Appendix 4C - Q2 FY21 Quarterly Cash Flow Report Highlights: Dr David Stamler appointed CEO; Geoffrey Kempler continues as Non-Executive Chairman New commercial opportunity for PBT2 with UniQuest to reverse bacterial res

Q2 FY21 Quarterly Cash Flow Report

AUSTRALIA AND SAN FRANCISCO, USA - 28 January 2021. Alterity Therapeutics Limited (ASX: ATH, NASDAQ: ATHE)

("Alterity" or "the Company") releases its Appendix 4C Quarterly Cash Flow Report and update on company

activities for the quarter ending 31 December 2020 (Q2 FY21).

The company's cash position

was significantly bolstered with A$35M raised through an oversubscribed placement to Australian and international institutions

and other unrelated sophisticated, professional, or exempt investors. Operational cash outflow for the period was A$4.5M which

was in line with company expectations and reflected the commencement of the BioMUSE Natural History study.

The proceeds from the placement

will be used to progress Alterity's Phase 2 clinical development program for ATH434, including the BioMUSE Natural History

study and a Phase 2 trial, both in Multiple System Atrophy (MSA) patients, ongoing research and discovery, and working capital.

Post the reporting period,

Alterity announced the appointment of Dr David Stamler to the role of Chief Executive Officer. Dr Stamler is based in San Francisco

and joined the Company in June 2017 as Chief Medical Officer and Senior Vice President Clinical Development. Mr. Geoffrey Kempler,

who founded the company in November 1997, has stepped down from the role of CEO and continues as Non-Executive Chairman.

In accordance with ASX Listing

Rule 4.7C, payments made to related parties and their associates included at item 6.1 of the Appendix 4C incorporates directors'

fees, consulting fees, remuneration and superannuation at commercial rates.

Operational Activities

During the quarter, Alterity

made significant operational progress.

In December, Alterity was granted a

licence by UniQuest, the commercialisation company of The University of Queensland (UQ), to novel zinc

ionophore technology to combat antimicrobial resistance in superbugs.

Under the licence, Alterity has

secured the worldwide exclusive right to patented technology to develop and

commercialise therapies that re-sensitise bacteria to antibiotics. The licensed technology combines

Alterity's PBT2 and other zinc ionophores with commonly used antibiotics to treat infections caused by multidrug

resistant bacteria. This is an opportunity for Alterity to further leverage its investment in PBT2.

The company announced the allowance

of a new composition of matter patent by the United States Patent and Trademark Office (USPTO). The new patent is the product

of in-house discovery research and is central to Alterity's next generation drug development portfolio focused on neurodegenerative

diseases. The patent, entitled "Compounds for and Methods of Treating Diseases" covers more than 150 novel pharmaceutical

compositions that are designed to redistribute the labile iron implicated in Parkinson's disease, Alzheimer's disease,

and other neurodegenerative conditions. The patent underwent prioritized examination by the USPTO.

An important step in the Phase

2 clinical program for Alterity's lead compound ATH434 is the commencement of the BioMUSE study in MSA patients, which began

enrollment during the quarter.

BioMUSE is a natural history

study that aims to track the progression of patients with MSA. The study is being conducted in collaboration with Vanderbilt

University Medical Center in the US under the direction of Daniel Claassen, MD, Associate Professor of Neurology and Principal

Investigator. Natural history studies are important for characterizing disease progression in selected patient populations.

The study will provide vital information on early stage MSA patients to optimize the design of Alterity's Phase 2 study in

MSA. The study will also inform the selection of biomarkers suitable to evaluate target engagement and preliminary efficacy.

Commenting on the quarter Alterity

CEO Dr David Stamler said: "We've made important progress throughout the quarter with our commercialisation program

for ATH434, including the initiation of our MSA natural history study and growing scientific validation of our library of compounds.

I look forward to evaluating new opportunities for PBT2 in the important area of antibiotic resistance. We are well capitalized

to continue to advance the company in the coming year."

Authorisation & Additional information

This announcement was authorised by Geoffrey Kempler,

Chairman of Alterity Therapeutics Limited.

Greig King, WE Communications

E: WE-AUAlterity@we-worldwide.com

About Alterity Therapeutics

Alterity's lead candidate,

PBT434, is the first of a new generation of small molecules designed to inhibit the aggregation of pathological proteins implicated

in neurodegeneration. PBT434 has been shown to reduce abnormal accumulation of -synuclein and tau proteins in animal models

of disease by restoring normal iron balance in the brain. In this way, it has excellent potential to treat various forms of atypical

Parkinsonism such as Multiple System Atrophy (MSA) and Progressive Supranuclear Palsy (PSP).

For further information

please visit the Company's web site at www.alteritytherapeutics.com.

Forward Looking Statements

This press release contains

"forward-looking statements" within the meaning of section 27A of the Securities Act of 1933 and section 21E of the Securities

Exchange Act of 1934. The Company has tried to identify such forward-looking statements by use of such words as "expects,"

"intends," "hopes," "anticipates," "believes," "could," "may," "evidences"

and "estimates," and other similar expressions, but these words are not the exclusive means of identifying such statements.

Important factors that

could cause actual results to differ materially from those indicated by such forward-looking statements are described in the sections

titled "Risk Factors" in the Company's filings with the SEC, including its most recent Annual Report on Form

20-F as well as reports on Form 6-K, including, but not limited to the following: statements relating to the Company's drug development

program, including, but not limited to the initiation, progress and outcomes of clinical trials of the Company's drug development

program, including, but not limited to, PBT434, and any other statements that are not historical facts. Such statements involve

risks and uncertainties, including, but not limited to, those risks and uncertainties relating to the difficulties or delays in

financing, development, testing, regulatory approval, production and marketing of the Company's drug components, including,

but not limited to, PBT434, the ability of the Company to procure additional future sources of financing, unexpected adverse side

effects or inadequate therapeutic efficacy of the Company's drug compounds, including, but not limited to, PBT434, that could slow

or prevent products coming to market, the uncertainty of patent protection for the Company's intellectual property or trade secrets,

including, but not limited to, the intellectual property relating to PBT434.

Any forward-looking statement made

by us in this press release is based only on information currently available to us and speaks only as of the date on which it

is made. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made

from time to time, whether as a result of new information, future developments or otherwise.

cash flow report for entities subject to Listing Rule 4.7B

Quarterly cash flow report for entities

subject to Listing Rule 4.7B

Quarterly cash flow report for entities

subject to Listing Rule 4.7B

Note: if any amounts are shown in items 6.1 or 6.2, your quarterly activity report must include a description of, and an explanation for, such payments.