Alto Neuroscience, Inc.

Condensed Consolidated Balance Sheets (Unaudited)

Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)

Condensed Consolidated Statements of Stockholders’ Equity (Unaudited)

Condensed Consolidated Statements of Stockholders’ Equity (Unaudited)

Condensed Consolidated Statements of Cash Flows (Unaudited)

(in thousands)

1. Description of the Business

Alto Neuroscience, Inc. (the “Company” or “Alto”) was incorporated in Delaware on March 25, 2019. The Company maintains its headquarters in Mountain View, California. The Company hasone wholly-owned subsidiary in Australia that was formed during 2020 to conduct clinical trials.

Alto is a clinical-stage biopharmaceutical company with a mission to redefine psychiatry by leveraging neurobiology to develop personalized and highly effective treatment options. Through insights derived from the Company’s scalable and proprietary Precision Psychiatry Platform, the Company aims to discover brain-based biomarkers to better identify which patients are more likely to respond to its novel product candidates. The Company’s current pipeline consists ofseven clinical-stage assets addressing high-need therapeutic areas, including major depressive disorder (“MDD”), bipolar depression (“BPD”), treatment resistant depression (“TRD”), schizophrenia, and Parkinson’s disease.

Liquidity and Capital Resources

The Company has incurred significant operating losses since inception and has relied primarily upon equity financings to fund its operations. At September 30, 2026, the Company had an accumulated deficit of approximately $280.6 million. As the Company continues to incur losses, its transition to profitability will depend on the successful development, approval and commercialization of product candidates and on the generation of sufficient revenues to support its cost structure. No assurance can be provided that the Company will ever be profitable, and unless or until it becomes profitable, the Company will need to continue to raise additional capital.

In February 2024, the Company completed its initial public offering (“IPO”) of its common stock. The Company issued and sold 9,246,000 shares of common stock at a public offering price of $16.00 per share, which included 1,206,000 shares sold pursuant to the exercise of the underwriters’ option to purchase additional shares, and received net proceeds of $133.0 million after deducting underwriting discounts and commissions and other offering costs. Upon completion of the IPO, all outstanding shares of the Company’s outstanding preferred stock converted into an aggregate of 13,664,261 shares of common stock. In addition, the IPO resulted in the net exercise and conversion of all outstanding Series A Preferred Stock Warrants for an aggregate of 72,631 shares of common stock.

On October 21, 2025, the Company completed a private placement transaction in which it issued and sold (i)3,832,263 shares of common stock and (ii) pre-funded warrants (in lieu of common stock) to purchase an aggregate of 4,622,251 shares of common stock. The Company received net proceeds of $49.7 million (see Note 11 for additional information).

On November 17, 2025, K2 HealthVentures LLC elected to convert $4.0 million of its outstanding loan balance into the Company’s common stock. Pursuant to the terms of the Amended Loan Agreement (as defined in Note 4), the conversion price was $4.83 per share, resulting in the issuance of 828,860 shares.

On March 17, 2026, the Company completed a private placement transaction in which it issued and sold (i)2,900,000 shares of common stock and (ii) pre-funded warrants (in lieu of common stock) to purchase an aggregate of 3,100,000 shares of common stock. The Company received net proceeds of $114.8 million (See Note 11 for additional information).

On March 18, 2026, K2 HealthVentures LLC elected to convert $1.0 million of its outstanding loan balance into the Company’s common stock. Pursuant to the terms of the Amended Loan Agreement, the conversion price was $4.83 per share, resulting in the issuance of 207,215 shares.

On July 14, 2026, the Company completed an underwritten registered direct offering in which it issued and sold 3,776,436 shares of common stock. The Company received net proceeds of$94.6 million, after deducting underwriting discounts and commissions and estimated net offering expenses.

On September 1, 2026, K2 HealthVentures LLC elected to convert $3.0 million of its outstanding loan balance into the Company’s common stock. Pursuant to the terms of the Amended Loan Agreement, the conversion price was $10.49 per share, resulting in the issuance of 285,986 shares.

2. Summary of Significant Accounting Policies and Basis of Presentation

Basis of Presentation

The accompanying interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), as determined by the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”), and include the accounts of Alto and its wholly-owned subsidiary. All intercompany transactions and balances have been eliminated in consolidation.

The interim condensed consolidated financial statements are unaudited and have been prepared on the same basis as the audited annual financial statements and, in management’s opinion, include all adjustments consisting of only normal recurring adjustments necessary for the fair statement of the Company’s financial position as of September 30, 2026 and its results of operations and statements of equity for thethree and nine months ended September 30, 2026 and 2025 and cash flows for thenine months ended September 30, 2026 and 2025. The results of operations for the three and nine months ended September 30, 2026 are not necessarily indicative of the results to be expected for the full fiscal year or any other period.

Certain information and footnote disclosures normally included in the Company’s annual financial statements have been condensed or omitted. These interim condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements and the related notes thereto for the year ended December 31, 2025 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 16, 2026 (the “Annual Report”).

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results may differ materially from those estimates. The most significant estimates and assumptions in the Company’s condensed consolidated financial statements relate to the determination of the volatility of its common stock (as an input for calculating stock-based compensation and warrants), estimating accrued or prepaid research and development expenses. These estimates and assumptions are based on current facts, historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of expenses that are not readily apparent from other sources. To the extent there are material differences between the estimates and actual results, the Company’s future results of operations will be affected.

Significant Accounting Policies

The Company’s significant accounting policies used in the preparation of these condensed consolidated financial statements for thethree and nine months ended September 30, 2026 are consistent with those discussed in Note 3 to the consolidated financial statements in the Annual Report.

Recently Adopted Accounting Pronouncements

In November 2024, the FASB issued ASU No. 2024-04, Debt – Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments, which affects entities that settle convertible debt instruments for which the conversion privileges were changed to induce conversion. The standard is effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods.

The Company adopted the provisions of ASU 2024-04 prospectively beginning January 1, 2026. The adoption did not have an impact on the Company’s condensed consolidated financial statements.

Recently Issued Accounting Pronouncements

In November 2024, the FASB issued ASU No. 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which expands disclosures about specific expense categories presented on the face of the income statement. The standard is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. The Company is currently evaluating the impact the adoption of this standard will have on its consolidated financial statements.

In December 2025, the FASB issued ASU No. 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements. This standard clarifies current interim reporting requirements on Topic 270 and introduces a disclosure principle requiring entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. This standard will be effective for fiscal years beginning after December 15, 2027, with the option to apply it retrospectively. Early adoption is allowed. Currently, the Company is evaluating the impact the adoption of this standard will have on its consolidated financial statements.

3. Balance Sheet Components

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist of the following (in thousands):

Property and Equipment, Net

Property and equipment, net are as follows (in thousands):

During thethree and nine months ended September 30, 2026, the Company recorded depreciation expense of$0.1 million and$0.5 million, respectively. During thethree and nine months ended September 30, 2025, the Company recorded depreciation expense of$0.2 million and$0.5 million, respectively.

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consist of the following (in thousands):

4. Debt

K2 HealthVentures LLC Loan Agreement

On December 16, 2022, the Company entered into a Loan and Security Agreement (the “Original Loan Agreement”) with K2 HealthVentures LLC as a lender, the other lenders party thereto (collectively, the “Lender”), K2 HealthVentures LLC, as administrative agent for Lender (the “Administrative Agent”), and Ankura Trust Company, LLC, as collateral agent for the Lender. Pursuant to the terms of the Original Loan Agreement, the Lender agreed to make available to the Company term loans (each, collectively, the “Term Loan”) in an aggregate principal amount of up to $35.0 million. As of December 31, 2024, the Company had drawn a principal amount of $10.0 million. The Lender’s commitment to make available additional Term Loans under the Original Loan Agreement expired without being drawn on January 1, 2025. The Original Loan Agreement had a Term Loan maturity date of December 1, 2026 (the “Original Term Loan Maturity Date”).

On January 13, 2025, the Company entered into an amendment to the Original Loan Agreement (the “Amendment” and the Original Loan Agreement as amended thereby, the “Amended Loan Agreement”) to, among other things, extend the Original Term Loan Maturity Date and increase the maximum available amount of term loans. The Amended Loan Agreement provides for term loans in an aggregate principal amount of up to $75.0 million, consisting of:

•a first tranche term loan of $20.0 million;

•second tranche term loans of up to $30.0 million in the aggregate available at the Company’s request until December 15, 2025, subject to certain time-based, clinical milestones; and

•third tranche term loans of up to $25.0 million in the aggregate available at the Company’s request subject to the Lender’s approval.

The Company drew $20.0 million upon entry into the Amendment (approximately $10.0 million of which was used to refinance obligations under the Original Loan Agreement and pay fees and expenses incurred in connection with the Amendment). The second tranche term loan was available until December 15, 2025 based on certain milestones and expired without being drawn.

The Amended Loan Agreement has a Term Loan maturity date of January 1, 2029 (the “Amended Term Loan Maturity Date”). The Amended Loan Agreement provides for an interest only period until January 1, 2027, following which the Term Loan shall be repaid in equal monthly payments through the Amended Term Loan Maturity Date.

The Term Loan bears interest at (i) a variable per annum cash pay rate equal to the Prime Rate plus 1.45% (subject to a floor of 8.45% per annum) and (ii) a fixed per annum paid-in-kind rate equal to 1.0%. Interest is due and payable monthly in arrears. Upon final payment or prepayment of the Term Loan, the Company is required to pay a final payment equal to 5.95% of the amount borrowed.

The Amended Loan Agreement was accounted for as a debt extinguishment, as the new loan was considered substantially different from the original loan. The Company recognized debt issuance costs and discount upon issuance of $2.0 million within Term Loan, non-current on its condensed consolidated balance sheet and recorded a loss on debt extinguishment of $0.7 million, which was recorded within loss on debt extinguishment in its condensed consolidated statement of operations and comprehensive loss forthe nine months ended September 30, 2025.

Fees

Under the terms of the Original Loan Agreement, the Company was obligated to pay a final fee equal to 6.25% of the aggregate amount of the term loans funded thereunder (the “Original Exit Fee”) upon the earliest of (i) the Original Term Loan Maturity Date, (ii) the acceleration of the Term Loan, and (iii) the prepayment of the Term Loan. The Company was also obligated to pay the Lender a one-time facility fee of $0.2 million (“Original Facility Fee”) on the initial closing date. The Original Exit Fee of $0.6 million and Original Facility Fee of $0.2 million were recorded as debt discount, and were being accreted using the effective interest method within interest expense in the condensed consolidated statements of operations and comprehensive loss. The Company’s obligation to pay the Original Exit Fee remains outstanding, and the timing for payment thereof was unaffected by, and reaffirmed in connection with, the Amendment, and is recorded in the condensed consolidated balance sheet within Term loan, current as of September 30, 2026 and December 31, 2025.

The Company was obligated to pay the Lender a one-time facility fee of $0.3 million upon entry into the Amendment. The Company is also obligated to pay a funding fee on each third tranche term loan in an amount equal to the sum of 0.5% multiplied by the amount of such third tranche term loan, if and when funded. Under the terms of the Amended Loan Agreement, the Company is obligated to pay a final fee equal to 5.95% of the aggregate amount of the Term Loan funded thereunder (the “Amended Exit Fee”) upon the earliest of (i) the Amended Term Loan Maturity Date, (ii) the acceleration of the Term Loan, and (iii) the prepayment of the Term Loan. As of September 30, 2026, the amount owed under the Amended Exit Fee is equal to $1.2 million. The Original Exit Fee and the Amended Exit Fee have been fully accrued and recorded as debt discount as of the closing date of the Amendment and are being accreted using the effective interest method within interest expense in the consolidated statement of operations and comprehensive loss.

The Company has the option to prepay all, but not less than all, of the Term Loan prior to the Amended Term Loan Maturity Date, which would require that the Company pay the Lender a prepayment penalty fee based on a percentage of the outstanding principal balance and the funding date of the individual tranches thereunder. As to each such tranche under the Term Loan, such fee shall be equal to 3% if the payment occurs on or before 24 months after the funding date of such tranche,2% if the prepayment occurs more than 24 months after, but on or before 36 months after the funding date of such tranche, or 1% if the prepayment occurs more than 36 months after the funding date of such tranche. No prepayment penalty fee is required if the applicable tranche is prepaid within six months prior to the Amended Term Loan Maturity Date or refinanced with the Lender.

Other Terms

The Company must maintain, at all times, a cash runway of at least 5 months, provided that this covenant is waived during any period in which the Company’s market capitalization exceeds $700.0 million.

The Company’s obligations under the Amended Loan Agreement are secured by a first priority security interest in substantially all of its assets (with an exclusion for intellectual property). The Amended Loan Agreement contains customary represent ations and warranties, and also includes customary events of default, including payment default, breach of covenants, change of control, and material adverse effects. The Amended Loan Agreement restricts certain activities, such as disposing of the Company’s business or certain assets, incurring additional debt or liens or making payments on other debt, making certain investments and declaring dividends, acquiring or merging with another entity, engaging in transactions with affiliates or encumbering intellectual property, among others.

Upon the occurrence of an event of default, a default interest rate of an additional 5% per annum may be applied to the outstanding loan balances, and the Lender may declare all outstanding obligations immediately due and payable and exercise all of its rights and remedies as set forth in the Amended Loan Agreement and under applicable law.

Warrants

In connection with the Original Loan Agreement, the Company issued to the Lender a warrant (the “Original Warrant”), which Original Warrant is exercisable for 35,773 shares of the Company’s common stock and expires on December 15, 2032. In connection with the Amendment, the Original Warrant was amended and restated (the “Amended and Restated Warrant”) to reduce the exercise price from $10.49 to $3.71 per share (the “Exercise Price”). The incremental value associated with this modification was immaterial, and was included as part of the determination of the loss on debt extinguishment, with a corresponding increase in additional paid-in capital during the nine months ended September 30, 2025.

In connection with the Amendment, the Company issued an additional warrant (the “New Warrant”, together with the Amended and Restated Warrant, the “Warrants”) to purchase a number of shares of the Company’s common stock calculated as follows: (a) (i)0.025, multiplied by (ii) the aggregate principal amount of the term loans actually funded under the Amended Loan Agreement, divided by (b) the Exercise Price. The New Warrant expires on January 13, 2035 and allows for the purchase of 134,691 shares of the Company’s common stock. In July 2026, the Lender exercised its right to purchase 134,691 shares of the Company’s common stock on a cashless basis, resulting in the net issuance of 116,853 shares of common stock pursuant to the Warrants.

If the Company draws down on additional tranches of the Term Loan, the number of shares available for purchase by the Lender under the New Warrant would increase. The Company determined the estimated fair value of the New Warrant at the date of issuance to be $0.5 million, which was included as part of the determination of the loss on debt extinguishment, with a corresponding increase in additional paid-in capital. As of the date of the issuance, key assumptions include an expected life of 10 years, a risk-free rate of 4.79% and an expected volatility of 89.47%. See Note 11 for additional information regarding the New Warrant.

Loan Conversion Feature

Under the terms of the Amended Loan Agreement, the Lender may, at its option, elect to convert up to $9.0 million of the then outstanding Term Loan (the “Conversion Amount”) ($4.0 million of which was reflected in the Original Loan Agreement and $5.0 million of which is reflected in the Amended Loan Agreement) into shares of the Company’s common stock (the “Conversion Shares”). The number of shares to be issued upon conversion is determined by dividing (a) the portion of the term loan amount converted, by (b) the Applicable Conversion Price. Applicable Conversion Price means (i) with respect to any conversion of up to $4.0 million of the Conversion Amount, $10.49, and (ii) with respect to any conversion of the remaining $5.0 million of the Conversion Amount, $4.83, in each case subject to certain adjustments set forth in the Amended Loan Agreement. The Company determined that the embedded conversion option is not required to be bifurcated from the Term Loan. The embedded conversion option meets the derivative accounting scope exception since the embedded conversion option is indexed to the Company’s own common stock and qualifies for classification within stockholders’ equity. On November 17, 2025 and March 18, 2026, the Lender elected to convert $4.0 million and $1.0 million, respectively, of its outstanding loan balance into the Company’s common stock. Pursuant to the terms of the Amended Loan Agreement, the conversion price was $4.83 per share, resulting in the issuance of 828,860 and 207,215 shares, respectively. In addition, on September 1, 2026, the Lender elected to convert $3.0 million of its outstanding loan balance into the Company’s common stock. Pursuant to the terms of the Amended Loan Agreement, the conversion price was $10.49 per share, resulting in the issuance of 285,986 shares. As of September 30, 2026, the Lender has the option to convert the remaining $1.0 million of outstanding Term Loan into shares of the Company’s common stock at a conversion price of $10.49 per share.

Interest Expense and future repayments

The Company recorded interest expense at a weighted average rate of 11.87% and 12.14% related to the Amended Loan Agreement for the three and nine months ended September 30, 2026, respectively. The Company recorded interest expense at a weighted average rate of 12.93% and 12.95% related to the Amended Loan Agreement for the three and nine months ended September 30, 2025, respectively. During the three and nine months ended September 30, 2026, the Company recorded interest expense of$0.5 million and$1.5 million, respectively. During thethree and nine months ended September 30, 2025, the Company recorded interest expense of$0.7 million and$1.9 million, respectively.

Future principal debt payments and Exit Fee of the term loan funded as of September 30, 2026 are as follows (in thousands):

The Wellcome Trust Limited Convertible Grant Agreement

In July 2024, the Company entered into a convertible loan agreement (the “Convertible Grant Agreement”) with The Wellcome Trust Limited (“Wellcome”). The Convertible Grant Agreement provides for an unsecured convertible loan (the “Convertible Loan”) from Wellcome of up to approximately $11.7 million, payable to Alto insix tranches, of which up to $2.0 million could be funded upon the execution of the Convertible Grant Agreement and the remainder of which will be funded upon the completion of certain milestones as set forth in the Convertible Grant Agreement. As of September 30, 2026, the Company has drawn down the entirety of the $2.0 million execution tranche and will continue to access the loan as needed as the ALTO-100 study in bipolar depression progresses. Interest accrues at an annual rate equal to the Sterling Overnight Index Rate plus 2%, subject to potential adjustment if such annual interest rate equals or exceeds 9% at any time. Proceeds from the Convertible Loan may be used by the Company solely to advance development of ALTO-100 in bipolar depression. The Convertible Grant Agreement also includes customary covenants, representations and warranties, including with respect to the conduct of the Company’s Phase 2b clinical trial evaluating ALTO-100 in patients with bipolar depression and certain information and audit rights of Wellcome in connection therewith, as well as with respect to the Company’s efforts to develop and exploit ALTO-100.

In accordance with the terms of the Convertible Grant Agreement, beginning in July 2026, Wellcome has the right, at its election, to convert some or all of the Convertible Loan into shares of the Company’s common stock at a price per share equal to a 20% discount to thethirty-day volume-weighted average price of Common Stock on the New York Stock Exchange at the date of such conversion. The Convertible Grant Agreement provides that in no event shall the aggregate number of shares of Common Stock issued pursuant to conversion of the Convertible Loan exceed 5,363,326, which is equal to 19.9% of the number of shares of Common Stock outstanding as of the date of the Convertible Grant Agreement. At any time after the fifth anniversary of the effective date of the Convertible Grant Agreement or in connection with an event of default, Wellcome may require repayment of the Convertible Loan in full, together with accrued interest, to the extent not converted as described above.

Future principal debt payments of the Convertible Grant Agreement funded as of September 30, 2026 are as follows (in thousands):

The Company assessed the terms and features of the Convertible Grant Agreement and determined that the Company was eligible to elect the fair value option under ASC 825, Financial Instruments. The Convertible Grant Agreement contains various embedded features and the election of the fair value option allowed the Company to bypass analysis of potential embedded derivatives and further analysis of bifurcation of any recognized financial liabilities. Under the fair value option, the financial liability is initially measured at its fair value on the issue date and subsequently remeasured at estimated fair value on a recurring basis at each reporting date. Changes in the fair value of the Convertible Grant Agreement, which include accrued interest, if any, are recorded as a componentof other, net or within other comprehensive income (loss) in the condensed consolidated statements of operations and comprehensive loss. The Company has not elected to present interest expense separately from changes in fair value and therefore will not present interest expense associated with the Convertible Grant Agreement. Any changes in fair value caused by instrument-specific credit risk are presented separately in other comprehensive income or loss.

The Company determined the initial fair value of the Convertible Grant Agreement using a probability-weighted income approach. Draw downs under the Convertible Grant Agreement were $0.8 million during the nine months ended September 30, 2025, and$1.3 million during theyear ended December 31, 2024. The Company remeasured the fair value of the Convertible Grant Agreement as of September 30, 2026 to be $2.5 million using a probability-weighted income approach. The Company calculated discounted cash flows of the Convertible Grant Agreement using a discount rate of 21.78% and adjusted for the probability of various repayment scenarios.

The following table reconciles the change in fair value of the Convertible Grant Agreement during the nine months ended September 30, 2026 (in thousands):

5. Fair Value

The Company’s financial instruments that are measured at fair value on a recurring basis consist of money market funds and the Convertible Grant Agreement. The following tables present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis and indicate the level of the fair value hierarchy used to determine such fair values (in thousands):

The Company classifies its money market funds, which are valued based on quoted market prices in an active market with no valuation adjustment, as Level 1 assets within the fair value hierarchy. The Company’s Convertible Grant Agreement is classified as a Level 3 instrument under the fair value hierarchy as the fair values were determined based on significant inputs not observable in the market. See Note 4 for additional information on the Convertible Grant Agreement.

6. Asset Purchase and License Agreements

From time to time, the Company enters into asset purchase and license agreements with third parties. For a detailed description of the significant agreements with certain financial commitments to which the Company is a party, see Note 10 to the consolidated financial statements included in the Company’s Annual Report. As of September 30, 2026, the Company was a party to the following significant agreement pursuant to which payments were made during thethree and nine months ended September 30, 2026 and 2025:

Chase Asset Purchase Agreement

On May 31, 2025 (the “Chase Closing Date”), the Company entered into an Asset Purchase Agreement (“Chase Agreement”) with Chase Therapeutics Corporation (“Chase”) pursuant to which the Company acquired all patent, know-how and other rights to ALTO-207, ALTO-208, and certain related assets (the “Acquired Compounds”).

On the Chase Closing Date, the Company made an initial payment of $1.8 million in cash and reimbursed Chase $1.2 million to offset certain expenses incurred by the Seller in connection with the Chase Agreement, which are recorded in research and development expenses in the consolidated statements of operations and comprehensive loss. The Company is obligated to pay Chase up to an aggregate of $71.5 million after the Chase Closing Date (the “Chase Milestone Payments”) upon the achievement of certain clinical, regulatory, and sales milestones related to the Acquired Compounds (the “Chase Milestone Events”). Of the potential Milestone Payments, $41.0 million in aggregate are tied to commercial success of the product candidates. Other than with respect to the first Chase Milestone Event, Chase may elect to receive the Chase Milestone Payments for each Chase Milestone Event either as cash or as restricted shares of the Company’s common stock, subject to an overall limitation of a maximum of 5,387,353 shares of common stock that may be issued pursuant to the Chase Agreement (representing 19.9% of the outstanding shares of the common stock as of the Chase Closing Date).

The number of shares of common stock issuable for a Chase Milestone Payment paid in restricted shares of common stock will be determined by dividing the Chase Milestone Payment by the applicable Company Stock Price (as defined below), rounded down to the nearest share. The Company Stock Price is defined as thefive-day volume-weighted average price per share of common stock as reported by Bloomberg and calculated during regular trading hours over thefive consecutive trading day period ending on: (a) with respect to a Chase Milestone Payment pursuant to Chase’s election to receive a Chase Milestone Payment as common stock, the first trading day immediately following an Achievement Notice (as defined in the Chase Agreement); and (b) with respect a Deadline Milestone Payment (as defined below), the first trading day immediately following the applicable anniversary of the Closing Date.

In May 2026, the Company achieved the first Chase Milestone Event, related to the initiation of its Phase 2b clinical trial evaluating ALTO-207 resulting in a cash payment of $2.0 million, which was recorded in research and development expenses during the nine months ended September 30, 2026. Except for this $2.0 million milestone payment, no additional milestones or royalties were paid or accrued during the three and nine months ended September 30, 2026 related to this agreement.

The Company must use commercially reasonable efforts to develop, seek Regulatory Approval (as defined in the Chase Agreement) for, and commercialize products containing or comprising the Acquired Compounds in the United States. If the Company fails to achieve certain Chase Milestone Events by an agreed date, the Company must either pre-pay a portion of the relevant Chase Milestone Payment associated with that Chase Milestone Event, (a “Deadline Milestone Payment”), which pre-payment obligation may be paid in restricted shares of Common Stock, or transfer the related Acquired Compound back to Chase, in the Company’s sole discretion.

7. Stock-Based Plans

2024 Equity Incentive Plan

In January 2024, the Board adopted, and the Company’s stockholders approved, the 2024 Equity Incentive Plan (the “2024 Plan”), which became effective on the execution of the underwriting agreement related to the IPO. Under the 2024 Plan, the Company may grant incentive stock options to employees, including employees of any parent or subsidiary, and nonstatutory stock options, stock appreciation rights, restricted stock awards (“RSAs”), restricted stock units (“RSUs”), performance awards and other forms of stock awards to employees, directors, and consultants, including employees and consultants of the Company’s affiliates. The 2024 Plan is a successor to the 2019 Equity Incentive Plan, which was adopted by the Board of Directors in March 2019 (as amended, the “2019 Plan”). Following effectiveness of the 2024 Plan, no further issuance may be made under the 2019 Plan. A total of 2,000,000 shares of common stock were approved to be initially reserved for issuance under the 2024 Plan. In addition, the number of shares of the Company’s common stock reserved for issuance under the 2024 Plan automatically increases on January 1 of each calendar year, starting on January 1, 2025 and continuing through and including January 1, 2034, in an amount equal to 5% of the total number of shares of the Company’s common stock outstanding on the last day of the calendar month before the date of each automatic increase, or a lesser number of shares determined by the Board.

As of September 30, 2026 and December 31, 2025, the total number of shares authorized to be issued under the 2024 Plan was 4,945,504 and 3,349,328, respectively. As of September 30, 2026 and December 31, 2025, there were 336,318 and 625,142 shares of common stock, respectively, reserved and available for issuance under the 2024 Plan.

2025 Inducement Plan

On February 6, 2025, the Board adopted the 2025 Inducement Plan (the “Inducement Plan”), pursuant to which it reserved 500,000 shares of common stock for issuance to individuals who were not previously employees of the Company, or who are returning to employment following a bona fide period of non-employment with the Company, as an inducement material to such persons entering into employment with the Company, in accordance with New York Stock Exchange Listed Company Manual Rule 303A.08. Under the Inducement Plan, the Company has the ability to issue non-statutory stock options, stock appreciation rights, RSAs, RSUs, and performance awards. As of September 30, 2026, stock options to purchase 150,000 shares of common stock had been granted under the Inducement Plan.

Employee Stock Purchase Plan

In January 2024, the Company’s Board adopted, and its stockholders approved, the 2024 Employee Stock Purchase Plan (the “ESPP”), which became effective on the execution of the underwriting agreement related to the IPO. In March 2026, the Board approved the Amended and Restated 2024 Employee Stock Purchase Plan (as amended, the “Amended ESPP”) which stockholders approved in May 2026. The ESPP is intended to qualify as an “employee stock purchase plan” within the meaning of Section 423 of the U.S. Internal Revenue Code of 1986, as amended.

As of September 30, 2026 there were 839,100 shares of common stock available for issuance under the Amended ESPP. As of September 30, 2026, the Company had not opened the Amended ESPP, and therefore there were no purchases or share issuances during the three and nine months ended September 30, 2026.

During the three months ended September 30, 2026, an offering document was adopted allowing the first offering under the Amended ESPP to commence on October 1, 2026. Eligible employees may purchase shares of the Company's common stock through payroll deductions at a price equal to 85% of the lower of the fair market value of the common stock as of the beginning of the offering or the end of eachsix-month purchase period. Each 24-month offering will consist of foursix-month purchase periods, and offerings will run concurrently. However, if the fair market value of the Company’s common stock on the first day of any purchase period is less than or equal to the fair market value on the offering date for an ongoing offering, the ongoing offering will terminate immediately following the purchase of shares on the purchase date immediately preceding the new offering, and the participants in the terminated ongoing offering will automatically be enrolled in the new offering. New offerings otherwise begin every 12 months. An employee's payroll deductions under the Amended ESPP are limited to 15% of the employee's compensation, and an employee may not purchase more than $25,000 worth of common stock during any calendar year and not more than 2,500 shares of common stock during any purchase period. Notwithstanding the above, the Board (or an authorized committee thereof) may modify the terms of or suspend any future offerings prior to their commencement.

Stock Option Repricing

In July 2025, the Board approved a stock option repricing, which was effective at the close of market on July 3, 2025 (“Repricing Effective Date”). The repricing generally applied to the outstanding stock options held by then current employees and consultants that had an exercise price greater than $2.35 per share. As of the Repricing Effective Date, the eligible stock options were immediately repriced such that the exercise price per share for such stock options was reduced to $2.35 (the closing price of the Company’s common stock on the New York Stock Exchange on the Repricing Effective

Date), subject to certain retention requirements. The retention period was 12 months following the Repricing Effective Date and was able to be accelerated under certain conditions. If an eligible stock option was exercised prior to the end of the retention period, the participant was required to pay a premium exercise price equal to the original exercise price per share of such stock option. There were no changes to the number of shares underlying the eligible stock options or to the vesting schedules or expiration dates of the eligible stock options. There were 4,225,763 shares underlying the repriced stock options, which had then-current exercise prices ranging from $2.44 to $16.00 per share. An incremental $1.4 million of stock-based compensation expense is being recognized over the greater of the 12-month retention period or the remaining vesting period of the outstanding stock options. Stock options held by non-employee members of the Board were not eligible for the repricing. For the three and nine months ended September 30, 2026, the Company recognized $0.1 million and $0.5 million of incremental stock-based compensation expense in connection with the stock option repricing. In addition, the Company has $0.5 million of unrecognized stock based compensation related to the stock option repricing which is expected to be recognized over a weighted-average period of 0.9 years.

Stock Options

The options have a 10-year contractual life and generally vest over a period offour years, with the first 25% of the award vesting afterone year and then monthly thereafter, subject to continuous service.

The weighted-average grant date fair value of options granted during the three and nine months ended September 30, 2026 for awards subject only to service-based vesting conditions were $22.21 and $13.97 per share, respectively. The weighted-average grant date fair value of options granted during the three and nine months ended September 30, 2025 for awards subject only to service-based vesting conditions were$2.12 and$2.88 per share, respectively. Weighted-average grant date fair value assumptions were based on the following:

The table below summarizes activity related to stock options subject only to service-based vesting conditions (in thousands, except per share amounts):

As of September 30, 2026, there was approximately $27.6 million of unrecognized stock-based compensation expense related to these service-based unvested stock options, excluding the impact of the option repricing, which is expected to be recognized over a weighted-average period of 2.3 years.

Restricted Stock Units

The table below summ arizes activity related to RSUs subject only to service-based vesting conditions (in thousands, except per share amounts):

On March 1, 2024, the Company issued 53,864 RSUs under the 2024 Plan;50% of the shares of common stock underlying the RSUs vested after 18 months and the remainder vested after 24 months from the grant date. The RSUs were subject only to a service-based vesting condition. Such shares were not accounted for as outstanding until they vested. As of September 30, 2026, there isno unrecognized stock-based compensation expense related to the RSUs. The fair value of the RSUs vested during the nine months ended September 30, 2026 was $0.7 million.

Performance Option Awards

The Board granted options to purchase common stock to certain employees and consultants that vest upon the achievement of certain performance conditions (“Performance Awards”) such as the completion of a future financing event or upon the achievement of defined clinical milestones or outcomes. The Company didnot issue Performance Awards during the three months ended September 30, 2026 and 2025.

As of September 30, 2026, there are 397,164 Performance Awards vested and outstanding, andno Performance awards remain unvested. The Performance Awards have a contractual term of 10 years. There isno unrecognized stock-based compensation expense related to Performance Awards.

Stock-based Compensation Expense

Non-cash stock-based compensation expense recognized in the accompanying condensed consolidated statements of operations and comprehensive loss for thethree and nine months ended September 30, 2026 and 2025 was as follows (in thousands):

8. Leases

On September 18, 2026, the Company and Los Altos Financial Center, LLC (“Landlord”) entered into a lease agreement (the “2026 Lease Agreement”) for 8,978 square feet of office space in a multi-tenant building located in Los Altos, California with an initial lease term of 51 months. The Company will make base rental payments of approximately$2.3 million over the course of the initial term of the lease. In connection with the 2026 Lease Agreement, the Company paid a security deposit of$0.1 million, which was recorded in prepaid expenses and other current assets on its condensed consolidated balance sheet as of September 30, 2026. At the Company’s option, it may renew the lease for one 3-year period. As of September 30, 2026, the Company did not have control of the space or the construction of the tenant improvements and therefore, no right-of-use or lease liabilities were recorded in connection with the 2026 Lease Agreement.

On May 29, 2024, the Company and Mountain View City Center, LP (“Landlord”) entered into a lease agreement (the “2024 Lease Agreement”) for 16,332 square feet of office space in a multi-tenant building located in Mountain View, California with an initial lease term of 65 months. On September 21, 2026, the Company exercised its early termination right to terminate the 2024 Lease Agreement as of October 31, 2027, or the Early Termination Date. As of the Early Termination Date, including payments already made, the Company will make payments of approximately $4.0 million over the term of the lease. As a result of exercising the early termination option, the Company remeasured its operating lease liability and related right-of-use asset, resulting in reductions of approximately $2.3 million. Additionally, as a result of the 2026 Lease Agreement, the Company conducted an impairment analysis on the 2024 Lease Agreement and determined the lease was impaired by $0.4 million. The related lease impairment was recorded within general and administrative in the condensed consolidated statement of operations and comprehensive loss for the three and nine months ended September 30, 2026.

Supplemental balance sheet information related to operating leases as of September 30, 2026 and December 31, 2025 was as follows (inthousands):

As of September 30, 2026, the future payments under operating leases were as follows (in thousands):

9. Loss Per Share

Basic net loss per common share is computed by dividing net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding for the period. The Company’s unvested restricted common stock is not included in the determination of loss per share until the award vests. Since the Company had a net loss in each of the periods presented, basic and diluted net loss per common share are the same.

In October 2025 and March 2026, the Company issued equity-classified Pre-Funded Warrants with a nominal exercise price of$0.0001 per share (see Note 11). In accordance with ASC 260, Earnings Per Share (ASC 260), shares issuable for little to no cash consideration should be included in the number of outstanding shares used to calculate basic loss per share as long as all conditions necessary for exercise are met. The Pre-Funded Warrants are therefore included as outstanding shares as of their issuance date to calculate the weighted average number of shares outstanding to calculate basic loss per share.

The following outstanding potentially dilutive common stock equivalents were excluded from the computation of diluted net loss per share for the periods presented because including them would have been antidilutive (in thousands):

10. Income Taxes

Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are provided if based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The Company has evaluated the positive and negative evidence bearing upon the realizability of its deferred tax assets, including its net operating losses. Based on its history of operating losses, the Company believes that it is more likely than not that the benefit of its deferred tax assets will not be realized. Accordingly, the Company has provided a full valuation allowance for its net deferred tax assets as of September 30, 2026 and December 31, 2025.

11. Stockholders’ Equity

Warrants

K2 Warrant

In December 2022, in connection with the closing of the Original Loan Agreement, the Company issued a warrant to the Lender to purchase a number of shares of the Company’s Series B convertible preferred stock, or at Lender’s election, next round stock (“K2 Warrant”). The number of shares of convertible preferred stock issuable upon exercise of the warrant was equal to (a) (i)0.0375, multiplied by (ii) the aggregate principal amount of term loans actually funded under the Original Loan Agreement, divided by (b) the warrant price then in effect. Following the conversion of all outstanding convertible preferred stock to common stock upon the completion of the IPO in February 2024, the K2 Warrant became a warrant to purchase up to an aggregate of 35,773 shares of the Company’s common stock at an exercise price of $10.49 per share (referred to in Note 4 as the Original Warrant).

On January 13, 2025, in connection with the Amended Loan Agreement (see Note 4 for additional information), the K2 Warrant was amended and restated (referred to in Note 4 as the Amended and Restated Warrant) to reduce the exercise price from $10.49 per share to $3.71 per share (referred to in Note 4 as the Exercise Price). Further, in connection with the Amendment, the Company issued an additional warrant (referred to in Note 4 as the New Warrant and, together with the Amended and Restated Warrant, the “Warrants”) to purchase a number of shares of the Company’s common stock calculated as follows: (a) (i)0.025, multiplied by (ii) the aggregate principal amount of the term loans actually funded under the Amended Loan Agreement, divided by (b) the Exercise Price. The New Warrant expires on January 13, 2035. The New Warrant is classified as equity as it meets all the conditions under GAAP for equity classification, and is therefore not subject to ongoing remeasurement. The Company reassesses whether equity classification for the warrant is appropriate upon any changes to the warrants or capital structure, at each balance sheet date.

In July 2026, the Lender exercised its warrant rights to purchase 134,691 shares of the Company’s common stock on a net exercise basis, resulting in an issuance of 116,853 shares of common stock under the terms of the Warrants. As of September 30, 2026, the Warrants allowed for the purchase of 35,773 shares of the Company’s common stock. If the Company draws down on additional tranches of the Term Loan, the number of shares available for purchase by the Lender under the Warrants would increase.

The Company is conditionally obligated to issue a fixed number of additional shares in connection with the Warrants (“Additional Warrants”) in the potential amount of 168,363 shares upon the funding of additional amounts under the Term Loan with the same exercise price and contractual term. The contingent obligation to issue the Additional Warrants did not meet the derivative scope exception or equity classification criteria and were accounted for as a derivative liability. The contingently issuable Additional Warrants derivative liability had a de minimis value at the time of issuance and as of September 30, 2026. The Additional Warrants derivative liability will be remeasured each reporting period until settled or extinguished with subsequent changes in fair value recorded through other income (expense), net in the condensed consolidated statements of operations and comprehensive loss. The initial fair value of the Additional Warrants derivative liability was determined using a Black-Scholes option pricing model based on the same input assumptions above, with an additional assessment required for the probability that additional amounts under the Term Loan will be funded which would trigger the issuance of the Additional Warrants.

Pre-Funded Warrants Issued in October 2025

In October 2025, the Company entered into a Securities Purchase Agreement (the “2025 PIPE Purchase Agreement”) with certain institutional and other accredited investors (the “2025 PIPE Purchasers”), pursuant to which the Company sold and issued to the 2025 PIPE Purchasers in a private placement transaction (the “2025 Private Placement”) (i)3,832,263 shares of the Company’s common stock (the “2025 PIPE Shares”), and (ii) with respect to certain 2025 PIPE Purchasers, pre-funded warrants to purchase 4,622,251 shares of the Company’s common stock (the “2025 Pre-Funded Warrants”) in lieu of shares of the Company’s common stock. The purchase price per share of common stock was $5.9140 per share (the “2025 PIPE Purchase Price”), and the purchase price for the 2025 Pre-Funded Warrants was $5.9139 per 2025 Pre-Funded Warrant.

The 2025 Pre-Funded Warrants have a per share exercise price of $0.0001, subject to proportional adjustments in the event of stock splits or combinations or similar events. The 2025 Pre-Funded Warrants will not expire until exercised in full. The 2025 Pre-Funded Warrants may not be exercised if the aggregate number of shares of common stock beneficially owned by the holder thereof immediately following such exercise would exceed a specified beneficial ownership limitation; provided, however, that a holder may increase or decrease the beneficial ownership limitation by giving 61 days’ notice to the Company, but not to any percentage in excess of 19.9%.

The Company concluded that the 2025 Pre-Funded Warrants meet the criteria for equity classification at issuance and were recorded as a component of stockholders’ equity within additional paid-in capital. The 2025 Pre-Funded Warrants are equity classified because they (i) are freestanding financial instruments that are legally detachable and separately exercisable from the equity instruments, (ii) are immediately exercisable, (iii) do not embody an obligation for the Company to repurchase its shares, (iv) permit the holders to receive a fixed number of shares of common stock upon exercise, (v) are indexed to the Company’s common stock and (vi) meet the equity classification criteria. In addition, such 2025 Pre-Funded Warrants do not provide any guarantee of value or return.

Pre-Funded Warrants Issued in March 2026

In March 2026, the Company entered into a Securities Purchase Agreement (the “2026 PIPE Purchase Agreement”) with certain institutional investors (the “2026 PIPE Purchasers”), pursuant to which the Company sold and issued to the 2026 PIPE Purchasers in a private placement transaction (the “2026 Private Placement”) (i)2,900,000 shares of the Company’s common stock (the “2026 PIPE Shares”), and (ii) with respect to certain 2026 PIPE Purchasers, pre-funded warrants to purchase 3,100,000 shares of the Company’s common stock (the “2026 Pre-Funded Warrants”) in lieu of shares of the Company’s common stock. The purchase price per share of common stock was $20.00 per share (the “2026 PIPE Purchase Price”), and the purchase price for the 2026 Pre-Funded Warrants was $19.9999 per 2026 Pre-Funded Warrant.

The 2026 Pre-Funded Warrants have a per share exercise price of $0.0001, subject to proportional adjustments in the event of stock splits or combinations or similar events. The 2026 Pre-Funded Warrants will not expire until exercised in full. The 2026 Pre-Funded Warrants may not be exercised if the aggregate number of shares of common stock beneficially owned by the holder thereof immediately following such exercise would exceed a specified beneficial ownership limitation; provided, however, that a holder may increase or decrease the beneficial ownership limitation by giving 61 days’ notice to the Company, but not to any percentage in excess of 19.9%.

The Company concluded that the 2026 Pre-Funded Warrants meet the criteria for equity classification at issuance and were recorded as a component of stockholders’ equity within additional paid-in capital. The 2026 Pre-Funded Warrants are equity classified because they (i) are freestanding financial instruments that are legally detachable and separately exercisable from the equity instruments, (ii) are immediately exercisable, (iii) do not embody an obligation for the Company to repurchase its shares, (iv) permit the holders to receive a fixed number of shares of common stock upon exercise, (v) are indexed to the Company’s common stock and (vi) meet the equity classification criteria. In addition, such 2026 Pre-Funded Warrants do not provide any guarantee of value or return.

Common Stock and Authorized Shares

As of both September 30, 2026 and December 31, 2025, the Company had 500,000,000 authorized shares of common stock with a par value of $0.0001 per share, of which 39,975,020 and 31,923,521 shares, respectively, were issued and outstanding. On February 6, 2024, the Company amended its certificate of incorporation such that the total number of shares of common stock authorized to be issued was increased to 500,000,000, and the total number of shares of new preferred stock authorized to be issued was 10,000,000 with a par value per share of $0.0001. As of September 30, 2026, no shares of preferred stock were issued or outstanding.

As of September 30, 2026 and December 31, 2025, the Company had reserved common stock, on an as-if converted basis, for issuance as follows (in thousands):

12. Commitments and Contingencies

From time to time, the Company is subject to occasional lawsuits, investigations and claims arising out of the ordinary course of business. Other than as set forth below, the Company had no significant pending or threatened litigation as of September 30, 2026.

On July 21, 2025, a purported stockholder of the Company filed a lawsuit against the Company, certain executive officers, and certain current and former directors in the United States District Court for the Northern District of California (Case No.

3:25-cv-06105). The plaintiff filed an amended complaint on January 23, 2026, a second amended complaint on April 6, 2026, and a third amended complaint on August 28, 2026. The complaint is a putative class action alleging violations of the Securities Act of 1933, as amended, related to the Company’s IPO in February 2024, and violations of the Exchange Act thereafter. The proposed classes consist of purchasers or acquirers of the Company’s common stock pursuant or traceable to the Company’s IPO as well as purchasers or acquirers of the Company’s common stock between March 18, 2024 and October 22, 2024, both dates inclusive. The plaintiff seeks unspecified damages, as well as interest, fees, and costs. The complaint claims, among other things, that the Company’s offering documents and subsequent public disclosures contained materially false and misleading statements and omitted material facts about the prospects of ALTO-100. The Company believes these allegations lack merit. The Company filed a motion to dismiss the second amended complaint on May 5, 2026. On August 7, 2026, the Court granted the Company’s motion to dismiss and granted leave to file a third amended complaint. The Company filed a motion to dismiss the third amended complaint on September 11, 2026.

In addition, a consolidated stockholder derivative action, captioned In re Alto Neuroscience, Inc. Derivative Litigation, Lead Case No. 5:25-cv-07144-NW was filed on behalf of the Company against certain executive officers and certain current and former directors for breach of fiduciary duty, unjust enrichment, abuse of control, gross mismanagement, waste of corporate assets, and violations of the federal securities laws. The claims arise out of the same factual allegations as the putative class action described above. The plaintiffs seek unspecified damages, as well as interest, fees, and costs. The consolidated stockholder derivative action was stayed on January 14, 2026 pending resolution of the motion to dismiss in the securities class action. The Company believes that these claims lack merit.

The Company has not recorded a liability related to these lawsuits because, at this time, the Company does not believe that an unfavorable outcome is either probable or estimable.

In the ordinary course of business, the Company enters into contracts that contain a variety of indemnifications with its employees, licensors, suppliers and service providers. Further, the Company indemnifies its directors and officers who are, or were, serving at the Company’s request in such capacities. The Company’s maximum exposure under these arrangements is unknown at September 30, 2026. The Company does not anticipate recognizing any significant losses relating to these arrangements.

13. Retirement Plan

In 2022, the Company began participating, through its Professional Employer Organization (“PEO”), in a defined contribution 401(k) plan (the “401(k) Plan”) for the benefit of its employees. All of the full-time employees of the Company were eligible to participate in the 401(k) Plan which permitted employees to make voluntary contributions up to the dollar limit allowed under the Internal Revenue Code. The 401(k) Plan was sponsored and administered by the PEO.

As of May 31, 2026, the Company terminated its relationship with the PEO. In June 2026, the Company approved the Alto Neuroscience 401(k) plan (the “Alto 401(k) Plan”) which the Company directly administers.

Beginning in January 2022, the 401(k) Plan, and beginning May 31, 2026, the Alto 401(k) Plan, provided for matching contributions as defined by the Company of up to 3% of an employee’s eligible annual compensation. During the nine months ended September 30, 2026 and 2025, the Company contributed $0.2 million and $0.3 million, respectively, to the 401(k) Plan. During the nine months ended September 30, 2026 the Company contributed $0.1 million to the Alto 401(k) Plan.

14. Segments

As a single reportable segment entity, the Company’s segment performance measure is consolidated net loss. Asset information is not used by the Company’s Chief Executive Officer, its chief operating decision maker (“CODM”) to allocate resources. Certain significant segment expenses below loss from operations are presented in the Company’s consolidated statements of operations and are therefore not presented below. Additional disaggregated significant segment expenses on a functional basis, that are not separately presented on the Company’s condensed consolidated statements of operations, are presented below (in thousands):

(a) Other research and development expenses primarily consist of license fees, facility charges, third party consultant costs, early research costs related to other product candidates, and other unallocated costs.

(b) General and administrative costs include professional fees, insurance, consultant fees and facility charges.