Allarity Therapeutics, Inc.

As described above, there are a significant number of authorized but unissued shares of our common stock and preferred stock relative to the number of shares outstanding.

We are mindful of the potential negative effects of a large number of authorized but unissued shares of our common stock. For instance, future issuances of common stock or securities convertible into common stock could have a negative impact on our earnings per share and book value per share and would dilute the voting power and ownership of our existing stockholders. In addition, the availability of a substantial number of authorized but unissued shares of common stock could, under certain circumstances, discourage or make more difficult efforts to obtain control of us. Further, a Delaware corporation’s franchise tax fees increase with the number of authorized shares of its capital stock. Therefore, having a larger number of authorized shares results in higher Delaware franchise tax obligations.

We believe that the number of shares of our common stock and preferred stock that are currently authorized, 750,500,000 shares, provides significantly more available shares than are necessary for our reasonably foreseeable future needs. As a result, our Board has approved and is recommending that our stockholders approve a reduction in the number of shares of our common stock that we are authorized to issue from 750,000,000 shares to 250,000,000. Our Board believes 250,000,000 authorized shares of common stock will provide us with sufficient flexibility to issue shares of our common stock and preferred stock as needed for general corporate purposes for the foreseeable future. In addition, a reduction to the authorized shares of our common stock will have the immediate effect of reducing our Delaware franchise tax obligations by an estimated amount of $98,000 annually.