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12-3100019994802026Q1False1Subsequent Events
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________
FORM 10-Q
_________________________
(Mark One)
xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2026
OR
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to .
Commission file number 001-41944
_________________________
Alto Neuroscience, Inc.
(Exact name of registrant as specified in its charter)
_________________________
Delaware
83-4210124
(State or Other Jurisdiction of
Incorporation or Organization)		(I.R.S. Employer
Identification No.)
650 Castro Street, Suite 450 Mountain View, CA
94041
(Address of Principal Executive Offices)(Zip Code)
(650) 200-0412
Registrant’s Telephone Number, Including Area Code
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.0001 par value per shareANRONew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x   No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x   No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated fileroAccelerated filero
Non-accelerated filerxSmaller reporting companyx
Emerging growth companyx
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o   No x
The number of shares of registrant’s Common Stock outstanding as of May 8, 2026 was 35,093,940.

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F-1

Unless context otherwise requires, the terms the “Company,” “Alto,” “we,” “us,” “our,” and similar references in this Quarterly Report on Form 10-Q refer to Alto Neuroscience, Inc. and its consolidated subsidiary.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q, or Quarterly Report, contains forward-looking statements about us and our industry that involve substantial risks and uncertainties. All statements other than statements of historical fact contained in this Quarterly Report, including statements regarding our plans, objectives, goals, strategies, future events, future revenues or performance, financing needs, plans, or intentions relating to product candidates and markets and business trends are forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “can,” “contemplate,” “continue,” “could,” “design,” “estimate,” “expect,” “intend,” “may,” “might,” “objective,” “plan,” “potential,” “predict,” “project,” “shall,” “should,” “target,” “will,” or “would,” or the negative of these words or other similar terms or expressions.

These statements involve known and unknown risks, uncertainties, and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking statements include, but are not limited to, statements about:

•the initiation, timing, progress, and results of our research and development programs, preclinical studies, any clinical trials, and investigational new drug, or IND, and other regulatory submissions;

•the ability of our approach to reproducibly predict treatment outcomes for product candidates amongst identified patient populations and achieve clinical success;

•our ability to continue to identify appropriate biomarkers for use in further clinical development;

•the timing of and costs involved in obtaining and maintaining regulatory approval of our current product candidates and any future product candidates that we may identify or develop;

•the beneficial characteristics, including potential safety, efficacy, and therapeutic effects, of our product candidates;

•our ability to efficiently and cost-effectively conduct our current and future clinical trials;

•our ability to obtain funding for our operations necessary to complete further development and commercialization of our product candidates, if approved;

•our ability to maintain existing, and establish new, strategic collaborations, licensing, or other arrangements, including our ability to comply with our financial obligations pursuant to the terms of such agreements;

•the timing and likelihood of the achievement of milestones pursuant to our existing collaboration and licensing agreements;

•our ability to identify and develop product candidates for treatment of additional indications;

•the performance of our third-party service providers, including our suppliers and manufacturers;

•the rate and degree of market acceptance and clinical utility for our current product candidates and any other product candidates we may develop;

•the effects of competition with respect to our current product candidates or any of our future product candidates, as well as innovations by current and future competitors in our industry;

•our estimates regarding the potential market opportunities and the number of patients for our product candidates and any future product candidates, if approved for commercial use;

•the implementation of our strategic plans for our business, any product candidates we may develop;

•our intellectual property position, including the scope of protection we are able to establish, maintain, defend and enforce for intellectual property rights covering our product candidates and our Precision Psychiatry Platform;

•our ability to attract and retain key scientific or management personnel;

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•regulatory and legal developments in the United States and foreign countries;

•our ability to attract and retain employees and collaborators with development, regulatory, and commercialization expertise;

•our ability to comply with the terms of our loan agreements and our expectations regarding our ability to access additional tranches thereunder;

•the accuracy of our estimates regarding future expenses, future revenue, capital requirements, and need for additional financing;

•the anticipated impact of global economic uncertainty, financial market conditions and geopolitical events, including the conflict between Ukraine and Russia, the conflict in the Middle East, geopolitical tensions, high levels of inflation, fluctuating interest rates, and tariffs on our business, results of operations, and financial condition;

•the period over which we estimate our existing cash and cash equivalents will be sufficient to fund our future operating expenses and capital expenditure requirements; and

•our expectations regarding the period during which we qualify as an emerging growth company under the JOBS Act.

These forward-looking statements reflect our management’s beliefs and views with respect to future events and are based on estimates and assumptions as of the date of this Quarterly Report and are subject to risks and uncertainties. In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

You are urged to carefully review the disclosures we make concerning risks and other factors that may affect our business and operating results under “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025, or Annual Report, under “Item 1A. Risk Factors” in this Quarterly Report, and in our other reports filed with the Securities and Exchange Commission, or SEC. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in such statements. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. Given these uncertainties, you should not place undue reliance on these forward-looking statements.

Any public statements or disclosures by us following this Quarterly Report that modify or impact any of the forward-looking statements contained in this Quarterly Report will be deemed to modify or supersede such statements in this Quarterly Report. Except as required by law, we assume no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in any forward-looking statements, whether as a result of new information, future events, or otherwise.

Availability of Information on Our Website

We routinely use our investor relations website to post presentations to investors and other important information, including information that may be material. Accordingly, we encourage investors and others interested in Alto to review the information it makes public on its investor relations website.


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PART I
FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited).
Alto Neuroscience, Inc. and Subsidiary
Condensed Consolidated Balance Sheets (Unaudited)
(in thousands, except per share amounts)
March 31,
2026		December 31,
2025
Assets
Current assets:
Cash and cash equivalents
$263,762 $176,484 
Prepaid expenses and other current assets
5,364 1,234 
Total current assets269,126 177,718 
Restricted cash500 500 
Property and equipment, net2,234 1,872 
Operating right-of-use asset4,061 4,261 
Other assets338 338 
Total assets$276,259 $184,689 
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable
$3,369 $1,878 
Accrued expenses and other current liabilities
7,610 8,862 
          Term loan, current2,136 585 
Total current liabilities13,115 11,325 
Term loan, non-current13,885 16,172 
Convertible Grant Agreement2,335 2,227 
Lease liability, long-term3,555 3,823 
Total liabilities
32,890 33,547 
Commitments and contingencies (Note 11)
Stockholders’ equity:
Common stock (par value $0.0001), 500,000 shares authorized; 35,053 and 31,924 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively
3 3 
Additional paid-in capital471,224 352,751 
Accumulated deficit(227,871)(201,634)
Accumulated other comprehensive loss13 22 
Total stockholders’ equity243,369 151,142 
Total liabilities and stockholders’ equity$276,259 $184,689 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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Alto Neuroscience, Inc. and Subsidiary
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)
(in thousands, except per share amounts)
Three months ended
March 31,
20262025
Operating expenses:
Research and development$20,294 $9,974 
General and administrative6,844 5,702 
Total operating expenses27,138 15,676 
Loss from operations(27,138)(15,676)
Other income (expense):
Interest income1,561 1,827 
Interest expense(545)(598)
Loss on debt extinguishment— (681)
Other, net(115)(41)
Total other income, net901 507 
Net loss $(26,237)$(15,169)
Other comprehensive income (loss):
Change in fair value attributable to instrument specific credit risk7 134 
Foreign currency translation(16)(19)
Total other comprehensive income (loss)(9)115 
Comprehensive loss$(26,246)$(15,054)
Net loss per share attributable to common stockholders, basic and diluted$(0.80)$(0.56)
Weighted-average number of common shares outstanding, basic and diluted32,893 27,049 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-2
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Alto Neuroscience, Inc. and Subsidiary
Condensed Consolidated Statements of Stockholders’ Equity (Unaudited)
(in thousands, except per share amounts)
Common StockAdditional
Paid-in
Capital		Accumulated
Deficit		Accumulated
Other
Comprehensive
 Loss
Total
Stockholders’
Equity
(Par Value of Shares $0.0001)
Shares 
(#)		Amount 
($)
Balance at December 31, 202426,987$3 $289,954 $(138,396)$(101)$151,460 
Exercise of common stock options85— 198— — 198 
Issuance of K2 warrants— — 524 — — 524 
Stock compensation expense— — 1,968 — — 1,968 
Other comprehensive income— — — — 115 115 
Net loss— — — (15,169)— (15,169)
Balance at March 31, 202527,072$3 $292,644 $(153,565)$14 $139,096 
Common StockAdditional
Paid-in
Capital		Accumulated
Deficit		Accumulated
Other
Comprehensive
 Income (Loss)		Total
Stockholders’
Equity
(Par Value of Shares $0.0001)
Shares 
(#)		Amount 
($)
Balance at December 31, 202531,924$3 $352,751 $(201,634)$22 $151,142 
Exercise of common stock options4 — 6 — — 6 
Restricted stock units vesting18(190)(190)
Issuance of common stock and pre-funded warrants in 2026 private placement, net of issuance costs2,900 — 114,892 — — 114,892 
Issuance of common stock for conversion of the K2 term loan, net of issuance207— 941 — — 941 
Stock compensation expense— — 2,824 — — 2,824 
Other comprehensive income— — — — (9)(9)
Net loss— — — (26,237)— (26,237)
Balance at March 31, 202635,053$3 $471,224 $(227,871)$13 $243,369 


The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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Table of Contents
Alto Neuroscience, Inc. and Subsidiary
Condensed Consolidated Statements of Cash Flows (Unaudited)
(in thousands)
Three months ended
March 31,
20262025
Cash Flows from Operating Activities:
Net loss
$(26,237)$(15,169)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense
2,8241,968
Depreciation
184171
Non-cash interest expense related to term loan
206180
Non-cash lease expense
200190
Loss on disposal of assets941
Change in other, net11641
Loss on extinguishment of debt—681
Changes in operating assets and liabilities:
Prepaid expenses and other assets
(4,130)(1,692)
Accounts payable
1,490(266)
Accrued liabilities and other liabilities
(1,753)(2,701)
Net cash used in operating activities(27,091)(16,556)
Cash Flows from Investing Activities:
Capital expenditures
(556)(24)
Net cash used in investing activities
(556)(24)
Cash Flows from Financing Activities:
Proceeds from sale of common stock and pre-funded warrants in 2026 private placement120,000—
Payments from sale of common stock and pre-funded warrants in 2026 private placement(4,875)—
Payment of withholding taxes for stock-based compensation(190)
Payments on issuance cost from registration statement —(419)
Proceeds from issuance of term loan, net—19,688
Repayment of former term loan—(10,213)
Payment of loan financing cost—(127)
Proceeds from exercise of stock options
6198
Net cash provided by financing activities
114,9419,127
Effect of exchange rate changes on cash, cash equivalents and restricted cash(16)(22)
Net (decrease) increase in cash, cash equivalents and restricted cash87,278(7,475)
Cash, cash equivalents and restricted cash at the beginning of the period176,984168,729
Cash, cash equivalents and restricted cash at the end of the period$264,262 $161,254 
Supplemental Disclosure of Non-cash Activities
Conversion of K2 term loan into shares of common stock$941 $— 
Costs from sale of common stock and pre-funded warrants in 2026 private placement not yet paid$233 $— 
Deferred offering and share issue costs not yet paid$— $138 
Issuance of warrants in connection with term loan agreement$— $524 
Supplemental Disclosure of Cash Flow Information
Cash paid for interest$342 $311 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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Table of Contents
Alto Neuroscience, Inc. and Subsidiary
Notes to Condensed Consolidated Financial Statements (Unaudited)

1. Description of the Business
Alto Neuroscience, Inc. (the “Company” or “Alto”) was incorporated in Delaware on March 25, 2019. The Company maintains its headquarters in Mountain View, California. The Company has one wholly-owned subsidiary in Australia that was formed during 2020 to conduct clinical trials.
Alto is 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 the Company’s scalable and proprietary Precision Psychiatry Platform, the Company aims to discover brain-based biomarkers to better identify which patients are more likely to respond to its novel product candidates. The Company’s current pipeline consists of seven clinical-stage assets addressing high-need therapeutic areas, including major depressive disorder (“MDD”), bipolar depression (“BPD”), treatment resistant depression (“TRD”), schizophrenia, and Parkinson’s disease.

Liquidity and Capital Resources

The Company has incurred significant operating losses since inception and has relied primarily upon equity financings to fund its operations. At March 31, 2026, the Company had an accumulated deficit of approximately $227.9 million. As the Company continues to incur losses, its transition to profitability will depend on the successful development, approval and commercialization of product candidates and on the generation of sufficient revenues to support its cost structure. No assurance can be provided that the Company will ever be profitable, and unless or until it becomes profitable, the Company will need to continue to raise additional capital.

In February 2024, the Company completed its initial public offering (“IPO”) of its common stock. The Company issued and sold 9,246,000 shares of common stock at a public offering price of $16.00 per share, which included 1,206,000 shares sold pursuant to the exercise of the underwriters’ option to purchase additional shares, and received net proceeds of $133.0 million after deducting underwriting discounts and commissions and other offering costs. Upon completion of the IPO, all outstanding shares of the Company’s outstanding preferred stock converted into an aggregate of 13,664,261 shares of common stock. In addition, the IPO resulted in the net exercise and conversion of all outstanding Series A Preferred Stock Warrants for an aggregate of 72,631 shares of common stock.

On October 21, 2025, the Company completed a private placement transaction in which it issued and sold (i) 3,832,263 shares of common stock and (ii) pre-funded warrants (in lieu of common stock) to purchase an aggregate of 4,622,251 shares of common stock. The Company received net proceeds of $49.7 million (see Note 10 for additional information).

On November 17, 2025, K2 HealthVentures LLC 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.

On March 17, 2026, the Company completed a private placement transaction in which it issued and sold (i) 2,900,000 shares of common stock and (ii) pre-funded warrants (in lieu of common stock) to purchase an aggregate of 3,100,000 shares of common stock. The Company received net proceeds of $114.9 million (See Note 10 for additional information).

On March 18, 2026, K2 HealthVentures LLC elected to convert $1.0 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 207,215 shares.


2. Summary of Significant Accounting Policies and Basis of Presentation
Basis of Presentation

The accompanying interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), as determined by the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”), and include the accounts of Alto and its wholly-owned subsidiary. All intercompany transactions and balances have been eliminated in consolidation.
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Alto Neuroscience, Inc. and Subsidiary
Notes to Condensed Consolidated Financial Statements (Unaudited)
The interim condensed consolidated financial statements are unaudited and have been prepared on the same basis as the audited annual financial statements and, in management’s opinion, include all adjustments consisting of only normal recurring adjustments necessary for the fair statement of the Company’s financial position as of March 31, 2026 and its results of operations and statements of equity for the three months ended March 31, 2026 and 2025 and cash flows for the three months ended March 31, 2026 and 2025. The results of operations for the three months ended March 31, 2026 are not necessarily indicative of the results to be expected for the full fiscal year or any other period.
Certain information and footnote disclosures normally included in the Company’s annual financial statements have been condensed or omitted. These interim condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements and the related notes thereto for the year ended December 31, 2025 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 16, 2026 (the “Annual Report”).
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results may differ materially from those estimates. The most significant estimates and assumptions in the Company’s condensed consolidated financial statements relate to the determination of the volatility of its common stock (as an input for calculating stock-based compensation and warrants), estimating accrued or prepaid research and development expenses. These estimates and assumptions are based on current facts, historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of expenses that are not readily apparent from other sources. To the extent there are material differences between the estimates and actual results, the Company’s future results of operations will be affected.
Significant Accounting Policies
The Company’s significant accounting policies used in the preparation of these condensed consolidated financial statements for the three months ended March 31, 2026 are consistent with those discussed in Note 3 to the consolidated financial statements in the Annual Report.
Recently Adopted Accounting Pronouncements
In November 2024, the FASB issued ASU No. 2024-04, Debt – Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments, which affects entities that settle convertible debt instruments for which the conversion privileges were changed to induce conversion. The standard is effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. The Company adopted the provisions of ASU 2024-04 prospectively beginning January 1, 2026. The adoption did not have an impact on the Company’s condensed consolidated financial statements.
Recently Issued Accounting Pronouncements
In November 2024, the FASB issued ASU No. 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which expands disclosures about specific expense categories presented on the face of the income statement. The standard is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. The Company is currently evaluating the impact the adoption of this standard will have on its consolidated financial statements.
In December 2025, the FASB issued ASU No. 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements. This standard clarifies current interim reporting requirements on Topic 270 and introduces a disclosure principle requiring entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. This standard will be effective for fiscal years beginning after December 15, 2027, with the option to apply it retrospectively.
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Alto Neuroscience, Inc. and Subsidiary
Notes to Condensed Consolidated Financial Statements (Unaudited)
Early adoption is allowed. Currently, the Company is evaluating the impact the adoption of this standard will have on its consolidated financial statements.
3. Balance Sheet Components
Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets consist of the following (in thousands):
March 31,
2026		  December 31,
2025
Prepaid insurance$1,894$191
Other prepaid expenses
3,4701,043
Total prepaid expenses and other current assets
$5,364$1,234
Property and Equipment, Net
Property and equipment, net are as follows (in thousands):
 March 31,
2026		December 31,
2025
Laboratory equipment
$2,667$2,125
Office equipment and furniture
453453
Computer software and equipment
574574
Leasehold improvements246246
Less: accumulated depreciation
(1,706)(1,526)
Property and equipment, net
$2,234$1,872
Depreciation expense was approximately $0.2 million for both the three months ended March 31, 2026, and 2025.
Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consist of the following (in thousands):
March 31,
2026		December 31,
2025
Accrued payroll, vacation and employee-related expenses
$2,001$4,870
Accrued research
3,1422,124
Accrued interest, short term
115118
Other accruals and current liabilities
1,048599
Lease liability, short term
1,3041,151
Total accrued expenses and other current liabilities
$7,610$8,862
4. Debt

K2 HealthVentures LLC Loan Agreement

On December 16, 2022, the Company entered into a Loan and Security Agreement (the “Original Loan Agreement”) with K2 HealthVentures LLC as a lender, the other lenders party thereto (collectively, the “Lender”), K2 HealthVentures LLC, as administrative agent for Lender (the “Administrative Agent”), and Ankura Trust Company, LLC, as collateral agent for the Lender. Pursuant to the terms of the Original Loan Agreement, the Lender agreed to make available to the Company term loans (each, collectively, the “Term Loan”) in an aggregate principal amount of up to $35.0 million. As of December
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Alto Neuroscience, Inc. and Subsidiary
Notes to Condensed Consolidated Financial Statements (Unaudited)
31, 2024, the Company had drawn a principal amount of $10.0 million. The Lender’s commitment to make available additional Term Loans under the Original Loan Agreement expired without being drawn on January 1, 2025. The Original Loan Agreement had a Term Loan maturity date of December 1, 2026 (the “Original Term Loan Maturity Date”).

On January 13, 2025, the Company entered into an amendment to the Original Loan Agreement (the “Amendment” and the Original Loan Agreement as amended thereby, the “Amended Loan Agreement”) to, among other things, extend the Original Term Loan Maturity Date and increase the maximum available amount of term loans. The Amended Loan Agreement provides for term loans in an aggregate principal amount of up to $75.0 million, consisting of:

•a first tranche term loan of $20.0 million;
•second tranche term loans of up to $30.0 million in the aggregate available at the Company’s request until December 15, 2025, subject to certain time-based, clinical milestones; and
•third tranche term loans of up to $25.0 million in the aggregate available at the Company’s request subject to the Lender’s approval.

The Company drew $20.0 million upon entry into the Amendment (approximately $10.0 million of which was used to refinance obligations under the Original Loan Agreement and pay fees and expenses incurred in connection with the Amendment). The second tranche term loan was available until December 15, 2025 based on certain milestones and expired without being drawn.

The Amended Loan Agreement has a Term Loan maturity date of January 1, 2029 (the “Amended Term Loan Maturity Date”). The Amended Loan Agreement provides for an interest only period until January 1, 2027, following which the Term Loan shall be repaid in equal monthly payments through the Amended Term Loan Maturity Date.

The Term Loan bears 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. Upon final payment or prepayment of the Term Loan, the Company is required to pay a final payment equal to 5.95% of the amount borrowed.

The Amended Loan Agreement was accounted for as a debt extinguishment, as the new loan was considered substantially different from the original loan. The Company recognized debt issuance costs and discount upon issuance of $2.0 million within Term Loan, non-current on its condensed consolidated balance sheet and recorded a loss on debt extinguishment of $0.7 million, which was recorded within loss on debt extinguishment in its condensed consolidated statement of operations and comprehensive loss for the three months ended March 31, 2025.

Fees

Under the terms of the Original Loan Agreement, the Company was obligated to pay a final fee equal to 6.25% of the aggregate amount of the term loans funded thereunder (the “Original Exit Fee”) upon the earliest of (i) the Original Term Loan Maturity Date, (ii) the acceleration of the Term Loan, and (iii) the prepayment of the Term Loan. The Company was also obligated to pay the Lender a one-time facility fee of $0.2 million (“Original Facility Fee”) on the initial closing date. The Original Exit Fee of $0.6 million and Original Facility Fee of $0.2 million were recorded as debt discount, and were being accreted using the effective interest method within interest expense in the condensed consolidated statements of operations and comprehensive loss. The Company’s obligation to pay the Original Exit Fee remains outstanding, and the timing for payment thereof was unaffected by, and reaffirmed in connection with, the Amendment, and is recorded in the condensed consolidated balance sheet within Term loan, current as of March 31, 2026 and December 31, 2025.

The Company was obligated to pay the Lender a one-time facility fee of $0.3 million upon entry into the Amendment. The Company is also obligated to pay a funding fee on each third tranche term loan in an amount equal to the sum of 0.5% multiplied by the amount of such third tranche term loan, if and when funded. Under the terms of the Amended Loan Agreement, the Company is obligated to pay a final fee equal to 5.95% of the aggregate amount of the Term Loan funded thereunder (the “Amended Exit Fee”) upon the earliest of (i) the Amended Term Loan Maturity Date, (ii) the acceleration of the Term Loan, and (iii) the prepayment of the Term Loan. As of March 31, 2026, the amount owed under the Amended Exit Fee is equal to $1.2 million. The Original Exit Fee and the Amended Exit Fee have been fully accrued and recorded as debt discount as of the closing date of the Amendment and are being accreted using the effective interest method within interest expense in the consolidated statement of operations and comprehensive loss.
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Alto Neuroscience, Inc. and Subsidiary
Notes to Condensed Consolidated Financial Statements (Unaudited)

The Company has the option to prepay all, but not less than all, of the Term Loan prior to the Amended Term Loan Maturity Date, which would require that the Company pay the Lender a prepayment penalty fee based on a percentage of the outstanding principal 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 funding date of such tranche, 2% if the prepayment occurs more than 24 months after, but on or before 36 months after the funding date of such tranche, or 1% if the prepayment occurs more than 36 months after the funding date of such tranche. No prepayment penalty fee is required if the applicable tranche is prepaid within six months prior to the Amended Term Loan Maturity Date or refinanced with the Lender.

Other Terms

The Company must maintain, at all times, a cash runway of at least 5 months, provided that this covenant will be waived during any period in which the Company’s market capitalization exceeds $700.0 million.

The Company’s obligations under the Amended Loan Agreement are secured by a first priority security interest in substantially all of its assets (with an exclusion for intellectual property). The Amended Loan Agreement contains customary representations and warranties, and also includes customary events of default, including payment default, breach of covenants, change of control, and material adverse effects. The Amended Loan Agreement restricts certain activities, such as disposing of the Company’s business or certain assets, incurring additional debt or liens or making payments on other debt, making certain investments and declaring dividends, acquiring or merging with another entity, engaging in transactions with affiliates or encumbering intellectual property, among others.

Upon the occurrence of an event of default, a default interest rate of an additional 5% per annum may be applied to the outstanding loan balances, and the Lender may declare all outstanding obligations immediately due and payable and exercise all of its rights and remedies as set forth in the Amended Loan Agreement and under applicable law.

Warrants

In connection with the Original Loan Agreement, the Company issued to the Lender a warrant (the “Original Warrant”), which Original Warrant is exercisable for 35,773 shares of the Company’s common stock and expires on December 15, 2032. In connection with the Amendment, the Original Warrant was amended and restated (the “Amended and Restated Warrant”) to reduce the exercise price from $10.49 to $3.71 per share (the “Exercise Price”). The incremental value associated with this modification was immaterial, and was included as part of the determination of the loss on debt extinguishment, with a corresponding increase in additional paid-in capital during the three months ended March 31, 2025.

In connection with the Amendment, the Company issued an additional warrant (the “New Warrant”, together with the Amended and Restated Warrant, the “Warrants”) to purchase a number of shares of the Company’s common stock calculated as follows: (a) (i) 0.025, multiplied by (ii) the aggregate principal amount of the term loans actually funded under the Amended Loan Agreement, divided by (b) the Exercise Price. The New Warrant expires on January 13, 2035 and allows for the purchase of 134,691 shares of the Company’s common stock. If the Company draws down on additional tranches of the Term Loan, the number of shares available for purchase by the Lender under the New Warrant would increase. The Company determined the estimated fair value of the New Warrant at the date of issuance to be $0.5 million, which was included as part of the determination of the loss on debt extinguishment, with a corresponding increase in additional paid-in capital. As of the date of the issuance, significant assumptions include an expected life of 10 years, a risk-free rate of 4.79% and an expected volatility of 89.47%. See Note 10 for additional information regarding the New Warrant.

Loan Conversion Feature

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 (the “Conversion Amount”) ($4.0 million of which was reflected in the Original Loan Agreement and $5.0 million of which is reflected in the Amended Loan Agreement) into shares of the Company’s common stock (the “Conversion Shares”). The number of shares to be issued upon conversion is determined by dividing (a) the portion of the term loan amount converted, by (b) the Applicable Conversion Price. Applicable Conversion Price means (i) with respect to any conversion of up to $4.0 million of the Conversion Amount, $10.49, and (ii) with respect to any conversion of the remaining $5.0 million of the Conversion Amount, $4.83, in each case subject to certain adjustments set
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Alto Neuroscience, Inc. and Subsidiary
Notes to Condensed Consolidated Financial Statements (Unaudited)
forth in the Amended Loan Agreement. The Company determined that the embedded conversion option is not required to be separated from the Term Loan. The embedded conversion option meets the derivative accounting scope exception since the embedded conversion option is indexed to the Company’s own common stock and qualifies for classification within stockholders’ equity. On November 17, 2025 and March 18, 2026, the Lender elected to convert $4.0 million and $1.0 million, respectively, 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 and 207,215 shares, respectively.

Interest Expense and future repayments
The Company recorded interest expense at a weighted average rate of 12.35% and 12.94% related to the Loan Agreement for the three months ended March 31, 2026, and 2025, respectively. During the three months ended March 31, 2026, and 2025, the Company recorded interest expense of $0.5 million and $0.6 million, respectively.
Future principal debt payments and Exit Fee of the term loan funded as of March 31, 2026 are as follows (in thousands):
2026 (remainder of year)$—
20276,858
20287,467
2029675
Total principal payments
15,000
Exit Fee
1,815
Deferred interest
235
Total principal payments and Exit Fee
17,050
Less: unamortized debt discount
(1,029)
Less: Term loan, current portion$(2,136)
Term loan, non-current$13,885
The Wellcome Trust Limited Convertible Grant Agreement
In July 2024, the Company entered into a convertible loan agreement (the “Convertible Grant Agreement”) with The Wellcome Trust Limited (“Wellcome”). The Convertible Grant Agreement provides for an unsecured convertible loan (the “Convertible Loan”) from Wellcome of up to approximately $11.7 million, payable to Alto in six tranches, of which up to $2.0 million could be funded upon the execution of the Convertible Grant Agreement and the remainder of which will be funded upon the completion of certain milestones as set forth in the Convertible Grant Agreement. As of March 31, 2026, the Company has drawn down the entirety of the $2.0 million execution tranche and will continue to access the loan as needed as the ALTO-100 study in bipolar depression progresses. Interest accrues at an annual rate equal to the Sterling Overnight Index Rate plus 2%, subject to potential adjustment if such annual interest rate equals or exceeds 9% at any time. 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 the Company’s 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 the Company’s efforts to develop and exploit ALTO-100.

At any time after the second anniversary of the effective date of the Convertible Grant Agreement or in connection with an event of default, Wellcome has the right, at its election, to convert some or all of the Convertible Loan into shares of the Company’s common stock at a price per share equal to a 20% discount to the thirty-day volume-weighted average price of Common Stock on the New York Stock Exchange at the date of such conversion. The Convertible Grant Agreement provides that in no event shall the aggregate number of shares of Common Stock issued pursuant to conversion of the Convertible Loan exceed 5,363,326, which is equal to 19.9% of the number of shares of Common Stock outstanding as of the date of the Convertible Grant Agreement. At any time after the fifth anniversary of the effective date of the Convertible Grant Agreement or in connection with an event of default, Wellcome may require repayment of the Convertible Loan in full, together with accrued interest, to the extent not converted as described above.

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Alto Neuroscience, Inc. and Subsidiary
Notes to Condensed Consolidated Financial Statements (Unaudited)
Future principal debt payments of the Convertible Grant Agreement funded as of March 31, 2026 are as follows (in thousands):

2026 (remainder of year)$—
2027—
2028—
20292,000
Term loan, non-current$2,000

The Company assessed the terms and features of the Convertible Grant Agreement and determined that the Company was eligible to elect the fair value option under ASC 825, Financial Instruments. The Convertible Grant Agreement contains various embedded features and the election of the fair value option allowed the Company to bypass analysis of potential embedded derivatives and further analysis of bifurcation of any recognized financial liabilities. Under the fair value option, the financial liability is initially measured at its fair value on the issue date and subsequently remeasured at estimated fair value on a recurring basis at each reporting date. Changes in the fair value of the Convertible Grant Agreement, which include accrued interest, if any, are recorded as a component of other, net or within other comprehensive income (loss) in the condensed consolidated statements of operations and comprehensive loss. The Company has not elected to present interest expense separately from changes in fair value and therefore will not present interest expense associated with the Convertible Grant Agreement. Any changes in fair value caused by instrument-specific credit risk are presented separately in other comprehensive income or loss.

The Company determined the initial fair value of the Convertible Grant Agreement using a probability-weighted income approach. Draw downs under the Convertible Grant Agreement were $0.8 million and $1.3 million during the years ended December 31, 2025, and 2024, respectively. The Company remeasured the fair value of the Convertible Grant Agreement as of March 31, 2026 to be $2.3 million using a probability-weighted income approach. The Company calculated discounted cash flows of the Convertible Grant Agreement using a discount rate of 20.69% and adjusted for the probability of various repayment scenarios.

The following table reconciles the change in fair value of the Convertible Grant Agreement during the three months ended March 31, 2026 (in thousands):

Fair value balance as of December 31, 2025$2,227
Issuance of new tranches—
Principal payments—
Changes in fair value reported in statements of operations115
Changes in fair value reported in other comprehensive loss(7)
Fair value balance as of March 31, 2026$2,335 


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Alto Neuroscience, Inc. and Subsidiary
Notes to Condensed Consolidated Financial Statements (Unaudited)



5. Fair Value
The Company’s financial instruments that are measured at fair value on a recurring basis consist of money market funds and the Convertible Grant Agreement. The following tables present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis and indicate the level of the fair value hierarchy used to determine such fair values (in thousands):

March 31, 2026
TotalLevel 1Level 2Level 3
Assets:
Cash and cash equivalents:
Money market funds$263,498 $263,498 $— $— 
Restricted cash:
Money market funds500 500 — — 
Total assets$263,998 $263,998 $— $— 
Liabilities:
Convertible Grant Agreement$2,335 $— $— $2,335 
Total liabilities$2,335 $— $— $2,335 

December 31, 2025
TotalLevel 1Level 2Level 3
Assets:
Cash and cash equivalents:
Money market funds$176,430 $176,430 $— $— 
Restricted cash:
Money market funds500 500 — — 
Total assets$176,930 $176,930 $— $— 
Liabilities:
Convertible Grant Agreement$2,227 $— $— $2,227 
Total liabilities$2,227 $— $— $2,227 

The Company classifies its money market funds, which are valued based on quoted market prices in an active market with no valuation adjustment, as Level 1 assets within the fair value hierarchy. The Company’s Convertible Grant Agreement is classified as a Level 3 instrument under the fair value hierarchy as the fair values were determined based on significant inputs not observable in the market. See Note 4 for additional information on the Convertible Grant Agreement.
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Alto Neuroscience, Inc. and Subsidiary
Notes to Condensed Consolidated Financial Statements (Unaudited)
6. Asset Purchase and License Agreements

From time to time, the Company enters into asset purchase and license agreements with third parties. For a detailed description of the significant agreements with certain financial commitments to which the Company is a party, see Note 10 to the consolidated financial statements included in the Company’s Annual Report. No payments were made during the three months ended March 31, 2026 and 2025 pursuant to any of these significant agreements.
7. Stock-Based Plans
2024 Equity Incentive Plan

In January 2024, the Board adopted, and the Company’s stockholders approved, the 2024 Equity Incentive Plan (the “2024 Plan”), which became effective on the execution of the underwriting agreement related to the IPO. Under the 2024 Plan, the Company may grant incentive stock options to employees, including employees of any parent or subsidiary, and nonstatutory stock options, stock appreciation rights, restricted stock awards (“RSAs”), restricted stock units (“RSUs”), performance awards and other forms of stock awards to employees, directors, and consultants, including employees and consultants of the Company’s affiliates. The 2024 Plan is a successor to the 2019 Equity Incentive Plan, which was adopted by the Board of Directors in March 2019 (as amended, the “2019 Plan”). Following effectiveness of the 2024 Plan, no further issuance may be made under the 2019 Plan. A total of 2,000,000 shares of common stock were approved to be initially reserved for issuance under the 2024 Plan. In addition, the number of shares of the Company’s common stock reserved for issuance under the 2024 Plan automatically increases on January 1 of each calendar year, starting on January 1, 2025 and continuing through and including January 1, 2034, in an amount equal to 5% of the total number of shares of the Company’s common stock outstanding on the last day of the calendar month before the date of each automatic increase, or a lesser number of shares determined by the Board.

As of March 31, 2026 and December 31, 2025, the total number of shares authorized to be issued under the 2024 Plan was 4,945,504 and 3,349,328, respectively. As of March 31, 2026 and December 31, 2025, there were 527,407 and 625,142 shares of common stock, respectively, reserved and available for issuance under the 2024 Plan.

2025 Inducement Plan

On February 6, 2025, the Board adopted the 2025 Inducement Plan (the “Inducement Plan”), pursuant to which it reserved 500,000 shares of common stock for issuance to individuals who were not previously employees of the Company, or who are returning to employment following a bona fide period of non-employment with the Company, as an inducement material to such persons entering into employment with the Company, in accordance with New York Stock Exchange Listed Company Manual Rule 303A.08. Under the Inducement Plan, the Company has the ability to issue non-statutory stock options, stock appreciation rights, RSAs, RSUs, and performance awards. As of March 31, 2026, stock options to purchase 150,000 shares of common stock had been granted under the Inducement Plan.

Employee Stock Purchase Plan

As of March 31, 2026, the Company had not opened the 2024 Employee Stock Purchase Plan for enrollment, and therefore there were no purchases or share issuances during this period.

Stock Option Repricing

In July 2025, the Board approved a stock option repricing, which was effective at the close of market on July 3, 2025 (“Repricing Effective Date”). The repricing generally applied to the outstanding stock options held by then current employees and consultants that had an exercise price greater than $2.35 per share. As of the Repricing Effective Date, the eligible stock options were immediately repriced such that the exercise price per share for such stock options was reduced to $2.35 (the closing price of the Company’s common stock on the New York Stock Exchange on the Repricing Effective Date), subject to certain retention requirements. The retention period is 12 months following the Repricing Effective Date and can be accelerated under certain conditions. If an eligible stock option is exercised prior to the end of the relevant retention period, the participant will be required to pay a premium exercise price equal to the original exercise price per share of such stock option. There were no changes to the number of shares underlying the eligible stock options or to the vesting schedules or expiration dates of the eligible stock options. There were 4,225,763 shares underlying the repriced stock options, which had then-current exercise prices ranging from $2.44 to $16.00 per share. An incremental $1.4 million
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Alto Neuroscience, Inc. and Subsidiary
Notes to Condensed Consolidated Financial Statements (Unaudited)
of stock-based compensation expense will be recognized over the greater of the 12-month retention period or the remaining vesting period of the outstanding stock options. Stock options held by non-employee members of the Board were not eligible for the repricing. For the three months ended March 31, 2026, the Company recognized $0.2 million of incremental stock-based compensation expense in connection with the stock option repricing. In addition, the Company has $0.8 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.

Stock Options
The options have a 10-year contractual life and generally vest over a period of four years, with the first 25% of the award vesting after one year and then monthly thereafter, subject to continuous service.
The weighted-average grant date fair value of options granted during the three months ended March 31, 2026 and 2025 for awards subject only to service-based vesting conditions were $12.90 and $3.09 per share, respectively. Weighted-average grant date fair value assumptions were based on the following:
Three months ended
March 31,
 20262025
Exercise price$16.72$4.08
Fair value of common stock$16.72$4.08
Expected term (in years)6.06.0
Volatility92.0%88.7%
Risk-free rate3.8%4.2%
Dividend yield0.0%0.0%
The table below summarizes activity related to stock options subject only to service-based vesting conditions (in thousands, except per share amounts):
 Shares
Weighted-
average
exercise
price per share (1)
Weighted –
average
remaining
contractual
term (in
years)
Aggregate
intrinsic
value (1)
Outstanding, December 31, 20254,950$7.287.9$52,078
Granted
1,72716.72
Exercised(4)1.6485
Forfeited and cancelled
(30)9.62
Outstanding, March 31, 20266,643$9.738.2$84,702
Exercisable at March 31, 20262,733$6.917.1$42,552
(1) Since the reporting period covered by the table above is before the expiration of the aforementioned retention period and any employees who exercised their repriced stock options during the reporting period, with certain exceptions, would have to pay the original exercise price, the weighted average exercise price and intrinsic value in the table above does not reflect the effect of repricing.
As of March 31, 2026, there was approximately $34.0 million of unrecognized stock-based compensation expense related to these service-based unvested stock options, excluding the impact of the option repricing, which is expected to be recognized over a weighted-average period of 2.9 years.

Restricted Stock Units
The table below summarizes activity related to RSUs subject only to service-based vesting conditions (in thousands, except per share amounts):

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Alto Neuroscience, Inc. and Subsidiary
Notes to Condensed Consolidated Financial Statements (Unaudited)
SharesWeighted-average
grant date fair value per share
Outstanding, December 31, 202527 $14.88
Granted— —
Vested
(27)14.88
Forfeited and cancelled— —
Outstanding, March 31, 2026— $—

On March 1, 2024, the Company issued 53,864 RSUs under the 2024 Plan; 50% of the shares of common stock underlying the RSUs vest after 18 months and the remainder vest after 24 months from the grant date. The RSUs are subject only to a service-based vesting condition. Such shares are not accounted for as outstanding until they vest. As of March 31, 2026, there is no unrecognized stock-based compensation expense related to the RSUs. The fair value of the RSUs vested during the three months ended March 31, 2026 was $0.5 million.
Performance Option Awards
The Board granted options to purchase common stock to certain employees and consultants that vest upon the achievement of certain performance conditions (“Performance Awards”) such as the completion of a future financing event or upon the achievement of defined clinical milestones or outcomes. The Company did not issue Performance Awards during the three months ended March 31, 2026 and 2025.
As of March 31, 2026, there are 435,381 Performance Awards vested and outstanding, and no Performance awards remain unvested. The Performance Awards have a contractual term of 10 years. There is no unrecognized stock-based compensation expense related to Performance Awards.
Stock-based Compensation Expense
Non-cash stock-based compensation expense recognized in the accompanying condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2026 and 2025 was as follows (in thousands):
Three months ended
March 31,
20262025
Research and development
$1,524$982
General and administrative
1,300986
Total stock-based compensation expense
$2,824$1,968
8. Loss Per Share
Basic net loss per common share is computed by dividing net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding for the period. The Company’s unvested restricted common stock is not included in the determination of loss per share until the award vests. Since the Company had a net loss in each of the periods presented, basic and diluted net loss per common share are the same.
In October 2025 and March 2026, the Company issued equity-classified Pre-Funded Warrants with a nominal exercise price of 0.0001 per share (see Note 10). In accordance with ASC 260, Earnings Per Share (ASC 260), shares issuable for little to no cash consideration should be included in the number of outstanding shares used to calculate basic loss per share as long as all conditions necessary for exercise are met. The Pre-Funded Warrants are therefore included as outstanding shares as of their issuance date to calculate the weighted average number of shares outstanding to calculate basic loss per share.
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Alto Neuroscience, Inc. and Subsidiary
Notes to Condensed Consolidated Financial Statements (Unaudited)
The following outstanding potentially dilutive common stock equivalents were excluded from the computation of diluted net loss per share for the periods presented because including them would have been antidilutive (in thousands):
March 31,
 20262025
K2 Common Stock Warrants170 170 
Restricted Stock Units
— 54 
Stock options issued and outstanding
7,078 5,651 
Total
7,248 5,875 
9. Income Taxes
Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are provided if based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The Company has evaluated the positive and negative evidence bearing upon the realizability of its deferred tax assets, including its net operating losses. Based on its history of operating losses, the Company believes that it is more likely than not that the benefit of its deferred tax assets will not be realized. Accordingly, the Company has provided a full valuation allowance for its net deferred tax assets as of March 31, 2026 and December 31, 2025.
10. Stockholders’ Equity

Warrants

K2 Warrant
In December 2022, in connection with the closing of the Original Loan Agreement, the Company issued a warrant to the Lender to purchase a number of shares of the Company’s Series B convertible preferred stock, or at Lender’s election, next round stock (“K2 Warrant”). The number of shares of convertible preferred stock issuable upon exercise of the warrant was equal to (a) (i) 0.0375, multiplied by (ii) the aggregate principal amount of term loans actually funded under the Original Loan Agreement, divided by (b) the warrant price then in effect. Following the conversion of all outstanding convertible preferred stock to common stock upon the completion of the IPO in February 2024, the K2 Warrant became a warrant to purchase up to an aggregate of 35,773 shares of the Company’s common stock at an exercise price of $10.49 per share (referred to in Note 4 as the Original Warrant).

On January 13, 2025, in connection with the Amended Loan Agreement (see Note 4 for additional information), the K2 Warrant was amended and restated (referred to in Note 4 as the Amended and Restated Warrant) to reduce the exercise price from $10.49 per share to $3.71 per share (referred to in Note 4 as the Exercise Price). Further, in connection with the Amendment, the Company issued an additional warrant (referred to in Note 4 as the New Warrant and, together with the Amended and Restated Warrant, the Warrants) to purchase a number of shares of the Company’s common stock calculated as follows: (a) (i) 0.025, multiplied by (ii) the aggregate principal amount of the term loans actually funded under the Amended Loan Agreement, divided by (b) the Exercise Price. The New Warrant expires on January 13, 2035. The New Warrant is classified as equity as it meets all the conditions under GAAP for equity classification, and is therefore not subject to ongoing remeasurement. The Company reassesses whether equity classification for the warrant is appropriate upon any changes to the warrants or capital structure, at each balance sheet date.

As of March 31, 2026 the New Warrant allowed for the purchase of 134,691 shares of the Company’s common stock. If the Company draws down on additional tranches of the Term Loan, the number of shares available for purchase by the Lender under the New Warrant would increase.

The Company is conditionally obligated to issue a fixed number of additional shares in connection with the New Warrant (“Additional Warrants”) in the potential amount of 168,363 shares upon the funding of additional amounts under the Term Loan with the same exercise price and contractual term. The contingent obligation to issue the Additional Warrants did not meet the derivative scope exception or equity classification criteria and were accounted for as a derivative liability. The
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Alto Neuroscience, Inc. and Subsidiary
Notes to Condensed Consolidated Financial Statements (Unaudited)
contingently issuable Additional Warrants derivative liability had a de minimis value at the time of issuance and as of March 31, 2026. The Additional Warrants derivative liability will be remeasured each reporting period until settled or extinguished with subsequent changes in fair value recorded through other income (expense), net in the condensed consolidated statements of operations and comprehensive loss. The initial fair value of the Additional Warrants derivative liability was determined using a Black-Scholes option pricing model based on the same input assumptions above, with an additional assessment required for the probability that additional amounts under the Term Loan will be funded which would trigger the issuance of the Additional Warrants.

Pre-Funded Warrants Issued in October 2025

In October 2025, the Company entered into a Securities Purchase Agreement (the “2025 PIPE Purchase Agreement”) with certain institutional and other accredited investors (the “2025 PIPE Purchasers”), pursuant to which the Company sold and issued to the 2025 PIPE Purchasers in a private placement transaction (the “2025 Private Placement”) (i) 3,832,263 shares of the Company’s common stock (the “2025 PIPE Shares”), and (ii) with respect to certain 2025 PIPE Purchasers, pre-funded warrants to purchase 4,622,251 shares of the Company’s common stock (the “2025 Pre-Funded Warrants”) in lieu of shares of the Company’s common stock. The purchase price per share of common stock was$5.9140 per share (the “2025 PIPE Purchase Price”), and the purchase price for the 2025 Pre-Funded Warrants was $5.9139 per 2025 Pre-Funded Warrant.

The 2025 Pre-Funded Warrants have a per share exercise price of $0.0001, subject to proportional adjustments in the event of stock splits or combinations or similar events. The 2025 Pre-Funded Warrants will not expire until exercised in full. The 2025 Pre-Funded Warrants may not be exercised if the aggregate number of shares of common stock beneficially owned by the holder thereof immediately following such exercise would exceed a specified beneficial ownership limitation; provided, however, that a holder may increase or decrease the beneficial ownership limitation by giving 61 days’ notice to the Company, but not to any percentage in excess of 19.9%.

The Company concluded that the 2025 Pre-Funded Warrants meet the criteria for equity classification at issuance and were recorded as a component of stockholders’ equity within additional paid-in capital. The 2025 Pre-Funded Warrants are equity classified because they (i) are freestanding financial instruments that are legally detachable and separately exercisable from the equity instruments, (ii) are immediately exercisable, (iii) do not embody an obligation for the Company to repurchase its shares, (iv) permit the holders to receive a fixed number of shares of common stock upon exercise, (v) are indexed to the Company’s common stock and (vi) meet the equity classification criteria. In addition, such 2025 Pre-Funded Warrants do not provide any guarantee of value or return.

Pre-Funded Warrants Issued in March 2026

In March 2026, the Company entered into a Securities Purchase Agreement (the “2026 PIPE Purchase Agreement”) with certain institutional investors (the “2026 PIPE Purchasers”), pursuant to which the Company sold and issued to the 2026 PIPE Purchasers in a private placement transaction (the “2026 Private Placement”) (i) 2,900,000 shares of the Company’s common stock (the “2026 PIPE Shares”), and (ii) with respect to certain 2026 PIPE Purchasers, pre-funded warrants to purchase 3,100,000 shares of the Company’s common stock (the “2026 Pre-Funded Warrants”) in lieu of shares of the Company’s common stock. The purchase price per share of common stock was $20.00 per share (the “2026 PIPE Purchase Price”), and the purchase price for the 2026 Pre-Funded Warrants was $19.9999 per 2026 Pre-Funded Warrant.

The 2026 Pre-Funded Warrants have a per share exercise price of $0.0001, subject to proportional adjustments in the event of stock splits or combinations or similar events. The 2026 Pre-Funded Warrants will not expire until exercised in full. The 2026 Pre-Funded Warrants may not be exercised if the aggregate number of shares of common stock beneficially owned by the holder thereof immediately following such exercise would exceed a specified beneficial ownership limitation; provided, however, that a holder may increase or decrease the beneficial ownership limitation by giving 61 days’ notice to the Company, but not to any percentage in excess of 19.9%.

The Company concluded that the 2026 Pre-Funded Warrants meet the criteria for equity classification at issuance and were recorded as a component of stockholders’ equity within additional paid-in capital. The 2026 Pre-Funded Warrants are equity classified because they (i) are freestanding financial instruments that are legally detachable and separately exercisable from the equity instruments, (ii) are immediately exercisable, (iii) do not embody an obligation for the Company to repurchase its shares, (iv) permit the holders to receive a fixed number of shares of common stock upon
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Alto Neuroscience, Inc. and Subsidiary
Notes to Condensed Consolidated Financial Statements (Unaudited)
exercise, (v) are indexed to the Company’s common stock and (vi) meet the equity classification criteria. In addition, such 2026 Pre-Funded Warrants do not provide any guarantee of value or return.

Common Stock and Authorized Shares
As of both March 31, 2026 and December 31, 2025, the Company had 500,000,000 authorized shares of common stock with a par value of $0.0001 per share, of which 35,052,731 and 31,923,521 shares, respectively, were issued and outstanding. On February 6, 2024, the Company amended its certificate of incorporation such that the total number of shares of common stock authorized to be issued was increased to 500,000,000, and the total number of shares of new preferred stock authorized to be issued was 10,000,000 with a par value per share of $0.0001. As of March 31, 2026, no shares of preferred stock were issued or outstanding.
As of March 31, 2026 and December 31, 2025, the Company had reserved common stock, on an as-if converted basis, for issuance as follows (in thousands):
March 31,
2026		December 31,
2025
K2 Warrants
170 170 
Pre-Funded Warrants7,7224,622
Stock options issued and outstanding from 2024, 2019 Equity Incentive Plan and Inducement Plan
7,078 5,385 
Shares available for future grant from 2024 Equity Incentive Plan and Inducement Plan
877 975 
Total
15,847 11,152 
The reserved common stock in the table above does not include (i) the number of shares of the Company’s common stock issuable upon conversion of the remaining amount of the Conversion Amount specified within the Amended Loan Agreement (see Note 4), (ii) the variable number of shares issuable pursuant to conversion of amounts funded under the Convertible Grant Agreement (see Note 4), and (iii) the variable number of shares issuable pursuant to terms of the asset purchase agreement, dated May 31, 2025, between the Company and Chase Therapeutics Corporation.
11. Commitments and Contingencies
From time to time, the Company is subject to occasional lawsuits, investigations and claims arising out of the ordinary course of business. Other than as set forth below, the Company had no significant pending or threatened litigation as of March 31, 2026.

On July 21, 2025, a purported stockholder of the Company filed a lawsuit against the Company, certain executive officers, and certain current and former directors in the United States District Court for the Northern District of California (Case No. 3:25-cv-06105). The plaintiff filed an amended complaint on January 23, 2026 and a second amended complaint on April 6, 2026. The complaint is a putative class action alleging violations of the Securities Act of 1933, as amended, related to the Company’s IPO in February 2024, and violations of the Exchange Act thereafter. The proposed classes consist of purchasers or acquirers of the Company’s common stock pursuant or traceable to the Company’s IPO as well as purchasers or acquirers of the Company’s common stock between March 18, 2024 and October 22, 2024, both dates inclusive. The plaintiff seeks unspecified damages, as well as interest, fees, and costs. The complaint claims, among other things, that the Company’s offering documents and subsequent public disclosures contained materially false and misleading statements and omitted material facts about the prospects of ALTO-100. The Company believes these allegations lack merit, and the Company filed a motion to dismiss on May 5, 2026.

In addition, a consolidated stockholder derivative action, captioned In re Alto Neuroscience, Inc. Derivative Litigation, Lead Case No. 5:25-cv-07144-NW was filed on behalf of the Company against certain executive officers and certain current and former directors for breach of fiduciary duty, unjust enrichment, abuse of control, gross mismanagement, waste of corporate assets, and violations of the federal securities laws. The claims arise out of the same factual allegations as the putative class action described above. The plaintiffs seek unspecified damages, as well as interest, fees, and costs. The
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Alto Neuroscience, Inc. and Subsidiary
Notes to Condensed Consolidated Financial Statements (Unaudited)
consolidated stockholder derivative action was stayed on January 14, 2026 pending resolution of the motion to dismiss in the securities class action. The Company believes that these claims lack merit.

The Company has not recorded a liability related to these lawsuits because, at this time, the Company does not believe that an unfavorable outcome is either probable or estimable.

In the ordinary course of business, the Company enters into contracts that contain a variety of indemnifications with its employees, licensors, suppliers and service providers. Further, the Company indemnifies its directors and officers who are, or were, serving at the Company’s request in such capacities. The Company’s maximum exposure under these arrangements is unknown at March 31, 2026. The Company does not anticipate recognizing any significant losses relating to these arrangements.
12. Segments
As a single reportable segment entity, the Company’s segment performance measure is consolidated net loss. Asset information is not used by the Company’s President and Chief Executive Officer, its chief operating decision maker (“CODM”) to allocate resources. Certain significant segment expenses below loss from operations are presented in the Company’s consolidated statements of operations and are therefore not presented below. Additional disaggregated significant segment expenses on a functional basis, that are not separately presented on the Company’s condensed consolidated statements of operations, are presented below (in thousands):
Three months ended
March 31,
20262025
Personnel expenses excluding stock-based compensation$6,249 $5,783 
Stock-based compensation2,824 1,968 
Direct external program expenses:
ALTO-1001,764 1,124 
ALTO-3001,507 922 
ALTO-1015,356 969 
ALTO-2036 737 
ALTO-2074,143 — 
Other research and development (a)
1,198 1,129 
General and administrative (b)
4,091 3,044 
Loss from operations$27,138 $15,676 
(a) Other research and development expenses primarily consists of license fees, facility charges, third party consultant costs, early research costs related to other product candidates, and other unallocated costs.
(b) General and administrative costs include professional fees, insurance, consultant fees and facility charges.
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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and the related notes included elsewhere in this Quarterly Report and the audited financial statements and notes thereto as of and for the year ended December 31, 2025 and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations, included in our Annual Report filed with the SEC on March 16, 2026.

As discussed in the section titled “Special Note Regarding Forward Looking Statements,” the following discussion and analysis includes forward-looking statements that involve risks and uncertainties. Our actual results and the timing of selected events could differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to those identified below and those set forth under “Item 1A. Risk Factors” in our Annual Report, under “Item 1A. Risk Factors” in this Quarterly Report, and in our other reports filed with the SEC.
Overview
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 Precision Psychiatry Platform, or our Platform, we aim to develop novel medicines that are more targeted based on a deep understanding of patient biology and the activity of our product candidates on brain processes. Our current pipeline consists of seven clinical-stage assets addressing high-need therapeutic areas, focusing on major depressive disorder, or MDD, bipolar depression, or BPD, treatment resistant depression, or TRD, schizophrenia, and Parkinson’s disease.

Our clinical-stage product candidates are being advanced based on extensive preclinical and clinical data that suggest the potential to bring significant improvements to patient populations not adequately treated with current standard-of-care medications.

Our pipeline of clinical-stage product candidates is depicted below:

2026.05_1Q Pipeline.jpg
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Private Placement Transactions

October 2025 Private Placement
In October 2025, we entered into a Securities Purchase Agreement, or the 2025 PIPE Purchase Agreement, with certain institutional and other accredited investors, or the 2025 PIPE Purchasers, 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 stock, or the 2025 PIPE Shares and (ii) with respect to certain 2025 PIPE Purchasers, pre-funded warrants to purchase 4,622,251 shares of our common stock, 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 share, 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.

March 2026 Private Placement
In March 2026, we entered into a Securities Purchase Agreement, or the 2026 PIPE Purchase Agreement, with certain institutional investors, or the 2026 PIPE Purchasers, 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 stock, or the 2026 PIPE Shares and (ii) with respect to certain 2026 PIPE Purchasers, pre-funded warrants to purchase 3,100,000 shares of our common stock, 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 share, 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 million.

Our Product Candidates

ALTO-207

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 will be 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. Following an FDA meeting in October 2025, we also expect to initiate a Phase 3 trial by early 2027 following Phase 3 readiness work and alignment with the FDA on the planned trial design.

In May 2025, we acquired ALTO-207 (formerly known as CTC-501) from Chase Therapeutics Corporation, or Chase. Prior to the acquisition, Chase completed a randomized, placebo-controlled Phase 2a clinical trial evaluating CTC-501 in 32 patients with depression. CTC-501 met the primary and secondary endpoints in this trial, 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.

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Our acquisition of ALTO-207 was motivated by the results from 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. We believe the profile of ALTO-207 will enable higher dosing of pramipexole while mitigating the significant rates of nausea and vomiting that have limited its use for depression.

ALTO-300

ALTO-300, also known as agomelatine, is an investigational oral, small molecule melatonergic (MT1 and MT2) agonist and serotonergic (5-HT2C) antagonist with antidepressant properties, and is being developed at 25mg as an adjunctive treatment in the United States for patients with MDD, characterized by an electroencephalography, or EEG, biomarker. Agomelatine has been approved as an antidepressant in Europe and Australia at both 25mg and 50mg, but has not been approved in the United States. In comparison to the 50mg dose of agomelatine, the 25mg dose has been shown to have equivalent antidepressant efficacy and has not been associated with reversible, low liver enzyme elevations observed with the 50mg dose. A published meta analysis including more than 58,000 patients demonstrated that agomelatine is not associated with elevated aspartate transferase, or AST, or alanine transaminase, or ALT, unlike certain other commonly used antidepressants. In our development program, including our completed Phase 2a and ongoing Phase 2b study, we have observed low rates of liver function test, or LFT, elevations (greater than 3 times the upper limit of normal, or ULN) with the 25mg dose which supports our strategy of developing only the 25mg dosage strength.

We are currently evaluating ALTO-300 in a double-blind, placebo-controlled, randomized Phase 2b clinical trial in patients with MDD characterized by an EEG biomarker signature. We expect to enroll approximately 200 biomarker positive patients in the final analysis sample, which is therefore expected to result in approximately 320 patients enrolled in the study in total (inclusive of biomarker negative patients and patients not included in the final analysis sample as a result of the completed blinded site and patient case review). Patients are randomized to receive either 25mg of ALTO-300 once daily before bedtime, or QHS, or placebo in addition to a background antidepressant, to which they have had inadequate response, over a six-week treatment period. Patients are then enrolled into an eight-week open-label extension in which they receive 25mg QHS of ALTO-300. We selected the 25mg dose of ALTO-300 with the aim to optimize clinical efficacy while balancing safety and tolerability. The primary endpoint in the trial is the change in MADRS score from baseline to week six in the EEG biomarker positive group. We expect to report topline data from this trial in the first half of 2027.

In February 2025, we announced a favorable outcome from the planned interim analysis for the Phase 2b trial of ALTO-300 as an adjunctive treatment for patients with MDD. The interim analysis resulted in a recommendation to continue the study and increase the biomarker positive sample, which we believe will improve the overall probability of success of this trial. Prior to the interim analysis, a blinded committee conducted an in-depth site and patient eligibility review that resulted in the prospective exclusion of sites and patients from the analysis population. Following the eligibility review, the biomarker positive population in the interim analysis consisted of 87 patients.

In May 2025, we presented additional analyses at the American Society of Clinical Psychopharmacology Annual Meeting (ASCP) Annual Meeting supporting the unique biomarker opportunity for patient stratification and reinforcing the well-established safety and tolerability profile for ALTO-300 in MDD.

ALTO-100

We are currently evaluating ALTO-100 in a Phase 2b trial in patients with BPD in which patients are assigned to take ALTO-100 as adjunctive treatment to a stable dose of a background mood stabilizing treatment over a six-week treatment period. BPD is associated with memory, cognitive, and neuroplasticity abnormalities at similar or greater rates than seen in MDD. Much like MDD, poor memory and cognition patients typically experience greater treatment resistance and disability, with overall worse outcomes. Moreover, the only currently approved therapies are antipsychotics. We believe the pro-neuroplasticity mechanism of ALTO-100 has the potential to address the high unmet need in this important patient population.

A blinded pharmacokinetic, or PK, analysis from the first cohort of patients in this trial demonstrated that 96% of samples for ALTO-100 qualified as PK positive. A sample was considered PK positive if observed drug levels
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were above a pre-specified minimum threshold. We believe these results underscore the effectiveness of the operational adjustments made to trial design and execution following the completion of the ALTO-100 MDD Phase 2b trial. Enrollment in this trial is ongoing, with a target of approximately 200 patients, and we expect to report topline data from the study in mid-2027.

In the fourth quarter of 2024, we completed the Phase 2b trial evaluating ALTO-100 as a treatment for MDD. The clinically meaningful signal in the adjunctive subgroup and the evidence of biomarker enrichment in the compliant subset of patients support the ongoing Phase 2b trial of ALTO-100 as an adjunctive treatment in BPD.

ALTO-101

In April 2026, we announced that our Phase 2 proof-of-concept, or POC, clinical trial evaluating ALTO-101 for the treatment of cognitive impairment associated with schizophrenia, or CIAS, did not achieve statistical significance on primary EEG or cognitive endpoints versus placebo; however, the study demonstrated directional improvements across certain EEG measures, including a near-significant effect on theta-ITC (n=83, d=0.34, p=0.052) – a measure correlated with cognitive performance across datasets. In a pre-specified analysis in a more cognitively impaired subgroup (n=59), ALTO-101 exhibited nominally significant effects on theta-ITC compared to placebo (d=0.44, p=0.03). Further, certain EEG measures, including theta-ITC, showed improvements from day 5 to day 10 in the trial, suggesting a longer treatment period may elucidate greater effects. ALTO-101 demonstrated a favorable tolerability profile, with rates of nausea and vomiting — hallmark side effects associated with the PDE4 inhibitor class — in line with placebo rates. This finding suggests the pharmacokinetic profile of ALTO-101 may overcome a key tolerability barrier that has historically limited PDE4 inhibitor adoption. High rates of application site skin reactions were observed across both active and placebo arms.

We have developed a modified-release oral formulation of ALTO-101 that has demonstrated an improved pharmacokinetic and tolerability profile relative to the immediate-release formulation. We believe this formulation may offer potential benefits across multiple therapeutic areas and intend to explore partnering opportunities. The formulation is covered by a pending patent application.

Following the topline data readout of the Phase 2 proof-of-concept study, further analyses have been completed and the findings reflect a potential product profile suitable for a range of cognitive disorders. Specifically, further analyses identified large and statistically significant effects of ALTO-101 across the overall study population on multiple EEG markers relevant to cognition. ALTO-101 produced an increase in individual alpha peak frequency (d=0.59, p=0.001), a heritable index of neurophysiological efficiency that tracks a range of cognitive functions, as well as a shift toward greater cortical excitability, evidenced by increases in high frequency power (beta: d=0.70, p<0.001; gamma: d=0.61, p=0.001) and a decrease in low frequency power (theta: d=0.50, p=0.007). These changes resulted in a decrease in the theta/beta ratio (d=0.57, p=0.003), an FDA-cleared measure of attention-deficit/hyperactivity disorder. Significant improvement was also observed in sustained attention, as measured by the Continuous Performance Task (d=0.41, p=0.02), while no significant effects were observed in processing speed or memory.

Taken together with the topline data, the deeper analysis of the ALTO-101 proof-of-concept data reveal compelling signals that we believe merit further evaluation of this product candidate.

ALTO-203

ALTO-203 is an investigational novel, oral, small molecule histamine H3 inverse agonist. We are currently advancing ALTO-203 for the treatment of patients with MDD associated with increased levels of anhedonia.

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. The exploratory Phase 2 POC trial, which enrolled 69 patients, was conducted in two sequential, double-blind, placebo-controlled periods. 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).

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The profile exhibited by ALTO-203 in the exploratory POC trial demonstrated clear effects on objective measures of attention and wakefulness, with observed improvements linked to changes in the EEG theta/beta ratio—a biomarker indexing cortical arousal and attentional control. This biomarker is FDA-cleared for use alongside clinical evaluation in the diagnosis of attention-deficit/hyperactivity disorder or ADHD, reinforcing its clinical relevance. These findings replicate results from the Phase 1 study in healthy volunteers, where ALTO-203 treatment led to improvements in sustained attention and reductions in the EEG theta/beta ratio. Baseline EEG theta/beta ratio predicted attentional benefits of ALTO-203 in both the Phase 1 study and Phase 2 POC trial. A higher-than-expected placebo response was observed on Bond & Lader measurements, therefore no significant separation of subjective effects between ALTO-203 and placebo were observed.

We presented data in early 2026 demonstrating the potential benefits of ALTO-203 in indications with excessive daytime sleepiness/hypersomnolence and/or impairments in sustained attention. We continue to evaluate the best indication to pursue with ALTO-203, and expect to provide further details on planned development in the future.

ALTO-202

We plan to develop ALTO-202, an investigational orally bioavailable antagonist of the GluN2B subunit of the N-methyl-D-aspartate, or NMDA receptor, for the treatment of patients with MDD. We are currently in the process of planning the next phase of clinical development for ALTO-202.

ALTO-208

ALTO-208 is a fixed-dose combination of pramipexole and aprepitant, an antiemetic, neurokinin-1 (NK-1) receptor antagonist. We plan to develop ALTO-208 for patients with Parkinson’s disease (PD). In May 2025, we acquired ALTO-208 (formerly known as CTC-413) from Chase.

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, 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 million and $15.2 million for the three months ended March 31, 2026 and 2025, respectively. As of March 31, 2026, we had an accumulated deficit of $227.9 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, and ALTO-100 and ALTO-300 in ongoing Phase 2b clinical trials, as well as ALTO-203, and ALTO-208;
•advance additional product candidates through clinical development;
•require the manufacture of larger quantities of our product candidates to support future clinical trials or potential commercialization;
•seek marketing authorizations for any of our product candidates that successfully complete clinical development, if any;
•acquire or license other product candidates or technologies;
•make milestone, royalty, or other payments under any current or future license agreements;
•obtain, maintain, protect, and enforce our intellectual property portfolio;
•seek to attract and retain new and existing skilled personnel; and
•add operational, legal, financial and management information systems and personnel to support our product development and clinical execution, as well as to support our transition to a public company.
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We will not generate any revenue from product sales unless and until we successfully complete clinical development and obtain regulatory approval for one or more of our product candidates. If we obtain regulatory approval for any of our product candidates, we expect to incur significant expenses related to developing our internal commercialization capability to support product sales, marketing, and distribution.
As a result, we will need substantial additional funding to support our operating activities as we advance our product candidates through clinical development, seek regulatory approval, and prepare for and, if any of our product candidates are approved, proceed to commercialization. Until such time, if ever, as we can generate substantial revenue from product sales to support our cost structure, we expect to finance our operating activities through a combination of public or private sales of equity, government or private party grants, debt financings, or other capital sources, including potential collaborations with other companies or other strategic transactions. Adequate funding may not be available to us on acceptable terms, or at all.
If we are unable to obtain funding, we will be forced to delay, reduce, or eliminate some or all of our research and development programs, product portfolio expansion, or commercialization efforts, which could adversely affect our business prospects, or we may be unable to continue operations. Although we continue to pursue these plans, there is no assurance that we will be successful in obtaining sufficient funding on terms acceptable to us to fund continuing operations, if at all.
As of March 31, 2026, we had cash, cash equivalents and restricted cash of $264.3 million. We believe that our existing cash and cash equivalents, together with 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.”
Components of Results of Operations
Operating Expenses
Research and Development Expenses
Research and development expenses consist primarily of costs incurred for the development of our product candidates and our platform and technology building efforts, which include:
•personnel expenses, including salaries, benefits, and stock-based compensation expense for our employees engaged in research and development functions;
•expenses incurred in connection with the clinical development of our product candidates, including under agreements with clinical sites and contract research organizations, or CROs;
•fees incurred in connection with license agreements and asset acquisitions;
•costs of manufacturing drug product and drug supply related to our current or future product candidates;
•cost of outside consultants engaged in research and development functions;
•expenses related to regulatory affairs; and
•fees for maintaining licenses and other amounts due under our third-party licensing agreements.
We expense research and development costs in the periods in which they are incurred. Costs for certain activities are recognized based on an evaluation of the progress to completion of specific tasks, using information provided to us by our vendors and analyzing the progress of our clinical trials or other services performed. Significant judgment and estimates are made in determining the accrued expense balances at the end of any reporting period.

Research and development activities are central to our business model. We expect our research and development expenses to increase substantially for the foreseeable future as we advance our product candidates into and through later stage clinical trials, pursue regulatory approval of our product candidates, build our operational and commercial capabilities for supplying and marketing our products, if approved, and expand our pipeline of product candidates.
The process of conducting the necessary clinical research to obtain regulatory approval is costly and time-consuming. Furthermore, product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. The actual probability of success for our product candidates may be affected by a variety of factors, including the safety and
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efficacy of our product candidates, conduct of clinical trials, investment in our clinical programs, competition, manufacturing capability, and commercial viability. We may never succeed in achieving regulatory approval for any of our product candidates. As a result of the uncertainties discussed above, we are unable to determine the duration and completion of costs of our research and development projects or if, when, and to what extent we will generate revenue from the commercialization and sale of our product candidates, if approved by the FDA and other applicable regulatory authorities.
Our future research and development costs may vary significantly based on factors such as:
•the timing and progress of our clinical development activities;
•the number and scope of preclinical and clinical programs we decide to pursue;
•the amount and timing of any milestone payment due under an existing, or any future, license or collaboration agreement or asset acquisition;
•the number of patients that participate in our clinical trials, and per participant clinical trial costs;
•the number and duration of clinical trials required for approval of our product candidates;
•the number of sites included in our clinical trials, and the locations of those sites;
•delays or difficulties in adding trial sites and enrolling participants in our clinical trials;
•patient drop-out or discontinuation rates;
•potential additional safety monitoring requested by regulatory authorities;
•the phase of development of our product candidates;
•the efficacy and safety profile of our product candidates;
•the timing, receipt, and terms of any approvals from applicable regulatory authorities including the FDA and non-U.S. regulators;
•maintaining a continued acceptable safety profile of our product candidates following approval, if any, of our product candidates;
•changes in the competitive outlook;
•the extent to which we establish additional strategic collaborations or other arrangements; and
•the impact of any business interruptions to our operations or to those of the third parties with whom we work.
A change in the outcome of any of these variables with respect to the development of any of our product candidates could significantly change the costs and timing associated with the development of that product candidate.
We also expect to incur significant manufacturing costs as our contract manufacturing organizations, or CMOs, develop scaled commercial manufacturing processes. However, we do not believe that it is possible at this time to accurately project expenses through commercialization. There are numerous factors associated with the successful commercialization of any of our product candidates, including future trial design and various regulatory requirements, many of which cannot be determined with accuracy at this time based on our stage of development. Additionally, future commercial and regulatory factors beyond our control will impact our clinical development programs and plans.
General and Administrative Expenses
General and administrative expenses consist primarily of salaries and other related costs, including stock-based compensation, for personnel in our executive, finance, corporate and business development, and administrative functions. General and administrative expenses also include professional fees for legal, patent, accounting, information technology, auditing, tax and consulting services, travel expenses, and facility-related expenses, which include direct depreciation costs and allocated expenses for rent and maintenance of facilities and other operating costs.
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 II, Item I. Legal Proceedings,” below), regulatory, and tax-related services, costs
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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.
Other Income (Expense)

Other income (expense) consists primarily of interest income on our cash and cash equivalents, interest expense on borrowings under our loan and security agreement, loss on debt extinguishment, and non-cash changes in the fair value of our Convertible Grant Agreement with Wellcome (See “— Liquidity and Capital Resources”).
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Results of Operations
Comparison of the Three Months Ended March 31, 2026 and 2025
The following table summarizes our results of operations for the three months ended March 31, 2026 and 2025 (in thousands):
Three months ended
March 31,
20262025
Operating expenses:
Research and development$20,294 $9,974 
General and administrative6,844 5,702 
Total operating expenses27,138 15,676 
Loss from operations(27,138)(15,676)
Other income (expense):
Interest income1,561 1,827 
Interest expense(545)(598)
Loss on debt extinguishment— (681)
Other, net(115)(41)
Total other income, net901 507 
Net loss $(26,237)$(15,169)
Research and Development Expenses
The following table summarizes our research and development expenses by program for the periods presented (in thousands):
Three months ended
March 31,
20262025
Direct external program expenses:
ALTO-100
$1,764 $1,124 
ALTO-3001,507 922 
ALTO-101
5,356 969 
ALTO-2036 737 
ALTO-207
4,143 — 
Other clinical development
250 300 
Licenses6 5 
Internal and unallocated expenses:
Personnel-related costs
6,320 5,093 
Other unallocated expenses
942 824 
Total research and development expenses
$20,294 $9,974 
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Research and development expenses were $20.3 million for the three months ended March 31, 2026, compared to $10.0 million for the three months ended March 31, 2025. Increases in research and development expenses were due primarily to:

•an increase of approximately $4.4 million in expenses related to the development of our ALTO-101 program, including our Phase 2 POC trial of ALTO-101 for which we announced top line data on April 1, 2026.

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

•an increase of $1.2 million in salary and personnel related costs, which includes $0.5 million of non-cash stock-based compensation.
General and Administrative Expenses
General and administrative expenses were $6.8 million for the three months ended March 31, 2026, compared to $5.7 million for the three months ended March 31, 2025. The increase of $1.1 million was primarily due to increases in professional fees.
Other Income (Expense)
Other income, net increased $0.4 million during the three months ended March 31, 2026, compared to the three months ended March 31, 2025. The increase was primarily due to debt extinguishment costs of $0.7 million that were incurred during the three months ended March 31, 2025. This increase was partially offset by a decrease in interest income of $0.3 million during the three months ended March 31, 2026 compared to the three months ended March 31, 2025.

Liquidity and Capital Resources
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, and pre-IPO sales of our convertible preferred stock) and borrowings under our loan and security agreement.
As of March 31, 2026 and December 31, 2025, we had cash, cash equivalents and restricted cash of $264.3 million and $177.0 million, respectively.
Private Placement Transactions
In October 2025, we entered into the 2025 PIPE Purchase Agreement with the 2025 PIPE Purchasers pursuant to which we sold and issued to the 2025 PIPE Purchasers: (i) 3,832,263 shares of our common stock and (ii) with respect to certain 2025 PIPE Purchasers, 2025 Pre-Funded Warrants to purchase 4,622,251 shares of common stock in lieu of shares of common stock. The purchase price per share of common stock was $5.9140 per share 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 the 2026 PIPE Purchase Agreement with the 2026 PIPE Purchasers pursuant to which we sold and issued to the 2026 PIPE Purchasers: (i) 2,900,000 shares of our common stock and (ii) with respect to certain 2026 PIPE Purchasers, 2026 Pre-Funded Warrants to purchase 3,100,000 shares of common stock in lieu of shares of common stock. The purchase price per share of common stock was $20.00 per share 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 million.
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Amended Loan and Security Agreement
In December 2022, we entered into a Loan and Security Agreement, or the Original Loan Agreement, with K2 HealthVentures LLC as a lender, the other lenders party thereto (collectively, the Lenders), K2 HealthVentures LLC, or the Administrative Agent, and Ankura Trust Company, LLC, as collateral agent for the Lender. In January 2025, we entered into an amendment to the Original Loan Agreement (the Amendment, and the Original Loan Agreement as amended thereby, the Amended Loan Agreement) to, among other things, extend the maturity date of the facility and increase the maximum available amount of term loans. The Amended Loan Agreement provides for term loans, which we refer to collectively as the Term Loan, in an aggregate principal amount of up to $75.0 million consisting of:

•a first tranche term loan of $20.0 million;
•second tranche term loans of up to $30.0 million in the aggregate available at our request until December 15, 2025, subject to certain time-based, clinical milestones; and
•third tranche term loans of up to $25.0 million in the aggregate available at our request subject to the Lender’s approval.

We drew $20.0 million upon entry into the Amendment (approximately $10.0 million of which was used to refinance obligations under the Original Loan Agreement and pay fees and expenses incurred in connection with the Amendment). The second tranche term loans, which were tied to the timing of clinical milestones, expired without being drawn.

As of March 31, 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.

The Amended Loan Agreement has a Term Loan maturity date of January 1, 2029, or the Amended Term Loan Maturity Date. The Amended Loan Agreement provides for an interest only period until January 1, 2027, following which the Term Loan shall be repaid in equal monthly payments through the Amended Term Loan Maturity Date.

The Term Loan bears 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. Upon final payment or prepayment of the Term Loan, the Company is required to pay a final payment equal to 5.95% of the amount borrowed.

We were obligated to pay the Lender a one-time facility fee of $0.3 million upon entry into the Amendment. We are also obligated to pay a funding fee on each third tranche term loan in an amount equal to the sum of 0.5% multiplied by the amount of such third tranche term loan, if and when funded. Our obligation under the Original Loan Agreement to pay the Lender a one-time fee of $0.6 million, or the Original Exit Fee, remains outstanding. We are also obligated to pay a final fee equal to 5.95% of the aggregate amount of the Term Loan funded thereunder, or the Amended Exit Fee, upon the earliest of (i) the Amended Term Loan Maturity Date, (ii) the acceleration of the Term Loan, and (iii) the prepayment of the Term Loan.

We have the option to prepay all, but not less than all, of the Term Loan prior to the Amended Term Loan Maturity Date, which would require that we pay the Lender a prepayment penalty fee based on a percentage of the outstanding principal 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 funding date of such tranche, 2% if the prepayment occurs more than 24 months after, but on or before 36 months after the funding date of such tranche, or 1% if the prepayment occurs more than 36 months after the funding date of such tranche. No prepayment penalty fee is required if the applicable tranche is prepaid within six months prior to the Amended Term Loan Maturity Date or refinanced with the Lender.

Beginning January 1, 2026, we 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 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 and March 19, 2026, the Lender elected to convert $4.0 million and $1.0 million, respectively, 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
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share, resulting in the issuance of 828,860 and 207,215 shares, respectively. The Lender has the option to convert a remaining $4.0 million into shares of common stock; the conversion price per share for the remaining option is $10.49.
Convertible Grant Agreement
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 March 31, 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 March 31, 2026, we have achieved clinical milestones that allow us to draw down an incremental $3.0 million under the Convertible Grant Agreement.

We may use proceeds from the Convertible Loan solely to advance development of ALTO-100 in bipolar depression. In addition, if we do not exploit or develop ALTO-100 (other than for safety or efficacy concerns) within a specified period following the completion of our Phase 2b clinical trial evaluating ALTO-100 in patients with bipolar depression, the Convertible Grant Agreement provides Wellcome with a limited right to exploit ALTO-100, solely in bipolar depression, subject to a revenue share between Wellcome and us of any proceeds arising from Wellcome’s exploitation. Outstanding amounts under the Convertible Loan accrue interest at an annual rate equal to the Sterling Overnight Index Rate plus 2%, subject to potential adjustment if such interest rate equals or exceeds 9% at any time. At any time after the second anniversary of the effective date of the Convertible Grant Agreement or in connection with an event of default, Wellcome has the right, at its election, to convert some or all of the Convertible Loan into shares of our common stock at a price per share equal to a 20% discount to the thirty-day volume-weighted average price of Common Stock on the New York Stock Exchange at the date of such conversion. The Convertible Grant Agreement provides that in no event shall the aggregate number of shares of our common stock issued pursuant to conversion of the Convertible Loan exceed 5,363,326, which is equal to 19.9% of the number of shares of our common stock outstanding as of the date of the Convertible Grant Agreement. At any time after the fifth anniversary of the date of the Convertible Grant Agreement or in connection with an event of default, Wellcome may require repayment of the Convertible Loan in full, together with accrued interest, to the extent not converted as described above.

Shelf Registration Statement

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.

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.

Cash Flows
The following table sets forth a summary of the net cash flow activity for each of the periods indicated (in thousands):
Three months ended
March 31,
20262025
Net cash used in operating activities$(27,091)$(16,556)
Net cash used in investing activities(556)(24)
Net cash provided by financing activities114,941 9,127 
Effect of exchange rate changes on cash, cash equivalents and restricted cash(16)(22)
Net (decrease) increase in cash, cash equivalents and restricted cash$87,278 $(7,475)
Operating activities
Net cash used in operating activities was $27.1 million for the three months ended March 31, 2026, as compared to $16.6 million for the three months ended March 31, 2025. The increase in cash used was the result of an increase in net
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losses of $11.1 million which was partially offset by increased non-cash stock-based compensation expenses of $0.9 million.
Investing activities
Net cash used in investing activities 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 three months ended March 31, 2025 was negligible.
Financing activities
Net cash provided by financing activities was $114.9 million for the three months ended March 31, 2026, primarily related to the proceeds from our 2026 PIPE Purchase Agreement.
Net cash provided by financing activities was $9.1 million for the three months ended March 31, 2025, primarily related to borrowings under our Amended Loan Agreement, offset by the repayment of our original loan and related financing obligations and lender fees.
Future Funding Requirements
We believe that our existing cash and cash equivalents of $263.8 million as of March 31, 2026, together with 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.
We will need substantial additional capital to develop our product candidates and fund operations for the foreseeable future. Our future capital requirements will depend on many factors, including:
•the scope, timing, rate of progress, and costs of our clinical trials for our current and any future product candidates;
•the number and scope of clinical programs we decide to pursue;
•the cost, timing, and outcome of preparing for and undergoing regulatory review of our current and any future product candidates;
•the cost and timing of manufacturing our product candidates;
•the costs of preparing, filing, and prosecuting patent applications, maintaining and enforcing our intellectual property rights, and defending intellectual property-related claims;
•the terms and timing of establishing and maintaining collaborations, licenses, and other similar arrangements;
•the timing of any milestone and royalty payments to our existing or future suppliers, collaborators, or licensors;
•our efforts to enhance operational systems and our ability to attract, hire, and retain qualified personnel, including personnel to support the development of our product candidates;
•the costs associated with being a public company;
•the extent to which we acquire or in-license other product candidates and technologies;
•the extent to which we enter into licensing or collaboration arrangements for any of our programs; and
•the costs and timing of future commercialization activities, including manufacturing, marketing, sales, and distribution of our product candidates, if they receive marketing approval.
Until such time, if ever, as we can generate substantial revenue from product sales to support our cost structure, we expect to finance our cash needs through the public or private sale of equity, government or private party grants, debt financings or other capital sources, including potential collaborations with other companies or other strategic transactions. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our
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stockholders may be diluted, and the terms of these securities may include liquidation or other preferences and anti-dilution protections that could adversely affect the rights of our common stockholders. Debt financing and equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends, which could adversely impact our ability to conduct our business, and may require the issuance of warrants, which could potentially dilute the ownership interests of our stockholders. If we raise funds through collaborations, or other similar arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs, or product candidates or may have to grant licenses on terms that may not be favorable to us and/or may reduce the value of our common stock. If we are unable to raise additional funds through equity or debt financings on acceptable terms when needed, we may be required to delay, limit, reduce, or terminate our drug development or future commercialization efforts or grant rights to develop and market our current or any future product candidates even if we would otherwise prefer to develop and market such product candidates ourselves.
Contractual Obligations and Commitments
In addition to ongoing needs to fund our operations, our material cash requirements as of March 31, 2026 consist primarily of obligations under both our Amended Loan Agreement (see Note 4 to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report) and our lease commitment for our headquarters office space located in Mountain View, California with an initial lease term of 65 months that terminates in March 2030 for which we currently have a $5.9 million commitment remaining. If the Company elects to terminate the lease after the third lease year, including payments already made, the Company will make payments of approximately $4.0 million over the term of the lease.
We enter into contracts in the normal course of business with clinical trial sites and clinical supply manufacturers and with vendors for preclinical studies and clinical trials, research supplies, and other services and products for operating purposes. These contracts generally provide for termination after a notice period, and, therefore, we believe that our non-cancelable obligations under these agreements are not material.
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 Note 11 to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report.

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. For additional information concerning these agreements, which are described below, including a detailed description of the financial terms, please see Note 6 to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report, Note 10 to our audited consolidated financial statements included in our Annual Report, and the section titled “Business— License and Other Agreements” in our Annual Report.

License Agreement with Stanford University

In December 2019, we entered into an exclusive license agreement with equity, or the Stanford Agreement, with the Board of Trustees of the Leland Stanford Junior University, or Stanford, which was subsequently amended in May 2020 and December 2023. Under the terms of the Stanford Agreement, we obtained a worldwide, royalty-bearing license, with the right to sublicense during the exclusive term only, under certain patent rights in five patent families relating to brain stimulation, electroencephalogram and functional MRI that we could use to guide treatment of psychiatry patients, or the Stanford Licensed Patents, and under certain technology relating to the inventions covered by the Stanford Licensed Patents, or the Stanford Licensed Technology, to make, have made, use, import, offer for sale and sell licensed products for use in any indication.

License Agreement with Sanofi

In May 2021, we entered into a license agreement, or the Sanofi Agreement, with Sanofi, pursuant to which we obtained an exclusive, worldwide, royalty-bearing license, with the right to sublicense, under certain patent rights and know-how of Sanofi relating to a PDE4 inhibitor compound, now known as ALTO-101, to use, have used, develop, have developed,
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manufacture, have manufactured, commercialize, have commercialized or otherwise exploit ALTO-101 and products incorporating ALTO-101, or the Sanofi Licensed Products, for all human therapeutic, prophylactic and diagnostic uses. We also obtained a non-exclusive, worldwide license to use certain other specified know-how licensed to Sanofi by a specified third party to exploit Sanofi Licensed Products solely with respect to Parkinson’s disease.

License Agreement with Cerecor

In May 2021, we entered into a patent and know-how license agreement, or the Cerecor Agreement, with Cerecor Inc.
(n/k/a Avalo Therapeutics, Inc.), or Cerecor, pursuant to which we obtained an exclusive worldwide, royalty-bearing license, with the right to sublicense, under certain patent rights and know-how owned or controlled by Cerecor relating to an NR2B inhibitor compound now known as ALTO-202, including certain rights licensed to Cerecor by Essex Chemie AG, or Merck, to research, develop, make, have made, use, import, offer for sale and sell ALTO-202 and products incorporating ALTO-202, or Cerecor Licensed Products, for the prevention, diagnosis and/or treatment of all diseases in humans.

Teva Asset Purchase Agreement

In October 2021, we entered into an asset purchase agreement, or the Teva Agreement, with Teva Pharmaceutical Industries, Ltd. and its affiliate Cephalon, Inc., or together Teva, pursuant to which we acquired patents, know-how and other rights to ALTO-203 and a specified related compound, or Teva Acquired Compounds, and we assumed all post-acquisition liabilities related thereto.

Palisade Asset Purchase Agreement

In October 2021, we entered into an asset transfer agreement, or the Palisade Agreement, with Palisade Bio, Inc., or Palisade, pursuant to which we acquired all patent, know-how and other rights to ALTO-100. Palisade also transferred and assigned to us all right, title, and interest in, to, and under that certain exclusive license agreement, or the Dow Agreement, between Dow Agrosciences LLC, or Dow, and Palisade (f/k/a Neuralstem, Inc.), dated as of December 1, 2016, pursuant to which we licensed patent rights covering an intermediate compound in the manufacturing process for ALTO-100.

License Agreement with MedRx

In September 2023, we entered into a joint development and license agreement, or the MedRx Agreement, with MedRx Co., Ltd., or MedRx, pursuant to which we obtained an exclusive, sublicensable, worldwide license, with the right to sublicense, under certain patent rights and know-how of MedRx relating to transdermal drug delivery to develop (excluding any pre-clinical development), manufacture, and commercialize transdermally delivered pharmaceutical products comprising MedRx’s transdermal patch technology and our ALTO-101, or MedRx Licensed Product, for all therapeutic, prophylactic, and diagnostic uses. We granted MedRx an exclusive, sublicensable, worldwide license under certain patent rights and know-how relating to ALTO-101 owned or controlled by us, including certain patents and know how licensed to us pursuant to the Sanofi Agreement, solely to conduct pre-clinical development and manufacturing of the MedRx Licensed Products for us in accordance with the MedRx Agreement and a separate manufacturing and supply agreement to be entered into between us and MedRx.

Chase Asset Purchase Agreement
On May 31, 2025, we entered into an asset purchase agreement, or Chase Agreement, with Chase Therapeutics Corporation, or Chase, to acquire all patent, know-how and other rights to ALTO-207, ALTO-208, and certain related assets.

We could not estimate when milestones, royalties, and/or other payments due to third parties under our existing license agreements will be due, and none of these events were probable to occur as of March 31, 2026.
Critical Accounting Policies and Significant Judgments and Estimates
There were no material changes to our critical accounting policies that are disclosed in our audited consolidated financial statements for the year ended December 31, 2025 filed with the SEC on March 16, 2026.
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Emerging Growth Company and Smaller Reporting Company Status
We are an “emerging growth company” as defined in the JOBS Act, and we may remain an emerging growth company for up to five years following the completion of our IPO. For so long as we remain an emerging growth company, we are permitted and intend to rely on certain exemptions from various public company reporting requirements, including not being required to have our internal control over financial reporting audited by our independent registered public accounting firm pursuant to Section 404(b) of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and any golden parachute payments not previously approved. In particular, in our Annual Report, we provided only two years of audited financial statements and did not include all of the executive compensation-related information that would be required if we were not an emerging growth company. Accordingly, the information contained herein may be different than the information you receive from other public companies in which you hold stock.
In addition, the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This provision allows an emerging growth company to delay the adoption of some accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period, and therefore, we are not subject to the same requirements to adopt new or revised accounting standards as other public companies that are not emerging growth companies; however, we may adopt certain new or revised accounting standards early. We would cease to be an “emerging growth company” upon the earliest to occur of: (i) the last day of the fiscal year in which we have $1.235 billion or more in annual revenue; (ii) the date on which we first qualify as a large accelerated filer under the rules of the SEC; (iii) the date on which we have, in any three-year period issued more than $1.0 billion in non-convertible debt securities; and (iv) the last day of the fiscal year ending after the fifth anniversary of our IPO (December 31, 2029).
We are also a “smaller reporting company” as defined in the Securities Exchange Act of 1934, as amended, or the Exchange Act. We may continue to be a smaller reporting company even after we are no longer an emerging growth company. We may take advantage of certain of the scaled disclosures available to smaller reporting companies and will be able to take advantage of these scaled disclosures for so long as our voting and non-voting common stock held by non-affiliates is less than $250.0 million measured on the last business day of our second fiscal quarter, or our annual revenue is less than $100.0 million during the most recently completed fiscal year and our voting and non-voting common stock held by non-affiliates is less than $700.0 million measured on the last business day of our second fiscal quarter.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
We maintain “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is (1) recorded, processed, summarized, and reported, within the time periods specified in the SEC’s rules and forms and (2) accumulated and communicated to our management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure. Our management, with the participation of our principal executive officer and principal financial officer, evaluated, as of the end of the period covered by this report, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on that evaluation, our principal
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executive officer and principal financial officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.
Changes in Internal Control over Financial Reporting
There was no change in our internal control over financial reporting that occurred during the quarter ended March 31, 2026 that has materially affected or is reasonably likely to materially affect our internal control over financial reporting.
Limitations on Effectiveness of Controls and Procedures
In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the company have been detected. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
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PART II
OTHER INFORMATION
Item 1. Legal Proceedings.

Information pertaining to legal proceedings can be found in Part I of this Quarterly Report under “Item 1. Financial Statements - Note 11. Commitments and Contingencies” and is incorporated by reference herein.

In addition, from time to time, we may be involved in legal proceedings arising in the ordinary course of business. We are not presently a party to any legal proceedings that, in the opinion of management, would have a material adverse effect on our business. Regardless of the outcome, litigation can have an adverse impact on us due to defense and settlement costs, diversion of management resources, negative publicity and reputational harm.
Item 1A. Risk Factors.

In addition to the risks described in our Annual Report, you should carefully consider the other information set forth in this Quarterly Report and the information in our other filings with the SEC, as they could materially affect our business, financial condition or future results of operations. There have been no material changes to the risk factors previously disclosed in “Item 1A. Risk Factors” in our Annual Report.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Unregistered Sales of Equity Securities

Except for those unregistered securities previously disclosed in a current report on Form 8-K filed with the SEC during the period covered by this report, we have not sold any securities under the Securities Act of 1933, as amended, or the Securities Act.

Use of Proceeds from Public Offering of Common Stock
On February 1, 2024, our Registration Statement on Form S-1, as amended (File No. 333-276495) relating to our IPO was declared effective. On February 6, 2024, we closed the IPO and 9,246,000 shares of our common stock were issued and sold at a public offering price of $16.00 per share, inclusive of the exercise in full by the underwriters of their option to purchase up to an additional 1,206,000 shares of common stock.

The aggregate net proceeds from the IPO, after underwriting discounts and commissions, and other offering expenses of $4.6 million, were $133.0 million. There has been no material change in the planned use of proceeds from our IPO as described in our prospectus filed pursuant to Rule 424(b)(4) under the Securities Act with the SEC on February 5, 2024.

Issuer Purchases of Equity Securities

None
Item 3. Defaults Upon Senior Securities.
Not applicable.
Item 4. Mine Safety Disclosures.
Not applicable.
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Item 5. Other Information.
Trading Arrangements

During the Company’s last fiscal quarter, certain of our directors and officers (as defined in Rule 16a-1(f) under the Exchange Act) terminated contracts, instructions or written plans for the purchase or sale of the Company’s securities as set forth below.

On March 13, 2026, Amit Etkin, M.D., Ph.D., our President, Chief Executive Officer, and Chair of the Board, terminated a Rule 10b5-1 trading plan effective March 17, 2026. No sales of common stock occurred under the plan prior to its termination. Prior to its termination, the plan had provided for the potential sale of up to 100,000 shares of our common stock at each of two specified price points (60,000 shares to be sold at $35.00 and 40,000 shares to be sold at $80.00). Transactions under Dr. Etkin’s plan were based upon pre-established dates and stock price thresholds and would only occur upon the expiration of the applicable mandatory cooling-off period. Dr. Etkin’s plan had a termination date of December 31, 2026, or the date all shares subject to the plan had been sold.

On March 11, 2026, Nicholas Smith, our Chief Financial Officer and Chief Business Officer, terminated a Rule 10b5-1 trading plan effective March 13, 2026. No sales of common stock occurred under the plan prior to its termination. Prior to its termination, the plan had provided for the potential sale of up to 14,376 shares of our common stock at a price per share of $45.00. Transactions under Mr. Smith’s plan were based upon pre-established dates and stock price thresholds and would only occur upon the expiration of the applicable mandatory cooling-off period. Mr. Smith’s plan had a termination date of December 31, 2026, or the date all shares subject to the plan had been sold.

Both Dr. Etkin’s plan and Mr. Smith’s plan were intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act.
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Item 6. Exhibits.
Exhibit No.DescriptionFormFile No.ExhibitFiling DateFiled Herewith
3.18-K001-419443.12/6/2024
3.28-K001-419443.22/6/2024
4.18-K001-419444.110/20/2025
4.28-K001-419444.13/16/2026
31.1X
31.2X
32.1*X
32.2*X
101.INSInline XBRL Instance Document.X
101.SCHTaxonomy Extension Schema With Embedded Linkbase DocumentsX
104Cover Page Interactive Data File (formatted in iXBRL and contained in Exhibit 101).X

*    This certification is deemed not filed for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act.


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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
ALTO NEUROSCIENCE, INC.
Date:May 13, 2026By:/s/ Amit Etkin
Amit Etkin, M.D., Ph.D.
President and Chief Executive Officer
Date:May 13, 2026By:/s/ Nicholas Smith
Nicholas Smith
Chief Financial Officer and Chief Business Officer

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