Note 6 - Stockholders' Equity

9 Months Ended

Sep. 30, 2025

Notes to Financial Statements

Equity [Text Block]

6. Stockholders’ Equity

Share Repurchase Plan

On March 3, 2025, the board of directors approved a share repurchase program, with authorization to purchase up to $5 million of the Company’s outstanding shares of common stock. For the three months ended September 30, 2025, the Company repurchased 145,061 shares at a cost of $140,038. For the nine months ended September 30, 2025, the Company purchased 2,600,763 shares for an aggregate cost of $2,705,550, inclusive of $52,015 in transaction fees. For the nine months ended  September 30, 2025 and 2024, the total proceeds used to repurchase shares were $2,705,550 and $0, respectively. As of September 30, 2025, there is $2,294,450 remaining for share repurchases under the share repurchase program.  

Share Issuance for Services

On July 7, 2025, the Company issued 49,505 restricted shares to a vendor in exchange for services rendered. For the nine months ended September 30, 2025, the Company issued 102,873 restricted shares for services rendered.

Sale of Common Stock

On September 22, 2025, the Company entered into a Securities Purchase Agreement with a certain accredited investor, pursuant to which the Company agreed to sell the shares and/or prefunded warrants to the investor, in a private placement transaction. The Company agreed to issue and sell 1,562,500 shares of the Company’s common stock for $1.60 per Share, and/or prefunded warrants to purchase one share of common stock per prefunded warrant, at an offering price of $1.60 per prefunded warrant, for gross proceeds to the Company of approximately $2.5 million, before deducting $0.05 million in legal fees and expenses.

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 $0.0001 per share, having an aggregate gross sales price of up to $50 million, to or through the Ascendiant. The offer and sale of the shares will be made pursuant to a previously filed shelf registration statement on Form S-3 (File No. 333-275282), originally filed with the SEC on November 2, 2023 and declared effective by the SEC on  November 29, 2023, and the related prospectus supplement dated September 9, 2024 and filed with the SEC on such date pursuant to Rule 424(b) under the Securities Act of 1933, as amended (the “Securities Act”). On May 2, 2024, the Company’s public float increased above $75.0 million and, as a result, the Company is not subject to the limitations contained in General Instruction I.B.6 of Form S-3.

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 3.0% of the gross proceeds from the sales of shares sold through Ascendiant under the Sales Agreement and has provided the Ascendiant with customary indemnification and contribution rights. The Company also agreed to reimburse Ascendiant for certain expenses incurred in connection with the Sales Agreement. The Company and the Ascendiant may each terminate the Sales Agreement at any time upon specified prior written notice. The Sales Agreement was fully utilized and terminated on March 31, 2025.

For the three months ended  September 30, 2025 and 2024, the amount of proceeds generated from the sale of common stock under the Sales Agreement was $0.0 and $5.4 million from the sale of 0 and 1,493,878 shares, respectively.  

For the nine months ended September 30, 2025, the Company sold an aggregate of 9,719,173 shares of its common stock pursuant to the Sales Agreement, resulting in net proceeds of $9.7 million.  For the nine months ended September 30, 2024, the Company sold an aggregate of $33.1 million pursuant to the Sales Agreement from the sale of 2,556,927 shares.    

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 717,941 shares of authorized but unissued common stock and expires 10 years from adoption and limits the term of each option to no more than 10 years from the date of grant.

The number of shares available for grant and issuance under the 2021 Incentive Plan will be increased on January 1^st of each of 2022 through 2031, by the lesser of (a) 5% of the number of shares of all classes of the Company’s common stock issued and outstanding on each December 31 immediately prior to the date of increase or (b) such number of shares determined by the Board. In January 2025, Board approved a 5% increase to the authorized shares in the 2021 Incentive Plan from 353,163 to 717,941.

Total shares available for the issuance of stock-based awards under the Company’s 2021 Incentive Plan was 85,051 shares at September 30, 2025.

Stock-based compensation expense has been reported in the Company’s condensed consolidated statements of operations as follows:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
($ in thousands)	2025		2024		2025		2024
Research and development	$	76	$	11	$	217	$	8
General and administrative		56		6		218		(1	)
Total stock-based compensation expense	$	132	$	17	$	435	$	7

Restricted Stock Units

The following table summarizes the restricted stock unit activity during the nine months ended September 30, 2025:

				Weighted
	Number of			Average Grant
	Units			Date Fair Value
Unvested balance at December 31, 2024		174,038		$	2.36
Granted		570,671		$	1.01
Vested		(39,494	)	$	2.11
Forfeited		(85,051	)	$	2.23
Unvested balance at September 30, 2025		620,164		$	1.15

At September 30, 2025, the Company had unrecognized stock-based compensation expense related to restricted stock awards of $0.41 million, which is expected to be recognized over the remaining weighted-average vesting period of 1.3 years. The expense is recognized over the vesting period of the award.

Stock Options

The following table summarizes stock option activity during the nine months ended September 30, 2025:

						Weighted
						Average
				Weighted		Remaining		Aggregate
	Number			Average		Contractual		Intrinsic Value
	of Options			Exercise Price		Term (years)		(in thousands)
Outstanding at December 31, 2024		—		$	—		—	$	—
Issued		75,000			1.01		9.3		—
Forfeited		(25,000	)		1.01		9.3		—
Outstanding at September 30, 2025		50,000		$	1.01		9.3	$	—
Exercisable		—		$	—		—	$	—

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 September 30, 2025, the total compensation cost related to non-vested options awards not yet recognized is $11,915 with a weighted average remaining vesting period of 0.3 years.

The Company estimated the fair value of stock options granted in the period presented using a Black-Scholes option-pricing model utilizing the following assumptions:

	As of September 30,
	2025			2024
Volatility		135	%		—
Expected term (in years)		5.6			—
Risk-free rate		3.7	%		—
Expected dividend yield		—			—