Allarity Therapeutics (ALLR) adds $20M debt, holds $26.9M cash in Q2 2026
Allarity Therapeutics, Inc., a clinical-stage oncology company, reported continued operating losses but a strengthened cash position for the quarter and six months ended June 30, 2026. Total assets were $32.1 million, up from $18.3 million at year-end, driven mainly by cash and restricted cash of $26.9 million.
The company recorded a six‑month net loss of $6.2 million (basic and diluted loss per share $0.39) on minimal revenue of $0.025 million from DRP testing services. Operating expenses declined year over year, with research and development at $2.6 million and general and administrative at $2.7 million for the six‑month period, reflecting lower clinical and legal costs.
To fund operations, Allarity completed a $20.0 million dual‑note financing with Streeterville Capital and established a $6.0 million equity line of credit with Tumim Stone Capital. Total liabilities increased to $28.6 million, and stockholders’ equity fell to $3.5 million. Management states existing cash and restricted cash are expected to fund operations for at least twelve months from the financial statement issuance date.
Positive
- Cash and restricted cash rose to $26.9 million from $14.7 million at year-end 2025, and management believes this balance is sufficient to fund operating expenses and capital requirements for at least the next twelve months.
- Total operating expenses decreased by $1.8 million year over year for the six months ended June 30, 2026, with lower research and development and general and administrative costs improving the loss from operations versus 2025.
Negative
- Total liabilities more than tripled to $28.6 million at June 30, 2026 from $8.4 million at December 31, 2025, largely due to a $20.0 million Streeterville promissory note financing.
- Net other income swung negatively by $2.9 million for the six months versus 2025, driven by higher interest expense, derivative fair value changes and weaker foreign exchange results, pressuring overall bottom‑line performance.
Filing Explained
The $10 million restricted cash balance secures debt, while the $6 million equity line had produced only $2,000 by June 30.
A Form 10-Q is a quarterly report; Allarity Therapeutics reports its financing and liquidity position as of
The filing warns that sales under the Tumim equity line may cause substantial dilution, but reports only 2,000 shares sold for
Beginning six months after issuance, Streeterville may require monthly cash redemptions of up to
Key Figures
Key Terms
restricted cash financial
embedded derivatives financial
variable interest entity financial
equity line of credit financial
share repurchase program financial
original issue discount financial
Earnings Snapshot
FAQ
How did Allarity Therapeutics (ALLR) perform financially in the six months ended June 30, 2026?
What is Allarity Therapeutics’ (ALLR) cash runway as of June 30, 2026?
What new financings did Allarity Therapeutics (ALLR) enter into in 2026?
How did Allarity Therapeutics’ (ALLR) operating expenses change year over year?
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Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For the quarterly period ended
or
For the transition period from _________ to ___________
Commission File Number:
ALLARITY THERAPEUTICS, INC.
(Exact name of registrant as specified in its charter)
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| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
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| (Address of principal executive offices and zip code) |
(
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| | | The |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by checkmark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| | ☒ | Smaller reporting company | |
| Emerging growth company | |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of August 14, 2026, there were
Table of Contents
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| Cautionary Note Regarding Forward-Looking Statements |
ii |
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| PART I—FINANCIAL INFORMATION |
1 |
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| Item 1. |
Financial Statements |
1 |
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| Condensed Consolidated Balance Sheets as at June 30, 2026 (Unaudited) and December 31, 2025 |
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| Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and six months ended June 30, 2026 and 2025 (Unaudited) |
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| Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three and six months ended June 30, 2026 and 2025 (Unaudited) |
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| Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2026 and 2025 (Unaudited) |
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| Notes to Condensed Consolidated Financial Statements (Unaudited) |
5 |
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| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
15 |
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| Item 3. |
Quantitative and Qualitative Disclosures About Market Risk |
20 |
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| Item 4. |
Controls and Procedures |
20 |
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| PART II—OTHER INFORMATION |
21 |
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| Item 1. |
Legal Proceedings |
21 |
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| Item 1A. |
Risk Factors |
21 |
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| Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds |
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| Item 3. |
Defaults Upon Senior Securities |
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| Item 4. |
Mine Safety Disclosures |
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| Item 5. |
Other Information |
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| Item 6. |
Exhibits |
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| Signatures |
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Unless the context indicates otherwise, references in this Quarterly Report on Form 10-Q (the “Quarterly Report”) to the “Company,” “Allarity,” “we,” “us,” “our” and similar terms refer to Allarity Therapeutics, Inc., Allarity Therapeutics A/S (as predecessor) and its respective consolidated subsidiaries.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report contains statements we believe are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Those forward-looking statements are intended to enjoy the protection of the safe harbor for forward-looking statements provided by that act as well as protections afforded by other federal securities laws. Generally, words such as “achieve,” “aim,” “ambitions,” “anticipate,” “believe,” “committed,” “continue,” “could,” “designed,” “estimate,” “expect,” “forecast,” “future,” “goals,” “grow,” “guidance,” “intend,” “likely,” “may,” “milestone,” “objective,” “on track,” “opportunity,” “outlook,” “pending,” “plan,” “position,” “possible,” “potential,” “predict,” “progress,” “roadmap,” “seek,” “should,” “strive,” “targets,” “to be,” “upcoming,” “will,” “would,” and variations of such words and similar expressions identify forward-looking statements, which are not historical in nature. Forward-looking statements may appear throughout this Quarterly Report and other documents we file with the Securities and Exchange Commission (the “SEC”). Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those anticipated by these forward-looking statements. These risks and uncertainties include, but are not limited to, the factors described in the section captioned “Risk Factors” in our Annual Report on Form 10-K (the “Form 10-K”), filed with the SEC on March 30, 2026.
We urge investors to consider all of the risks, uncertainties, and other factors disclosed in these filings carefully in evaluating the forward-looking statements contained in this Quarterly Report. We cannot assure you that the results or developments anticipated by us and reflected or implied by any forward-looking statement contained in this Quarterly Report will be realized or, even if substantially realized, that those results or developments will result in the forecasted or expected consequences for us or affect us, our operations or financial performance as we forecasted or expected. As a result of the matters discussed above and other matters, including changes in facts, assumptions not being realized, or other factors, the actual results relating to the subject matter of any forward-looking statement in this Quarterly Report may differ materially from the anticipated results expressed or implied in that forward-looking statement. The forward-looking statements included in this Quarterly Report are made only as of the date of this Quarterly Report, and we undertake no obligation to update any such statements to reflect subsequent events or circumstances.
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements.
ALLARITY THERAPEUTICS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except for share and per share data)
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash | $ | $ | ||||||
| Restricted Cash | ||||||||
| Other current assets | ||||||||
| Prepaid expenses | ||||||||
| Tax credit receivable | ||||||||
| Total current assets | ||||||||
| Non-current assets: | ||||||||
| Property, plant and equipment, net | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued expenses and other current liabilities | ||||||||
| Income taxes payable | ||||||||
| Promissory note, net of discounts and accrued interest | ||||||||
| Derivative liability | ||||||||
| Convertible promissory notes and accrued interest | ||||||||
| Total current liabilities | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies (Note 8) | ||||||||
| Stockholders’ equity | ||||||||
| Common stock, $0.0001 par value: 250,000,000 shares authorized; 19,124,363 and 19,030,619 shares issued and 15,910,724 and 16,080,980 outstanding at June 30, 2026 and December 31, 2025, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Treasury stock, at cost; 3,213,639 and 2,949,639 shares at June 30, 2026, and December 31, 2025, respectively | ( | ) | ( | ) | ||||
| Total stockholders’ equity | ||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
See accompanying notes to condensed consolidated financial statements.
ALLARITY THERAPEUTICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(UNAUDITED)
(in thousands, except for share and per share data)
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Revenue: | ||||||||||||||||
| License Revenue | $ | $ | $ | $ | ||||||||||||
| Total revenue | ||||||||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | ||||||||||||||||
| General and administrative | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income (expense): | ||||||||||||||||
| Interest income | ||||||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Foreign exchange gains (losses) | ( | ) | ( | ) | ||||||||||||
| Change in fair value of derivative and warrant liabilities | ( | ) | ( | ) | ||||||||||||
| Total other income (expense), net | ( | ) | ( | ) | ||||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Net loss per common share, basic and diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Weighted average common shares outstanding, basic and diluted | ||||||||||||||||
| Other comprehensive loss | ||||||||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Change in cumulative translation adjustment | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Total comprehensive loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
See accompanying notes to condensed consolidated financial statements.
ALLARITY THERAPEUTICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)
For the three and six months ended June 30, 2026 and 2025
(UNAUDITED)
(in thousands, except for share data)
| Accumulated | ||||||||||||||||||||||||||||||||
| Additional | Other | Total | ||||||||||||||||||||||||||||||
| Common Stock | Paid in | Treasury Stock | Comprehensive | Accumulated | Stockholders’ | |||||||||||||||||||||||||||
| Number | Value | Capital | Number | Value | Loss | Deficit | Equity | |||||||||||||||||||||||||
| Balance, December 31, 2025 | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||||
| Stock-based compensation | — | — | ||||||||||||||||||||||||||||||
| Repurchase of common stock | — | ( | ) | ( | ) | |||||||||||||||||||||||||||
| Sale of common shares, net | ||||||||||||||||||||||||||||||||
| Currency translation adjustment | — | — | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Loss for the period | — | — | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Balance, March 31, 2026 | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Stock-based compensation | — | — | ||||||||||||||||||||||||||||||
| Issuance of common stock for service | ||||||||||||||||||||||||||||||||
| Currency translation adjustment | — | — | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Loss for the period | — | — | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Balance, June 30, 2026 | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||||
| Accumulated |
||||||||||||||||||||||||||||||||
| Additional |
Other |
Total |
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| Common Stock | Paid in | Treasury Stock | Comprehensive | Accumulated | Stockholders’ | |||||||||||||||||||||||||||
| Number |
Value |
Capital |
Number |
Value |
Loss |
Deficit |
Equity |
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| Balance, December 31, 2024 |
$ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ||||||||||||||||||||||
| Stock-based compensation |
— | — | ||||||||||||||||||||||||||||||
| Issuance of common stock, net of offering costs under open market sales agreement (ATM) |
— | |||||||||||||||||||||||||||||||
| Currency translation adjustment |
— | — | ( |
) | ( |
) | ||||||||||||||||||||||||||
| Loss for the period |
— | — | ( |
) | ( |
) | ||||||||||||||||||||||||||
| Balance, March 31, 2025 |
( |
) | ( |
) | ||||||||||||||||||||||||||||
| Stock based compensation |
— | — | ||||||||||||||||||||||||||||||
| Issuance of common stock for service |
— | |||||||||||||||||||||||||||||||
| Repurchase of common stock |
— | ( |
) | ( |
) | |||||||||||||||||||||||||||
| Currency translation adjustment |
— | — | ( |
) | ( |
) | ||||||||||||||||||||||||||
| Loss for the period |
— | — | ( |
) | ( |
) | ||||||||||||||||||||||||||
| Balance, June 30, 2025 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ||||||||||||||||||||
See accompanying notes to condensed consolidated financial statements.
ALLARITY THERAPEUTICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)
| Six Months Ended | ||||||||
| June 30, | ||||||||
| 2026 | 2025 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Reconciliation of net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Common stock issued for services | ||||||||
| Stock-based compensation | ||||||||
| Unrealized foreign exchange gains | ( | ) | ||||||
| Non-cash interest expense | ||||||||
| Change in fair value of warrant and derivative liabilities | ( | ) | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Other current assets | ( | ) | ||||||
| Tax credit receivable | ( | ) | ( | ) | ||||
| Prepaid expenses | ( | ) | ( | ) | ||||
| Accounts payable | ( | ) | ||||||
| Accrued expenses and other liabilities | ( | ) | ( | ) | ||||
| Income taxes payable | ||||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Purchase of property and equipment | ( | ) | ||||||
| Net cash used in investing activities | ( | ) | ||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Proceeds from ATM sales of common stock, net of issuance costs | ||||||||
| Net proceeds from sale of common stock and pre-funded warrant issuance | ||||||||
| Proceeds from promissory notes | ||||||||
| Common stock repurchase | ( | ) | ( | ) | ||||
| Net cash provided by financing activities | ||||||||
| Effect of exchange rate changes on cash and cash equivalents | ( | ) | ( | ) | ||||
| Net increase in cash, cash equivalents, and restricted cash | ( | ) | ||||||
| Cash, cash equivalents, and restricted cash, beginning of period | ||||||||
| Cash, cash equivalents, and restricted cash, end of period | $ | $ | ||||||
| Supplemental information | ||||||||
| As reported within the consolidated balance sheets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Restricted cash | ||||||||
| Total cash and cash equivalents and restricted cash as presented in the condensed consolidated balance sheet | $ | $ | ||||||
See accompanying notes to condensed consolidated financial statements.
ALLARITY THERAPEUTICS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. Organization, Principal Activities and Basis of Presentation
Background
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 Venlighedsvej 1, 2970 Horsholm, Denmark. The Company’s business address in the United States is located at 123 E Tarpon Ave, Tarpon Springs, FL 34689.
Liquidity
The accompanying unaudited condensed interim consolidated financial statements (the “Financial Statements”) have been prepared on the basis of continuity of operations, realization of assets and the satisfaction of liabilities and commitments in the ordinary course of business.
Pursuant to the requirements of Accounting Standard Codification (“ASC”) 205-40, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, the Company has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date the accompanying Financial Statements are issued. The Company had an accumulated deficit of $
While the Company believes its capital resources are sufficient to fund the Company’s on-going operations for the next twelve months from the issuance date of the Financial Statements, the Company’s liquidity could be materially affected over this period by: (1) its ability to raise additional capital through equity offerings, debt financings, or other non-dilutive third-party funding; (2) costs associated with new or existing strategic alliances, or licensing and collaboration arrangements; (3) negative regulatory events or unanticipated costs related to the DRP or stenoparib; (4) any other unanticipated material negative events or costs. One or more of these events or costs could materially affect the Company’s liquidity. If the Company is unable to meet its obligations when they become due, the Company may have to delay expenditures, reduce the scope of its research and development programs, or make significant changes to its operating plan.
2. Summary of Significant Accounting Policies
There have been no new or material changes to the significant accounting policies discussed in Form 10-K for the year ended December 31, 2025, that are of significance, or potential significance, to the Company.
Basis of Presentation and Principles of Consolidation
The accompanying unaudited condensed 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 unaudited condensed consolidated financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of our management, reflect all adjustments, which include only normal recurring adjustments, necessary to fairly state our financial position as of June 30, 2026, our results of operations and stockholders’ equity for the three and six months ended June 30, 2026 and 2025, and cash flows for the six months ended June 30, 2026 and 2025. The financial data and the other financial information disclosed in these notes to the condensed consolidated financial statements related to the three and six month period are also unaudited. The results of operations for the three and six months ended June 30, 2026 are not necessarily indicative of the results to be expected for the year ending December 31, 2026 or for any other future annual or interim period. The consolidated balance sheet data as of December 31, 2025 was derived from our audited financial statements, but does not include all disclosures required by GAAP. The condensed consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2025 that was filed with the Securities and Exchange Commission (“SEC”), on March 30, 2026.
The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries:
| Name | Country of Incorporation | |
| Allarity Acquisition Subsidiary Inc. | United States | |
| Allarity Therapeutics Europe ApS (formerly Oncology Venture Product Development ApS) | Denmark | |
| Allarity Therapeutics Denmark ApS (formerly OV-SPV2 ApS)* | Denmark | |
| ALLR Holdings, LLC | United States | |
| ALLR Sponsor, LLC | United States | |
| MPI Inc.* | United States |
| * | In the process of being dissolved because inactive. |
ALLR Holdings, LLC was formed on February 11, 2026, to be the designated entity for restricted cash proceeds from a promissory note. All intercompany transactions and balances, including unrealized profits from intercompany sales, have been eliminated upon consolidation.
ALLR Sponsor, LLC was formed on April 10, 2026. The Company is the Subsidiary’s sole managing member and has the power to direct the activities that most significantly affect the Subsidiary’s economic performance. The Subsidiary was designed with insufficient equity at risk to finance its activities without additional subordinated financial support from the Company and therefore is a variable interest entity. The Company is the Subsidiary’s primary beneficiary because the Company has the power to direct the Subsidiary’s significant activities and has the obligation to absorb losses and the right to receive benefits that could potentially be significant to the Subsidiary. Accordingly, the accounts of the Subsidiary have been included in the Company’s condensed consolidated financial statements from the Subsidiary’s formation date, and all intercompany balances and transactions have been eliminated.
Use of Estimates
The preparation of Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities 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 are not limited to, the accrual for research and development expenses, share based compensation expense, promissory note and fair value of embedded derivatives, 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, but not limited to, uncertainties related to clinical effectiveness of products, commercialization of products, regulatory approvals, dependence on key products, key personnel and third-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.
Derivative Financial Instruments
The Company evaluates financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815, “Derivatives and Hedging”. Derivative instruments are initially recorded at fair value on the grant date and re-valued at each reporting date, with changes in the fair value reported in the condensed consolidated statements of operations. Derivative assets and liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date. The Company accounted for the stock‑price‑linked features contained in the unsecured promissory note A-1, issued pursuant to the Note Purchase Agreement with Streeterville Capital, LLC, under the guidance at FASB ASC Topic 815. See Note 4.
Fair Value Measurement
The Company follows guidance in ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually.
The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:
| Level 1: | Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. |
| Level 2: | Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active. |
| Level 3: | Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability. |
Carrying amounts of certain of the Company’s financial instruments, including cash, cash equivalents and restricted cash, prepaid expenses and other current assets, accounts payable, accrued liabilities, and other short-term liabilities approximate fair value due to their relatively short maturities.
Non-financial assets such as property and equipment are evaluated for impairment and adjusted to fair value using Level 3 inputs only when impairment is recognized. Fair values are considered Level 3 when management makes significant assumptions in developing a discounted cash flow model based upon a number of considerations including projections of revenues, earnings, and a discount rate. To date, the Company has not recorded any adjustments to fair value related to impairment on property and equipment.
The unsecured promissory note A-1 contains stock-price linked features, including (i) a limited redemption feature that may accelerate principal repayment upon the Company's stock meeting specified price thresholds and (ii) a monitoring fee forgiveness feature that may reduce amounts otherwise payable upon sustained low stock price or trading volume conditions. Management determined these features are embedded derivatives that are not clearly and closely related to the debt host and therefore require bifurcation under ASC 815. At issuance, the embedded derivatives were bifurcated and recorded at fair value, with a corresponding reduction to the carrying amount of the unsecured promissory note A-1. The embedded derivative liabilities are remeasured at fair value each reporting period, with changes in fair value recognized in earnings. Fair value is estimated using valuation techniques that incorporate significant unobservable inputs, and, accordingly, the embedded derivatives are classified as Level 3 within the fair value hierarchy under ASC 820.
The embedded derivative liability arising under the A-1 Note is valued using a probability-weighted discounted cash flow model and Monte Carlo simulation framework with significant unobservable inputs including
The change in the fair value measurement using significant inputs (Level 3) for the six months ended June 30, 2026, is summarized below:
| Embedded | ||||
| Derivative | ||||
| ($ in thousands) | Liability | |||
| Balance at March 2, 2026 | $ | |||
| Change in fair value of net derivative liability | ||||
| Balance at June 30, 2026 | $ | |||
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 on the balance sheet date. Revenues and expenses are translated at the average exchange rate in effect during each monthly period. Unrealized translation gains and losses are recorded as a cumulative translation adjustment, which is included in the condensed consolidated statements of changes in 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. During the three months ended June 30, 2026 and 2025, the Company recorded foreign exchange gains (losses) of ($
Concentrations of credit risk and of significant suppliers
Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents. The Company maintains its cash and cash equivalents in financial institutions in amounts that could exceed government-insured limits. The Company does not believe it is subject to additional credit risks beyond those normally associated with commercial banking relationships. The Company has not experienced losses on its cash and cash equivalents accounts and management believes, based upon the quality of the financial institutions, that the credit risk regarding these deposits is not significant. The Company is dependent on third-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 and restricted cash
The Company maintains deposits primarily in financial institutions, which may at times exceed amounts covered by insurance provided by the U.S. Federal Deposit Insurance Corporation (“FDIC”). The Company has not experienced any losses related to amounts in excess of FDIC limits. The Company had restricted cash of $
Property, plant and equipment
Property, plant, and equipment are stated at cost, less accumulated depreciation. Depreciation is recognized using the straight-line method over the estimated useful lives of the respective assets as follows:
| Estimated | ||
| Useful | ||
| Economic | ||
| Life (in years) | ||
| Laboratory equipment | | |
| Furniture and office equipment | |
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 condensed consolidated statements of operations and comprehensive loss. During the three and six months ended June 30, 2026 and 2025, the Company’s other comprehensive loss was $
Recently Issued Accounting Pronouncements
In November 2024, the FASB issued ASU No. 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which 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 do not 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. Accrued liabilities
The Company’s accrued expenses and other current liabilities are comprised of the following:
| June 30, | December 31, | |||||||
| ($ in thousands) | 2026 | 2025 | ||||||
| Development cost liability | $ | $ | ||||||
| Accrued interest on milestone liabilities | ||||||||
| Payroll accruals | ||||||||
| Accrued audit and legal | ||||||||
| Other | ||||||||
| Total accrued expenses and other current liabilities | $ | $ | ||||||
4. Convertible and Non-Convertible Promissory Notes
Notes Purchase Agreement - Streeterville
On March 2, 2026, the Company entered into a Note Purchase Agreement with Streeterville Capital, LLC ("Streeterville"), pursuant to which the Company issued and sold (i) an unsecured promissory note (the "A-1 Note"), and (ii) a secured promissory note (the "B Note") for aggregate gross proceeds of $
A-1 Note: The Company issued the A-1 Note with a stated principal amount of $
Ninety days after issuance, the Company is charged a one-time fee for monitoring this Note equal to the outstanding balance divided by .85 less the outstanding balance. On May 31, 2026, the monitoring fee was $
Beginning six months after issuance, the investor may require monthly cash redemptions of up to $
B Note: The Company issued the B Note in the principal amount of $
Beginning six months after issuance, the investor may require monthly cash redemptions of up to $
As of June 30, 2026, the A-1 Note, B Note, and related net embedded derivative liability (see Note
| June 30, | December 31, | |||||||
| ($ in thousands) | 2026 | 2025 | ||||||
| Principal balance and fees | $ | $ | ||||||
| Original issue discount (OID) | ||||||||
| Unamortized OID | ( | ) | ||||||
| Accrued interest | ||||||||
| Monitoring Fee | ||||||||
| Unamortized discounts/deferred financing | ( | ) | ||||||
| Total outstanding debt | $ | $ | ||||||
Convertible Promissory Note - Novartis
See Note 6.
5. Stockholders’ Equity
Share Repurchase Plan
On March 3, 2025, the board of directors approved a share repurchase program, with authorization to purchase up to $
Sale of Common Stock
On January 28, 2026, Allarity Therapeutics, Inc. entered into a Common Stock Purchase Agreement with Tumim Stone Capital LLC ("Tumim"). Pursuant to the Purchase Agreement, the Company has the right, but not the obligation, to sell to Tumim up to $
The Company issued
ATM Facility
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 may offer and sell, from time to time at its sole discretion, shares of its common stock, par value $
Under the Sales Agreement, Ascendiant may sell shares by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415(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 may impose). The Company agreed to pay Ascendiant a commission of
The Company sold
Equity Incentive Plan
The Company has in effect the Allarity Therapeutics, Inc. 2021 Incentive Plan (as amended, the “2021 Incentive Plan”). Under the 2021 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. The 2021 Incentive Plan authorizes grants to issue up to
Stock-based compensation expense has been reported in the Company’s condensed consolidated statements of operations as follows:
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| ($ in thousands) | 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Research and development | $ | $ | $ | $ | ||||||||||||
| General and administrative | ||||||||||||||||
| Total stock-based compensation expense | $ | $ | $ | $ | ||||||||||||
Restricted Stock Units
The following table summarizes the restricted stock unit activity during the six months ended June 30, 2026:
| Weighted | ||||||||
| Number of | Average Grant | |||||||
| Units | Date Fair Value | |||||||
| Unvested balance at December 31, 2025 | $ | |||||||
| Granted | $ | |||||||
| Unvested balance at June 30, 2026 | $ | |||||||
At June 30, 2026, the Company had unrecognized stock-based compensation expense related to restricted stock awards of $
Stock Options
The following table summarizes stock option activity during the six months ended June 30, 2026:
| Weighted | ||||||||||||||||
| Average | ||||||||||||||||
| Weighted | Remaining | Aggregate | ||||||||||||||
| Number | Average | Contractual | Intrinsic Value | |||||||||||||
| of Options | Exercise Price | Term (years) | (in thousands) | |||||||||||||
| Outstanding at December 31, 2025 | $ | $ | ||||||||||||||
| Exercised/Forfeited | — | |||||||||||||||
| Outstanding at June 30, 2026 | $ | 8.5 | ||||||||||||||
The aggregate intrinsic value of options is calculated as the difference between the exercise price of the underlying options and the fair value of the Company’s common stock for those options that had exercise prices lower than the fair value of the Company’s common stock. As of June 30, 2026, all of the outstanding stock options have been fully vested.
License Agreement with Novartis for Dovitinib
On January 26, 2024, the Company received a termination notice from Novartis due to a material breach of the License Agreement. Accordingly, under the terms of the License 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
7. Loss Per Share of Common Stock
Basic loss per share is derived by dividing net loss applicable to common stockholders by the weighted average number of shares of common stock outstanding during each period. Diluted loss per share includes the effect, if any, of the potential exercise or conversion of securities, such as warrants and stock options, which would result in the issuance of incremental shares of common stock unless such effect is anti-dilutive. In calculating the basic and diluted net loss per share applicable to common stockholders, the weighted average number of shares remained the same for both calculations because when a net loss exists, dilutive shares are not included in the calculation. Potentially dilutive securities outstanding, as determined by the latest applicable conversion price, that have been excluded from diluted loss per share due to being anti-dilutive include the following:
| Three and Six Months Ended | ||||||||
| June 30, | ||||||||
| 2026 | 2025 | |||||||
| Warrants | ||||||||
| Options | ||||||||
| Unvested restricted stock units | ||||||||
8. 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.
9. Subsequent Event
On July 7, we announced the Clinical Laboratory Improvement Amendments (CLIA) certification for our in-house laboratory. With all equipment in place, our Horsholm, Denmark, laboratory is able to do all necessary testing in house to support the acceleration of stenoparib toward FDA registration. With the lab already in place, the certification allows us to integrate our processes to reduce cost and turnaround times for DRP analyses and improve communication with clinical trial sites.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Forward-Looking Statements
You should read the following discussion and analysis of our financial condition and results of operations together with “Cautionary Note Regarding Forward-Looking Statements” and our condensed consolidated financial statements and related notes included under Item 1 of this Quarterly Report as well as our most recent Annual Report on Form 10-K for the year ended December 31, 2025, including Part 1, Item 1A “Risk Factors.”
The forward-looking statements contained in this report reflect our views and assumptions as of the effective date of this report. New risks and uncertainties arise from time to time, and it is impossible for us to predict these events or how they may affect us. Except as required by law, we assume no responsibility for updating any forward-looking statements to reflect events or circumstances that may arise after the date of this report, except as required by applicable law.
We qualify all of our forward-looking statements by these cautionary statements. In addition, with respect to all of our forward-looking statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.
Overview
We are a clinical-stage, precision medicine pharmaceutical company focused on developing novel anti-cancer therapeutics for patients with high unmet medical need. We were founded on the innovation of our novel Drug Response Predictor (DRP®) platform. The DRP® technology is designed to define the gene expression signatures in cancer cells that predict the cancer cell’s sensitivity to a specific cancer therapeutic. Once defined, the DRP® gene expression signature can then be assessed in cancer tissue biopsies from patients to identify those cancers that share this signature of drug sensitivity, and by extension, to identify those patients who may then be most likely to receive benefit from that specific anti-cancer therapeutic. We have developed and published DRP® signatures for dozens of anti-cancer therapeutics. Ideally, by using DRP to identify the patients most likely to benefit clinically from a given therapeutic, clinical development of that therapeutic can be focused on a smaller, more responsive patient population, which would allow for smaller, cheaper and quicker trials while also enhancing the probability of clinical and regulatory success for that therapeutic. Historically, we have generated DRP signatures for numerous anti-cancer therapeutics and had in-licensed numerous assets for DRP-guided development, including Liposomal CisPlatin (LiPlaCis), Irofulven and dovitinib as well as the novel PARP/tankyrase inhibitor, stenoparib.
Recent Developments
CLIA Lab Certification
On July 7, we announced the Clinical Laboratory Improvement Amendments (CLIA) certification for our in-house laboratory. With all equipment in place, our Horsholm, Denmark, laboratory is able to do all necessary testing in house to support the acceleration of stenoparib toward FDA registration. With the lab already in place, the certification allows us to integrate our processes to reduce cost and turnaround times for DRP analyses and improve communication with clinical trial sites.
Risks and Uncertainties
We are subject to risks common to companies in the biotechnology industry, including but not limited to, risks of failure of preclinical studies and clinical trials, the need to obtain marketing approval for any drug product candidate that we may identify and develop, the need to successfully commercialize and gain market acceptance of our product candidate, dependence on key personnel and collaboration partners, protection of proprietary technology, compliance with government regulations, development by competitors of technological innovations, and the ability to secure additional capital to fund operations. Our product candidate currently under development will require significant additional research and development efforts, including preclinical and clinical testing and regulatory approval prior to commercialization. Even if our research and development efforts are successful, it is uncertain when, if ever, we will realize significant revenue from product sales.
Recently Issued Accounting Pronouncements
See Note 2, “Summary of Significant Accounting Policies”, to our unaudited condensed consolidated financial statements contained in Part I, Item 1 of this Quarterly Report for a discussion of recent accounting pronouncements.
Financial Operations Overview
Since our inception in September 2004, we have focused substantially all our resources on conducting research and development activities, including drug discovery and preclinical studies, establishing, and maintaining our intellectual property portfolio, the manufacturing of clinical and research material, hiring personnel, raising capital and providing general and administrative support for these operations. In recent years, we have recorded very limited revenue from collaboration activities, or any other sources. We have funded our operations to date primarily from convertible notes and the issuance and sale of our securities.
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:
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advance stenoparib through clinical trials; |
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pursue regulatory approval of stenoparib; |
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operate as a public company; |
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continue our preclinical programs and clinical development efforts; |
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continue research activities for stenoparib; and |
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manufacture supplies for our preclinical studies and clinical trials. |
Components of Operating Expenses
Research and Development Expenses
Research and development expenses include:
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expenses incurred under agreements with third-party contract organizations, and consultants; |
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costs related to production of drug substance, including fees paid to contract manufacturers; |
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laboratory and vendor expenses related to the execution of preclinical trials; and |
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employee-related expenses, which include salaries, benefits, and stock-based compensation |
We expense all research and development costs in the periods in which they are incurred. Costs for certain development activities are recognized based on an evaluation of the progress to completion of specific tasks and estimates of services performed using information and data provided to us by our vendors and third-party service providers. Non-refundable advance payments for goods or services to be received in future periods for use in research and development activities are deferred and accounted for as prepaid expenses. The prepayments are then expensed as the related goods are delivered and as services are performed. To date, most of these expenses have been incurred to advance our lead drug candidate stenoparib.
We expect our research and development expenses on stenoparib to increase substantially for the foreseeable future as we continue to invest to accelerate stenoparib in clinical trials designed to attain regulatory approval. We expect additional costs in research and development activities as we continue to conduct clinical trials. The process of conducting the necessary clinical research to obtain regulatory approval is costly and time-consuming, and the successful development of our drug candidate is highly uncertain. As a result, we are unable to determine the duration and completion costs of our research and development projects or when and to what extent we will generate revenue from the commercialization and sale of stenoparib.
General and Administrative Expenses
General and administrative expenses consist primarily of personnel-related costs, facilities costs, depreciation and amortization expenses and professional services expenses, including legal, human resources, audit, and accounting services. Personnel-related costs consist of salaries, benefits, travel, insurance and stock-based compensation. Facilities costs consist of rent and maintenance of facilities. We expect our general and administrative expenses to increase for the foreseeable future due to anticipated increases in headcount to advance stenoparib and as a result of operating as a public company, including expenses related to compliance with the rules and regulations of the SEC, Nasdaq, additional insurance expenses, investor relations activities and other administrative and professional services.
Results of Operations
Comparison of the Three and Six Months Ended June 30, 2026 and 2025 (unaudited)
| Three Months Ended |
Six Months Ended |
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| June 30, |
Increase/ |
June 30, |
Increase/ |
|||||||||||||||||||||
| ($ in thousands) |
2026 |
2025 |
(Decrease) |
2026 |
2025 |
(Decrease) |
||||||||||||||||||
| Revenue: |
||||||||||||||||||||||||
| License Revenue |
$ | - | $ | - | $ | - | $ | 25 | $ | - | $ | 25 | ||||||||||||
| Total revenue |
— | — | — | 25 | — | 25 | ||||||||||||||||||
| Operating expenses: |
||||||||||||||||||||||||
| Research and development |
1,345 | 2,321 | (976 | ) | 2,642 | 3,724 | (1,082 | ) | ||||||||||||||||
| General and administrative |
1,326 | 1,812 | (486 | ) | 2,742 | 3,445 | (703 | ) | ||||||||||||||||
| Total operating expenses |
2,671 | 4,133 | (1,462 | ) | 5,384 | 7,169 | (1,785 | ) | ||||||||||||||||
| Loss from operations |
(2,671 | ) | (4,133 | ) | 1,462 | (5,359 | ) | (7,169 | ) | 1,810 | ||||||||||||||
| Other income (expense): |
||||||||||||||||||||||||
| Interest income |
217 | 237 | (20 | ) | 380 | 459 | (79 | ) | ||||||||||||||||
| Interest expense |
(719 | ) | (12 | ) | (707 | ) | (948 | ) | (69 | ) | (879 | ) | ||||||||||||
| Foreign exchange gains (losses) |
(104 | ) | 1,588 | (1,692 | ) | (100 | ) | 1,726 | (1,826 | ) | ||||||||||||||
| Change in fair value of derivative and warrant liabilities |
(128 | ) | — | (128 | ) | (128 | ) | 1 | (129 | ) | ||||||||||||||
| Total other income (expense), net |
(734 | ) | 1,813 | (2,547 | ) | (796 | ) | 2,117 | (2,913 | ) | ||||||||||||||
| Net loss |
$ | (3,405 | ) | $ | (2,320 | ) | $ | (1,085 | ) | $ | (6,155 | ) | $ | (5,052 | ) | $ | (1,103 | ) | ||||||
Revenue
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.
Research and Development Expenses
For the three months ended June 30, 2026, compared to June 30, 2025
Research and development expenses decreased $1.0 million primarily due to reduced costs and supplies of the Phase II clinical trial of stenoparib. A significant amount of these fees occurred in 2025 and were recognized at the time of purchase.
For the six months ended June 30, 2026, compared to June 30, 2025
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.
General and Administrative Expenses
For the three months ended June 30, 2026 compared to June 30, 2025
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.
For the six months ended June 30, 2026 compared to June 30, 2025
General and administrative expenses decreased by $0.7 million for the six months ended June 30, 2026, compared to June 30, 2025. The decrease was primarily due to a reduction in legal fees.
Other income (expense)
For the three months ended June 30, 2026, compared to June 30, 2025
For the three months ended June 30, 2026, net other income decreased $2.5 million from the comparable quarter. Interest income was substantially consistent. Foreign exchange gains decreased $1.7 million (moving from a $1.6 million gain in Q2 2025 to a $0.1 million loss in Q2 2026). Interest expense increased $0.7 million and change in fair value of derivative liability was $0.1 million, both primarily driven by the March 2026 issuance of the Streeterville promissory notes..
For the six months ended June 30, 2026, compared to June 30, 2025
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.
Liquidity, Capital Resources and Plan of Operation
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.
For the three months ended June 30, 2026, and 2025, there were no sales of equity or financing transactions.
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.
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.
We believe that our current cash balance is sufficient to fund operations through at least the next twelve months from the date of this Quarterly Report. We may need to seek additional capital through the sale of our securities or other sources to carry out all of our planned research and development and potential commercialization activities. There are no assurances, however, that we will be successful in raising additional working capital, or if we are able to raise additional working capital, we may be unable to do so on commercially favorable terms. Our failure to raise capital or enter into other such arrangements if and when needed would have a negative impact on our business, results of operations and financial condition and our ability to develop stenoparib.
We expect to incur substantial expenses in the foreseeable future for the development and potential commercialization of our drug candidate and ongoing internal research and development programs. At this time, we cannot reasonably estimate the nature, timing, or aggregate amount of costs for our development, potential commercialization, and internal research and development programs. However, to complete our current and future preclinical studies and clinical trials, and to complete the process of obtaining regulatory approval for stenoparib, as well as to build the sales, marketing, and distribution infrastructure that we believe will be necessary to commercialize stenoparib, if approved, we may require substantial additional funding in the future.
Contractual Obligations and Commitments
We enter into agreements in the normal course of business with vendors for preclinical studies, clinical trials, and other service providers for operating purposes. We have not included these payments in a table of contractual obligations since these contracts are generally cancellable at any time by us following a certain period after notice and therefore, we believe that our non-cancellable obligations under these agreements are not material.
Cash Flows
| Six Months Ended |
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| June 30, |
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| ($ in thousands) |
2026 | 2025 | ||||||
| Total cash, cash equivalents and restricted cash provided by (used in): |
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| Operating activities, net |
$ | (7,057 | ) | $ | (8,167 | ) | ||
| Investing activities, net |
(64 | ) | — | |||||
| Financing activities, net |
19,740 | 8,578 | ||||||
| Effect of foreign exchange rates on cash |
(325 | ) | (2,143 | ) | ||||
| Net increase (decrease) in cash, cash equivalents and restricted cash |
$ | 12,294 | $ | (1,732 | ) | |||
Operating Activities
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.
Investing Activities
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.
Financing Activities
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.
Operating Capital and Capital Expenditure Requirements
We believe that our existing cash and cash equivalents will be sufficient to fund our anticipated expenditures and commitments for the next twelve months. Our estimate as to how long we expect our cash to be able to continue to fund our operations is based on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect. Further, changing circumstances, some of which may be beyond our control, could cause us to consume capital significantly faster than we currently anticipate, and we may need to seek additional funds sooner than planned.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements.
Critical Accounting Policies and Use of Estimates
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.
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.
Recently Issued Accounting Standards Not Yet Effective or Adopted
See Note 2, "Summary of Significant Accounting Policies", to our unaudited condensed consolidated financial statements contained in Part I, Item 1 of this Quarterly Report for a discussion of recent accounting pronouncements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act of 1934, as amended (the “Exchange Act”) and are not required to provide the information under this item.
Item 4. Controls and Procedures.
Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, as of the end of the period covered by this Financial Report, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Our disclosure controls and procedures are designed to provide reasonable assurance that the information required to be included in our SEC reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, relating to the Company, including our consolidated subsidiaries, and was made known to them by others within those entities, particularly during the period when this report was being prepared. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of June 30, 2026.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the fiscal quarter ended June 30, 2026, which have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II—OTHER INFORMATION
Item 1. Legal Proceedings.
From time to time in the future, we may become involved in litigation or other legal proceedings that arise in the ordinary course of business. We are not currently party to any legal proceedings, and we are not aware of any pending or threatened litigation against us that we believe could have a material adverse effect on our business, operating results or financial condition. In the event we are subject to a legal proceeding, it could have a material adverse impact on us because of litigation costs and diversion of management resources.
Item 1A. Risk Factors.
Except as set forth below, there have been no material changes to the risk factors disclosed in Part I, Item 1A, “Risk Factors,” of our Annual Report on Form 10-K for the year ended December 31, 2025.
Sales of our common stock under our equity line of credit with Tumim Stone Capital LLC may result in substantial dilution to our stockholders, may adversely affect the market price of our common stock and may not provide us with the full amount of capital contemplated by the facility.
On January 28, 2026, we entered into a Common Stock Purchase Agreement with Tumim Stone Capital LLC, or Tumim, under which we have the right, but not the obligation, to direct Tumim to purchase up to $6.0 million of newly issued shares of our common stock, subject to the conditions and limitations contained in the agreement. During the six months ended June 30, 2026, we sold 2,000 shares under the agreement for gross proceeds of $2,000, and approximately $5.998 million remained available under the facility as of June 30, 2026.
Any issuances under the facility will dilute the ownership and voting interests of our existing stockholders. Tumim may resell shares it acquires into the public market, and such sales, or the perception that such sales may occur, could cause or contribute to a decline in the market price of our common stock. A decline in our market price could increase the number of shares that we would need to issue to raise the same amount of proceeds, result in further dilution and make it more difficult for us to raise additional capital on favorable terms.
Our obligations under the Streeterville financing may materially impair our liquidity and financing flexibility, and a trigger event or default could result in acceleration, increased amounts owed, enforcement against restricted cash, pledged equity and subsidiary guarantors, and dilution to our stockholders.
On March 2, 2026, we entered into a Note Purchase Agreement with Streeterville Capital, LLC, or Streeterville, under which we issued an A-1 Note and a B Note for aggregate gross proceeds of $20.0 million. The A-1 Note had an initial stated principal amount of approximately $10.93 million, including an original issue discount and transaction-expense reimbursement, bears interest at 9% per annum compounded daily and matures on September 2, 2027. The B Note has a principal amount of $10.0 million, bears interest at 5% per annum compounded daily and also matures on September 2, 2027.
Although no redemptions, covenant breaches or defaults had occurred as of June 30, 2026, there can be no assurance that we will remain in compliance with the financing documents or have sufficient cash to satisfy all redemptions and other obligations when due. We may need to raise additional capital to make payments under the notes, including through issuances of common stock or other equity-linked securities. Any such financing could be highly dilutive, could be available only on unfavorable terms or might not be available at all. A default or enforcement action also could trigger defaults under other agreements, materially adversely affect our liquidity and ability to continue our development programs and cause the market price of our common stock to decline.
ALLR Sponsor LLC (the “Subsidiary”), our fully-owned subsidiary, which we consolidate as a variable interest entity, may expose us to additional financial, operational, regulatory, accounting, conflicts-of-interest and reputational risks.
We have determined that Subsidiary is a variable interest entity and that we are its primary beneficiary because we have the power to direct the activities that most significantly affect its economic performance and have the obligation to absorb losses or the right to receive benefits that could potentially be significant to the Subsidiary. Accordingly, we consolidate the Subsidiary in our condensed consolidated financial statements.
The Subsidiary may incur formation, professional, offering, operating, and other costs. The Subsidiary also may make investments, advances or other capital commitments and may enter into indemnification, reimbursement or support arrangements. Amounts invested or advanced by us or the Subsidiary may not be recoverable, and the Subsidiary may incur additional wind-down, professional or other expenses.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
(c) Issuer Purchases of Equity Securities
The following table provides information with respect to repurchases of shares of common stock by the Company during the three months ended June 30, 2026:
| Period |
Total Number of Shares Purchased |
Average Price Paid per Share |
Cumulative Shares Purchased as Part of Publicly Announced Plans* |
Dollar Value of Shares That May Yet Be Purchased Under the Plan |
||||||||||||
| April 2026 |
— | $ | — | 65,000 | $ | 4,928,833 | ||||||||||
| May 2026 |
— | $ | — | 65,000 | $ | 4,928,833 | ||||||||||
| June 2026 |
— | $ | — | 65,000 | $ | 4,928,833 | ||||||||||
| Total |
— | |||||||||||||||
* Cumulative shares represent all shares purchased under the 2026 Share Repurchase Plan since its adoption.
On March 3, 2025, the Company’s board of directors approved the share repurchase program (the "2025 Share Repurchase Plan") with authorization to purchase up to $5 million of the Company’s outstanding shares of common stock. Pursuant to the 2025 Share Repurchase Plan, repurchases of the Company’s common stock were made through open market transactions or other methods as permitted by securities laws and regulations, including Rule 10b-18 under the Securities Exchange Act of 1934, as amended. The 2025 Share Repurchase Plan was authorized through February 28, 2026; however, the Company is not obligated to acquire any specific number of shares and may be modified, suspended, or discontinued at any time at the Company’s discretion.
On February 26, 2026, the board of directors approved a new share repurchase program ("the 2026 Share Repurchase Plan"), with authorization to purchase up to $5 million of the Company's outstanding shares of common stock over a twelve month period ending March 1, 2027. For the three months ended June 30, 2026, the Company did not repurchase any shares. For the six months ended June 30, 2026, the Company repurchased 264,000 shares at a cost of $262,036. Of the shares repurchased, 199,000 shares occurred under the 2025 Share Repurchase Plan and 65,000 shares were repurchased during March under the 2026 Share Repurchase Plan. As of June 30, 2026, there is $4,928,833 remaining for share repurchases under the 2026 Share Repurchase Plan.
Item 3. Defaults Upon Senior Securities.
Not applicable.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
None of our directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement (as defined in Item 408(c) of Regulation S-K) during the second quarter of 2026.
Item 6. Exhibits.
See the Exhibit Index to this Quarterly Report immediately below and before the signature page hereto, which Exhibit Index is incorporated by reference as if fully set forth herein.
| Incorporated by Reference |
||||||||||||
| Exhibit Number |
Exhibit Description |
Form |
File No. |
Exhibit |
Filing Date |
Filed Herewith |
||||||
| 3.1 |
Certificate of Incorporation |
S-4 |
333-258968 |
3.1 |
August 20, 2021 |
|||||||
| 3.2 |
Certificate of Amendment to the Certificate of Incorporation of Allarity Therapeutics, Inc. |
S-4/A |
333-259484 |
3.3 |
September 29, 2021 |
|||||||
| 3.3 |
Second Certificate of Amendment to Certificate of Incorporation of Allarity Therapeutics, Inc. |
8-K |
001-41160 |
3.1 |
March 20, 2023 |
|||||||
| 3.4 |
Third Certificate of Amendment to Certificate of Incorporation of Allarity Therapeutics, Inc. |
8-K |
001-41160 |
3.1 |
March 24, 2023 |
|||||||
| 3.5 |
Fourth Certificate of Amendment to Certificate of Incorporation of Allarity Therapeutics, Inc. |
8-K |
001-41160 |
3.1 |
June 28, 2023 |
|||||||
| 3.6 |
Fifth Certificate of Amendment to Certificate of Incorporation of Allarity Therapeutics, Inc. |
8-K |
001-41160 |
3.1 | April 4, 2024 |
|||||||
| 3.7 |
Specimen Common Stock Certificate of Allarity Therapeutics, Inc. |
S-4/A |
333-259484 |
4.1 |
September 29, 2021 |
|||||||
| 3.8 |
Amended and Restated Bylaws of Allarity Therapeutics, Inc. |
S-4/A |
333-259484 |
3.4 |
October 18, 2021 |
|||||||
| 3.9 |
Amendment No. 1 to Amended and Restated Bylaws of Allarity Therapeutics, Inc. |
8-K |
001-41160 |
3.1 |
July 11, 2022 |
|||||||
| 3.10 | Sixth Certificate of Amendment to Certificate of Incorporation of Allarity Therapeutics, Inc. | 8-K | 001-41160 | 3.1 | September 9, 2024 | |||||||
| 3.11 | Seventh Certificate of Amendment to Certificate of Incorporation of Allarity Therapeutics, Inc. | 8-K | 001-41160 | 3.2 | September 9, 2024 | |||||||
| 3.12 | Certificate of Correction to the Seventh Certificate of Amendment to the Certificate of Incorporation of Allarity Therapeutics, Inc. | 8-K/A | 001-41160 | 3.3 | September 10, 2024 | |||||||
| 4.1 |
|
Unsecured Promissory Note A-1, dated March 2, 2026. |
|
8-K |
|
001-41160 |
|
4.1 |
|
March 6, 2026 |
|
|
| 4.2 |
|
Secured Promissory Note B, dated March 2, 2026. |
|
8-K |
|
001-41160 |
|
4.2 |
|
March 6, 2026 |
|
|
| 10.1 |
|
Common Stock Purchase Agreement, dated as of January 28, 2026, by and between the Company and Tumim Stone Capital, LLC. |
|
8-K |
|
001-41160 |
|
10.1 |
|
January 29, 2026 |
|
|
| 10.2 |
|
Note Purchase Agreement, dated March 2, 2026. |
|
8-K |
|
001-41160 |
|
10.1 |
|
March 6, 2026 |
|
|
| 10.3 |
|
Deposit Account Control Agreement, dated March 2, 2026. |
|
8-K |
|
001-41160 |
|
10.2 |
|
March 6, 2026 |
|
|
| 10.4 |
|
Guaranty, dated March 2, 2026. |
|
8-K |
|
001-41160 |
|
10.3 |
|
March 6, 2026 |
|
|
| 10.5 |
|
Pledge Agreement, dated March 2, 2026. |
|
8-K |
|
001-41160 |
|
10.4 |
|
March 6, 2026 |
|
|
| 31.1 |
Certifications of the Chief Executive Officer under Section 302 of the Sarbanes-Oxley Act |
X |
||||||||||
| 31.2 |
Certifications of the Chief Financial Officer under Section 302 of the Sarbanes-Oxley Act |
X |
||||||||||
| 32* |
Section 1350 Certifications of Chief Executive Officer and Chief Financial Officer | — | ||||||||||
| 101.INS |
Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) |
X |
||||||||||
| 101.SCH |
Inline XBRL Taxonomy Extension Schema Document |
X |
||||||||||
| 101.CAL |
Inline XBRL Taxonomy Extension Calculation Linkbase Document |
X |
||||||||||
| 101.DEF |
Inline XBRL Taxonomy Extension Definition Linkbase Document |
X |
||||||||||
| 101.LAB |
Inline XBRL Taxonomy Extension Label Linkbase Document |
X |
||||||||||
| 101PRE |
Inline XBRL Taxonomy Extension Presentation Linkbase Document |
X |
||||||||||
| 104* |
The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2026, formatted in Inline XBRL (included in Exhibit 101) |
— |
||||||||||
| * |
Furnished herewith. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| ALLARITY THERAPEUTICS, INC., |
||
| Date: August 14, 2026 |
By: |
/s/ Thomas H. Jensen |
| Thomas H. Jensen |
||
| Chief Executive Officer |
||
| Date: August 14, 2026 |
By: |
/s/ Jeffrey S. Ervin |
| Jeffrey S. Ervin |
||
| Chief Financial Officer |
||