ANRO 10-K & 10-Q changes, risk factors and insider trading

•The terms of our Amended Loan Agreementand Security Agreement, as amended, and the Convertible Grant Agreement place restrictions on our operating and financial flexibility and may cause dilution to our stockholders. If we raise additional capital through debt financing, the terms of any new debt could further restrict our ability to operate our business or result in further dilution to investors in our common stock.

•If we are unable to obtain and maintain sufficient intellectual property protection for our Platform, technologies, and product candidates and any future product candidates we may develop, or if the scope of the intellectual property protection obtained is not sufficiently broad, our competitors or other third parties could develop and commercialize products similar or identical to ours, and our ability to successfully develop and commercialize our product candidates may be adversely affected. Further, our issued composition of matter patents covering our pharmaceutical product candidates may expire at such a date that our patents may not prevent competitors from developing, making, and marketing a product that is identical to our product candidates after expiration of any applicable regulatory exclusivities. For example, our composition of matter patents covering ALTO-100 expired and patents covering its method of manufacturing are due to expire in 2030; our composition of matter patents in ALTO-202 (compound) expired (in foreign countries) and are due to expire in 2026 (in the United States), and our polymorph composition of matter patents in ALTO-202 are due to expire in 2035; and our composition of matter patents in ALTO-203 are due to expire in 2027, in all cases without taking into account patent term extensions or adjustments, and assuming payment of all applicable maintenance, renewal, and annuity fees.

•conduct further clinical trials for ALTO-207, ALTO-100, ALTO-300, ALTO-101, ALTO-203, and ALTO-202, and advance our preclinical programs into the clinic;

Successful commercialization will require achievement of many key milestones, including demonstrating safety and efficacy in clinical trials, obtaining regulatory, including marketing approval for these product candidates, manufacturing, marketing, and selling those products for which we, or any of our future collaborators, may obtain regulatory approval, satisfying any post-marketing requirements, and obtaining reimbursement for our products from private insurance or government payors. Because of the uncertainties and risks associated with these activities, we are unable to accurately and precisely predict the timing and amount of revenues, the extent of any further losses, or if or when we might achieve profitability. We and any future collaborators may never succeed in these activities and, even if we do, or any future collaborators do, we may never generate revenues that are large enough for us to achieve profitability. Even if we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. Additionally, our expenses could increase if we are required by the FDAFDA, MHRA, or any comparable foreign regulatory authority to perform clinical trials in addition to those currently expected, or if there are any delays in completing our clinical trials or the development of any of our product candidates.

As of December 31, 2024,2025, we had $168.7$177.0 million of cash, cash equivalents and restricted cash. Based upon our current operating plan, we believe that our existing cash and cash equivalents as of the date of filing of this QuarterlyAnnual Report, will enable us to fund our operating expenses and capital expenditure requirements for at least the next 12 months. Our future capital requirements and the period for which our existing resources will support our operations may vary significantly from what we expect, and we will in any event require additional capital in order to complete clinical development of any of our current programs. Our monthly spending levels will vary based on new and ongoing development and corporate activities. Because the length of time and activities associated with development of our programs and product candidates is highly uncertain, we are unable to estimate the actual funds we will require for development and any approved marketing and future commercialization activities, if any. Our future capital requirements will depend on many factors, including:

•our ability to mitigate the impact of adverse macroeconomic conditions or other geopolitical events, the ongoing conflicts between Ukraine and Russia and in the Middle East, geopolitical tensions in China,tensions, inflation, fluctuating interest rates, tariffs, or other factors on our preclinical and clinical development or operations;

We will require substantial additional capital to achieve our business objectives. Additional funds may not be available on a timely basis, on favorable terms or at all, and such funds, if raised, may not be sufficient to enable us to continue to implement our long-term business strategy. Market volatility resulting from adverse macroeconomic conditions or geopolitical events, including the ongoing conflicts between Ukraine and Russia and in the Middle East, geopolitical tensions in China,tensions, inflation, fluctuating interest rates, proposed tariffs, or other factors may further adversely impact our ability to access capital as and when needed. Until such time, if ever, as we can generate substantial product revenue, we expect to finance our cash needs through equity offerings, debt financings, or other capital sources, including potential collaborations, licenses, and other similar arrangements. To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a holder of our common stock. Any future debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, selling or licensing our assets, making capital expenditures, declaring dividends, or encumbering our assets to secure future indebtedness. Such restrictions could adversely impact our ability to conduct our operations and execute our business plan.

Under the terms of certain of our license and acquisition agreements, the counterparties to such agreements are entitled to substantial contingent payments upon the occurrence of certain events. For example, under the terms of our asset purchase agreement with Chase, we will be obligated to pay Chase up to an aggregate of $71.5 million in clinical, regulatory, and sales milestone payments with respect to ALTO-207, of which $41.0 million in aggregate are tied to commercial success of the product candidates, and certain of these potential milestone payments may be made, at Chase’s election, as restricted shares of our common stock, subject to an overall limitation of a maximum of 5,387,353 shares of common stock that may be issued pursuant to this agreement. Under the terms of our license agreement with Sanofi, we will be required to pay Sanofi up to an aggregate amount in the low-mid double digit millions upon the achievement of certain one-time development and regulatory approval milestones with respect to ALTO-101, and, if regulatory approval is achieved, up to an aggregate amount of $102.0 million in commercial milestone payments and a tiered royalty on aggregate annual worldwide net sales at percentages ranging from the mid-to-high single digits. Under the terms of our license agreement with Cerecor, we will be required to pay Cerecor or Merck, depending on the milestone, up to an aggregate of $59.1 million if we achieve certain development, regulatory, and first commercial sale milestones for ALTO-202. If we successfully commercialize ALTO-202, we will be required to pay Merck sales milestones in an amount of up to $15.0 million. Beginning on the date of our first commercial sale of ALTO-202, we will also be obligated to pay Merck and Cerecor tiered royalties on aggregate annual worldwide net sales at percentages in the high single digits, in addition to potential payments in respect of a companion diagnostic product. Pursuant to our asset purchase agreement with Teva, pursuant to which we acquired the rights to ALTO-203, we may be required to pay up to an aggregate of $27.0 million upon the achievement of certain development and regulatory approval milestones ($0.5 million of which was paid to Teva in connection with the initiation of our Phase 2 POC trial evaluating ALTO-203), and up to $35.0 million for the achievement of certain tiered sales milestones, as well as tiered royalties on worldwide annual net sales at percentages ranging from the mid-single-digit to ten percent. Pursuant to our joint development and license agreement with MedRx, we are required to pay MedRx up to an aggregate of $11.0 million for the achievement of certain development and first commercial sale milestones for ALTO-101 with respect to a first indication, an additional milestone in the mid single digit millions for each additional approved distinct indication for ALTO-101, as well as sales milestones based on the achievement of specified levels of aggregate annual worldwide net sales of up to $110.0 million in the aggregate and a mid-single digit royalty on annual, worldwide net sales. In April 2024, we achieved a milestone under the MedRx Agreement and paid MedRx approximately $0.8 million in cash and issued MedRx 46,875 shares of our common stock. If we achieve certain development and regulatory approval milestones for a product that contains ALTO-100 or is otherwise derived from assets we acquired from Palisade we will be required to pay Palisade up to an aggregate of $4.5 million. See “Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Contractual Obligations and Commitments” in this Annual Report for additional information regarding these agreements.

All of our product candidates are in preclinical or clinical development and their risk of failure is high. In particular, our approach to utilizing our Platform to identify biomarkers and conducting clinical trials in patient populations expressing certain biomarkers has not been validated and may not prove to be successful. It is impossible to predict when or if any of our product candidates will receive regulatory approval. To obtain the requisite regulatory approvals to commercialize any product candidates, we must demonstrate through lengthy, complex, and expensive clinical trials that our product candidates are safe and effective in patient populations identified by our Platform for the relevant indication. Preclinical and clinical testing can take many years to complete, and its outcome is inherently uncertain. There is typically a high rate of failure of product candidates proceeding through clinical trials, and failure can occur at any time during the preclinical study or clinical trial process, despite promising preclinical or clinical results. The results of preclinical studies and early clinical trials of our product candidates may not be predictive of the results of later-stage clinical trials, and results in one indication may not be predictive of results to be expected for the same product candidate in another indication. For example, in October 2024, we reported that our Phase 2b trial of ALTO-100 in patients with MDD did not meet its primary endpoint. Differences in trial design between early-stage clinical trials and later-stage clinical trials make it difficult to extrapolate the results of earlier clinical trials to later clinical trials. A number of companies in the biopharmaceutical industry have suffered significant setbacks in advanced clinical trials due to lack of efficacy or unfavorable safety profiles, notwithstanding promising results in earlier trials. Additionally, because ALTO-207 is a fixed combination drug product, we will need to demonstrate that each component of the product candidate makes a contribution to the claimed effect for TRD. Under the 505(b)(2) pathway, existing safety from the approved reference listed drugs will be taken into account, and FDA will still need to consider the two drugs in combination for the TRD indication as part of their safety review. Certain of our product candidates were previously subject to all-comer population studies and were not progressed for further development or did not achieve statistically significant outcomes. For example, ALTO-100 demonstrated numerical improvements in MADRS scores but did not achieve statistically significant outcomes in a prior all-comer population study. There can be no assurance that our results to date for these product candidates in our biomarker-characterized patient populations will continue or that the results of our trials will continue to differ from the outcomes of prior all-comer studies. Moreover, preclinical and clinical data are often susceptible to varying interpretations and analyses, and many companies that have believed their product candidates achieved promising results have nonetheless failed to obtain marketing approval of such product candidates. We may be unable to establish clinical endpoints that applicable regulatory authorities would consider clinically meaningful.

In addition, our approach of identifying biomarkers and conducting clinical trials in patient populations expressing those biomarkers is unique, unproven, and does not have significant precedent with the FDA and the FDA has, thus far, not affirmatively adopted our approach. Commencing any future clinical trials is subject to finalizing the trial protocol and submitting an IND to the FDA or similar application to initiate a clinical study to a comparable foreign regulatory authority. Even after we make our submission, the FDAFDA, MHRA, or comparable foreign regulatory authorities could disagree that we have satisfied their requirements to commence our clinical trials or disagree with our study design, which may require us to complete additional preclinical studies or amend our protocols or impose stricter conditions on the commencement of clinical trials, which may lead to delays and increase the costs of our preclinical development programs. The FDA also has the authority to require a panel of experts, referred to as an Advisory Committee, to deliberate on the adequacy of the safety and efficacy data to support approval. The opinion of the Advisory Committee, although not binding, could have a significant impact on our ability to obtain approval of any product candidates. Similar decisions may also be made by foreign regulatory authorities and have similar impact.

•regulators, such as the FDAFDA, MHRA, or comparable foreign regulatory agencies, Institutional Review Boards, or IRBs, or ethics committees may impose additional requirements before permitting us to initiate a clinical trial, may not authorize us or our investigators to commence or conduct a clinical trial at a prospective trial site, may not allow us to amend trial protocols, or regulators may disagree as to the design or implementation of our clinical trials and require that we modify or amend our clinical trial protocols;

•IRBs refusing to approve, suspending, or terminating the trial at an investigational site, precluding enrollment of additional subjects, or withdrawing their approval of the trialtrial, and similar measures from ethics committees;

•a facility manufacturing our product candidates or any of their components being ordered by the FDAFDA, MHRA, or comparable foreign regulatory authorities to temporarily or permanently shut down due to violations of current good manufacturing practice, or cGMP, regulations or other applicable requirements, or cross-contaminations of product candidates in the manufacturing process;

•third-party clinical investigators may lose the licenses or permits necessary to perform our clinical trials and may fail to perform our clinical trials on our anticipated schedule or consistent with the clinical trial protocol, good clinical practices, or GCP, or other regulatory requirements;

Clinical trials must be conducted in accordance with the FDA and other applicable regulatory authorities’ legal requirements, regulations, and guidelines, and remain subject to oversight by these governmental agencies and ethics committees or IRBs at the medical institutions where such clinical trials are conducted. We could encounter delays if a clinical trial is suspended or terminated by us, the IRBs or ethics committees of the institutions in which such trials are being conducted, the FDAFDA, MHRA, or comparable foreign regulatory authorities, or the Data Safety Monitoring Board, or the DSMB, for such trial. A suspension or termination may be imposed due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical trial protocols, adverse findings from inspection of the clinical trial operations or trial site by the FDAFDA, MHRA, or comparable foreign regulatory authorities, unforeseen safety issues or adverse side effects, failure to establish or achieve clinically meaningful trial endpoints, changes in governmental regulations or administrative actions, or lack of adequate funding to continue the clinical trial. In addition, changes in regulatory requirements and policies may occur, and we may need to amend clinical trial protocols to comply with these changes. Amendments may require us to resubmit our clinical trial protocols to regulators or to IRBs or ethics committees for reexamination, which may impact the costs, timing, or successful completion of a clinical trial. For example, recently the FDA informed us of a partial clinical hold related to a limit on the exposure level of ALTO-101 in our ongoing Phase 2 POC trial, which we subsequently resolved by amending the dosing paradigm to evaluate broader exposure levels of ALTO-101.

We currently conduct preclinical testing of our patch formulation drug/device combination product candidate with our collaborator MedRx and may in the future, conduct preclinical and clinical research in collaboration with other academic, pharmaceutical, and biotechnology entities in which we combine our development efforts with those of our collaborators. Such collaborations may be subject to additional delays because of the management of the trials, contract negotiations, the need to obtain agreement from multiple parties, and may increase our future costs and expenses.

In addition, certain of our primary or secondary endpoints in our clinical trials, including our currently ongoing Phase 2b clinical trials of ALTO-100 in patients with bipolar depression and ALTO-300, and our currently ongoing Phase 2 clinical trial of ALTO-101 in patients with CIAS, and our currently ongoing Phase 2 clinical trial of ALTO-203 in patients with MDD, involve subjective assessments by physicians and/or patients, which can increase the uncertainty of clinical trial outcomes. For example, primary endpoints include the change in MADRS score from baseline to week six, which requires patients or examiners to undertake a questionnaire regarding ten symptoms at the beginning and end of the trial. This and other assessments are inherently subjective, which can increase the variability of clinical results across clinical trials and create a significant degree of uncertainty in determining overall clinical benefit. Such subjectivity may cause the indications we study to be more difficult to evaluate than indications for which clinical trials are structured with more objective endpoints, as such indications are often subject to high placebo effect which may make it more challenging to isolate the beneficial effects of our product candidates. Accordingly, these subjective assessments can complicate clinical trial design, adversely impact the ability of a study to show a statistically significant improvement, and generally adversely impact a clinical development program by introducing additional uncertainties.

Patient enrollment is a significant factor in the timing of clinical trials, and the timing of our clinical trials depends, in part, on the speed at which we can recruit patients to participate in our trials, as well as completion of required follow-up periods. For example, we have, and may in the future, delay certain milestones due to enrollment or other factors (see “–If we do not achieve our projected development goals in the time frames we announce and expect, the commercialization of our products may be delayed”). We may not be able to initiate or continue clinical trials for our product candidates if we are unable to identify and enroll a sufficient number of eligible patients to participate in these trials to such trial’s conclusion as required by the FDAFDA, MHRA, or comparable foreign regulatory authorities. Subject enrollment is affected by many factors including the size and nature of the patient population, competing clinical trials in the same or similar indications or at the same trial site, the severity of the disease or condition under investigation, the availability and efficacy of approved drugs and diagnostics for the disease or condition under investigation, the number and location of clinical sites, the proximity of patients to clinical sites, willingness of patients to participate in a decentralized clinical trial, should we conduct future trials in this manner, the eligibility and exclusion criteria for the trial, perceived risks and benefits of the product candidate under study, the design of the clinical trial, continued enrollment of prospective patients by clinical trial sites, the risk that enrolled patients will not complete a clinical trial, our ability to recruit clinical trial investigators with the appropriate competencies and experience, efforts to facilitate timely enrollment in clinical trials, patient referral practices of physicians, the ability to monitor patients adequately during and after treatment, competing clinical trials, and clinicians’ and patients’ perceptions as to the potential advantages and risks of the product candidate being studied in relation to other available therapies, including any new products that may be approved for, or any product candidates under investigation for, the indications we are investigating.

We will be required to identify and enroll a sufficient number of subjects for each of our clinical trials. Utilizing our Platform, we plan to focus our development activities on patients characterized by a biomarker that we believe will be most likely to respond to our product candidates. As a result, the potential patient populations for our clinical trials may be narrowed, and we may experience difficulties in identifying and enrolling a sufficient number of patients in our clinical trials. We may not be able to initiate or continue clinical trials if we are unable to locate a sufficient number of eligible subjects to participate in the clinical trials required by the FDAFDA, MHRA, or comparable foreign regulatory authorities. In addition, the process of finding and diagnosing subjects may prove costly.

Results of our clinical trials could reveal a high and unacceptable severity and prevalence of side effects or unexpected characteristics. Undesirable side effects caused by our product candidates could cause us or regulatory authorities to interrupt, delay, or halt clinical trials or the delay or denial of regulatory approval by the FDAFDA, MHRA, or comparable foreign regulatory authorities, or, if such product candidates are approved, result in a more restrictive label and other post-approval requirements. Any treatment-related side effects could also affect patient recruitment or the ability of enrolled patients to complete the trial, or could result in potential product liability claims. Any of these occurrences may harm our business, financial condition, and prospects significantly.

Patients in our ongoing and planned clinical trials may in the future suffer significant adverse events or other side effects not observed in our preclinical studies or previous clinical trials. If such significant adverse events or other side effects are observed in any of our ongoing or planned clinical trials, we may have difficulty recruiting patients to the clinical trials, or we may be required to abandon the trials or our development efforts of that product candidate altogether. We, the FDA, MHRA, other comparable regulatory authorities, or an IRB or ethics committee may suspend clinical trials of a product candidate at any time for various reasons, including a belief that subjects in such trials are being exposed to unacceptable health risks or adverse side effects. Even if the side effects do not preclude the product candidate from obtaining or maintaining regulatory approval, undesirable side effects may inhibit market acceptance due to tolerability concerns as compared to other available therapies. Any of these developments could materially harm our business, financial condition, and prospects.

Our ability to generate product revenues, which we do not expect will occur for many years, if ever, will depend heavily on the successful development and eventual commercialization of our product candidates, along with the companion diagnostic tools needed to leverage our Platform. Our development programs contemplate the use of our Platform, which uses machine learning to identify appropriate patient populations. Our Platform measures biomarkers by analyzing factors such as brain activity patterns detected via EEG readings, cognitive assessment scores, and sleep structure and circadian rhythms captured by wearable data. Analyzing a broad range of biomarkers allows our scientists to develop a comprehensive understanding of the underlying mechanisms of mental health conditions, and target these accordingly. Companion diagnostics, which come in many forms, are the tests needed to identify these biomarkers and, thus, identify an appropriate patient population for our product candidates. The process of obtaining or creating such diagnostic is time consuming and costly. Absent an exemption, these companion diagnostics will be subject to regulation and marketing approval or clearance as medical devices by the FDAFDA, MHRA, and comparable foreign regulatory authorities before we may commercialize our product candidates.

•the FDAFDA, MHRA, or comparable foreign regulatory authorities may disagree with the design or implementation of our clinical trials or the use of biomarkers to identify patient populations who will benefit from our product candidates;

•we may be unable to demonstrate to the satisfaction of the FDAFDA, MHRA, or comparable foreign regulatory authorities that our product candidates are safe and effective for any of their proposed indications;

•negative or ambiguous results from our clinical trials, or results may not meet the level of statistical significance required by the FDAFDA, MHRA, or comparable foreign regulatory authorities for approval;

•such authorities may not accept clinical data from trials that are conducted at clinical facilities or in countries where the standard of care is potentially different from that of their own countrycountry, due to data integrity issues, or unfavorable findings during a regulatory inspection;

•the FDAFDA, MHRA, or comparable foreign regulatory authorities may disagree with our interpretation of data from preclinical studies or clinical trials;

•the data collected from clinical trials of our product candidates may not be sufficient to the satisfaction of the FDAFDA, MHRA, or comparable foreign regulatory authorities to support the submission of an NDA or other comparable submission in foreign jurisdictions or to obtain regulatory approval in the United States or elsewhere, and such authorities may impose requirements for additional preclinical studies or clinical trials;

•the FDAFDA, MHRA, or comparable foreign regulatory authorities may find deficiencies in or fail to approve the manufacturing processes or facilities of third-party manufacturers with which we contract for clinical and commercial supplies.

Finally, the FDAFDA, MHRA, and comparable foreign regulatory authorities may change their approval policies and new regulations may be enacted, which could delay or prevent our ability to obtain approval. If any of our product candidates fail to achieve regulatory approval due to the above factors, or otherwise, any such failure would adversely affect our business, results of operations, and financial condition. In addition, difficulties in obtaining approval of a product candidate in any of the initial indications for which we are developing it could adversely affect our efforts to seek approval from regulatory authorities for other indications.

We are developing one of our product candidates, ALTO-101, as a drug/device combination product candidate. While we have not had conversations to date with the FDA regarding whether ALTO-101 would be regulated as a combination product, we anticipate that, if successfully developed, ALTO-101 would be regulated as a combination product by the FDA and other regulatory authorities. Combination products require coordination within the FDA and within comparable regulatory agencies for review of their drug and device components. For example, the FDA’s review of a marketing application for ALTO-101 may include the participation of both the FDA’s Center for Drug Evaluation and Research and the FDA’s Center for Devices and Radiological Health. Although the FDAFDA, MHRA, and comparable foreign agencies have or may have systems in place for the review and approval of combination products, we may experience additional delays in the development and commercialization of such product candidates due to regulatory timing constraints and uncertainties in the product development and approval process. Moreover, although we anticipate that the device component of any combination product candidates we develop will be reviewed within the usual time frames expected for the underlying drug component application, and that no separate marketing application for the device components of such product candidates will be required in the United States, the FDA or comparable regulatory authorities may delay approval or require us to conduct additional studies with the device which may delay the approval of the combination product.

The process of obtaining marketing approvals, both in the United States and abroad, is expensive, often takes many years following the commencement of clinical trials, if approval is obtained at all, and can vary substantially based upon a variety of factors, including the type, complexity, and novelty of the product candidates involved, as well as the target indications and patient populations. Changes in marketing approval policies during the development period, changes in or the enactment of additional statutes or regulations, or changes in regulatory review for each submitted product application, may cause delays in the approval or rejection of an application. Prior to obtaining approval to commercialize a product candidate in the U.S. or abroad, we must demonstrate with substantial evidence from adequate and well-controlled clinical trials, and to the satisfaction of the FDA or comparable foreign regulatory authorities, that such product candidates are safe and effective for their intended uses. The FDAFDA, MHRA, and comparable foreign regulatory authorities have substantial discretion in the approval process and may delay, limit, or deny approval of a product candidate for many reasons, or may decide that our data are insufficient for approval and require additional preclinical, clinical, or other studies. In addition, varying interpretations of the data obtained from preclinical and clinical testing could delay, limit, or prevent marketing approval of a product candidate. Despite the time and expense invested in clinical development of product candidates, regulatory approval of a product candidate is never guaranteed. Of the large number of drugs in development, only a small percentage successfully complete the FDA or foreign regulatory approval processes and are commercialized. With respect to foreign markets, approval procedures vary among countries and, in addition to the foregoing risks, may involve additional product testing, administrative review periods, and agreements with pricing authorities.

Because we have limited financial and managerial resources, we intend to focus on developing product candidates for specific indications that we identify as most likely to succeed, in terms of both their potential for regulatory approval and commercialization. We also may acquire product candidates that we identify as promising and expend resources towards their development, including ALTO-207. As a result, we may forego or delay pursuit of opportunities with other product candidates or for other indications that may prove to have greater commercial potential.

We may conduct one or more of our clinical trials for our product candidates outside the United States. For example, we intend to include sites from the United Kingdom in our clinical trials of ALTO-207 and ALTO-100. Although the FDA may accept data from clinical trials conducted outside the United States, acceptance of this data is subject to certain conditions imposed by the FDA. For example, to accept data from a clinical trial that was conducted only at sites outside of the United States and not subject to an IND, the FDA requires such clinical trial to have been conducted in accordance with GCPs, and the FDA must be able to validate the data from the clinical trial through an on-site inspection if the FDA deems such inspection necessary. In cases where data from foreign clinical trials are intended to serve as the sole basis for marketing approval in the United States, the FDA will generally not approve the application on the basis of foreign data alone unless (i) the data are applicable to the U.S. population and U.S. medical practice; (ii) the trials were performed by clinical investigators of recognized competence and pursuant to GCP regulations; and (iii) the data may be considered valid without the need for an on-site inspection by the FDA, or if the FDA considers such inspection to be necessary, the FDA is able to validate the data through an on-site inspection or other appropriate means. For studies not subject to an IND, the FDA generally does not review clinical protocols for the studies, and therefore there is an additional potential risk that the FDA could determine that the study design, protocol, and/or results from a non-U.S. clinical trial were inadequate for the purposes we intend, which could require us to conduct additional clinical trials. Many foreign regulatory authorities have similar requirements for clinical data gathered outside of their respective jurisdictions. In addition, such foreign trials would be subject to the applicable local laws of the foreign jurisdictions where the trials are conducted. There can be no assurance the FDA or any comparable foreign regulatory authority will accept data from clinical trials conducted outside of the United States or the relevant jurisdiction. If the FDA or any comparable foreign regulatory authority does not accept data from our clinical trials of our product candidates, it may result in the need for additional clinical trials, which would be costly and time consuming and delay or permanently halt our development of our therapeutic product candidates.

In addition, the product candidate we are developing as ALTO-300 is already an approved antidepressant in Europe and Australia with the International Nonproprietary Name agomelatine. While we are developing ALTO-300 solely in the United States, if there is a recall, safety concern, or adverse regulatory action with respect to agomelatine in Europe or Australia, it could prevent us from achieving or maintaining market acceptance of ALTO-300 or otherwise adversely affect our ability to successfully commercialize ALTO-300 in the United States. Similarly, any recall, safety concern, or adverse regulatory action with respect to pramipexole or ondansetron could prevent us from achieving or maintaining market acceptance of ALTO-207 or otherwise adversely affect our ability to successfully commercialize ALTO-207.

In December 2022, we entered into a loan and security agreement, or the Original Loan Agreement, with K2 HealthVentures, as a lender and the other lenders from time to time party thereto, or collectively, the Lender, K2 HealthVentures, as administrative agent for the Lender, and Ankura Trust Company, LLC, as collateral agent for the Lender. In January 2025, we entered into an amendment to this facility, or the Amendment (and collectively with the Original Loan Agreement, the Amended Loan Agreement), pursuant to which the Lender has agreed to make available to us term loans in an aggregate principal amount of up to $75.0 million, including a $20.0 million tranche funded on January 13, 2025 (approximately $10.0 million of which was used to refinance all obligations under the Original Loan Agreement and pay fees and expenses incurred in connection with the Amendment). Based upon the terms of the Amended Loan Agreement, up to an additional $30.0 million is available at our request until December 15, 2025, subject to our achievement of certain milestones as more fully described in the Amended Loan Agreement, and up to an additional $25.0 million is available at our request subject to the Lender’s approval. Our obligations under the Amended Loan Agreement are secured by a security interest in substantially all of our assets, other than intellectual property assets. The Amended Loan Agreement includes customary affirmative and negative covenants, as well as standard events of default, including an event of default based on the occurrence of a material adverse event. The negative covenants include, among others, restrictions on our ability to transfer collateral, incur additional indebtedness, engage in mergers or acquisitions, pay cash dividends or make other distributions, make investments, create liens, sell assets, and make any payment on subordinated debt, in each case subject to certain exceptions. In addition, following an initial period with no financial covenants, beginning January 1, 2026, we must maintain a cash runway of at least five months, provided that this covenant will be waived during any period in which our market capitalization exceeds $700.0 million. These restrictive covenants could limit our flexibility in operating our business and our ability to pursue business opportunities that we or our stockholders may consider beneficial and failure to comply with these restrictive covenants would make us ineligible to receive future additional funding under the Amended Loan Agreement.

In July 2024, we entered into a convertible loan agreement, or the Convertible Grant Agreement,Agreement with The Wellcome Trust Limited, or Wellcome. The Convertible Grant Agreement provides for an unsecured convertible loan, or the Convertible Loan,Loan from Wellcome of up to approximately $11.7 million, payable in six tranches,tranches. $1.3As of December 31, 2025, we had drawn down $2.0 million of which was funded upon the execution ofunder the Convertible Grant Agreement, and the remainder of which will be funded upon draw down of thepayments remaining initiation payment orfollowing the completion of certain milestones as set forth in the Convertible Grant Agreement, subject to certain conditions described therein which may or may not be met in a timely manner or at all. In addition to the funds that we have drawn down as of December 31, 2025, we have achieved clinical milestones that allow us to draw down an incremental $3.0 million under the Convertible Grant Agreement. Proceeds from the Convertible Loan may be used by the Company solely to advance development of ALTO-100 in bipolar depression. The Convertible Grant Agreement also includes customary covenants, representations and warranties, including with respect to the conduct of our Phase 2b clinical trial evaluating ALTO-100 in patients with bipolar depression and certain information and audit rights of Wellcome in connection therewith, as well as with respect to our efforts to develop and exploit ALTO-100.

In addition, pursuant to the Amended Loan Agreement, the Lender has converted $4.0 million and may, at its option, elect to convert up to $9.0an additional $5.0 million of the then outstanding term loan amount into shares of our common stock. The Lender also has warrants to purchase shares of our common stock, and we may be required to issue additional warrants to the Lender in the future. At any time after the second anniversary of the date of the Convertible Grant Agreement, Wellcome has the right, from time to time, to convert some or all of the Convertible Loan into shares of our common stock at a 20% discount to the 30-day volume-weighted average price on the New York Stock Exchange at the date of conversion. Any conversion of debt into equity by the Lender or Wellcome pursuant to the Amended Loan Agreement or the Convertible Grant Agreement, respectively, or exercise of any warrants held by the Lender now or in the future would cause dilution to our stockholders.

The biopharmaceutical industry is characterized by the rapid innovation and intense competition. While we believe that our innovative precision psychiatry approach and pipeline of clinical assets provide us with competitive advantages, we face competition from multiple biopharmaceutical and biotechnology companies that are similarly working to develop therapeutics targeting neuropsychiatry and CNS disorders, as well as from academic institutions, governmental agencies, and public and private research institutions. Many of our potential competitors, either alone or with collaboration partners, have significantly greater financial resources than we do, as well as equal or greater experience in the discovery and development of product candidates, obtaining FDA and other regulatory approvals of products, and the commercialization of those products. Accordingly, our potential competitors may be more successful than we are in achieving regulatory approvals and commercializing their products. We anticipate that we will face intense and increasing competition from existing, approved drugs, as well as new drugs entering the market and emerging technologies that become available. In particular we are developing our product candidates in the areas of major depressive disorder, bipolar depression, and schizophrenia. Notable examples of companies with either approved therapies or product candidates in development in areas that may be competitive in our areas of focus are AbbVie Inc.; Atai Beckley, Inc.; Axsome Therapeutics, Inc.; Compass Pathways, Inc.; Neumora Therapeutics, Inc.; Neurocrine Biosciences, Inc.; and Xenon Pharmaceuticals, Inc., among others.

We are exposed to the risk of employee fraud or other illegal activity by our current and any future employees, independent contractors, consultants, commercial partners, CROs, CMOs, and vendors. Misconduct by these parties could include intentional, reckless, and/or negligent conduct that fails to comply with FDA or other regulations, provide true, complete and accurate information to the FDA, European Medicines Agency, MHRA, and other comparable foreign regulatory authorities, comply with manufacturing standards we may establish, comply with healthcare fraud and abuse laws and regulations, report financial information or data accurately, or disclose unauthorized activities to us. If we obtain FDA approval of any of our product candidates and begin commercializing those products in the United States, our potential exposure under these laws will increase significantly, and our costs associated with compliance with these laws are likely to increase. In particular, sales, marketing, and business arrangements in the healthcare industry are subject to extensive laws and regulations intended to prevent fraud, kickbacks, self-dealing, and other abusive practices. These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive programs, and other business arrangements. Employee misconduct could also involve the improper use of information obtained in the course of clinical trials, which could result in regulatory sanctions and serious harm to our reputation. Additionally, we are subject to the risk that a person could allege such fraud or other misconduct, even if none occurred. It is not always possible to identify and deter employee misconduct, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to comply with such laws or regulations. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a material and adverse effect on our business, financial condition, results of operations, and prospects, including the imposition of significant civil, criminal, and administrative penalties, damages, fines, disgorgement, imprisonment, the curtailment or restructuring of our operations, loss of eligibility to obtain approvals from the FDA, exclusion from participation in government contracting, healthcare reimbursement or other government programs, including Medicare and Medicaid, integrity oversight and reporting obligations, or reputational harm.

As we conduct clinical trials of our current or future product candidates, we are exposed to significant product liability risks inherent in the development, testing, manufacturing, and marketing of new treatments. Product liability claims could delay or prevent completion of our development programs. If we succeed in obtaining approval for, and market, our products, such claims could result in an investigation by the FDA, MHRA, comparable foreign regulatory authorities, or other regulators of the safety and efficacy of our future product candidates, our manufacturing processes and facilities, or our marketing programs and potentially a recall of our products or more serious enforcement action, limitations on the approved indications for which they may be used, or suspension or withdrawal of approvals. Regardless of the merits or eventual outcome, liability claims may also result in decreased demand for our product candidates, termination of clinical trial sites or entire trial programs, withdrawal of clinical trial participants, injury to our reputation and significant negative media attention, significant costs to defend the related litigation, a diversion of management’s time and our resources from our business operations, substantial monetary awards to trial participants or patients, loss of revenue, the inability to commercialize any products that we may develop, and a decline in our stock price. We may need to obtain higher levels of product liability insurance for later stages of clinical development or marketing any of our product candidates. Any insurance we may obtain may not provide sufficient coverage against potential liabilities. Furthermore, clinical trial and product liability insurance is becoming increasingly expensive. As a result, we may be unable to obtain sufficient insurance at a reasonable cost to protect us against losses caused by product liability claims that could adversely affect our business, financial condition, results of operations, and prospects.

We may seek Fast Track Designation for the product candidates we develop.develop, and we have received Fast Track Designation for ALTO-101 for the treatment of CIAS. The Fast Track program is intended to expedite or facilitate the process for reviewing new product candidates that meet certain criteria. Specifically, if a new drug is intended for the treatment of a serious or life-threatening disease or condition and preclinical or clinical data demonstrate the potential to address an unmet medical need for this disease or condition, the drug sponsor may apply for Fast Track Designation.

If our telecommunications or information technology systems, or those used by our collaborators, CROs, CMOs, clinical sites, third-party logistics providers, distributors, or other contractors, consultants, or third partyparties servicewith providers upon whichwhom we rely,work, are or were compromised, to become unavailable, or to suffer security breaches, loss, or leakage of data or other disruptions, we could suffer adverse consequences resulting from such compromise, including but not limited to, operational or service interruption, harm to our reputation, litigation, fines, penalties and liability, compromise of sensitive information related our business, and other adverse consequences.

Our Platform, our internal, proprietary systems for data collection, and our information technology systems and those of our collaborators, CROs, CMOs, clinical sites, third-party logistics providers, distributors, and other contractors and consultants uponwith whichwhom we relywork are vulnerable to attack, damage, and interruption from cyberattacks, computer viruses, bugs, worms, or other malicious codes, malware (including ransomware, and as a result of advanced persistent threat intrusions), model poisoning, and other attacks by computer hackers, nation-state and nation-state-supported actors, cracking, application security attacks, social engineering (including through deep fakes, which may be increasingly more difficult to identify as fake, and phishing attacks), supply chain attacks and vulnerabilities through our third-party service providers, denial- or degradation-of-service attacks, credential stuffing attacks, credential harvesting, personnel misconduct or error, supply-chain attacks, software bugs, server malfunctions, software or hardware failures, loss of data or other information technology assets, adware, telecommunications or electrical failures, natural disasters (e.g., earthquakes, fires, and floods), terrorism, war, attacks enhanced or facilitated by artificial intelligence,AI/ML, and other similar threats. Such systems are also vulnerable to intentional or inadvertent acts or lack of action by those with authorized access to our systems that could lead to exposure or exploitation of those systems.

Our sensitive information could be leaked, disclosed, or revealed as a result of or in connection with the use by our personnel or vendors of generative artificial intelligence, or AI,AI/ML technologies. Additionally, remote work has increased risks to our information technology systems and data, as our employees utilize network connections, computers and devices outside our premises or network, including working at home, while in transit and in public locations.

Health pandemics or epidemics have in the past and could again in the future result in quarantines, stay-at-home orders, remote work policies, or other similar events that may disrupt businesses, delay our research and development programs and timelines, negatively impact productivity and increase risks associated with cybersecurity, the future magnitude of which will depend, in part, on the length and severity of the restrictions and other limitations. More specifically, these types of events may negatively impact personnel at third-party manufacturing facilities or the availability or cost of materials, which could disrupt our supply chain. Moreover, our trials may be negatively affected. Clinical site initiation and patient enrollment may be delayed due to prioritization of hospital resources. Some patients may not be able or willing to comply with trial protocols if quarantines impede patient movement or interrupt healthcare services. Our ability to recruit and retain patients, principal investigators, and site staff (who as healthcare providers may have heightened exposure) may be hindered, which would adversely affect our trial operations. Disruptions or restrictions on our ability to travel to monitor data from our trials, or to conduct trials, or the ability of patients enrolled in our trials or staff at trial sites to travel, as well as temporary closures of our trial partners and CMOs’ facilities, would negatively impact our trial activities. In addition, we rely on independent clinical investigators, CROs, and other third-party service providers to assist us in managing, monitoring, and otherwise carrying out certain of our preclinical studies and clinical trials, including the collection of data from our trials, and the effects of health pandemics or epidemics may affect their ability to devote sufficient time and resources to our programs or to travel to sites to perform work for us. Similarly, our trials could be delayed and/or disrupted. As a result, the expected timeline for data readouts, including incompleteness in data collection and analysis and other related activities, and certain regulatory filings may be negatively impacted, which would adversely affect our ability to obtain regulatory approval for and to commercialize our product candidates, increase our operating expenses, and adversely affect our business, financial condition, results of operations, and prospects. In addition, impact on the operations of the FDAFDA, MHRA, or comparable foreign regulatory authorities could negatively affect our planned trials and approval processes. Finally, economic conditions and business activity may be negatively impacted and may not recover as quickly as anticipated.

Composition of matter patents for pharmaceutical product candidates often provide a strong form of intellectual property protection for those types of products, as such patents provide protection without regard to any method of use. However, we cannot be certain that the claims in any of our or our collaborators’ or licensors’ patent applications directed to composition of matter of our product candidates will be considered patentable by the USPTO or by patent offices in foreign countries, or that the claims in any of our or our licensors’ issued patents will be considered valid and enforceable by courts in the United States or foreign countries. Further, our issued composition of matter patents covering our pharmaceutical product candidates may expire at such a date that our patents may not prevent competitors from developing, making and marketing a product that is identical to our product candidates after expiration of any applicable regulatory exclusivities.exclusivities, or composition of matter patents may not be available for our pharmaceutical product candidates. For example, our composition of matter patents in ALTO-100 expired and patents covering its method of manufacturing are due to expire in 2030; our composition of matter patents in ALTO-202 (compound) expired in May 2024 (in foreign countries) and are due to expire in 2026 (in the United States), and our polymorph composition of matter patents in ALTO-202 are due to expire in 2035; and our composition of matter patents in ALTO-203 are due to expire in 2027, in all cases without taking into account patent term extensions or adjustments, and assuming payment of all applicable maintenance, renewal, and annuity fees. Similarly, patents for pharmaceutical formulations containing pharmaceutical product candidates may provide an additional form of intellectual property protection, as such patents provide protection without regard to any method of use. However, we cannot be certain that the claims in our or our collaborators’ or licensors’ pending patent applications directed to pharmaceutical formulations containing our product candidates will be considered patentable by the USPTO or by patent offices in foreign countries, or that the claims in any of our or our licensors’ issued patents will be considered valid and enforceable by courts in the United States or foreign countries. In addition, we cannot be certain that the claims of such patents, if granted, will be sufficiently broad to effectively prevent competitors from working around our claimed inventions by developing an alternative formulation and thereby competing with us without infringing our patent rights. Method of use patents protect the use of a product for the specified method or indication. In the absence of separate composition of matter protection, this type of patent does not prevent a competitor from making and marketing a product that is identical to our product candidates for an indication that is outside methods of use included in our patents. Moreover, even if competitor products are not approved for use in our patented indications, and our competitors do not actively promote their product for indications that are covered by our patents, clinicians may prescribe these competitor products “off-label.” Although off-label prescriptions may infringe or contribute to the infringement of method of use patents, such infringement is difficult to prevent or prosecute. Like method of use patents, patents relating to our Platform protect the platform for the method specified in the patent claims. This type of patent does not prevent a competitor from developing alternative technologies to identify biomarkers or target patient populations. Even if competitors copy our Platform, infringement may be difficult to determine, prevent, or prosecute.

The growth of our business may depend in part on our ability to acquire, in-license, or use third-party intellectual property and proprietary rights. A number of our existing product candidates are the subject to in-licenses from third parties or were acquired from third parties. Other pharmaceutical companies and academic institutions may own patents or may have filed, or be planning to file, patent applications potentially relevant to our business. In order to avoid infringing such patent rights, we may find it necessary or prudent to obtain licenses to such patent rights from such third parties. For example, we may be required by the FDAFDA, MHRA, or comparable foreign regulatory authorities to provide a specific companion diagnostic test or tests with our product candidates, any of which could require us to obtain rights to use patents or know how owned or controlled by third parties. In addition, with respect to any patent or other intellectual property rights we may co-own with third parties, we may require licenses to such co-owners’ interest to such patent or other intellectual property rights. We may be unable to acquire or in-license any compositions, methods of use, processes, or other third-party intellectual property rights from third parties that we identify as necessary or important to our business operations. In addition, we may fail to obtain any of these licenses at a reasonable cost or on reasonable terms, if at all. Were that to happen, we may need to cease use of the compositions or methods covered by those third-party intellectual property rights, and may need to seek to develop alternative approaches that do not infringe, misappropriate, or otherwise violate those intellectual property rights, which may entail additional costs and development delays, even if we were able to develop such alternatives, which may not be feasible. Even if we are able to obtain a license, it may be non-exclusive, which means that our competitors may also receive access to the same technologies licensed to us. In that event, we may be required to expend significant time and resources to develop or license replacement technology.

Further, the U.S. federal government retains certain rights in inventions produced with its financial assistance under the Patent and Trademark Law Amendments Act, or Bayh-Dole Act. For examples,example, certain patents and patent applications licensed from Stanford may have been made with financial assistance from the federal government. The federal government retains a “nonexclusive, nontransferable, irrevocable, paid-up license” for its own benefit. The Bayh-Dole Act also provides federal agencies with “march-in rights.” March-in rights allow the government, in specified circumstances, to require the contractor or successors in title to the patent to grant a “nonexclusive, partially exclusive, or exclusive license” to a “responsible applicant or applicants.” If the patent owner refuses to do so, the government may grant the license itself. We may at times choose to collaborate with academic institutions to accelerate our preclinical research or development. While we do not currently engage, and it is our policy to avoid engaging, university partners in projects concerning our product candidates in which there is a risk that federal funds may be commingled, we cannot be sure that any co-developed intellectual property will be free from government rights pursuant to the Bayh-Dole Act. If, in the future, we co-own or license in technology which is critical to our business that is developed in whole or in part with federal funds subject to the Bayh-Dole Act, our ability to enforce or otherwise exploit patents covering such technology may be adversely affected.

We are a clinical-stage biopharmaceutical company with a mission to redefine psychiatry by leveraging neurobiology to develop personalized and highly effective treatment options. Through insights derived from our scalable and proprietary Platform, we aim to discover brain-based biomarkers to better identify which patients are more likely to respond to our novel product candidates. Our current pipeline consists of fiveseven clinical-stage assets addressing high-need therapeutic areas, including MDD, BPD, TRD, schizophrenia, and schizophrenia.Parkinson’s Our most advanced programs are supported by prospectively replicated evidence of clinical activity in biomarker-characterized populations.disease.

Since our inception in 2019, we have devoted substantially all of our resources to the research and development of our product candidates by conducting clinical trials and preclinical studies, building our Precision Psychiatry Platform, and recruiting management and technical staff to support these operations. To date, we have funded our operations primarily through the aggregate net proceeds from equity financings (including from our IPOIPO, our Private Placement (described below), and pre-IPO sales of our convertible preferred stock) and borrowings under our loan and security agreement.

•continue to progress the clinical development of our product candidates, including ALTO-207 in our planned Phase 2b and Phase 3 clinical trials, ALTO-100 and ALTO-300 in ongoing Phase 2b clinical trialstrials, ALTO-101 in our ongoing Phase 2 POC trial, as well as ALTO-203 and potential Phase 3 programsALTO-208;

As of December 31, 2024,2025, we had cash, cash equivalents, and restricted cash of $168.7$177.0 million. In February 2024, we raised net proceeds of approximately $133.0 million in our IPO. We believe that our existing cash and cash equivalentsequivalents, together with the anticipated proceeds under our Convertible Grant Agreement with Wellcome, will be sufficient to fund our operating expenses and capital expenditure requirements into 2028. See “—Liquidity and Capital Resources.”

For a detailed description of our license, collaborationcollaboration, and other agreements, see “Item 1. Business—License and Other Agreements” in this Annual Report.

•expenses incurred in connection with the clinical development of our product candidates, including under agreements with clinical sites and contract research organizations, or CROs;

We expect that our general and administrative expenses will increase in the future as we expand our headcount to support our continued research and development of our product candidates. We also expect to incur increased expenses associated with operating as a public company, including costs related to accounting, audit, legal, (including legal costs related to the stockholder litigation described in “Part I, Item 3. Legal Proceedings,” above), regulatory, and tax-related services, costs related to compliance with the rules and regulations of the SEC and listing standards applicable to companies listed on a national securities exchange, director and officer insurance costs, and investor relations costs. In addition, if we obtain regulatory approval for any of our product candidates and do not enter into a third-party commercialization collaboration, we expect to incur significant expenses related to building a sales and marketing team to support product sales, marketing, and distribution activities.

The following table summarizes our results of operations for the years ended December 31, 20242025 and 20232024 (in thousands):

The following table summarizes our research and development expenses by program for the periods presented (in thousands):

Research and development expenses were $45.6 million for the year ended December 31, 2025, compared to $47.0 million for the year ended December 31, 2024, compared to $30.3 million for the year ended December 31, 2023.2024. The increasedecrease of $16.7$1.4 million was primarily due to the following:

•an increase of approximately $2.0$3.8 million relatedof toclinical development milestonesrelated achievedexpenses underprimarily licensingdriven agreementsby coveringdevelopment ALTO-203work on ALTO-207 (which was acquired in 2025) and our Phase 2 POC trial of ALTO-101; and

•an increase of approximately $5.8$0.9 million in salaryasset acquisition and personnellicensing fees primarily driven by fees related costs,to whichthe includesChase $1.5asset millionacquisition ofduring non-cash2025; stock based compensation.and

General and administrative expenses were $20.7 million for the year ended December 31, 2025, compared to $21.6 million for the year ended December 31, 2024, compared to $7.5 million for the year ended December 31, 2023.2024. The increasedecrease of $14.1$0.9 million during 20242025 was primarily due to thereduced following:consulting and professional fees.

We have incurred net losses and negative cash flows from operations since our inception and anticipate we will continue to incur net losses for the foreseeable future. We have not yet commercialized any of our product candidates, which are in various phases of development, and we do not expect to generate revenue from sales of any of our product candidates for several years, if at all. As we progress through the phases of development, we anticipate that we will incur increasing losses in future quarters and years compared to historical periods. To date, we have funded our operations primarily through the aggregate net proceeds from equity financings (including from our IPOIPO, the Private Placement, and pre-IPO sales of our convertible preferred stock) and borrowings under our loan and security agreement.

As of December 31, 2024 and December 31, 2023, we had cash and cash equivalents of $168.2 million and $82.5 million, respectively. On February 6, 2024, we issued 9,246,000 shares of common stock in our IPO, which included the exercise in full by the underwriters of their option to purchase 1,206,000 additional shares. The price to the public for each share was $16.00. The aggregate net proceeds from our IPO were $133.0 million, after underwriting discounts and commissions and other offering expenses of $4.6 million.

The Amended Loan Agreement has a Term Loan maturesmaturity ondate of January 1, 2029.2029, or the Amended Term Loan Maturity Date. The Amended Loan Agreement provides for an interest only period until January 1, 2027, which may be extended to January 1, 2028, subject to the funding of at least $20.0 million of the second tranche term loan, following which the TermsTerm Loan shall be repaid in equal monthly payments through the Amended Term Loan maturityMaturity date.Date.

BorrowingsThe under the AmendedTerm Loan Agreement bearbears interest at (i) a variable per annum cash pay rate equal to the Prime Rate plus 1.45% (subject to a floor of 8.45% per annum) and (ii) a fixed per annum paid-in-kind rate equal to 1.0%. Interest is due and payable monthly in arrears. The Term Loan is secured by substantially all of our assets, excluding intellectual property. Upon final payment or prepayment of the Term Loan, wethe areCompany is required to pay a final payment equal to 5.95% of the amount borrowed.

We have the option to prepay all, but not less than all, of the Term Loan prior to the Amended Term Loan maturityMaturity date,Date, which would require that we pay the Lender a prepayment penalty fee based on a percentage of the outstanding principal balance,balance and the funding date of the individual tranches thereunder. As to each such tranche under the Term Loan, such fee shall be equal to 3% if the payment occurs on or before 24 months after the initial funding date,date of such tranche, 2% if the prepayment occurs more than 24 months after, but on or before 36 months after the initial funding date,date of such tranche, or 1% if the prepayment occurs more than 36 months after the initial funding date.date of such tranche. No prepayment penalty fee is required if the Termapplicable Loantranche is prepaid within six months prior to the Amended Term Loan maturityMaturity dateDate or refinanced with the Lender. We were obligated to pay the Lender a one-time facility fee of $250,000 on the closing date of the Amendment. We are also obligated to pay a 0.5% fee multiplied by the third tranche term loan amount at the time of funding of the third trance term loan. Our obligation under the Original Loan Agreement to pay the Lender a one-time fee of $625,000 on the earlier of December 1, 2026 or earlier prepayment of the Term Loan remains outstanding.

Following an initial period with no financial covenants, beginning January 1, 2026, we must maintainmaintain, at all times, a cash runway of at least five months,months based upon a trailing three month cash consumption calculation, provided that this covenant will be waived during any period in which our market capitalization exceeds $700.0 million. The Term Loan is secured by substantially all of our assets, excluding intellectual property.

Additionally, under the terms of the Amended Loan Agreement, the Lender may, at its option, elect to convert up to $9.0 million of the then outstanding Term Loan ($4.0 million of which was reflected in the Original Loan Agreement and $5.0 million of which is reflected in the Amendment) into shares of our common stock. On November 17, 2025, the Lender elected to convert $4.0 million of its outstanding loan balance into the Company’s common stock. Pursuant to the terms of the Amended Loan Agreement, the conversion price was $4.83 per share, resulting in the issuance of 828,860 shares. The Lender has the option to convert a remaining $5 million into shares of common stock; the conversion price per share for the remaining option is as follows; $1.0 million at $4.83 and $4.0 million at $10.49 .

In July 2024, we entered into the Convertible Grant Agreement with Wellcome. The Convertible Grant Agreement provides for an unsecured convertible loan, or the Convertible Loan,Loan from Wellcome of up to approximately $11.7 million, payable in six tranches,tranches. $1.3As of December 31, 2025, we had drawn down $2.0 million of which was funded upon the execution ofunder the Convertible Grant Agreement, and the remainder of which will be funded upon draw down of thepayments remaining initiation payment orfollowing the completion of certain milestones as set forth in the Convertible Grant Agreement, subject to certain conditions described thereintherein, which may or may not be achieved. AsIn addition to the funds that we have drawn down as of JanuaryDecember 31, 2025, we have achieved aclinical milestonemilestones that allow us to draw down an incremental $3.0 million under the Convertible Grant Agreement giving us the right to draw down a total of $3.8 million which represents the milestone and the remaining portion of the initiation payment.Agreement.

Shelf Registration Statement and Sales Agreement

On February 3, 2025, we filed a shelf registration statement on Form S-3 with the SEC in relation to the registration of common stock, preferred stock, debt securities, warrants and units or any combination thereof up to a total aggregate offering price of $300.0 million. We also simultaneously entered into a Sales Agreement, or the Sales Agreement, with Leerink Partners LLC, or the Sales Agent, pursuant to which we may issue and sell, from time to time at our discretion, shares of our common stock having an aggregate offering price of up to $75.0 million through or to the Sales Agent. No shares of common stock have been issued and sold to date pursuant to the Sales Agreement.

•increased non-cash expenses including stock-based compensation and debt extinguishment expenses which increased by $4.7$0.5 million toand $7.6$0.7 millionmillion, respectively, for the year ended December 31, 2024,2025, compared to $2.9 million for the year ended December 31, 2023,2024, and $0.7 million of non-cash expense in the year ended December 31, 2024 related to the achievement of a milestone related to a license agreement which was settled, in part, through the issuance of shares of our common stock.

Net cash used in investing activities was nominal for the year ended December 31, 2025, as compared to $2.1 million for the year ended December 31, 2024, as compared to $0.5 million for the year ended December 31, 20232024 for corporate and clinical trial related capital expenditures, primarily related to the purchase of EEG machines utilized in our clinical trials.

We believe that our existing cash and cash equivalents,equivalents of $176.5 million as of December 31, 2025, together with the netanticipated proceeds fromunder our IPOConvertible whichGrant wasAgreement completedwith in February 2024,Wellcome, will be sufficient to fund our operating expenses and capital expenditure requirements into 2028. This estimate reflects both our prioritization efforts to improve operating efficiency, including reducing headcount in May 2025 which resulted in short-term severance costs, and our re-deployment of long-term savings toward new programs such as ALTO-207 and ALTO-208. However, our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement that involves risks and uncertainties, and actual results could vary materially. We have based this estimate on assumptions that may prove to be wrong, and we could expend our capital resources sooner than we currently expect.

In addition to ongoing needs to fund our operations, our material cash requirements as of December 31, 20242025 consist primarily of obligations under our Amended Loan Agreement, and lease commitment over the next fivefour years. For additional information regarding our Loan Agreement and the Amended Loan Agreement, see “Item 8. Financial Statements and Supplementary Data - Note 8. Debt”. For additional information regarding our lease commitment, see “Item 8. Financial Statements and Supplementary Data - Note 7. Leases”.

In addition, we enter into agreements in the normal course of business with clinical trial sites, CROs, CMOs, and other vendors for research and development services. Such agreements generally provide for termination upon limited written notice. These payments are therefore not included in our contractual obligations discussion above. For additional information regarding our contractual obligations and commitments, see “Item 8. Financial Statements and Supplementary Data - Note 15. Commitments and Contingencies.”

We are also party to certain collaboration and license agreements, which contain a number of contractual obligations. Those contractual obligations may entitle us to receive, or may obligate us to make, certain payments. The amount and timing of those payments are unknown or uncertain as we are unable to estimate the timing or likelihood of the events that will obligate those payments. We have milestones, royalties, and/or other payments due to third parties under our existing license agreements. See “Item 1. Business—License and Other Agreements” and “Item 8. Financial Statements and Supplementary Data – Note 10. Asset Purchase and License Agreements.” We could not estimate when such payments will be due, and none of these events were probable to occur as of December 31, 2024.2025.

We define our critical accounting policies as those accounting principles that require us to make subjective estimates and judgments about matters that are uncertain and are likely to have a material impact on our financial condition and results of operations, as well as the specific manner in which we apply those principles. While our significant accounting policies are more fully described in our audited consolidated financial statements (see “Item 8. Financial Statements and Supplementary Data – Note 3. Summary of Significant Accounting Policies”), we believe the following are the critical accounting policies used in the preparation of our financial statements that require significant estimates and judgments.

Changes in the foregoing assumptions can materially affect the fair value and ultimately how much stock-based compensation expense is recognized. These inputs are subjective and generally require significant analysis and judgment to develop. See Item 8. Financial Statements and Supplementary Data – Note 11. Stock Based Plans for information concerning certain of the specific assumptions we used in applying the Black-Scholes option pricing model to determine the estimated fair value of our stock options granted in the periods presented.

As of December 31, 2024,2025, there was $19.9$14.5 million of unrecognized stock-based compensation expense related to our granted service-based vesting options, which we expect to recognize over a remaining weighted-average period of 2.92.4 years. In addition, there was $1.0 million of unrecognized stock based compensation related to the stock option repricing which is expected to be recognized over a weighted-average period of 1.0 year.

ALTO-207 is a fixed-dose combination of pramipexole, a dopamine D3-preferring D3/D2 agonist, approved for the treatment of Parkinson’s disease with demonstrated antidepressant effect through multiple robust randomized, placebo-controlled clinical trials, and ondansetron, an antiemetic, selective 5-HT3 receptor antagonist. As a fixed-dose combination, ALTO-207 is designed to enable rapid titration and higher dosing by mitigating the dose-limiting adverse events typically experienced with pramipexole. ALTO-207 is being developed to address the significant unmet need for patients with TRD. The Phase 2b trial of ALTO-207, which has the potential to serve as a pivotal trial subject to U.S. Food and Drug Administration, or FDA, feedback and review of data, was initiated in April 2026. The Phase 2b trial is a randomized, double-blind, placebo-controlled study evaluating ALTO-207 as an adjunctive treatment in approximately 178 adults with TRD. Eligible participants will have experienced two to five prior treatment failures and have moderate to severe depression symptoms, and will remain on their baseline antidepressant medication. Participants will be randomized 1:1 to receive ALTO-207 or placebo during an eight-week double-blind treatment period, which includes a 12-day dose titration period to reach a target total daily dose of 3.2mg pramipexole/15mg ondansetron. The study willis bebeing conducted across clinical sites in the U.S. and U.K. The primary endpoint is change from baseline in MADRS. The Company expects to report topline data from the trial in the second half of 2027. FollowingWe an FDA meeting in October 2025, weare also on track and expect to initiate aan adjunctive TRD Phase 3 trial by early 2027 following Phase 3 readiness work and alignment with the FDA on the planned trial design. In July 2026 we announced plans to further accelerate the development of ALTO-207, and we expect to initiate a monotherapy Phase 3 trial in patients with TRD in the second half of 2027. We believe the broad development program has the potential to position ALTO-207 as a treatment option across the broadest potential TRD patient population.

In May 2025, weWe acquired ALTO-207 (formerly known as CTC-501) from Chase Therapeutics Corporation, or Chase. PriorThe scientific rationale for ALTO-207 is supported by the results from multiple independent clinical trials and a Phase 2a clinical trial conducted by Chase prior to theour acquisition,acquisition. ChaseIn completed aChase’s randomized, placebo-controlled Phase 2a clinical trial evaluating CTC-501 in 32 patients with depression.depression, CTC-501 met the primary and secondary endpoints in this trial,endpoints, demonstrating statistically significant and clinically meaningful improvements on the Montgomery Åsberg Depression Rating Scale, or MADRS, compared to placebo. Patients randomized to receive CTC-501 reached a mean dose of 4.1mg per day. Real-world data demonstrate that it is challenging to achieve doses above 1mg per day of pramipexole. CTC-501 was generally well tolerated in the maintenance period of the study with an adverse event rate similar to placebo. In the PAX-D study conducted by the University of Oxford. Results, which were published in The Lancet Psychiatry, showed pramipexole augmentation of antidepressant treatment, at a target dose of 2.5mg, demonstrated a large (Cohen’s d=0.87) reduction in symptoms relative to placebo at 12 weeks (and continuing through 48 weeks), but was associated with a high rate of adverse effects.

In June 2025, we announced the completion of our exploratory Phase 2 POC trial of ALTO-203 in MDD with elevated levels of anhedonia and the resulting identification of a patient selection biomarker and positive pharmacodynamic results. TheAn exploratory Phase 2 POC trial, which enrolled 69 patients, was conducted in two sequential, double-blind, placebo-controlled periods.periods and resulted in the identification of a patient selection biomarker and positive pharmacodynamic results. The trial was designed to characterize the pharmacodynamic, pharmacokinetic, safety, and tolerability profile of ALTO-203 across two dose levels compared to placebo in a crossover design and was not powered to detect statistical significance on traditional depression outcome scales (e.g., MADRS).

Since our inception in 2019, we have devoted substantially all of our resources to the research and development of our product candidates by conducting clinical trials and preclinical studies, building our Platform, and recruiting management and technical staff to support these operations. To date, we have funded our operations primarily through the aggregate net proceeds from equity financings (including from our initial public offering, or IPO, private placement transactions, our July 2026 Offering (see “Liquidity and Capital Resources,” below), and pre-IPO sales of our convertible preferred stock) and borrowings under our loan and security agreement.

We have not generated any revenue from product sales and we have incurred recurring losses since our inception. Our net losses were $26.2$27.6 million and $15.2$53.9 million for the three and six months ended MarchJune 31,30, 20262026, respectively. Our net losses were $17.7 million and $32.9 million for the three and six months ended June 30, 2025, respectively. As of MarchJune 31,30, 2026, we had an accumulated deficit of $227.9$255.5 million. We expect to continue to generate operating losses and negative operating cash flows for the foreseeable future. We anticipate that our operating expenses and capital expenditures will increase substantially with our ongoing activities, particularly as we:

•continue to progress the clinical development of our product candidates, including ALTO-207 in our Phase 2b clinical trial and planned Phase 3 clinical trial,trials, and ALTO-100 and ALTO-300 in ongoing Phase 2b clinical trials, as well as ALTO-203, and ALTO-208;

As of MarchJune 31,30, 2026, we had cash, cash equivalents and restricted cash of $264.3$244.2 million.million, and we raised approximately $94.6 million in July 2026 Offering (defined below). We believe that our existing cash and cash equivalents, together with the net proceeds of the July 2026 Offering and the anticipated proceeds under our Convertible Grant Agreement with Wellcome, will be sufficient to fund our operating expenses and capital expenditure requirements for at least the next 12 months. See “—Liquidity and Capital Resources.”

Comparison of the Three Months Ended MarchJune 31,30, 2026 and 2025

The following table summarizes our results of operations for the three months ended MarchJune 31,30, 2026 and 2025 (in thousands):

Research and development expenses were $20.3$22.1 million for the three months ended MarchJune 31,30, 2026, compared to $10.0$13.1 million for the three months ended MarchJune 31,30, 2025. Increases in research and development expenses were due primarily to:

•an increase of approximately $4.1$6.4 million in expenses related to development of our ALTO-207 program, which we acquired in May 2025. The costs are primarily related to clinical and manufacturing activities required to launch the Phase 2b clinical trial, which we announced the initiation ofinitiated in April 2026.

•an increase of $1.2approximately $1.6 million in salaryexpenses related to the ongoing development of our ALTO-100 and personnelALTO-300 related costs, which includes $0.5 million of non-cash stock-based compensation.programs.

General and administrative expenses were $6.8$7.0 million for the three months ended MarchJune 31,30, 2026, compared to $5.7$5.6 million for the three months ended MarchJune 31,30, 2025. The increase of $1.1$1.5 million was primarily due to increases in professional fees.

Other income, net increased $0.4$0.9 million duringin the threesix months ended MarchJune 31,30, 2026,2026 compared to the threesix months ended MarchJune 31,30, 2025. The increase was primarily due to $0.7 million of expenses related to debt extinguishment costs of $0.7($0.4 million thatof which was non-cash) for our Amended Term Loan which were incurred during the threesix months ended MarchJune 31,30, 2025.2025 Thisand increasedid wasnot partially offset by a decrease in interest income of $0.3 millionrecur during the threesix months ended MarchJune 31,30, 2026 compared to the three months ended March 31, 2025.2026.

We have incurred net losses and negative cash flows from operations since our inception and anticipate we will continue to incur net losses for the foreseeable future. We have not yet commercialized any of our product candidates, which are in various phases of development, and we do not expect to generate revenue from sales of any of our product candidates for several years, if at all. As we progress through the phases of development, we anticipate that we will incur increasing losses in future quarters and years compared to historical periods. To date, we have funded our operations primarily through the aggregate net proceeds from equity financings (including from our IPO, our October 2025 and March 2026 private placement transactions,transactions (described below), our July 2026 Offering, and pre-IPO sales of our convertible preferred stock) and borrowings under our loan and security agreement.

As of MarchJune 31,30, 2026 and December 31, 2025, we had cash, cash equivalents and restricted cash of $264.3$244.2 million and $177.0 million, respectively.

In October 2025, we entered into a Securities Purchase Agreement, or the 2025 PIPE Purchase AgreementAgreement, with certain institutional or other accredited investors, or the 2025 PIPE PurchasersPurchasers, pursuant to which we sold and issued to the 2025 PIPE Purchasers in a private placement transaction, or the 2025 Private Placement: (i) 3,832,263 shares of our common stockstock, or the 2025 PIPE Shares, and (ii) with respect to certain 2025 PIPE Purchasers, 2025pre-funded Pre-Funded Warrantswarrants to purchase 4,622,251 shares of our common stockstock, or the 2025 Pre-Funded Warrants, in lieu of shares of common stock. The purchase price per share of common stock was $5.9140 per shareshare, or the 2025 PIPE Purchase Price, and the purchase price for the 2025 Pre-Funded Warrants was $5.9139 per 2025 Pre-Funded Warrant. The closing occurred on October 21, 2025. The total gross proceeds to us were approximately $50.0 million, and, after deducting offering expenses payable by us, net proceeds were approximately $49.7 million.

In March 2026, we entered into a Securities Purchase Agreement, or the 2026 PIPE Purchase AgreementAgreement, with certain institutional investors, or the 2026 PIPE PurchasersPurchasers, pursuant to which we sold and issued to the 2026 PIPE Purchasers in a private placement transaction, or 2026 Private Placement: (i) 2,900,000 shares of our common stockstock, or the 2026 PIPE Shares, and (ii) with respect to certain 2026 PIPE Purchasers, 2026pre-funded Pre-Funded Warrantswarrants to purchase 3,100,000 shares of our common stockstock, or the 2026 Pre-Funded Warrants, in lieu of shares of common stock. The purchase price per share of common stock was $20.00 per shareshare, or the 2026 PIPE Purchase Price, and the purchase price for the 2026 Pre-Funded Warrants was $19.9999 per 2026 Pre-Funded Warrant. The closing occurred on March 17, 2026. The total gross proceeds to us were approximately $120.0 million, and, after deducting offering expenses payable by us, net proceeds were approximately $114.9$114.8 million.

As of MarchJune 31,30, 2026 and December 31, 2025, we had an outstanding principal balance of $15.0 million and $16.0 million under the Amended Loan Agreement, respectively.

Beginning January 1, 2026, weWe must maintain, at all times, a cash runway of at least five months based upon a trailing three month cash consumption calculation, provided that this covenant will beis waived during any period in which our market capitalization exceeds $700.0 million. The Term Loan is secured by substantially all of our assets, excluding intellectual property.

In July 2024, we entered into a convertible loan agreement, or the Convertible Grant Agreement, with Wellcome. The Convertible Grant Agreement provides for an unsecured convertible loan, or the Convertible Loan, from Wellcome of up to approximately $11.7 million, payable in six tranches. As of MarchJune 31,30, 2026, we had drawn down $2.0 million under the Convertible Grant Agreement, and the remainder will be funded upon draw down of payments following the completion of certain milestones as set forth in the Convertible Grant Agreement, subject to certain conditions described therein, which may or may not be achieved. In addition to the funds that we have drawn down as of MarchJune 31,30, 2026, we have achieved clinical milestones that allow us to draw down an incremental $3.0 million under the Convertible Grant Agreement.

On February 3, 2025, we filed a shelf registration statement on Form S-3 with the SEC in relation to the registration of common stock, preferred stock, debt securities, warrants and units or any combination thereof up to a total aggregate offering price of $300.0 million. We issued and sold $100.0 million of shares of our common stock pursuant to the shelf registration statement in the July 2026 Offering.

On February 3, 2025, we also simultaneously entered into a Sales Agreement, or the Sales Agreement, with Leerink Partners LLC, or the Sales Agent, pursuant to which we could issue and sell, from time to time at our discretion, shares of our common stock having an aggregate offering price of up to $75.0 million through or to the Sales Agent. We terminated the Sales Agreement effective as of October 30, 2025. We had not sold any shares of common stock under the Sales Agreement prior to termination.

Net cash used in operating activities was $27.1$46.9 million for the threesix months ended MarchJune 31,30, 2026, as compared to $16.6$30.3 million for the threesix months ended MarchJune 31,30, 2025. The increase in cash used was the result of an increase in net losses of $11.1$21.0 million which was partially offset by increased non-cash stock-based compensation expenses of $0.9$2.4 million.

Net cash used in investing activities six months ended June 30, 2026 consisted of purchases of property and equipment that are being used for research and development purposes.

The net cash used in investing activities for the threesix months ended MarchJune 31,30, 2025 was negligible.

Net cash provided by financing activities was $114.9$114.7 million for the threesix months ended MarchJune 31,30, 2026, primarily related to the proceeds from our 2026 PIPE Purchase Agreement.

Net cash provided by financing activities was $9.1$9.7 million for the threesix months ended MarchJune 31,30, 2025, primarily related to borrowings under our Amended Loan Agreement,Agreement offsetas bywell as the repaymentdrawdown of $0.8 million under our originalConvertible loanGrant and related financing obligations and lender fees.Agreement.

We believe that our existing cash and cash equivalents of $263.8$243.7 million as of MarchJune 31,30, 2026, together with both the net proceeds of approximately $94.6 million from the July 2026 Offering and the anticipated proceeds under our Convertible Grant Agreement with Wellcome, will be sufficient to fund our operating expenses and capital expenditure requirements for at least the next 12 months. However, our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement that involves risks and uncertainties, and actual results could vary materially. We have based this estimate on assumptions that may prove to be wrong, and we could expend our capital resources sooner than we currently expect.