Allarity Therapeutics, Inc.

Previous wording

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

Current wording

We have incurred net losses in each year since inception. Our net losses were $12.4 million and $7.9 million for the nine months ended September 30, 2026 and 2025, respectively. As of September 30, 2026, we had an accumulated deficit of $142.6 million and cash and restricted cash of $24.1 million. Substantially all our net losses have resulted from costs incurred in connection with our research and development programs and from general and administrative costs associated with our operations. We expect to continue to incur significant expenses and increasing operating losses over at least the next several years. We expect our expenses will increase substantially in connection with our ongoing activities, as we:

Previous wording

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

Current wording

Comparison of the Three and Nine Months Ended September 30, 2026 and 2025 (unaudited)

Previous wording

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.

Current wording

We generated $0.005 million revenue for the three months ended September 30, 2026. We generated $0.03 million of license revenue for the nine months ended September 30, 2026 from the license of DRP testing services. There was no revenue for the three and nine months ended September 30, 2025.

Previous wording

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.

Current wording

Research and development expenses increased $1.9 million primarily due to recognizing the one-time manufacturing expense of Phase 3 drug, and reduced costs and supplies of the Phase 2 clinical trial of stenoparib.

Previous wording

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.

Current wording

General and administrative expenses decreased by $0.02 million for the three months ended September 30, 2026, compared to September 30, 2025. The decrease was primarily due to a reduction in legal fees.

Previous wording

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.

Current wording

General and administrative expenses decreased by $0.7 million for the nine months ended September 30, 2026, compared to September 30, 2025. The decrease was primarily due to a reduction in legal fees.

Previous wording

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..

Current wording

For the three months ended September 30, 2026, net other income was consistent with the comparable quarter. Interest income was substantially consistent. However, interest expense increased $1.0 million offset by a $0.1 million gain in fair value of the derivative and a decrease of foreign exchange losses by $0.4 million, both primarily driven by the March 2026 issuance of the Streeterville promissory notes.

Previous wording

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.

Current wording

For the nine months ended September 30, 2026, net other income decreased $3.3 million from the comparable period. Foreign exchange gains decreased $1.4 million, interest expense increased $1.8 million with the March promissory note, and interest income decreased $0.1 million.

Previous wording

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.

Current wording

Since our inception through September 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 September 30, 2026, we had $24.1 million in cash and restricted cash and an accumulated deficit of $142.6 million.

Previous wording

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

Current wording

For the three months ended September 30, 2026, and 2025, there were no sales of equity or financing transactions. We issued $0.2 million of common stock as a payment for debt.

Previous wording

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. Pursuant to the purchase agreement, we have the right, but not the obligation, to sell to Tumim up to $6.0 million of newly issued shares of our common stock under an equity line of credit arrangement. The purchase price per share for each sale is based on the volume-weighted average price ("VWAP") of our common stock during the applicable pricing period, at 95% of the lowest one-day VWAP or 97% of the lowest three-day VWAP, at our election, subject to volume-based and dollar-based limitations. The agreement includes customary limitations on Tumim's beneficial ownership and is subject to Nasdaq listing rules, including a 19.99% issuance limit. On March 2, 2026, we entered into a Note Purchase Agreement with Streeterville Capital, LLC, pursuant to which the Company issued and sold a $10.0 million unsecured and $10.0 million secured promissory note. 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.

Current wording

For the nine months ended September 30, 2026, we executed two financing transactions. On January 28, 2026, we entered into a Common Stock Purchase Agreement with Tumim Stone Capital LLC. Pursuant to the purchase agreement, we have the right, but not the obligation, to sell to Tumim up to $6.0 million of newly issued shares of our common stock under an equity line of credit arrangement. The purchase price per share for each sale is based on the volume-weighted average price ("VWAP") of our common stock during the applicable pricing period, at 95% of the lowest one-day VWAP or 97% of the lowest three-day VWAP, at our election, subject to volume-based and dollar-based limitations. The agreement includes customary limitations on Tumim's beneficial ownership and is subject to Nasdaq listing rules, including a 19.99% issuance limit. On March 2, 2026, we entered into a Note Purchase Agreement with Streeterville Capital, LLC, pursuant to which the Company issued and sold a $10.0 million unsecured and $10.0 million secured promissory note. 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.

Previous wording

We believe that our current cash balance is sufficient to fund operations through at least the next twelve months from the date of this Quarterly Report. We may need to seek additional capital through the sale of our securities or other sources to carry out all of our planned research and development and potential commercialization activities. There are no assurances, however, that we will be successful in raising additional working capital, or if we are able to raise additional working capital, we may be unable to do so on commercially favorable terms. Our failure to raise capital or enter into other such arrangements if and when needed would have a negative impact on our business, results of operations and financial condition and our ability to develop stenoparib.

Current wording

Our existing cash and restricted cash of $24.1 million, of which $10.0 million is restricted to secure the B Note, may not be sufficient to fund operations through at least the next twelve months from the date of this Quarterly Report. We are pursuing additional capital through the sale of our securities or other sources to carry out all of our planned research and development and potential commercialization activities. There are no assurances, however, that we will be successful in raising additional working capital, or if we are able to raise additional working capital, we may be unable to do so on commercially favorable terms. Our failure to raise capital or enter into other such arrangements if and when needed would have a negative impact on our business, results of operations and financial condition and our ability to develop stenoparib.

Previous wording

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.

Current wording

Net cash used in operating activities was $9.9 million for the nine months ended September 30, 2026, primarily derived from our $12.4 million net loss, $0.8 million increase in tax receivable, and a $0.6 million reduction in accrued expenses. This was offset by a $1.1 million decrease in prepaid expense and an increase of $1.8 million for non-cash interest. The Company used $11.6 million of net cash for operating activities for the nine months ended September 30, 2025.

Previous wording

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.

Current wording

Net cash used in investing activities totaled $0.1 million for the nine months ended September 30, 2026. The Company has no investing activity spending for the nine months ended September 30, 2025.

Previous wording

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 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.

Current wording

Net cash and restricted cash provided by financing activities was $19.7 million for the nine months ended September 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 nine months ended September 30, 2025 was $10.9 million. The Company raised $11.1 million using the ATM financing vehicle and a $2.5 million sale of common stock for which was offset by $2.7 million of the share repurchase program.

Previous wording

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. GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, and expenses. On an on-going basis, we evaluate our critical accounting policies and estimates. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable in the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions and conditions.

Current wording

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

Previous wording

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 six months ended June 30, 2026. These unaudited condensed interim consolidated financial statements should be read in conjunction with our audited financial statements and accompanying notes.

Current wording

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 nine months ended September 30, 2026. These unaudited condensed interim consolidated financial statements should be read in conjunction with our audited financial statements and accompanying notes.