Allarity Therapeutics, Inc.

NOTES TO FINANCIAL STATEMENTS

(in thousands, except for share and per share data and where otherwise noted)

1. Organization and Description of Business

Allarity Therapeutics, Inc. and Subsidiaries (the “Company”) is a clinical stage pharmaceutical company that develops drugs for the personalized treatment of cancer using drug specific companion diagnostics generated by its proprietary drug response predictor technology, DRP®. Additionally, the Company, through its Danish subsidiary, Allarity Denmark (previously Oncology Venture ApS), specializes in the research and development of anti-cancer drugs.

The Company’s principal operations are located at Venlighedsvej1, 2970 Horsholm, Denmark. The Company’s business address in the Unites States is located at24 School Street,2nd Floor, Boston, MA02108.

Liquidity

The Company has incurred significant losses and has an accumulated deficit of $119.0 million. Since inception, the Company's operations have been funded primarily through proceeds received from its collaboration arrangements, sale of equity and debt securities, and the proceeds from the exercise of warrants. The Company has incurred losses from operations and negative cash flows from operating activities since inception and expects to continue to incur substantial losses for the next several years as it continues to fully develop and prepare regulatory filings and obtain regulatory approvals for its existing and new product candidates. The Company's estimates its current cash of $19.5 million, based on the Company's current operating plan, is sufficient to enable the Company to fund its activities through at least the next12 months from the date of this report on Form10-K.

The Company is subject to industry risks and the expenses associated with any company performing research and development. There isno guarantee that our research and development projects will succeed, that developed products will secure necessary regulatory approvals, or that any approved products will be commercially successful. Furthermore, our industry is characterized by rapid technological advancements, and we heavily rely on the expertise of our employees and consultants. If we fail to achieve profitability or sustain it over time, we* may*be unable to maintain our operations at current levels and could be forced to scale back our activities.

Reverse Stock Splits

On* March 24, 2023,** June 28, 2023,** April 9, 2024,and September 11, 2024,the Company effected a1*-for-40 reverse stock split,1-for-35 reverse stock split,1-for-20 reverse stock split, and1-for-30 reverse stock split, respectively, of the shares of common stock of the Company (collectively, the “Reverse Stock Splits”). All share and per share information has been retroactively adjusted to give effect to the Reverse Stock Splits for all periods presented, unless otherwise indicated. Proportionate adjustments were made to the per share exercise price and/or the number of shares issuable upon the exercise or vesting of all stock options, restricted stock, preferred stock and warrants outstanding on* September 12, 2024,*which resulted in a proportional decrease in the number of shares of the Company’s common stock reserved for issuance upon exercise or vesting of such stock options, restricted stock and warrants, and, in the case of stock options and warrants, a proportional increase in the exercise price of all such stock options and warrants.No fractional shares were issued in connection with the Reverse Stock Splits. If, as a result of the Reverse Stock Splits, a stockholder would otherwise have been entitled to a fractional share, each fractional share was rounded up to the next whole number.

2. Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The accompanying consolidated financial statements have been prepared on an accrual basis of accounting, in accordance with accounting principles generally accepted in the United States of America (“GAAP”). 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 consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries:

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

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting years. Significant estimates and assumptions reflected in these consolidated financial statements include, but arenot limited to, the fair value of the Series A preferred shares, warrants,3i Exchange Warrants, convertible debt, and the accrual for research and development expenses, fair values of acquired intangible assets and impairment review of those assets, share based compensation expense, and income tax uncertainties and valuation allowances. The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances. Estimates are periodically reviewed considering reasonable changes in circumstances, facts, and experience. Changes in estimates are recorded in the period in which they become known and if material, their effects are disclosed in the notes to the consolidated financial statements. Actual results could differ from those estimates or assumptions.

Risks and Uncertainties

The Company is subject to risks common to early-stage companies in the biopharmaceutical industry including, butnot limited to, uncertainties related to clinical effectiveness of products, commercialization of products, regulatory approvals, dependence on key products, key personnel andthird-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.

Foreign currency and currency translation

The functional currency is the currency of the primary economic environment in which an entity’s operations are conducted. The Company and its subsidiaries operate mainly in Denmark and the United States. The functional currencies of the Company’s subsidiaries are their local currency.

The Company’s reporting currency is the U.S. dollar. The Company translates the assets and liabilities of its Denmark subsidiaries into the U.S. dollar at the exchange rate in effect at the balance sheet date and the results of operations are translated using the average exchange rate for the year. Unrealized translation gains and losses are recorded as a cumulative translation adjustment, which is included in the consolidated statements of changes in redeemable convertible preferred stock and stockholders’ equity as a component of accumulated other comprehensive loss.

Monetary assets and liabilities denominated in currencies other than the functional currency are remeasured into the functional currency at rates of exchange prevailing at the balance sheet dates. Non-monetary assets and liabilities denominated in foreign currencies are re-measured into the functional currency at the exchange rates prevailing at the date of the transaction. Exchange gains or losses arising from foreign currency transactions are included in the determination of net loss for the respective periods.

Adjustments that arise from exchange rate translations are included in other comprehensive loss in the consolidated statements of operations and comprehensive loss as incurred. The Company recorded a foreign exchange translation gain of $0.1 million and $0.3 million, included in accumulated other comprehensive loss for the years ended* December 31, 2024and2023*, respectively.

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Concentrations of credit risk and of significant suppliers

Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash. The Company maintains its cash in financial institutions in amounts that could exceed government-insured limits. The Company doesnot believe it is subject to additional credit risks beyond those normally associated with commercial banking relationships. The Company hasnot experienced losses on its cash accounts and management believes, based upon the quality of the financial institutions, that the credit risk regarding these deposits isnot significant. The Company is dependent onthird-party manufacturers to supply products for research and development activities in its programs. In particular, the Company relies and expects to continue to rely on a small number of manufacturers to supply its requirements for supplies and raw materials related to these programs. These programs could be adversely affected by a significant interruption in these manufacturing services or the availability of raw materials.

Cash

The company considers cash equivalents as highly liquid investments with original maturities ofthree months or less at the date of purchase. The Company hadno cash equivalents or restricted cash on* December 31, 2024and2023*.

Property, plant and equipment

Property, plant, and equipment are stated at cost, less accumulated depreciation. Depreciation expense is recognized using the straight-line method over the estimated useful lives of the respective assets as follows:

Upon retirement or sale, the cost of assets disposed of, and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is included in loss from operations. As of* December 31, 2024and2023*, there have beenno significant asset retirements to date. Expenditures for repairs and maintenance that donot improve or extend the lives of the respective assets are charged to expense as incurred.

Impairment of long-lived assets

Long-lived assets consist of property, plant and equipment, and intangible assets. Long-lived assets to be held and used are tested for recoverability whenever events or changes in business circumstances indicate that the carrying amount of the assets* may**not* be fully recoverable. Factors that the Company considers in deciding when to perform an impairment review include significant underperformance of the business in relation to expectations, significant negative industry or economic trends and significant changes or planned changes in the use of the assets. An impairment loss would be recognized as a loss from operations when estimated undiscounted future cash flows expected to result from the use of an asset group or the estimated return on investment are less than its carrying amount. The impairment loss would be based on the excess of the carrying value of the impaired asset group over its fair value, determined based on discounted cash flow or return on investment calculations.

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Acquired in-process research and development ("IPR&D")

Acquired IPR&D represents the fair value assigned to research and development assets that the Company acquired as part of a business combination and havenot been completed at the acquisition date. The fair value of IPR&D acquired in a business combination is recorded on the consolidated balance sheets at the acquisition-date fair value and is determined by estimating the costs to develop the technology into commercially viable products, estimating the resulting revenue from the projects, and discounting the projected net cash flows to present value. IPR&D isnot amortized, but rather is reviewed for impairment on an annual basis or more frequently if indicators of impairment are present, until the project is completed, abandoned, or transferred to athird-party. Management assesses its acquired IPR&D for impairment at year end date as well as when events and circumstances indicate there is a potential impairment. Significant quantitative indicators considered are the Company’s market capitalization, market share, length of remaining clinical trials, and projected revenue per treatment. The projected discounted cash flow models used to estimate the fair value of partnered assets and cost approach model used to estimate proprietary assets as part of the Company’s IPR&D reflect significant assumptions regarding the estimates a market participant would make to evaluate a drug development asset, including the following:

Once brought into use, intangible assets are amortized over their estimated useful economic lives using the economic consumption method if anticipated future revenues can be reasonably estimated. The straight-line method is used when revenues cannot be reasonably estimated. For the years ended* December 31, 2024and2023*, the Company has recorded impairment losses of $9.7 million and $0 respectively on its intangible assets. As of* December 31, 2024,*the IPR&D intangible assets have been fully amortized and have a $0 balance.

Fair value measurements of financial instruments

The carrying value of the Company’s financial instruments of cash, other current assets, accounts payable and accrued liabilities, approximate their fair value due to their short-term nature. The Company’s other financial instruments include preferred shares, convertible debt, warrant liabilities, and warrant derivative liabilities. The warrant liabilities and derivative liabilities that are freestanding equity-linked financial instruments are fair valued at the end of every period using level3 inputs.

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC Topic820, Fair Value Measurement (“ASC820”), establishes a fair value hierarchy for instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company’s own assumptions (unobservable inputs). Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances. ASC820 identifies fair value as the exchange price, or exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As a basis for considering market participant assumptions in fair value measurements, ASC820 establishes athree-tier fair value hierarchy that distinguishes between the following:

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In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement.

Segment and geographic information

Operating segments are defined as components of a business for which separate discrete financial information is available for evaluation by the chief operating decision maker in deciding how to allocate resources and assess performance. The Company operates as a single operating and reporting segment, reflecting our sole focus in developing a treatment for ovarian cancer. Our Chief Executive Officer serves as the Chief Operating Decision Maker (CODM), responsible for assessing the Company's performance and making resource allocation decisions. The CODM evaluates financial information on a consolidated basis, focusing on key metrics such as research and development expense, general and administrative expenses, and other income/expenses. The CODM allocates resources based on the Company's available cash resources, forecasted cash flow, and expenditures on a consolidated basis, as well as an assessment of the probability of success of its research and development activities. Resource allocation decisions are informed by budgeted and forecasted expense information, along with actual expenses incurred to date. The measure of segment assets is reported on the balance sheet as total assets. Disaggregated profit or loss information at the program or functional level isnot regularly provided to or relied upon by the CODM, as our integrated operating model emphasizes shared resources and centralized decision-making. The Company operates intwo geographic areas: Denmark and the United States.

Research and development expenses

Research and development ("R&D") costs are expensed as incurred. R&D expenses primarily consist of costs associated with preclinical studies and clinical trials as well as salaries, stock-based compensation and benefits, facilities costs and laboratory supplies, manufacturing expenses and external costs of outside vendors engaged to conduct preclinical development activities and clinical trials. Typically, upfront payments and milestone payments made for the licensing of technology are expensed as research and development in the period in which they are incurred. The Company has entered into various research and development contracts with companies in Europe, the United States, and other countries.

General and administrative expenses

General and administrative ("G&A") expenses consist primarily of employee-related expenses, such as salaries, stock-based compensation, and benefits for employees engaged in G&A activities. G&A also consists of marketing, advertising, legal and accounting fees, consulting services, and other operating costs relating to corporate matters and daily operations.

R&D incentives and receivable

Denmark Tax Incentives

Denmark allows loss making companies the opportunity to apply for a payment equal to the tax value (22%) of negative taxable income related to R&D costs. The negative taxable income is calculated on the total negative income of the companies participating in the joint taxation. Tax payment according to this rule cannot exceed an amount of DKK5.5 million, corresponding to a tax loss relating to R&D expenditure of DKK25 million. The tax credit is recorded as tax receivable and other income within research and development expenses. In each of the years ended* December 31, 2024and2023*, research and development expenses include refundable tax credits of $0.8 million.

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Convertible debt instruments

The Company follows ASC480-10, Distinguishing Liabilities from Equity in its evaluation of the accounting for a hybrid instrument. A financial instrument that embodies an unconditional obligation, or a financial instrument other than an outstanding share that embodies a conditional obligation, that the issuer must or* maysettle by issuing a variable number of its equity shares shall be classified as a liability (or an asset in some circumstances) if, at inception, the monetary value of the obligation is based solely or predominantly on anyone* of the following: (a) a fixed monetary amount known at inception; (b) variations in something other than the fair value of the issuer’s equity shares; or (c) variations inversely related to changes in the fair value of the issuer’s equity shares. Hybrid instruments meeting these criteria arenot further evaluated for any embedded derivatives and are carried as a liability at fair value at each balance sheet date with remeasurements reported in change on fair value expense in the accompanying Consolidated Statements of Operations and Comprehensive Loss.

Additionally, the Company accounts for certain convertible debt (“Convertible Notes”) issued under the fair value option election of ASC825, Financial Instruments wherein the financial instrument is initially measured at its issue-date estimated fair value and then subsequently re-measured at estimated fair value on a recurring basis at each reporting period date. The estimated fair value adjustment is recognized as other income (expense) in the accompanying consolidated statements of operations and the portion of the fair value adjustment attributed to a change in the instrument-specific credit risk is recognized as a component of other comprehensive loss. Convertible Notes are settled with shares at fair value of the stock issued with any differences recorded to other income (expense), as a gain (loss) on extinguishment.

Warrants

When the Company issues warrants it evaluates the proper balance sheet classification to determine classification as either equity or as a derivative liability on the consolidated balance sheets. In accordance with ASC815-40, Derivatives and Hedging-Contracts in the Entity’s Own Equity (“ASC815-40”), the Company classifies a warrant as equity so long as it is “indexed to the Company’s equity” and several specific conditions for equity classification are met. A warrant isnot considered indexed to the Company’s equity, in general, when it contains certain types of exercise contingencies or adjustments to exercise price. If a warrant isnot indexed to the Company’s equity or it has net cash settlement that results in the warrants to be accounted for under ASC480, Distinguishing Liabilities from Equity, or ASC815-40, it is classified as a derivative liability, which is carried on the Consolidated Balance Sheet at fair value with any changes in its fair value recognized immediately in the Consolidated Statement of Operations and Comprehensive Loss.

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Derivative financial instruments

The Company doesnot use derivative instruments to hedge exposures to interest rate, market, or foreign currency risks. The Company evaluates all its financial instruments to determine if such instruments contain features that qualify as embedded derivatives. Embedded derivatives must be separately measured from the host contract if all the requirements for bifurcation are met. The assessment of the conditions surrounding the bifurcation of embedded derivatives depends on the nature of the host contract. Bifurcated embedded derivatives are recognized at fair value, with changes in fair value recognized in the Consolidated Statements of Operations and Comprehensive Loss each reporting period.

Stock-based compensation

The Company accounts for stock-based compensation in accordance with ASC718, Compensation — Stock Compensation (“ASC718”). ASC718 requires companies to estimate the fair value of equity-based payment awards on the date of grant. The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite service period in the Company’s Consolidated Statements of Operations and Comprehensive Loss.

The Company records the expense for option awards using either a graded or straight-line method. The Company accounts for forfeitures as they occur. For stock-based awards, the measurement date is the date of grant. The compensation expense is then recognized over the requisite service period, which is the vesting period of the respective award.

The Company reviews all stock award modifications including when there is an exchange of original award for a new award. In the case of stock award modifications, the Company calculates for the incremental fair value based on the difference between the fair value of the modified award and the fair value of the original award immediately before it was modified. The Company immediately recognizes the incremental value as compensation cost for vested awards and recognizes, on a prospective basis over the remaining requisite service period, the sum of the incremental compensation cost and any remaining unrecognized compensation cost for the original award on the modification date.

The fair value of restricted stock units is based on the fair value of the Company's common stock on the date of the grant.

The fair value of stock options (“options”) on the grant date is estimated using the Black-Scholes option-pricing model using the single-option approach. The Black-Scholes option pricing model requires the use of highly subjective and complex assumptions, including the option’s expected term and the price volatility of the underlying stock, to determine the fair value of the award. The Company applies the Black-Scholes model as it believes it is the most appropriate fair value method for all option awards. The Black-Scholes model requires several assumptions, of which the most significant are the share price, expected volatility and the expected award term.

Since the Company has limited option exercise history, it has generally elected to estimate the expected life of an award based upon the "simplified method" with the continued use of this method extended until such time the Company has sufficient exercise history. The Company hasno foreseeable plans to pay dividends on its common stock, and therefore, uses an expected dividend yield ofzero in the option pricing model. The risk-free interest rate is based on the yield of U.S. treasury bonds with equivalent terms. The expected share price volatility for the Company's common shares is estimated by taking the average historical price volatility for industry peers.

The Company classifies stock-based compensation expense in its Consolidated Statements of Operations and Comprehensive Loss in the same way the award recipient’s payroll costs are classified or in which the award recipient’s service payments are classified.

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Accumulated other comprehensive loss

Accumulated other comprehensive loss includes net loss as well as other changes in stockholders’ equity (deficit) that result from transactions and economic events other than those with shareholders. 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 Consolidated Statements of Operations and Comprehensive Loss. For the years ended* December 31, 2024and2023*, the Company’s other comprehensive loss was comprised of currency translation adjustments.

Income taxes

The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the consolidated financial statements or in the Company’s tax returns. Deferred tax assets and liabilities are determined based on the differences between the consolidated financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Changes in deferred tax assets and liabilities are recorded in the provision for income taxes. The Company assesses the likelihood that its deferred tax assets will be recovered from future taxable income and, to the extent it believes, based upon the weight of available evidence, that it is more likely thannot that all or a portion of the deferred tax assets willnot be realized, a valuation allowance is established through a charge to income tax expense. Potential for recovery of deferred tax assets is evaluated by estimating the future taxable profits expected and considering prudent and feasible tax planning strategies.

The Company accounts for uncertainty the consolidated financial statements by applying atwo-step process to determine the amount of tax benefit to be recognized. First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination by the taxing authorities. If the tax position is deemed more-likely-than-not-to be sustained, the tax position is then assessed to determine the amount of benefit to recognize in the consolidated financial statements. The amount of the benefit that* maybe recognized is the largest amount that will more likely thannot* be realized upon ultimate settlement. Any provision for income taxes includes the effects of any resulting tax reserves, or unrecognized tax benefits that are considered appropriate. The Company recognizes interest and penalties related to uncertain tax positions in other (income) expenses.

Net Loss Per Share

Basic net loss per common share is determined by dividing net loss attributable to common stockholders by the weighted-average number of common shares outstanding during the period, without consideration of common stock equivalents. Diluted net loss per share is computed by dividing net loss attributable to common stockholders by the weighted-average number of common stock and common stock equivalents outstanding for the period. The Company adjusts net loss to arrive at the net loss attributable to common stockholders to reflect the amount of dividends accumulated during the period on the Company’s redeemable convertible preferred stock, if any. The treasury stock method is used to determine the dilutive effect of the Company’s stock option grants, restricted stock units, and warrants and the if-converted method is used to determine the dilutive effect of the Company’s redeemable convertible preferred stock and convertible notes. For the years ended* December 31, 2024and2023*, the Company had a net loss attributable to common stockholders, and as such, all outstanding stock options, unvested restricted stock units, convertible notes, shares of redeemable convertible preferred stock, and warrants were excluded from the calculation of diluted loss per share.

F-16

Recently Adopted Accounting Standards

In* November 2023,the FASB issued ASUNo.* 2023-07, Segment Reporting (Topic280): Improvements to Reportable Segment Disclosures, which requires that an entity report segment information in accordance with Topic280, Segment Reporting. The amendment in the ASU is intended to improve reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. The Company adopted ASU2023-07 for the year ended* December 31, 2024retrospectively to all periods presented in the consolidated financial statements. The adoption of this ASU hadno* impact on reportable segments identified and hadno effect on the Company’s consolidated financial position, results of operations, or cash flows.

Accounting StandardsNot Yet Adopted**

In* December 2023,the FASB issued ASUNo.* 2023-09, Income Taxes (Topic740): Improvements to Income Tax Disclosures, which expands disclosures in an entity’s income tax rate reconciliation table and disclosures regarding cash taxes paid both in the U.S. and foreign jurisdictions. The update will be effective for annual periods beginning after* December 15, 2024.*The Company is currently evaluating the impact that this guidance will have on its financial statement disclosures.

In* November 2024,the FASB issued ASUNo.* 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic220-40): Disaggregation of Income Statement Expenses, which requires new financial statement disclosures in tabular format, in the notes to financial statements, of specified information about certain costs and expenses. The amendments in this update donot change or remove current expense disclosure requirements. The amendments in this update are effective for fiscal years beginning after* December 15, 2026,and interim periods within fiscal years beginning after December 15, 2027.*Early adoption is permitted. The Company is currently evaluating the impact of the new standard on its financial statement disclosures.

3. Other Current Assets

The Company’s other current assets are comprised of the following:

4. Intangible assets

Intangible assets, impairment charges and adjustments are summarized as follows:

As of the year ended* December 31, 2024*, as a result of continued downward pressure on the Company’s common stock and updated clinical development plan, the Company performed an impairment assessment on the individual intangible assets utilizing a discounted cash flow model with a weighted average cost of capital of 26%, and recognized a full impairment charge of $9.7 million during the year ended* December 31, 2024*. There wasno impairment charge in2023.

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5. Accrued liabilities

The Company’s accrued liabilities are comprised of the following:

6. Convertible promissory note due to Novartis

On* April 12, 2022,Allarity Denmark re-issued a Convertible Promissory Note (the “Novartis Promissory Note”) to Novartis Pharma AG, a company organized under the laws of Switzerland (“Novartis,” and together with Allarity Therapeutics Europe ApS (“Allarity Europe”), the “License Parties”) in the principal amount of $1.0 million. The Novartis Promissory Note was re-issued pursuant to an amendment of the license agreement, with an effective date of March 30, 2022 (the “First Amendment”), entered into by and between the License Parties, which amended the License Agreement dated April**6,* 2018 (the “Original Agreement”) previously entered into by the License Parties relating to the Compound (as defined in the Original Agreement). The First Amendment amends and restates Section11.7 of the Original Agreement to add the revised Note to the list of enforceable claims in thesecond paragraph of Section11.7 making the revised Note enforceable under New York law as a legal obligation of Allarity Denmark ApS (formerly OV-SPV2 ApS). All other provisions of the Original Agreement and Novartis Promissory Note were unchanged and remain in full force and effect. The Novartis Promissory Note pays simple interest on the outstanding principal amount from the date until payment in full, which interest shall be payable at the rate of 5% per annum. Interest shall be calculated on the basis of a360-day year for the actual number of days elapsed.

The roll forward of the Novartis Promissory Note as of* December 31, 2024and2023* is as follows:

On* January 26, 2024,the Company received a termination notice from Novartis due to a material breach of the Original Agreement. Accordingly, under the terms of the Original 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 is continuing to accrue at 5% per annum. As of December 31, 2024,*the liability is recorded as a current liability on the Company's condensed consolidated balance sheets as follows: $3.6 million in accounts payable and $1.6 million in convertible promissory notes and accrued interest.

During the years ended* December 31, 2024and2023*, the Company recorded $0.2 million and $0.2 million, respectively, to interest expense.

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7. Promissory Notes due to3i, LP ("3i")**

3i Convertible Senior Promissory Notes (2024) (collectively the"2024 Notes")**

On* January 18, 2024,the Company entered into a Securities Purchase Agreement (the "SPA"), as amended, with3i,* pursuant to whichthree senior convertible promissory notes were issued as follows:

The Company agreed to pay interest to3i on the aggregate unconverted and then outstanding principal amount of the2024 Notes at the rate of 8% per annum with interest payments commencingone month after the initial receipt of net proceeds.

The2024 Notes and accrued interest were redeemed in full and cancelled on* May 6, 2024.*

3i Convertible Secured Promissory Notes (2023)

On* November 22, 2022,the Company entered into a Secured Note Purchase Agreement (“Purchase Agreement”) with3i,* LP (“Holder”, or*“3i”), whereby the Company authorized the sale and issuance ofthree* Secured Promissory Notes (each a “Note” and collectively, the*“2023* Notes”). Effective* November 28, 2022,the Company issued: (1) a Note in the principal amount of $1.7 million as payment of $1.7 million due to3i,* LP in Alternative Conversion Floor Amounts that began to accrue on* July 14, 2022;and (2) a Note in the principal amount of $0.4 million in exchange for cash. Effective December 30, 2022,the Company issued an additional Note in the principal amount of $0.7 million in exchange for cash. Each Note was due to mature on January 1, 2024,*carried an interest rate of 5% per annum, and was secured by all of the Company’s assets pursuant to a security agreement (the “Security Agreement”).

On* April 19, 2023,3i provided the Company with a loan for $0.4 million, which was evidenced by a Secured Promissory Note dated April 19, 2023 (the “April*Note”).

On* April 20, 2023,the Company entered into a Cancellation of Debt Agreement with3i,* which became effective as of the* AprilOffering Closing. Upon the closing, pursuant to the terms of the Cancellation of Debt Agreement, all of the Company’s outstanding indebtedness under the Notes (as defined therein) and the Alternative Conversion Amount (as defined therein) due by the Company to3i* were paid in full. Accordingly, any and all obligations in connection therewith were extinguished without any additional further action on the part of3i upon payment of $3.3 million in cash from a portion of the proceeds from the* April*Offering.

On* June 29, 2023,the Company entered into a Secured Note Purchase Agreement with3i,* (the* “June2023* Purchase Agreement”), pursuant to which, on* June 30, 2023,3i purchased a secured promissory note for a principal amount of $0.4 million (the “JuneNote”). Such note matured on July 31, 2023,and carried an interest rate of 5% per annum, and was secured by all of the Company’s assets pursuant to that certain security agreement dated June29,* 2023 (the “Security Agreement”). As contemplated by the* June 2023Purchase Agreement, the Company filed the Second Certificate of Amendment with the Delaware Secretary of State on June 30, 2023.From the proceeds of the JulyOffering, on July 10, 2023,the Company redeemed the June*Note for $0.4 million in cash.

The roll forward of the* AprilNote and the JuneNote for thetwelve* months ended* December 31, 2023*is as follows:

The* AprilNote and JuneNote were repaid in full in2023.*

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8. Preferred Stock

Series A Preferred Stock and Common Stock Purchase Warrants

Amendments to Series A Preferred Stock

On* November 22, 2022,the Company amended Section12* of the Certificate of Designation of Series A Convertible Preferred Stock (“Series A Preferred Stock”) to provide for voting rights. Subject to a 9.99% beneficial ownership limitation, the holders of Series A Preferred Stock had the right to vote on all matters presented to the stockholders for approval together with the shares of common stock, voting together as a single class, on an “as converted” basis using the “Conversion Price” (initially $9.906 per share before any adjustment) (rounded down to the nearest whole number and using the record date for determining the stockholders of the Company eligible to vote on such matters), except as required by law (including without limitation, the DGCL) or as otherwise expressly provided in the Company’s Certificate of Incorporation or the Certificate of Designations of Series A Convertible Preferred Stock. The voting rights described above expired on* February 28, 2023,and thereafter holders of preferred stock shallnot* have voting rights except as required by law.

On* December 9, 2022,the Company and3i* entered into a letter agreement which provided that pursuant to Section8(g) of the Certificate of Designations for the Series A Preferred Stock, the parties agreed that the Conversion Price was modified to mean the lower of: (i) the Closing Sale Price on the trading date immediately preceding the Conversion Date and (ii) the average Closing Sale Price of the common stock for thefive trading days immediately preceding the Conversion Date, for the Trading Days through and inclusive of* January 19, 2023.Any conversion which occurs shall be voluntary at the election of the Holder, which shall evidence its election as to the Series A being converted in writing on a conversion notice setting forth the then Minimum Price. Management determined that the adjustment made to the Conversion Price isnot* a modification of the COD which allows for adjustments to the Conversion Price at any time by the Company and the other terms of the Certificate of Designations remained unchanged.

On* January 23, 2023,the Company and3i* amended the letter agreement entered into on* December 8, 2022,to provide that the modification of the term Series A Preferred Stock Conversion Price (“Series A Preferred Stock Conversion Price”) to mean the lower of: (i) the Closing Sale Price (as defined in the Certificate of Designations of Series A Preferred Stock (“Series A Certificate of Designations”)) on the trading date immediately preceding the Conversion Date (as defined in the Series A Certificate of Designations and (ii) the average Closing Sale Price of the common stock for thefive* trading days immediately preceding the Conversion Date, for the Trading Days (as defined in the Series A Certificate of Designations) will be in effect until terminated by us and3i.

On* April 20, 2023,the Company entered into a certain Modification and Exchange Agreement (the “Exchange Agreement”) with3i* pursuant to which the parties agreed to, among other things, subject to the* AprilOffering Closing, (i) amend the Certificate of Designations for the Series A Convertible Preferred Stock (the “Amended COD”), which among other things, eliminates the Series A Preferred Stock redemption right and dividend (except for certain exceptions as specified in the Amended COD), and provides for the conversion of Series A Preferred Stock into common stock at a conversion price of $450.00 which is equal to the price for a share of common stock sold in the AprilOffering, (ii) exchange 50,000 shares of Series C Preferred Stock (the “Series C Shares”) beneficially owned by3i* for 5,577 shares of Series A Preferred Stock (the “Exchange Shares”), (iii) exchange a warrant to purchase common stock issued on* December 20, 2021to3i* (the “Original Warrant”) for a new warrant (the “Exchange Warrant”), which reflects an exercise price of $18,000.00 (the “New Exercise Price”) and represents a right to acquire 526 shares of common stock (the “New Warrant Shares”). In addition to the satisfaction or waiver of customary and additional closing conditions set forth in the Exchange Agreement, the transactions contemplated by the Exchange Agreement were subject to (a) the occurrence of the closing of the Offering and (b) the filing of the Amended COD with the Delaware Secretary of State. On* April 21, 2023,the closing of the transactions contemplated by the Exchange Agreement occurred and the Exchange Warrant and the Exchange Shares were issued to3i,* and the Original Warrant and the Series C Shares were cancelled. In addition, on* April 21, 2023,*the Amended COD was filed with the Delaware Secretary of State.

F-20

On* April 20, 2023,the Company also entered into a Cancellation of Debt Agreement as described in Note7.* Pursuant to such agreement,1,550 shares of Series A Preferred Stock (the “Redemption Shares”) beneficially owned by3i were redeemed in full for a purchase price of $1,652, which redemption price was paid in cash from the portion of the proceeds from the* AprilOffering. The Company also entered into the First Amendment to the Registration Rights Agreement dated May 20, 2023 (the “RRA”), which became effective upon the April*Offering Closing, to amend certain defined terms under the RRA to include the Exchange Shares, the New Warrant Shares and the Note Conversion Shares.

On* April 21, 2023,in connection with the transactions contemplated under the Exchange Agreement, the Company filed an Amended and Restated Certificate of Designations of Series A Convertible Preferred Stock of the Company (the “Amended and Restated Series A COD”) with the Delaware Secretary of State. The Amended and Restated Series A COD eliminates the Series A Preferred Stock redemption right and dividend (except for certain exceptions as specified therein) and provides for the conversion of Series A Preferred Stock into Common Stock at a conversion price equal to the price for a share of Common Stock sold in the April*Offering, $18,000.00 per share, and based on a stated value of $1,080 per share. As a result of the Amended and Restated Series A COD, the Company determined that the Series A Preferred Stock met the definition of equity and reclassified it from mezzanine equity.

On* May 30, 2023,*the Company filed an amendment to the Amended and Restated Certificate of Designations for the Series A Preferred Stock with the Delaware Secretary of State (the “Amended COD”) to amend the voting rights of the Series A Preferred Stock which among other things provided additional voting rights to the Series A Preferred Stock.

Under the Amended COD, holders of the Series A Preferred Stock have the following voting rights: (1) holders of the Series A Preferred Stock have a right to vote on all matters presented at the Special Meeting together with the common stock as a single class on an “as converted” basis using the conversion price of $18,000.00 and based on stated value of $1,080 subject to a beneficial ownership limitation of 9.99%, and (2), in addition, holders of Series A Preferred Stock have granted the Board the right to vote, solely for the purpose of satisfying quorum and casting the votes necessary to adopt a reverse stock split of the Company’s issued and outstanding shares of common stock (the “Reverse Stock Split Proposal”) and to adjourn any meeting of stockholders called for the purpose of voting on reverse stock split (the “Adjournment Proposal”) under Delaware law, that will “mirror” the votes cast by the holders of shares of common stock and Series A Preferred Stock, voting together as a single class, with respect to the Reverse Stock Split Proposal and the Adjournment Proposal.

The number of votes per each share of Series A Preferred Stock that* maybe voted by the Board shall be equal to the quotient of (x) the sum of (1) the original aggregated stated value of the Series A Preferred Stock when originally issued on December 20, 2021 (calculated based on the original stated value of $1,000 of the Series A Preferred Stock multiplied by 20,000 shares of Series A Preferred Stock) and (2) $1,200, which represents the purchase price of the Series C Preferred Stock when originally issued; divided by (y) the conversion price of $30.00. If the Board decides to cast the vote, it must vote all votes created by the Amended COD in the same manner and proportion as votes cast by the holders of Common Stock and Series A Preferred Stock, voting as single class. The Series A Preferred Stock voting rights granted to the holders thereof relating to the Reverse Stock Split Proposal and the Adjournment Proposal2* expired automatically on* July 31, 2023.*

F-21

On* June 6, 2023,3i and the Company entered into a separate limited waiver and amendment agreement whereby3i (“3i Waiver Agreement”) agreed to waive certain rights granted under a Series A Preferred Stock securities purchase agreement dated December 20, 2021,the Exchange Agreement, and the securities purchase agreement related to the AprilOffering in exchange for, among other things, amending the conversion price of the Series A Preferred Stock to equal the public offering price of the shares of common stock in the JulyOffering. Upon the consummation of the JulyOffering, the conversion price of the Series A Preferred Stock was reduced to $2,700.00. On July 10, 2023,*the Company filed a Third Certificate of Amendment to the Amended and Restated Certificate of Designations of Series A Preferred Stock (“Third Amendment”) to effect the change to conversion price.

In connection with the* September 2023Inducement Letter and the transactions contemplated therein, the Company and3i,* LP entered into a limited waiver agreement (the “Waiver”) pursuant to which3i, LP agreed to allow the filing of the Resale Registration Statementnot otherwise permitted under certain agreements with3i, LP. In consideration of entering in the Waiver, the Company agreed to amend the “Conversion Price” of the Series A Convertible Preferred Stock to equal $600.00 as soon as practicable. On* September 22, 2023,*the Company filed the Fourth Certificate of Amendment to the Amended and Restated Certificate of Designations of Series A Convertible Preferred Stock (“Fourth Amendment”) with the Secretary of State of the State of Delaware to reflect the new conversion price of the Series A Preferred Stock of $600.00.

On* January 14, 2024,pursuant to the terms of the January**14th,* 2024, 3i LP Bridge Loan, the Company modified the conversion price of the3i Exchange Warrants from $600.00 to $268.50, thereby increasing the number of Exchange Warrants outstanding from 7,346 at* December 31, 2023to 16,411 outstanding at January 14, 2024.Also on January 14, 2024,the conversion price of the outstanding 1,417 shares of Series A Preferred Stock was revised from $600.00 to $268.50. We filed the Fifth Certificate of Amendment to Amended and Restated Certificate of Designations of Series A Convertible Preferred Stock (the “Fifth Amendment”) with the Secretary of State of the State of Delaware to reflect the new conversion price of the Series A Preferred Stock of $268.50. At a stated value of $1,080 for each share of Series A Preferred Stock, the revised price of $268.50 per share results in the 1,417 shares being convertible into 5,699 common shares as of January 14, 2024.*

On* February 13, 2024,pursuant to the terms of the February 13, 2024,Bridge Loan, the Company modified the conversion price of the3i* Exchange Warrants from $268.50 to $243.00 and thereby increased the number of Exchange Warrants outstanding from 16,411 on* January 18, 2024,to 18,137 on February 13, 2024.*The Company also agreed to amend the conversion price of the Series A Preferred Stock to equal $243.00 as soon as practicable. We filed the Sixth Certificate of Amendment to Amended and Restated Certificate of Designations of Series A Convertible Preferred Stock (the “Sixth Amendment”) with the Secretary of State of the State of Delaware to reflect the new conversion price of the Series A Preferred Stock of $243.00. At a stated value of $1,080 for each share of Series A Preferred Stock, the revised price of $243.00 per share results in the 1,296 shares being convertible into 5,760 common shares.

On* March 14, 2024,pursuant to the terms of the Third Note, the Company modified the conversion price of the3i* Exchange Warrants from $4,860.00 to $4,200.00 and thereby increased the number of Exchange Warrants outstanding from 907 on* February 13, 2024,to 1,383 on March 14, 2024.The Company filed the Seventh Certificate of Amendment to Amended and Restated COD (the “Seventh Amendment”) with the Secretary of State of the State of Delaware to reflect the new conversion price of the Series A Preferred Stock of $4,200.00. As of March 14, 2024,*the Company used the Black-Scholes option pricing model to determine the fair value of the then 1,296 Series A Preferred Stock outstanding and concluded there was a gain on extinguishment of $0.1 million. At a stated value of $1,080 for each share of Series A Preferred Stock, the revised price of $4,200.00 per share results in the 1,215 shares being convertible into 893 shares of common stock.

During the period* April 1, 2024,through May 2, 2024,the Company amended the conversion prices of the Series A Convertible Preferred Stock, the Exchange Warrants and the2024* Notes to equal the current last sale price of its shares of Common Stock of $34.50 as of* May 1, 2024.*

F-22

3i Warrants

Effective* April**21,* 2023, pursuant to the terms of an Exchange Agreement, the PIPE Warrant was exchanged for an Exchange Warrant representing a right to acquire 526 shares of common stock, exercisable at $18,000.00 per share. The number of shares exercisable under the Exchange Warrant and the exercise price was subsequently adjusted in* July 2023*to the right to acquire 15,755 shares of common stock, exercisable at $600.00 per share.

Effective* July 10, 2023,upon the closing of the JulyOffering, the number of shares exercisable under the Exchange Warrant and the exercise price was adjusted to 3,501 shares of Common Stock and $2,700.00 per share, respectively. Subsequently on July 26, 2023,pursuant to Section2*(e) of the Exchange Warrant, due to the event market price on the16th day after the* June*Reverse Stock Split being less than the exercise price of the Exchange Warrant then in effect, the number of shares exercisable under such Warrant and the exercise price was further adjusted to 5,225 shares and $1,809.30 per share, respectively.

Effective* September 14, 2023,the date of the SeptemberInduced Warrant offering, the number of shares exercisable under the Exchange Warrant and the exercise price was adjusted to 15,755 shares of common stock and $600.00 per share, respectively. On December 5, 2023,*3i exercised 8,410 Exchange Warrants on a cashless basis in exchange for 833 common shares.

Accounting* *

Series A Preferred Stock

The Company evaluated the Series A Preferred Stock under ASC480-10 to determine whether it represents an obligation that would require the Company to classify the instrument as a liability and determined that the Series A Preferred Stock isnot a liability pursuant to ASC480-10. Management then evaluated the instrument and determined that because the holders of the Series A Preferred Stock* may*be entitled to receive cash, the Series A Preferred stock should be recorded as mezzanine equity given the cash redemption right that is within the holder’s control.

F-23

Generally, preferred stock that are currently redeemable should be adjusted to their redemption amount at each balance sheet date. If it is probable that the equity instrument will become redeemable, the Company has the option to either accrete changes in the redemption value over the period from the date of issuance (or from the date that it becomes probable that the instrument will become redeemable, if later) to the earliest redemption date of the instrument or to recognize changes in the redemption value immediately as they occur and adjust the carrying amount of the instrument to equal the redemption value at the end of each reporting period. The Company recognizes changes in redemption value when redemption becomes probable to occur.

Through* December 9, 2022,the derivative scope exception under ASC815* wasnot met because a settlement contingency wasnot indexed to the Company’s stock. Therefore, the redemption feature (derivative liability) was bifurcated from the Series A Preferred Stock, valued with a Monte Carlo Simulation model and recorded as a derivative liability.

Subsequent to* December 9, 2022,because of the agreed conversion price adjustment, although bifurcation of the conversion feature is still required, the value of the derivative has been determined to be immaterial since the conversion price will always be at market. Additionally, because the Series A redemption terms were amended to be entirely within the Company’s control, they have now been classified as permanent equity. Management has fair valued the Series A Preferred Stock prior to and after its modification and because the change in fair value was greater than10%,* has made a policy election to treat the amendment as an extinguishment. Accordingly, the difference in fair value has been recorded as a deemed dividend and reduction in additional paid in capital.

Deemed Dividends

In the year ended* December 31, 2023,*the Company, has recorded $8.4 million in deemed dividends resulting from using the Black-Scholes model to determine the fair value the Company’s Series A Preferred shares as follows:

As a result of fair value adjustments during thetwelve months ended* December 31, 2024,the Company recognized a deemed dividend of $0.3 million on the Series A Preferred Stock. Inputs used in the Black-Scholes valuation models utilized to fair value the modification to the Series A Preferred Stock during the year ended December 31, 2024,*are as follows:

As of the dates noted below, the Company used the Black-Scholes option pricing model to determine the fair values using the following inputs:

F-24

During the year ended* December 31, 2023,*the Company used the Black-Scholes option pricing model to determine the fair values using the following inputs:

3i Warrants

The3i Warrants were identified as a freestanding financial instrument and meet the criteria for derivative liability classification, initially measured at fair value. Subsequent changes in fair value are recognized through earnings for as long as the contracts continue to be classified as a liability. The measurement of fair value is determined utilizing an appropriate valuation model considering all relevant assumptions current at the date of issuance and at each reporting period (i.e., share price, exercise price, term, volatility, risk-free rate and expected dividend rate).

Series A Preferred Stock Conversions

During the year ended* December 31, 2023,3i exercised its option to convert 12,052 shares of Series A Preferred stock for 404 shares of common stock at the fair value of $3.9 million. From the proceeds of the JulyOffering, on July 10, 2023,the Company redeemed (i)4,630 shares of Series A Preferred Stock held by3i,* for $5.0 million, and (ii) the3i * JunePromissory Note (as defined below) for $0.4 million in cash. As a result of the payment, the3i* * JunePromissory Note was paid in full on July 10, 2023.*

During the year ended* December 31, 2024,3i exercised its option to convert 202 shares of Series A Preferred Stock for 904 shares of common stock at the fair value of $0.3 million.3i exercised its option to convert 1,215 shares of Series A Preferred Stock for 15,072 shares of common stock at the fair value of $1.5 million. As of December 31, 2024,*there wereno shares of Series A Preferred Stock issued and outstanding.

F-25

Series C Convertible Preferred Stock

On* February 28, 2023,the Company entered into a Securities Purchase Agreement (the “SPA”) with3i,* L.P. for the purchase and sale of 50,000 shares of Series C Convertible Redeemable Preferred Stock (“Series C Preferred Stock”) at a purchase price of $24.00 per share, for a subscription receivable in the aggregate amount equal to the total purchase price of $1.2 million (the “Offering”). The 50,000 shares of Series C Preferred Stock (the “Shares”) are convertible into shares of the Company’s common stock, subject to the terms of the COD. The conversion price for the Series C Preferred Stock is initially equal the lower of: (i) $0.182 ($6.37 post reverse stock split), which is the official closing price of the Common Stock on the Nasdaq Global Market (as reflected on Nasdaq.com) on the Trading Day (as defined in the COD) immediately preceding the Original Issuance Date (as defined in the COD); and (ii) the lower of: (x) the official closing price of the Common Stock on the Nasdaq Global Market (as reflected on Nasdaq.com) on the Trading Day immediately preceding the Conversion Date or such other date of determination; and (y) the average of the official closing prices of the Common Stock on the Nasdaq Global Market (as reflected on Nasdaq.com) for thefive Trading Days immediately preceding the Conversion Date (as defined in the COD) or such other date of determination, subject to adjustment (the “Conversion Price”). Inno event will the Conversion Price be less than $0.0370 ($1.295 post reverse stock split) (the “Floor Price”).

F-26

In the event that the Conversion Price on a Conversion Date would have been less than the applicable Floor Price ifnot for the immediately preceding sentence, then on any such Conversion Date the Company will pay the Holder an amount in cash, to be delivered by wire transfer out of funds legally and immediately available therefor pursuant to wire instructions delivered to the Company by the Holder in writing, equal to the product obtained by multiplying (A) the higher of (I) the highest price that the Common Stock trades at on the Trading Day immediately preceding such Conversion Date and (II) the applicable Conversion Price and (B) the difference obtained by subtracting (I) the number of shares of Common Stock delivered (or to be delivered) to the Holder on the applicable Share Delivery Date with respect to such conversion of Series C Preferred Stock from (II) the quotient obtained by dividing (x) the applicable Conversion Amount that the Holder has elected to be the subject of the applicable conversion of Series C Preferred Stock, by (y) the applicable Conversion Price without giving effect to clause (x) of such definition. The Offering closed on* February 28, 2023.*

In connection with the Offering, concurrently with the SPA, the Company entered into a registration rights agreement with3i (the “RRA”) pursuant to which the Company is required to file a registration statement with the SEC to register for resale the shares of Common Stock that are issued upon the potential conversion of the Shares. Under the terms of the RRA, if the Company fails to file an Initial Registration Statement (as defined in the RRA) on or prior to its Filing Date (as defined in the RRA), or fail to maintain the effectiveness of the registration statement beyond defined allowable grace periods set forth in the RRA, we will incur certain registration delay payments, in cash and as partial liquidated damages andnot as a penalty, equal to 2.0% of3i’s subscription amount of the Shares pursuant to the SPA. In addition, if we fail to pay any partial liquidated damages in full withinseven days after the date payment, we will have to pay interest at a rate of 18.0% per annum, accruing daily from the date such partial liquidated damages are due until such amounts, plus all such interest thereon, are paid in full. The Company has also agreed to pay all fees and expenses incident to the performance of the RRA, except for any broker or similar commissions. In connection with the Offering, the Company and3i entered into a limited waiver agreement (the “Waiver”) pursuant to which3i confirmed that the sale and issuance of the Shares willnot give rise to any, or trigger any, rights of termination, defaults, amendment, anti-dilution or similar adjustments, acceleration or cancellation under agreements with3i.

The Company has evaluated the terms of the Series C Preferred Stock as required pursuant to ASC570, 480, 815 and ASU2020-06, and concluded the Series C Preferred Stock will be recorded at fair value of $1,200, net of share issuance costs of $40, and accreted dividends at 5% to redemption value of $1,446 on* April 21, 2023,using the effective interest method. Effective April 21, 2023,*all of the 50,000 shares of Series C Preferred stock were exchanged for 5,577 shares of Series A Preferred Stock at an agreed value of $1,652.

The Company has treated the exchange of Series C Preferred Stock for Series A Preferred Stock as an extinguishment as there has been a fundamental change in the nature of the instrument and has applied the derecognition accounting model in ASC260-10-S99-2. Accordingly, the Company has recognized the difference between (1) the fair value of the consideration transferred to the holders of the preferred shares of $5,200, and (2) the carrying amount of the preferred shares (net of issuance costs), of $1,240 as a deemed dividend of $3,959 that is deducted from additional paid in capital and subtracted from net income to arrive at income available to common stockholders in the calculation of loss per common share.

The roll forward of the Series C Preferred Stock as of* December 31, 2023,*is as follows:

F-27

**** August 2024**** Series A Convertible Redeemable Preferred Stock

On* August 19, 2024 (the "AugustClosing Date"), the Company entered into a Securities Purchase Agreement (the “August 2024SPA”) with certain purchasers (the “August 2024Purchasers”), pursuant to which the Company issued and sold, in a private placement (the “August 2024Offering”),35,000 shares of the Company’s Convertible Redeemable Series A Preferred Stock, par value $0.0001 per share (the “August 2024Preferred Stock”), for net proceeds of approximately $2.9 million, after the deduction of discounts, fees and offering expenses. In connection with the August 2024*Offering, the Company paid $0.2 million to Ascendiant Capital Markets, LLC, the Company’s placement agent.

On the* AugustClosing Date, the Company filed a certificate of designation (the “August 2024COD”) with the Secretary of the State of Delaware designating the rights, preferences and limitations of the August 2024Preferred Stock. Under the August 2024COD, for purposes of determining the presence of a quorum at any meeting of the stockholders of the Company at which the August 2024Preferred Stock were entitled to vote and the voting power of the August 2024Preferred Stock, each holder of the August 2024Preferred Stock was entitled to a number of votes equal to shares of the Company’s common stock into which such August 2024Preferred Stock are then convertible, disregarding, for such purposes, any limitations on conversion. The August 2024*Preferred Stock were entitled to vote on each matter submitted to a vote of the stockholders generally and shall vote together with the common stock and any other class or series of capital stock entitled to vote thereon as a single class and on an as converted to the common stock basis.

The holders of the* August 2024Preferred Stock were entitled to dividends, on an as-if converted basis, equal to dividends actually paid, if any, on the common stock. The August 2024*Preferred Stock was convertible, at the option of the holders and, in certain circumstances, by the Company, into common stock, as determined by dividing the net purchase price of $90 per share by the conversion price of $5.10, at the option of the holders.

On the* AugustClosing Date, the Company and the August 2024Purchasers also entered into a Registration Rights Agreement (the “August 2024RRA”), pursuant to which the Company agreed to file a registration statement with the SEC, to register for resale the common stock issuable upon the conversion of the August 2024Preferred Stock. The registration statement was filed with the SEC on August 30, 2024.*

All of the* August 2024Preferred Stock was redeemed in September 2024.As a result of the redemption of the August 2024*Preferred Stock, the Company recognized a deemed dividend of $0.6 million.

9. Derivative Liabilities

The derivative liabilities are measured at fair value at each reporting period and the reconciliation of changes in fair value in the years ended* December 31, 2024and2023*, is presented in the following tables:

On* December 31, 2024,*the Company used the Black-Scholes Merton model to estimate the fair value of the Common Share Purchase Warrants derivative liability at approximately $1,000, using the following inputs:

See Note10 for the inputs used for the Black-Scholes Merton model to estimate the fair value of the Common Share Purchase Warrants derivative liability in2023.

3i Exchange Warrants– Valuation Inputs**

On* December 5, 2023,3i converted 8,410 Exchange Warrants on a cashless basis for 833 shares of our common stock. Therefore, we utilized the reset strike options Type2 model by Espen Garder Haug and Black-Scholes Merton models to estimate the fair value of the outstanding 15,755 Exchange Warrants immediately before3i’s conversion to be approximately $1.9 million as of December 5, 2023.*Accordingly, we recorded a $2.0 million reduction in the fair value of the 15,755 Exchange Warrants as a credit to change in fair value of warrants in our consolidated statement of comprehensive loss and $1.0 million, being the fair value of the 8,410 converted Exchange Warrants, was recorded as a credit to additional paid in capital.

F-28

On* December 31, 2023the Company utilized the reset strike options Type2* model by Espen Garder Haug and Black-Scholes Merton models to estimate the fair value of the3i Exchange Warrants to be approximately $0.8 million and $0.4 million, respectively.

The3i Exchange Warrants were valued at* December 31, 2023and December 5, 2023*using the following inputs:

10. Stockholders’** Equity**

Common Stock

On* September 3, 2024,the stockholders of the Company voted at the Company's2024* annual meeting of stockholders to approve an amendment to the Company's Fifth Amended and Restated Certificate of Incorporation, to decrease the number of authorized shares of common stock by 500,000,000 shares of common stock, bringing the total number of authorized shares of common stock to 250,000,000 shares with a par value of $0.0001, of which 7,302,797 shares of common stock are outstanding as of* December 31, 2024.As of December 31, 2023,*750,000,000 shares were authorized and 9,812 shares of common stock were outstanding.

2023 Shelf

On* November 2, 2023,the Company filed a shelf registration statement (FileNo.* 333-275282) on Form S-3, which was declared effective on* November 29, 2023 (the "Shelf"). Approximately $10.0 million of securities remain available for sale under the Shelf as of December 31, 2024.*

On* March 19, 2024,the Company entered into an At-The-Market Issuance Sales Agreement, as amended (the “Sales Agreement”) with Ascendiant Capital Markets, LLC (“Ascendiant”) pursuant to which, the Company mayoffer and sell, from time to time at its sole discretion, shares of its common stock, par value $0.0001 per share, having an aggregate gross sales price of up to $50 million, to or through Ascendiant. The offer and sale of the shares will be made pursuant to a previously filed shelf registration statement on Form S-3 (FileNo.* 333-275282), originally filed with the SEC on* November 2, 2023and declared effective by the SEC on November 29, 2023,and the related prospectus supplement dated September 9, 2024and filed with the SEC on such date pursuant to Rule424*(b) under the Securities Act of1933, as amended (the “Securities Act”). On* May 2, 2024,the Company's public float increased above $75.0 million and, as a result, the Company isnot* subject to the limitations contained in General InstructionI.B.6 of Form S-3.

Under the Sales Agreement, Ascendiant* maysell shares by any method permitted by law deemed to be an “at the market offering” as defined in Rule415*(a)(4) under the Securities Act. Ascendiant will use commercially reasonable efforts to sell the shares from time to time, based upon instructions from the Company (including any price, time or size limits or other customary parameters or conditions the Company* mayimpose). The Company agreed to pay Ascendiant a commission of 3.0% of the gross proceeds from the sales of shares sold through Ascendiant under the Sales Agreement and has provided Ascendiant with customary indemnification and contribution rights. The Company also agreed to reimburse Ascendiant for certain expenses incurred in connection with the Sales Agreement. The Company and Ascendiant may*each terminate the Sales Agreement at any time upon specified prior written notice.

For the year ended* December 31, 2024,the Company sold an aggregate of 6,953,259 shares of its common stock pursuant to the Sales Agreement, resulting in net proceeds of approximately $38.8 million, after deducting underwriting discounts. There wereno sales of common stock pursuant to the Sales Agreement in2023.* As of* December 31, 2024,*$10.0 million remained available for the sale of the Company's common stock under the ATM program.

Series B Preferred Stock

On* November 22, 2022,*the Company’s Board of Directors established the Series B Preferred Stock, par value $0.0001 per share (“Series B Preferred Stock”). Following is a summary of the terms of the Series B Preferred Stock:

The Series B Preferred Stock shall rank senior to the Common Stock, but junior to the Series A Preferred stock, as to any distribution of assets upon a liquidation, dissolution or winding up of the Company, whether voluntarily or involuntarily.

All shares of Series B Preferred Stock outstanding were automatically redeemed in2023, with the holders of the Series B Preferred Stock only having a right to receive the purchase price for the redemption, which was $0.01 per share of Series B Preferred Stock.

Series C Preferred Stock

On* February 24, 2023,the Company filed a Certificate of Designation of Preferences, Rights and Limitations of Series C Convertible Redeemable Preferred Stock (the “Series C COD”) with the Delaware Secretary of State designating 50,000 shares of its authorized and unissued preferred stock as Series C Preferred Stock (the "Series C Shares") with a stated value of $27.00 per share. On February 28, 2023,*the Company filed a Certificate of Amendment to the Series C COD (the “COD Amendment”) to clarify the terms of conversion price and floor price based on definitions provided in the Series C COD (the COD Amendment, together with the Series C COD, the “COD”). Each share of Series C Preferred Stock had 620 votes and was subject to certain redemption rights and voting limitations.

Pursuant to the terms of a Modification and Exchange Agreement dated* April 20, 2023,by and between3i* and the Company, effective* April 21, 2023,*3i exchanged 50,000 Series C Shares beneficially owned by3i for 5,577 shares of Series A Preferred Stock.

Common Share Purchase Warrant, Pre-Funded Warrant and3i Warrant Derivative Liabilities**

In* April 2023,the Company issued 119 shares of our common stock and 119 common stock purchase warrants, each exercisable forone share of common stock, at a combined public offering price of $18,000.00, and 297 pre-funded warrants, each exercisable forone share of common stock, and 297 common stock purchase warrants, each exercisable forone share of common stock only (the common stock purchase warrants sold in the public offering hereinafter referred to as the “April 2023Common Warrants”) at a combined public offering price of $18,000.00 less the $0.001 for the pre-funded warrants, for aggregate net proceeds of approximately $6.8 million, after deducting placement agents fees and offering expenses payable by the Company, or the AprilOffering. The Common Stock, pre-funded warrant and April 2023Common Warrants were sold pursuant to a securities purchase agreement with the purchaser signatory thereto or pursuant to the prospectus which was part of an effective registration statement on Form S-1 filed with the SEC. The Common Stock, pre-funded warrants and April 2023Common Warrants are immediately separable and were issued separately in the offering. As of June 30, 2023,all pre-funded warrants from the April*Offering were exercised in exchange for 297 common shares.

In* July 2023,the Company issued 596 shares of our common stock pre-funded warrants to purchase up to 3,478 shares of common stock (the “JulyPre-Funded Warrants”), and common warrants to purchase up to 4,075 shares of common stock (the “July 2023Common Warrants”) at an effective combined purchase price of $2,700.00 per share and related common stock purchase warrants for aggregate net proceeds of approximately $10 million, after deducting placement agent fees and offering expenses payable by the Company of approximately $0.9 million on July 10, 2023 (** “JulyOffering”). The securities in the JulyOffering were registered pursuant to the registration statement on Form S-1, as amended (FileNo.* 333-272469). The purchase price of each* JulyPre-Funded Warrant and July 2023Common Warrant was equal to $2,700.00 less the $0.001 per share exercise price of each Pre-Funded Warrant. Such securities were sold pursuant to a securities purchase agreement with the purchaser signatory thereto or pursuant to the prospectus which was part of an effective registration statement on Form S-1 filed with the SEC. As of September**30,* 2023, all* July*Pre-Funded Warrants were exercised prior in exchange for 3,478 common shares.

In* September 2023,the Company entered into an Inducement Letter dated September 14, 2023 (the “Inducement Letter”) with each of Armistice Capital Master Fund Ltd. and Sabby Volatility Warrant Master Fund, Ltd. ( “SeptemberInvestors”) who were the holders of existing common stock purchase warrants issued (i) in the April 2023Offering (the “April 2023Warrants”) and (ii) in the JulyOffering (the “July 2023Warrants” and together with the April 2023Warrants, the “Existing2023* Warrants”). Pursuant to the Inducement Letter, the* SeptemberInvestors agreed to exercise for cash their respective Existing2023* Warrants to purchase an aggregate of up to 4,065 shares of the Company’s common stock (the “Existing Warrant Shares”), at a reduced exercise price of $600.00 per share, in consideration for the Company’s agreement to issue a new unregistered common stock purchase warrant to purchase up to a number of shares of common stock equal to 200% of the number of Existing2023 Warrant Shares issued (the "Inducement Warrants"), pursuant to each Existing Warrant exercise, exercisable for 5 years andsix months from the issue date, at an exercise price of $600.00, subject to adjustment. Upon execution of the Inducement Letter by each of the* SeptemberInvestors the Company issued the Inducement Warrants to the SeptemberInvestors pursuant to a private placement (the “SeptemberPrivate Placement”). As of December 31, 2023,*the Company received approximately $3.0 million, net of costs in exchange for the exercise of 4,065 Existing Warrants.

**** April 2023,** July 2023and September 2023Common Warrants**

Subject to certain ownership limitations, the* April 2023Common Warrants are exercisable immediately from the date of issuance. The April 2023Common Warrants have an exercise price of $20,400.00 per share and expire on the 5-year anniversary of the date of issuance, April 21, 2023,unless otherwise agreed upon by the Company and holder of the warrant. The exercise price of the April 2023Common Warrants is subject to certain adjustments, including stock dividends, stock splits, combinations and reclassifications of the Company’s common stock. In the event of a fundamental transaction, as described in the April 2023Common Warrants, each of the holders of the April 2023Common Warrants will have the right to exercise its April 2023Common Warrant and receive the same amount and kind of securities, cash or property as such holder would have been entitled to receive upon the occurrence of such fundamental transaction if such holder had been, immediately prior to such fundamental transaction, the holder of shares of the Company’s common stock issuable upon the exercise of its April 2023Common Warrant. Additionally, in the event of a fundamental transaction within the Company’s control, as described in the April 2023Common Warrants, each holder of the April 2023Common Warrants will have the right to require the Company to repurchase the unexercised portion of its April 2023Common Warrant at its fair value using a variant of the Black Scholes option pricing formula. In the event of a fundamental transaction that isnot* within the Company’s control, each holder of the* April 2023Common Warrants will have the right to require the Company or a successor entity to redeem the unexercised portion of its April 2023Common Warrant for the same consideration paid to the holders of the Company’s common stock in the fundamental transaction at the unexercised April 2023*Common Warrant’s fair value using a variant of the Black Scholes option pricing formula.

Pursuant to a securities purchase agreement entered into with certain investors in the* AprilOffering, the Company agreed that for a period of90* days from the close of the* AprilOffering, that the Company wouldnot* issue, enter into any agreement to issue or announce the issuance or proposed issuance of any shares of common stock or securities convertible or exercisable into common stock or file a registration statement with the SEC to register its securities, subject to certain exceptions. The investors to the securities purchase agreement in the* AprilOffering, excluding3i,* have agreed to waive that provision and permit the* Julyoffering of the Company's common stock, pre-funded warrants and common warrants (“Offering Waiver”) in exchange for (i) the repricing of the exercise price of the April 2023Common Warrant to the exercise price of the common warrants offered in the JulyOffering if the exercise price of the common warrant is lower than the then-current April 2023Common Warrant exercise price; and (ii) extending the termination date of the April 2023Common Warrant to the date of termination of the common warrants offered in the JulyOffering. As a result of the JulyOffering, investors to the securities purchase agreement in the AprilOffering, excluding3i,* had the exercise price of their* April 2023Common Warrant reduced to $2,700.00 per share and the exercise period extended to on or around July 10, 2028.3i and the Company entered into a separate limited waiver and amendment agreement, as discussed above. We used the Black-Scholes option pricing model to fair value the AprilCommon Warrants as of July 10, 2023,*using the Black-Scholes option pricing model and recorded the incremental value of $0.2 million as a fair value modification cost in other income (expenses).

Management considered the* April 2023Common Warrants, July 2023Common Warrants, and Inducement Warrant Shares, which donot* represent outstanding shares, and determined that they contain certain contingent redemption features, outside of the Company’s control and at the election of the Holder, which* mayrequire the Company to repurchase the September,** Julyand AprilCommon Warrants or Warrant Shares in exchange for cash (i.e., puttable) in an amount as defined in the Warrant Agreements. The Company concluded that the September,** July,and AprilCommon Warrants represent liabilities under ASC480.* Accordingly, the* September,** Julyand AprilCommon Warrants have been initially recorded at their fair value of $4.2 million, $6.8 million, and $4.1 million, respectively, using the Black-Scholes option pricing model and as a reduction of additional paid in capital. Additionally, the total Julyfinancing cost of $0.9 million has been proportionately allocated to financing costs and additional paid in capital in the amounts of the amount of $0.6 million and $0.3 million, respectively; and the total Aprilfinancing cost of $0.7 million has been proportionately allocated to the finance expense and additional paid in capital in the amounts of $0.4 million and $0.3 million, respectively. The September*financing cost of $0.2 million has been allocated to a finance expense in general and administration costs.

On* September 14, 2023,the exercise prices of the April 2023Common Warrants and July 2023Common Warrants were reduced to $600.00 per share and the exercise period extended to on or about September 14, 2028.We used the Black-Scholes option pricing model to fair value the April 2023Common Warrants and July 2023Common Warrants as of September 14, 2023,*using the Black-Scholes option pricing model and recorded the incremental value of $0.4 million as a fair value modification cost in other income (expenses).

Inputs used in the above noted Black-Scholes valuation models for the* April 2023Common Warrants, July 2023*Common Warrants and Inducement Warrants are as follows:

On* November 8,** December 1,and December 5, 2023,a total of 622,444, and 2,290 * July 2023Common Warrants were exercised, respectively, and we used the Black-Scholes option pricing model to fair value the* July 2023Common Warrants at $0.1 million, $0.1 million, and $0.2 million, respectively. On December 5, 2023,a total of 139 * April 2023Common Warrants were exercised, and we used the Black-Scholes option pricing model to fair value the* April 2023*Common Warrants at $22 thousand.

Inputs used in the above noted Black-Scholes valuation models for the exercise of the* April 2023Common Warrants and July 2023*Common Warrants are as follows:

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11. Stock-based Compensation

2021 Equity Incentive Plan

The Company has in effect the Allarity Therapeutics, Inc.2021 Incentive Plan (as amended, the*"2021* Incentive Plan"). The2021 Incentive Plan was approved by shareholders in connection with the Recapitalization Share Exchange and became effective on* December 20, 2021.The2021* Incentive Plan authorizes the award of stock options, Restricted Stock Awards (“RSAs”), Stock Appreciation Rights (“SARs”), Restricted Stock Units (“RSUs”), cash awards, performance awards and stock bonus awards. Under the2021 Incentive Plan, the compensation committee of the Company's board of directors is authorized to grant stock-based awards to employees, directors, consultants, independent contractors and advisors. The2021 Incentive Plan authorizes the issuance of up to 353,163 shares of authorized but unissued common stock and expires10 years from adoption and limits the term of each option tono more than10 years from the date of the grant.

Total shares available for the issuance of stock-based awards under the Company's2021 Incentive Plan as of* December 31, 2024was 353,163. The number of shares reserved for issuance under our2021* Plan will increase automatically on* January**1* of each of2022 through2031 by the number of shares equal to the lesser of 5% of the aggregate number of outstanding shares of our common stock as of the immediately preceding* December 31,or a number as maybe determined by our board of directors. In January 2025,*the Board approved an increase of 5% of the outstanding shares of common stock, or 364,778 shares, increasing the total shares authorized to 717,941.

Restricted Stock Units

The following table summarizes restricted stock unit activity for the year ended* December 31, 2024:*

For the years ended* December 31, 2024and2023,* stock-based compensation expenses associated with the restricted stock units for employees were approximately $68 thousand and $0, respectively.

At* December 31, 2024,*the Company had unrecognized stock-based compensation expense related to restricted stock units of $0.3 million, which is expected to be recognized over the remaining weighted-average vesting period of 1.7 years. This expense is recognized over the vesting period of the award.

Stock Options

The following table summarizes the stock option activity for the years ended* December 31, 2024and2023:*

The aggregate intrinsic value of options is calculated as the difference between the exercise price of the stock options and the fair value of common stock for those options that had exercise prices lower than the fair value of common stock. Upon exercise of stock options, the Company will issue new shares of its common stock.

For the years ended* December 31, 2024and2023,* stock-based compensation expenses (recoveries) associated with the options awards for employees and non-employees were approximately $3 thousand and ($71) thousand, respectively. As of* December 31, 2024,there wasno* unrecognized compensation cost for options issued since all outstanding options were forfeited in* December 2024.*

Stock-Based Compensation

The following table summarizes stock-based compensation for the years ended* December 31, 2024and2023* (in thousands):

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12. License and Development Agreements

License Agreement with Eisai Inc. for Stenoparib

The Company holds the exclusive worldwide rights to all preventative, therapeutic and/or diagnostic uses related to cancer in humans and by amendment to the agreement on* December 11, 2020,viral infections in humans (including, butnot* limited to, coronaviruses) for stenoparib from Eisai, Inc. (“Eisai”) pursuant to a license agreement (the “Eisai License Agreement”). Pursuant to the Eisai License Agreement, the Company is solely responsible for the development of stenoparib during the term of the Eisai License Agreement. Eisai License Agreement also provides for a joint development committee consisting ofsix members,three appointed by the Company andthree appointed by Eisai. One of the Company’s members of the joint development committee is designated chair of the committee and has the power to break any deadlock in decisions by the committee that must be made by a majority vote with each representative havingone vote. The purpose of the committee is to implement and oversee development activities for stenoparib pursuant to the clinical development plan, serving as a forum for exchanging data, information and development strategy.

Effective* July 12, 2022,the Company’s July 6, 2017Exclusive License Agreement with Eisai Inc. (the “Third Amendment”), the terms of the original exclusive license were further amended in order to (1) further postpone the due date of the extension payment and extend the deadline for the Company’s successful completion of itsfirst* Phase1b or Phase2 clinical trial for stenoparib beyond* December**31,* 2022; and (2) amend terms related to Eisai’s right of termination of development.

On* May 26, 2023,the Company and Eisai entered into afourth* amendment to the Exclusive License Agreement with an effective date of* May 16, 2023,to postpone the extension payment, restructure the payment schedule and extend the deadline to complete enrollment in a further Phase1b* or Phase2 Clinical Trial for the stenoparib. The Company agreed to pay Eisai in periodic payments as follows: (i) $100,000, which has been paid; (ii) $50,000 within10 days of execution of thefourth amendment, which has been paid; (iii) $100,000 upon completion of a capital raise, which has been paid; and (iv) $850,000 on or before* March 1, 2024.*

On* February 26, 2024,in exchange for an additional $0.2 million, paid as of May 1, 2024,the Company and Eisai entered into afifth* amendment to the Exclusive License Agreement to postpone the payment of $850,000. The Company agreed to make aone-time payment to Eisai of $850,000 upon completion of aten-million dollar capital raising campaign,no later than* September 1, 2024.The Company paid Eisai $850,000 on August 20, 2024andno* payments are currently outstanding.

On* August 2, 2024,the Company and Eisai entered into asixth* amendment to the Exclusive License Agreement with an effective date of* August 2, 2024.*The terms of the amended exclusive license were further amended in order to (1) amend the definition of a successful completion and (2) amend the terms related to Eisai's right of termination for development.

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Development Milestone Payments

The Company has agreed to make milestone payments to Eisai in connection with the development of stenoparib by the Company or its affiliates, or by athird-party program acquirer that assumes control of the stenoparib development program from the Company corresponding to: (i) successful completion of a Phase2 clinical trial; (ii) upon dosing of thefirst patient in thefirst Phase3 clinical trial; (iii) upon submission of thefirst NDA with the FDA; (iv) submission of an MAA to the EMA; (v) submission of an NDA to the MHLW in Japan; (vi) upon receipt of authorization by the FDA to market and sell a licensed product; (vii) upon receipt of approval of an MAA by the EMA for a licensed product; and (viii) upon receipt of approval by the MHLW in Japan for a licensed product. If all milestones have been achieved, the Company* maybe obligated to pay Eisai up to a maximum of $94 million. In addition, the Company has agreed to pay Eisai aone*-time sales milestone payment in the amount of $50 million thefirst time the Company’s annual sales of licensed product is $1 billion or more.

Royalty Payments

In addition to the milestone payments described above, the Company has agreed to pay Eisai royalties based on annual incremental sales of product derived from stenoparib in an amount between 5% and 10% of annual sales of between $0 and $100 million, between 6% and 10% of annual sales between $100 million and $250 million, between 7% and 11% of annual sales between $250 million and $500 million, and between 11% and 15% of annual sales in excess of $500 million.

The Company is obligated to pay royalties under the agreement on a country-by-country and product-by-product basis for a period that commences with thefirst commercial sale of a product in such country and expiring on the later of (i) the expiration of the last valid claim of any and all Eisai patents, Company patents and joint patents covering such product in such country; or, (ii) the15 year anniversary of the date offirst commercial sale of such licensed product in such country. However, the agreement* maybe terminated sooner without cause by the Company upon120* days prior written notice, or upon written notice of a material breach of the agreement by Eisai that isnot cured within90 days (30 days for a payment default).

Eisai also has the right to terminate the agreement upon written notice of a material breach of the agreement by the Company that isnot cured within90 days (30 days for a payment default) or if the Company files for bankruptcy.

Option to Reacquire Rights to Stenoparib

For the period commencing with enrollment of thefirst five patients in a Phase2 clinical trial pursuant to the clinical development plan and ending90 days following successful completion of such Phase2 clinical trial, Eisai has the option to reacquire the Company's licensed rights to develop stenoparib for a purchase price equal to the fair market value of the Company's rights, giving effect to the stage of development of stenoparib that the Company has completed under the agreement. The Company commenced a Phase2 clinical trial* April 15, 2019,and as of the date of the Financial Statements, Eisai hasnot* indicated an intention to exercise its repurchase option.

License Agreement with Novartis for Dovitinib

On* January 26, 2024,we received a Termination Notice from Novartis due to a material breach of our license agreement. Accordingly, under the terms of the Agreement (i) we shall cease all development and commercialization activities with respect to all licensed products; (ii) all rights and licenses granted by Novartis to Allarity shall revert to Novartis; and all liabilities due to Novartis became immediately due and payable in the amount of $5.0 million inclusive of interest which is continuing to accrue at 5% per annum. As of December 31, 2024*, the liability is recorded as a current liability on our Consolidated Balance Sheets as follows: $3.6 million in accounts payable and $1.4 million convertible promissory note and accrued interest.

Development costs and Out-License Agreement with Smerud

Pursuant to the terms of the amendment on* March 28, 2022*to the out-license agreement with Smerud Medical Research International (the "Amended License Agreement"), Chosa ApS, a company organized under the laws of Denmark (“Chosa”), replaced us as the exclusive licensee to the LiPlaCis® technology. In addition, we also granted Chosa an exclusive, royalty-free, transferable and sublicensable license for (i) our DRP® Companion Diagnostics that are specific for Cisplatin or LiPlaCis® (a liposomal formulation of Cisplatin) for the research and development of LiPlaCis® products, and (ii) the use of any and all know-how and intellectual property rights owned by us for Chosa’s use of our DRP® Companion Diagnostics that are specific for Cisplatin or LiPlaCis® (a liposomal formulation of Cisplatin) for the development and commercialization of LiPlaCis® products, as contemplated in the Amended License Agreement.

In2024, the Company signed service agreements with external biotech clients for both DRP® analysis and gene expression services. Leveraging its gene expression and diagnostic capabilities, its laboratory will provide the services to the external clients. The Company received down payments in2024 totaling approximately $0.2 million, is actively preparing the laboratory and required samples, and expects to start recognizing revenue in2025.

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13. Income Tax

The reconciliation of the statutory rate to the effective tax rate is as follows:

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

The components of the provision for income taxes from operations were as follows:

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Tax losses carried forward of approximately $89.4 million can be carried forward indefinitely. Deferred tax has been provided corresponding to the statutory tax rate applied.

The statute of limitations for re-assessment of tax returns in Denmark isthree years andfive years for transfer pricing. As of* December 31, 2024*, the tax years that remain subject to examination by the major tax jurisdictions, under the statute of limitations, are from the year ended* December 31,2019,forward. The Company doesnot* believe it has any uncertain tax positions that would result in the Company having a liability to the taxing authorities.

14. Related parties

During the year ended* December 31, 2023,Thomas H. Jensen, a director of the Company, was paid $0.1 million in fees as a consultant. Effective December 12, 2023,*the Company announced the appointment of Thomas H. Jensen as CEO.

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15. Financial Instruments

The following tables present information about the Company’s financial instruments measured at fair value on a recurring basis and indicate the level of the fair value hierarchy used to determine such fair values:

Methods used to estimate the fair values of our financial instruments,not disclosed elsewhere in these consolidated financial statements, are as follows:

When available, the Company's marketable securities are valued using quoted prices for identical instruments in active markets. If the Company is unable to value its marketable securities using quoted prices for identical instruments in active markets, the Company values its investments using broker reports that utilize quoted market prices for comparable instruments. Accordingly, its investment is considered a Level1 financial asset. The Company hasno financial assets or liabilities measured using Level2 inputs. Financial assets and liabilities are considered Level3 when their fair values are determined using pricing models, discounted cash flow methodologies, or similar techniques, and at leastone significant model assumption or input is unobservable.

The Company recognizes its derivative liabilities as level3 and values its derivatives using the methods discussed below. While the Company believes that its valuation methods are appropriate and consistent with other market participants, it recognizes that the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. The primary assumptions that would significantly affect the fair values using terms in the notes that are subject to volatility and market price of the underlying common stock of the Company.

The Company reviews the fair value hierarchy classification on a quarterly basis. Changes in the ability to observe valuation inputs* mayresult in a reclassification of levels for certain securities within the fair value hierarchy. The Company’s policy is to recognize transfers into and out of levels within the fair value hierarchy at the date the actual event or change in circumstances that caused the transfer occurs. When a determination is made to classify an asset or liability within Level3,* the determination is based upon the significance of the unobservable inputs to the overall fair value measurement. There wereno transfers between level1 or level2 during the years ended* December 31, 2024*, or2023.

During the year ended* December 31, 2023the Company utilized the reset strike options Type2* model by Espen Garder Haug and Black-Scholes Merton models to measure the fair value of the3i Exchange Warrant derivative liability at $0.8 million. All changes in fair value were recorded in the Consolidated Statements of Operation and Comprehensive Loss during the corresponding period. Fluctuations in the Company’s stock price are a primary driver for the changes in the derivative valuations during each reporting period. During the years ended* December 31, 2024and2023,* the Company’s stock price decreased from its initial valuation. As the stock price decreases for each of the related derivative instruments, the value to the holder of the instrument generally decreases. Stock price isone of the significant unobservable inputs used in the fair value measurement of each of the Company’s derivative instruments.

16. Commitments and Contingencies

Indemnification

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.

On* July 19, 2024,the Company received a “Wells Notice” from the Staff of the SEC relating to the Company’s previously disclosed SEC investigation. The Wells Notice related to the Company’s disclosures regarding meetings with the United States Food and Drug Administration (the “FDA”) regarding the Company’s NDA for Dovitinib or Dovitinib-DRP, which was submitted to the FDA in2021.* The Company understands that all conduct relating to the SEC Wells Notice occurred during or prior to fiscal year2022. The Company also understands thatthree of its former officers received Wells Notices from the SEC relating to the same conduct. A Wells Notice is neither a formal charge of wrongdoing nor a final determination that the recipient has violated any law. The Wells Notice informed the Company that the SEC Staff has made a preliminary determination to recommend that the SEC file an enforcement action against the Company that would allege certain violations of the federal securities laws.

Nasdaq Delisting Notifications

On* June 18, 2024,the Company received a letter from the Nasdaq Listing Qualifications Staff (the “Staff”) of Nasdaq indicating that the Company hasnot* complied with the Nasdaq Listing Rule5550(a)(2) (the “Bid Price Rule”) which is the requirement that for30 consecutive business days the bid price for the Company’s common stock close above the*$1* per share minimum bid price requirement for continued inclusion on Nasdaq. On* July**30,* 2024, the Company attended a hearing before a Nasdaq Hearings Panel (the “Panel”), and by decision date* August 15, 2024,the Panel granted the Company’s request for an extension through September 6, 2024to obtain shareholder approval for a reverse split at a ratio that will allow the Company to demonstrate compliance with the Bid Price Rule. This approval was granted by Allarity’s shareholders at the Company’s Annual Meeting of Stockholders on September 3, 2024.On October 9, 2024,the Company was formally notified by the Staff that the Company has evidenced compliance with the Bid Price Requirement for continued listing on the Nasdaq, as set forth in Nasdaq Listing Rule5550*(a)(2).

On* September 13, 2024,a purported class action captioned Osman Mukeljic v. Allarity Therapeutics, Inc., et al,1:24-cv-06952, was filed in the United States District Court for the Southern District of New York against the Company and certain of its current and former officers. The complaint alleged, among other things, that defendants made false and misleading statements and/or failed to disclose information related to Dovitinib NDA’s continued regulatory prospects and purported misconduct in connection with the Dovitinib NDA and/or the Dovitinib-DRP PMA. The complaint asserted violations of Section10*(b) of the Securities Exchange Act of1934 and Rule10b-5 thereunder against all defendants as well as violations of Section20(a) of the Securities Exchange Act of1934, as amended, against the individual defendants.

17. Subsequent Events

On* February 26, 2025,*the Company issued a press release announcing the dismissal of the aforementioned class action lawsuit.

On* March 13, 2025,the Company issued a press release that the Company has reached a final settlement with the SEC relating to the Company's previously disclosed SEC investigation, and as part of the settlement, the Company has agreed to pay aone*-time civil penalty of $2.5 million.

During the period* January 1, 2025through March 25, 2025,the Company had sold 9,719,173 shares of it's common stock for net proceeds of 9.7 million. As of March 26, 2025,*there wereno more shares of the Company's common stock available for sale under the ATM program.

Share Buyback

On* March 3, 2025,the Company’s board of directors authorized a share repurchase program, allowing for the repurchase of up to $5 million of the Company’s common stock through February 28, 2026.The Company expects the purchases to be made from time to time through open market transactions or other methods as permitted by securities laws and regulations, including Rule10b*-18 under the Securities Exchange Act of1934, as amended.