)

Total cash and cash equivalents provided by (used in):

Total cash, cash equivalents and restricted cash provided by (used in):

Operating activities, net

2 unchanged sentences

Effect of foreign exchange rates on cash

Net increase in cash and cash equivalents

Net increase (decrease) in cash, cash equivalents and restricted cash

Operating Activities

Net cash used in operating activities was $4.5 million for the three months ended March 31, 2026, primarily derived from our $2.7 million net loss, a $1.4 million increase in prepaid expenses, a $0.5 million reduction of accrued expenses.

The company used $2.7 million of net cash for operating activities for the three months ended March 31, 2025.

Net cash used in operating activities was $7.1 million for the six months ended June 30, 2026, primarily derived from our $6.2 million net loss, a $1.3 million increase in prepaid expenses, and a $0.4 million increase in tax receivable.

A $0.7 million and $0.2 million reduction of accrued expenses and accounts payable, respectively, was offset by an increase of $0.9 million for non-cash interest.

The company used $8.2 million of net cash for operating activities for the six months ended June 30, 2025.

Investing Activities

Net cash used in investing activities totaled $0.1 million for the three months ended March 31, 2026.

The Company has no investing activity spending for the three months ended March 31, 2025.

Net cash used in investing activities totaled $0.1 million for the six months ended June 30, 2026.

The Company has no investing activity spending for the six months ended June 30, 2025.

Financing Activities

Net cash and restricted cash provided by financing activities was $19.7 million for the three months ended March 31, 2026.

Net cash and restricted cash provided by financing activities was $19.7 million for the six months ended June 30, 2026.

The Company issued promissory notes with gross proceeds of $20.0 million, which was offset by $0.3 million used as part of a share repurchase program.

Net cash provided by financing activities for the three months ended March 31, 2025 was $11.1 million from capital raised using the ATM financing vehicle.

Net cash provided by financing activities for the six months ended June 30, 2025 was $8.6 million.

The Company raised $11.1 million using the ATM financing vehicle, which was offset by $2.5 million of the share repurchase program.

Operating Capital and Capital Expenditure Requirements

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Critical Accounting Policies and Use of Estimates

Our management’s discussion and analysis of financial condition and results of operations is based upon our unaudited condensed interim consolidated financial statements for the three months ended March 31, 2026 and 2025, and our audited consolidated financial statements for the years ended December 31, 2025 and 2024, which have been prepared in accordance with U.S.

Our management’s discussion and analysis of financial condition and results of operations is based upon our unaudited condensed interim consolidated financial statements for the three and six months ended June 30, 2026 and 2025, and our audited consolidated financial statements for the years ended December 31, 2025 and 2024, which have been prepared in accordance with U.S.

The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, and expenses.

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Actual results may differ from these estimates under different assumptions and conditions.

Our significant accounting policies are described in the notes to our consolidated financial statements for the year ended December 31, 2025 included in the Form 10-K, and there have been no significant changes to our significant accounting policies during the three months ended March 31, 2026.

These unaudited condensed interim consolidated financial statements should be read in conjunction with our audited financial statements and accompanying notes.

4 unchanged sentences

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-Q

Item 1. Financial Statements