Allarity Therapeutics, Inc.

Previous wording

We have incurred net losses in each year since inception. Our net losses were $2.8 million and $2.7 million for the three months ended March 31, 2026 and 2025, respectively. As of March 31, 2026, we had an accumulated deficit of $132.9 million and cash and restricted cash of $29.8 million. Substantially all our net losses have resulted from costs incurred in connection with our research and development programs and from general and administrative costs associated with our operations. We expect to continue to incur significant expenses and increasing operating losses over at least the next several years. We expect our expenses will increase substantially in connection with our ongoing activities, as we:

Current wording

We have incurred net losses in each year since inception. Our net losses were $6.2 million and $5.0 million for the six months ended June 30, 2026 and 2025, respectively. As of June 30, 2026, we had an accumulated deficit of $136.4 million and cash and restricted cash of $26.9 million. Substantially all our net losses have resulted from costs incurred in connection with our research and development programs and from general and administrative costs associated with our operations. We expect to continue to incur significant expenses and increasing operating losses over at least the next several years. We expect our expenses will increase substantially in connection with our ongoing activities, as we:

Previous wording

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

Current wording

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

Previous wording

We generated $0.025 million of service revenue for the three months ended March 31, 2026 from the license of DRP testing services. There was no revenue for the three months ended March 31, 2025.

Current wording

We generated no revenue for the three months ended June 30, 2026. We generated $0.025 million of service revenue for the six months ended June 30, 2026 from the license of DRP testing services. There was no revenue for the three and six months ended June 30, 2025.

Previous wording

Research and development expenses decreased $0.1 million primarily due to reduced costs and supplies of the Phase II clinical trial of stenoparib. These expenses are recognized at the time of purchase.

Current wording

Research and development expenses decreased $1.1 million primarily due to reduced costs and supplies of the Phase II clinical trial of stenoparib. These expenses are recognized at the time of purchase.

Previous wording

General and administrative expenses decreased by $0.2 million for the three months ended March 31, 2026, compared to March 31, 2025. The decrease was primarily due to a reduction in legal fees.

Current wording

General and administrative expenses decreased by $0.5 million for the three months ended June 30, 2026, compared to June 30, 2025. The decrease was primarily due to a reduction in legal fees.

Previous wording

For the three months ended March 31, 2026, net other income decreased $0.4 million from the comparable quarter. Interest income and foreign exchange decreased $0.1 million each while interest expense increased $0.2 million.

Current wording

For the six months ended June 30, 2026, net other income decreased $2.9 million from the comparable period. Foreign exchange decreased $1.8 million while interest expense and derivative liability increased $1 million with the March promissory note.

Previous wording

Liquidity, Capital Resources and Plan of Operations

Current wording

Liquidity, Capital Resources and Plan of Operation

Previous wording

Since our inception through March 31, 2026, our operations have been financed primarily by the sale of convertible promissory notes and the sale and issuance of our securities. As of March 31, 2026, we had $29.8 million in cash and restricted cash and an accumulated deficit of $132.9 million.

Current wording

Since our inception through June 30, 2026, our operations have been financed primarily by the sale of convertible promissory notes and the sale and issuance of our securities. As of June 30, 2026, we had $26.9 million in cash and restricted cash and an accumulated deficit of $136.4 million.

Previous wording

For the three months ended March 31, 2026, we executed two financing transactions. On January 28, 2026, we entered into a Common Stock Purchase Agreement with Tumim Stone Capital LLC. Pursuant to the purchase agreement, we have the right, but not the obligation, to sell to Tumim up to $6.0 million of newly issued shares of our common stock under an equity line of credit arrangement. The purchase price per share for each sale is based on the volume-weighted average price ("VWAP") of our common stock during the applicable pricing period, at 95% of the lowest one-day VWAP or 97% of the lowest three-day VWAP, at our election, subject to volume-based and dollar-based limitations. The agreement includes customary limitations on Tumim's beneficial ownership and is subject to Nasdaq listing rules, including a 19.99% issuance limit. On March 2, 2026, we entered into a Note Purchase Agreement with Streeterville Capital, LLC, pursuant to which the Company issued and sold a $10.0 million unsecured and $10.0 million secured promissory note. Beginning six months after issuance, Streeterville may require monthly cash redemptions of up to $250,000 and also permits additional early redemptions upon the occurrence of specified stock-price based conditions.

Current wording

For the six months ended June 30, 2026, we executed two financing transactions. On January 28, 2026, we entered into a Common Stock Purchase Agreement with Tumim Stone Capital LLC. Pursuant to the purchase agreement, we have the right, but not the obligation, to sell to Tumim up to $6.0 million of newly issued shares of our common stock under an equity line of credit arrangement. The purchase price per share for each sale is based on the volume-weighted average price ("VWAP") of our common stock during the applicable pricing period, at 95% of the lowest one-day VWAP or 97% of the lowest three-day VWAP, at our election, subject to volume-based and dollar-based limitations. The agreement includes customary limitations on Tumim's beneficial ownership and is subject to Nasdaq listing rules, including a 19.99% issuance limit. On March 2, 2026, we entered into a Note Purchase Agreement with Streeterville Capital, LLC, pursuant to which the Company issued and sold a $10.0 million unsecured and $10.0 million secured promissory note. Beginning six months after issuance, Streeterville may require monthly cash redemptions of up to $250,000 and also permits additional early redemptions upon the occurrence of specified stock-price based conditions.

Previous wording

Our primary use of cash is to fund operating expenses, which consist of research and development as well as regulatory expenses clinical programs for stenoparib, and to a lesser extent, general and administrative expenses. Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable and accrued expenses.

Current wording

Our primary use of cash is to fund operating activities, primarily research and development, regulatory activities, and clinical programs for stenoparib, as well as, to a lesser extent, general and administrative costs. Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable and accrued expenses.

Previous wording

Net cash used in operating activities was $4.5 million for the three months ended March 31, 2026, primarily derived from our $2.7 million net loss, a $1.4 million increase in prepaid expenses, a $0.5 million reduction of accrued expenses. The company used $2.7 million of net cash for operating activities for the three months ended March 31, 2025.

Current wording

Net cash used in operating activities was $7.1 million for the six months ended June 30, 2026, primarily derived from our $6.2 million net loss, a $1.3 million increase in prepaid expenses, and a $0.4 million increase in tax receivable. A $0.7 million and $0.2 million reduction of accrued expenses and accounts payable, respectively, was offset by an increase of $0.9 million for non-cash interest. The company used $8.2 million of net cash for operating activities for the six months ended June 30, 2025.

Previous wording

Net cash used in investing activities totaled $0.1 million for the three months ended March 31, 2026. The Company has no investing activity spending for the three months ended March 31, 2025.

Current wording

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

Previous wording

Net cash and restricted cash provided by financing activities was $19.7 million for the three months ended March 31, 2026. The Company issued promissory notes with gross proceeds of $20.0 million, which was offset by $0.3 million used as part of a share repurchase program. Net cash provided by financing activities for the three months ended March 31, 2025 was $11.1 million from capital raised using the ATM financing vehicle.

Current wording

Net cash and restricted cash provided by financing activities was $19.7 million for the six months ended June 30, 2026. The Company issued promissory notes with gross proceeds of $20.0 million, which was offset by $0.3 million used as part of a share repurchase program. Net cash provided by financing activities for the six months ended June 30, 2025 was $8.6 million. The Company raised $11.1 million using the ATM financing vehicle, which was offset by $2.5 million of the share repurchase program.

Previous wording

Our management’s discussion and analysis of financial condition and results of operations is based upon our unaudited condensed interim consolidated financial statements for the three months ended March 31, 2026 and 2025, and our audited consolidated financial statements for the years ended December 31, 2025 and 2024, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, and expenses. On an on-going basis, we evaluate our critical accounting policies and estimates. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable in the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions and conditions.

Current wording

Our management’s discussion and analysis of financial condition and results of operations is based upon our unaudited condensed interim consolidated financial statements for the three and six months ended June 30, 2026 and 2025, and our audited consolidated financial statements for the years ended December 31, 2025 and 2024, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, and expenses. On an on-going basis, we evaluate our critical accounting policies and estimates. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable in the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions and conditions.

Previous wording

Our significant accounting policies are described in the notes to our consolidated financial statements for the year ended December 31, 2025 included in the Form 10-K, and there have been no significant changes to our significant accounting policies during the three months ended March 31, 2026. These unaudited condensed interim consolidated financial statements should be read in conjunction with our audited financial statements and accompanying notes.

Current wording

Our significant accounting policies are described in the notes to our consolidated financial statements for the year ended December 31, 2025 included in the Form 10-K, and there have been no significant changes to our significant accounting policies during the six months ended June 30, 2026. These unaudited condensed interim consolidated financial statements should be read in conjunction with our audited financial statements and accompanying notes.