Note 11 - Stock-based Compensation

12 Months Ended

Dec. 31, 2025

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

11. Stock-based Compensation

2021 Equity Incentive Plan

The Company has in effect the Allarity Therapeutics, Inc. 2021 Incentive Plan (as amended, the "2021 Incentive Plan"). The 2021 Incentive Plan was approved by shareholders in connection with the Recapitalization Share Exchange and became effective on December 20, 2021. The 2021 Incentive Plan authorizes the award of stock options, Restricted Stock Awards (“RSAs”), Stock Appreciation Rights (“SARs”), Restricted Stock Units (“RSUs”), cash awards, performance awards and stock bonus awards. Under 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 limits the term of each option to no more than 10 years from the date of the grant.

Total shares available for the issuance of stock-based awards under the Company's 2021 Incentive Plan as of December 31, 2024 was 353,163. The number of shares reserved for issuance under our 2021 Plan will increase automatically on January 1 of each of 2022 through 2031 by the number of shares equal to the lesser of 5% of the aggregate number of outstanding shares of our common stock as of the immediately preceding December 31, or a number as may be determined by our board of directors. In January 2025 and 2026, the Board approved an increase of 5% of the outstanding shares of common stock, or 364,778 and 804,049 shares, respectively. The total shares authorized under the plan totaled 717,941 and 1,521,990 for 2025 and 2026, respectively.

Restricted Stock Units

The following table summarizes restricted stock unit activity for the year ended December 31, 2025:

						*Weighted*
						*Average Grant*
		*Number of Units*				*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 December 31, 2025			620,164				1.15

For the years ended December 31, 2025 and 2024, stock-based compensation expenses associated with the restricted stock units for employees were approximately $445 thousand and $68 thousand, respectively.

At December 31, 2025, the Company had unrecognized stock-based compensation expense related to restricted stock units of $312 thousand, which is expected to be recognized over the remaining weighted-average vesting period of 1.9 years. This expense is recognized over the vesting period of the award.

Stock Options

The following table summarizes the stock option activity for the years ended December 31, 2025 and 2024:

										*Weighted*
						*Weighted*				*Average*				*Aggregate*
						*Average*				*Contractual*				*Intrinsic*
		*Number*				*Exercise*				*Term*				*Value*
		*of Shares*				*Price*				*(in years)*				*(in thousands)*

Outstanding as of December 31, 2023			9			$	4,725,600				3.2			$	—
Forfeited			(9	)			(4,725,600	)			3.2
Outstanding as of December 31, 2024			—			$	—				—			$	—
Granted			75,000			$	1.01				9.0				5,250
Forfeited			(25,000	)		$	1.01				9.0				(1,750	)
Outstanding as of December 31, 2025			50,000			$	1.01				9.0			$	3,500

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

For the years ended December 31, 2025 and 2024, stock-based compensation expenses (recoveries) associated with the options awards for employees and non-employees were approximately $36 thousand and $0, respectively. At December 31, 2025, the Company had unrecognized stock-based compensation expense related to stock options of $2 thousand, which is expected to be recognized over the remaining weighted-average vesting period of 1 month.

Stock-Based Compensation

The following table summarizes stock-based compensation for the years ended December 31, 2025 and 2024:

		*Year ended December 31,*
($ in thousands)		*2025*				*2024*
Research and development			273				46
General and administrative			209				25
Total stock-based compensation expense (forfeiture)			482				71

Stock-based compensation is recorded as an expense based on the Nasdaq Official Closing Price on the incentive grant date. The stock-based compensation uses the closing price for the amount of shares granted and is amortized equally over the vesting term of the grant.