What changed in this filing

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Item 9A. Controls and Procedures

2025-03-31 compared with 2024-04-01 · 241 added, 368 removed, 713 unchanged (46% of the section changed)

2 unchanged sentences

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer and our principal accounting officer, we have evaluated the effectiveness of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) or 15d-15(e) promulgated under the Exchange Act, as of December 31, 2024.

Based on that evaluation, our principal executive officer and principal financial officer has concluded that as of December 31, 2023, our disclosure controls and procedures were effective.

Based on that evaluation, our principal executive officer and principal financial officer has concluded that as of December 31, 2024, our disclosure controls and procedures were not effective.

We note that the design of any system of controls 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 the stated goals under all potential future conditions.

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Our management’s assessment of the effectiveness of our internal control over financial reporting included testing and evaluating the design and operating effectiveness of our internal controls.

In management’s opinion, we have maintained effective internal control over financial reporting as of December 31, 2023, based on the criteria discussed above.

In management’s opinion, we have determined that our internal controls over our financial reporting was not effective due to the lack of sufficient number of personal to allow for the required segregation of duties as of December 31, 2024, based on the criteria discussed above.

Inherent Limitations on Internal Controls

Our management, including our principal executive officer and principal financial officer, and our principal accounting officer, do not expect that our disclosure controls and procedures or our internal controls over financial reporting will prevent all errors and all fraud.

Our management do not expect that our disclosure controls and procedures or our internal controls over financial reporting will prevent all errors and all fraud.

A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

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 our company have been detected.

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 our company have been detected.

These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake.

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Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.

Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree

of compliance with the policies or procedures may deteriorate.

Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that 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.

Changes in Internal Controls over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) and Rule 15d-15(f) of the Exchange Act) that occurred during the fiscal quarter ended December 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) and Rule 15d-15(f) of the Exchange Act) that occurred during the year ended December 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Other Information

Trading Plans

During the three months ended December 31, 2023, no director or Section 16 officer of the Company adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement" as each term is defined in Item 408(a) of Regulation S-K.

During the year ended December 31, 2024, no director or Section 16 officer of the Company adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement" as each term is defined in Item 408(a) of Regulation S-K.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

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The information required by this Item 10 will be included in our definitive proxy statement to be filed with the SEC with respect to our 2025 Annual Meeting of Stockholders and is incorporated herein by reference.

Policy Prohibiting Insider Trading and Related Procedures.

Our insider trading policy has been reasonably designed to promote compliance with applicable insider trading laws, rules and regulations, and Nasdaq listing standards .

Our Insider Trading Policy is filed hereto as Exhibit 19.1 to our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Executive Compensation

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Report of Independent Registered Public Accounting Firm

Balance Sheets as of December 31, 2024 and 2023

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000-32353, filed August 9, 2005).

Amended and Restated Certificate of Incorporation, and all amendments thereto (incorporated by reference to Exhibit 3.1 to the Registrant’s Annual Report on Form 10-Q, SEC File No.

001-33038, filed August 14, 2023).

Certificate of Merger dated September 13, 2005, relating to the merger of ZIO Acquisition Corp.

with and into ZIOPHARM, Inc.

(incorporated by reference to Exhibit 3.1 to the Registrant’s Form 8-K, SEC File No.

000-32353, filed September 19, 2005).

Certificate of Ownership of the Registrant (formerly “EasyWeb, Inc.”) dated as of September 14, 2005, relating the merger of ZIOPHARM, Inc.

with and into the Registrant, and changing the Registrant’s corporate name from EasyWeb, Inc.

to ZIOPHARM Oncology, Inc.

(incorporated by reference to Exhibit 3.2 to the Registrant’s Form 8-K, SEC File No.

000-32353, filed September 19, 2005).

Third Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Registrant's Form 8-K filed July 17, 2024)

Amended and Restated Certificate of Designation, Preferences and Rights of Series 1 Preferred Stock, as filed with the Delaware Secretary of State on July 1, 2016 (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K/A, SEC File No.

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001-33038, filed March 30, 2022).

Employment Agreement, dated as of January 21, 2024, by and between the Registrant and Dale Curtis Hogue (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q, SEC File No.

001-33038, filed May 15, 2024.

ZIOPHARM Oncology, Inc.

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001-33038, filed November 14, 2023).

Consulting Agreement, dated as of November 14, 2023, between the Registrant and Melinda Lackey.

Consulting Agreement, dated as of November 14, 2023, between the Registrant and Melinda Lackey (incorporated by reference to Exhibit 10.59 to the Registrant's Annual Report on Form 10-K, SEC File No.

001-33038, filed April 1, 2024).

Separation Agreement, dated as of December 22, 2023, between the Registrant and Kevin S.

(incorporated by reference to Exhibit 10.59 to the Registrant's Annual Report on Form 10-K, SEC File No.

001-33038, filed April 1, 2024) .

Consulting Agreement, dated as of December 22, 2023, between the Registrant and Kevin S.

(incorporated by reference to Exhibit 10.59 to the Registrant's Annual Report on Form 10-K, SEC File No.

001-33038, filed April 1, 2024) .

Consulting Agreement, dated as of February 21, 2024, between the Registrant and Ferdinand Groenewald.

Consent of Independent Registered Public Accounting Firm .

Insider Trading Policy

Consent of Independent Registered Public Accounting Firm

Certification of Principal Executive Officer and Principal Financial Officer pursuant to Exchange Act Rule 13a-14(a) or 15(d)-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

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ALAUNOS THERAPEUTICS, INC.

April 1, 2024

March 31, 2025

/s/ Dale Curtis Hogue, Jr.

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(Principal Executive Officer and Principal Financial Officer)

April 1, 2024

March 31, 2025

/s/ Ferdinand Groenewald

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Interim Chief Executive Officer and Director (Principal Executive Officer and Principal Financial Officer)

April 1, 2024

March 31, 2025

/s/ Ferdinand Groenewald

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Vice President, Finance (Principal Accounting Officer)

April 1, 2024

March 31, 2025

/s/ Robert Hofmeister

Robert Hofmeister

April 1, 2024

March 31, 2025

/s/ Robert W.

April 1, 2024

March 31, 2025

/s/ Jaime Vieser

April 1, 2024

March 31, 2025

/s/ Holger Weis

April 1, 2024

March 31, 2025

Alaunos Therapeutics, Inc.

INDEX TO FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm ( RSM US LLP ;

Report of Independent Registered Public Accounting Firm (PCAOB ID:

Balance Sheets as of December 31, 2024 and 2023

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors of Alaunos Therapeutics, Inc.

To the Board of Directors and Stockholders

Alaunos Therapeutics, Inc.

Houston, Texas

Opinion on the Financial Statements

We have audited the accompanying balance sheets of Alaunos Therapeutics, Inc.

(the Company) as of December 31, 2023 and 2022, the related statements of operations, stockholders' equity and cash flows for the years then ended, and the related notes to the financial statements (collectively, the financial statements).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

The Company’s Ability to Continue as a Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 1 to the financial statements, the Company has suffered recurring losses from operations since inception and will be required to raise additional capital to fund operations.

This raises substantial doubt about the Company's ability to continue as a going concern.

Management's plans in regard to these matters also are described in Note 1.

We have audited the accompanying balance sheet of Alaunos Therapeutics, Inc.

(the “Company”) as of December 31, 2024, and the related statements of operations, stockholders’ equity, and cash flows the year ended December 31, 2024, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and the results of its operations and its cash flows for the year ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

The financial statements of the Company as of and for the year ended December 31, 2023, before the retroactive adjustments described in Note 3 with respect to the July 2024 one-for-ten reverse stock split were audited by other auditors whose report, dated April 1, 2024, expressed an unqualified opinion, with an explanatory paragraph expressing substantial doubt regarding the Company’s ability to continue as a going concern, on those statements.

We also audited the adjustments described in Note 3 that were applied retroactively to the 2023 financial statements to reflect the July 2024 one-for-ten reverse stock split and the related disclosures included therein.

In our opinion, such adjustments and related disclosures are appropriate and have been properly applied.

We were not engaged to audit, review, or apply any procedures to the 2023 financial statements of the Company other than with respect to the adjustments and disclosures referred to herein and, accordingly, we do not express an opinion or any other form of assurance on the 2023 financial statements taken as a whole.

Substantial Doubt about the Company’s Ability to Continue as a Going Concern

The accompanying financial statements have been prepared assuming the Company will continue as a going concern.

As discussed in Note 1 to the financial statements, the Company has recurring losses and negative cash flows from operations that raise substantial doubt about its ability to continue as a going concern.

Management’s evaluations of the events and conditions and management’s plans regarding those matters are also described in Note 1.

The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

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These financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with U.S.

Our responsibility is to express an opinion on these financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of this critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Accruals for Clinical Trials and Other Research and Development Expenses

As discussed in Note 3 to the financial statements, the Company accrues costs for clinical trials and other research and development expenses based on estimates of costs incurred through the balance sheet date that have not been invoiced by the clinical research organizations, clinical study sites, consultants, or other vendors.

This process involves reviewing open contracts and purchase orders, communicating with vendors and internal personnel to identify services that have been performed, and estimating the level of service performed and the associated costs incurred for the services when the Company has not yet been invoiced or otherwise notified of the actual costs.

The Company's accrual for clinical trial expenses totaled $0.6 million at December 31, 2023, as disclosed in Note 6.

We identified the accruals for clinical trials and other research and development expenses to be a critical audit matter because auditing the Company’s accruals is complex as the information necessary to make an estimate is accumulated from multiple sources and there may be delays in invoicing from clinical study sites and other vendors, or payments may depend on factors such as the completion of clinical trial milestones.

Additionally, in certain circumstances, it requires judgment, as the timing and pattern of vendor invoicing may not correspond to the level of services provided.

How We Addressed the Matter in our Audit

Our audit procedures to test the accruals for clinical trials and preclinical studies expenses included, among others:

• We tested the accuracy and completeness of the underlying data used in the estimates and evaluated the reasonableness of assumptions used by management.

• We inspected certain contracts with third parties and related information received by the Company to test proper recording of costs incurred to date.

• We corroborated the progress of research and development activities through confirmations with certain third parties.

• We performed analytical procedures over fluctuations in accrued expenses by department level throughout the year.

• We tested subsequent invoices received from third parties and cash disbursements to assess completeness of recorded accruals.

/s/ RSM US LLP

Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

We determined that there were no critical audit matters.

/s/ Cherry Bekaert LLP

We have served as the Company’s auditor since 2024.

Tampa, Florida

March 31, 2025

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors of Alaunos Therapeutics, Inc.

Opinion on the Financial Statements

We have audited, before the effects of the adjustments to retrospectively apply the reverse stock split effective July 17, 2024 described in Note 3, the accompanying balance sheet of Alaunos Therapeutics, Inc.

(the Company) as of December 31, 2023, the related statements of operations, changes in stockholders’ equity and cash flows for the year then ended, and the related notes to the financial statements (collectively, the financial statements).

The 2023 financial statements before the effects of the adjustments around the July 17, 2024 reverse stock split described in Note 3 are not presented herein.

In our opinion, before the effects of the adjustments to retrospectively apply the reverse stock split effective July 17, 2024, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

We were not engaged to audit, review, or apply any procedures to retrospectively apply the changes in the Company's disclosures related to the reverse stock split effective July 17, 2024 described in Note 3 and, accordingly we do not express an opinion or any other form of assurance about whether such adjustments are appropriate and have been properly applied.

Those adjustments were audited by other auditors.

The Company’s Ability to Continue as a Going Concern

The accompanying 2023 financial statements were prepared assuming that the Company would continue as a going concern.

As discussed in Note 1 to the 2023 financial statements, the Company had suffered recurring losses from operations since inception and would be required to raise additional capital to fund operations.

This raised substantial doubt about the Company's ability to continue as a going concern.

Management's plans in regard to these matters were also described in Note 1 to the 2023 financial statements.

The 2023 financial statements did not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audit.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

/s/ RSM US LLP

We served as the Company’s auditor from 2010 to 2024.

Boston, Massachusetts

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Cash and cash equivalents

Restricted cash

Prepaid expenses and other current assets

1 unchanged sentence

Property and equipment, net

Right-of-use assets

Other non-current assets

LIABILITIES AND STOCKHOLDERS' EQUITY

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Accounts payable

Current portion of long-term debt

Accrued expenses

Lease liabilities, current

Total current liabilities

Lease liabilities, non-current

Other non-current liabilities

Total liabilities

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Common stock $ 0.001 par value;

34,666,667 shares authorized, 16,012,522 shares issued and outstanding at December 31, 2023 and 28,000,000 shares authorized, 16,027,384 shares issued and outstanding at December 31, 2022

5,000,000 shares authorized, 1,601,252 shares issued and outstanding at December 31, 2024 and at December 31, 2023

Additional paid-in capital

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For the Year Ended December 31,

Collaboration revenue

Operating expenses:

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General and administrative

Gain on lease modification and termination

Gain on lease modification

Restructuring costs

Property and equipment and right-of-use assets impairment

Property and equipment and right-of-use asset impairment

Total operating expenses

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Total Stockholders' Equity

Balance at December 31, 2021

Balance at January 1, 2023

Stock-based compensation

Restricted stock awards

Cancelled restricted common stock

Exercise of employee stock options

Repurchase of common stock

Issuance of common stock, net of expenses

Cancelled restricted common stock

Balance at December 31, 2023

Stock-based compensation

Issuance of common stock, net of expenses

Cancelled restricted common stock

Balance at December 31, 2024

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Adjustments to reconcile net loss to net cash used in operating activities:

Property and equipment and right-of-use assets impairment

Property and equipment right-of-use asset impairment

Amortization of financing costs

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Loss on sale of equipment, net

(Increase) decrease in:

Changes in operating assets and liabilities:

Prepaid expenses and other current assets

Other non-current assets

Increase (decrease) in:

Other non-current liability

Accounts payable

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Lease liabilities

Other non-current liabilities

Other liabilities, non-current

Net cash used in operating activities

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Proceeds from the disposal of property and equipment

Net cash provided by (used in) investing activities

Net cash provided by investing activities

Cash flows from financing activities:

Proceeds from the issuance of common stock

Proceeds from the exercise of stock options

Repurchase of common stock

Repayment of long-term debt

Debt extinguishment costs

Net cash provided by (used in) financing activities

Debt extinguishment

Net cash used in financing activities

Net decrease in cash, cash equivalents and restricted cash

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Reduction in right-of-use assets for modification and termination

Amounts included in accrued expenses and accounts payable related to property and equipment

The accompanying notes are an integral part of these financial statements.

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NOTES TO FINANCIAL STATEMENTS

Alaunos Therapeutics, Inc., which is referred to herein as “Alaunos,” or the “Company,” is a clinical-stage oncology-focused cell therapy company that was historically involved in the development of adoptive TCR therapies, designed to treat multiple solid tumor types in large cancer patient populations with unmet clinical needs.

On January 25, 2022, the Company changed its corporate name from ZIOPHARM Oncology, Inc.

to Alaunos Therapeutics, Inc.

The Company was working to leverage its proprietary, non-viral Sleeping Beauty gene transfer platform and its novel cancer mutation hotspot TCR library to design and manufacture personalized cell therapies that target neoantigens arising from common tumor-related mutations in key oncogenic genes, including KRAS , TP53 and EGFR .

Alaunos Therapeutics, Inc., which is referred to herein as “Alaunos,” or the “Company,” is a pre-clinical obesity and metabolic disorder and clinical-stage oncology-focused cell therapy company with a current focus on developing small molecules that are expected to be efficacious against obesity and other metabolic disorders and was historically involved in the development of adoptive TCR therapies, designed to treat multiple solid tumor types in large cancer patient populations with unmet clinical needs.

The Company is currently working to develop novel small molecule-based obesity therapeutics.

See Note 11 - Restructuring regarding a strategic reprioritization of the Company's business.

The Company’s operations to date have consisted primarily of conducting research and development and raising capital to fund those efforts.

As of December 31, 2024 there were 1,601,252 shares of common stock outstanding and an additional 142,745 shares of common stock reserved for issuance pursuant to outstanding stock options and warrants.

On August 14, 2023, the Company announced a strategic reprioritization of its business and wind down of its TCR-T Library Phase 1/2 Trial.

In connection with the reprioritization, the Company has significantly reduced its workforce and continues working to reduce costs in order to extend its cash runway.

The Company continues to explore strategic alternatives, including, but not limited to, an acquisition, merger, reverse merger, sale of assets, strategic partnerships, capital raises or other transactions.

The Company has engaged Cantor Fitzgerald & Co., or Cantor , to act as strategic advisor for this process.

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities and commitments in the normal course of business.

The Company follows the guidance of Accounting Standards Codification, or ASC, Topic 205-40, Presentation of Financial Statements - Going Concern , in order to determine whether there is substantial doubt about its ability to continue as a going concern for one year after the date its financial statements are issued.

This evaluation initially does not take into consideration the potential mitigating effect of management's plans that have not been fully implemented as of the date the financial statements are issued.

When substantial doubt exists, management evaluates whether the mitigating effect of its plans sufficiently alleviates the substantial doubt about the Company's ability to continue as a going concern.

The mitigating effect of management's plans, however, is only considered if both (i) it is probable that the plans will be effectively implemented within one year after the date that the financial statements are issued and (ii) it is probable that the plans, when implemented, will mitigate the relevant conditions or events that raise substantial doubt about the entity's ability to continue as a going concern within one year after the date that the financial statements are issued.

The Company has operated at a loss since its inception in 2003 and has no recurring revenue from operations.

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The Company’s accumulated deficit at December 31, 2024 was approximately $ 920.4 million.

Given its current development plans and cash management efforts, the Company anticipates cash resources will be sufficient to fund operations into the third quarter of 2024.

Given its current development plans and cash management efforts, the Company anticipates cash resources will be sufficient to fund operations into the second quarter of 2025.

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Based on the current cash forecast and the Company's dependence on its ability to obtain additional financing to fund its operations after the current resources are exhausted, about which there can be no certainty, management has determined that the Company's present capital resources will not be sufficient to fund its planned operations for at least one year from the issuance date of the financial statements, and substantial doubt as to the Company's ability to continue as a going concern exists.

This forecast of cash resources is forward-looking information that involves risks and uncertainties, and the actual amount of expenses could vary materially and adversely as a result of a number of factors.

The Company has elected to make a reclassification in the presentation of the cash flow to show non-cash changes in right-of-use assets and lease liabilities related to modifications and terminations as non-cash for the year ended December 31, 2022 in order to conform presentation to the December 31, 2023 disclosures.

Alaunos Therapeutics, Inc.

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On May 1, 2023, the Company repaid its outstanding debt obligations under the amended Loan and Security Agreement in their entirety.

Refer to Note 4, Debt, for further discussion of the Loan and Security Agreement and the First Amendment.

2022 Equity Distribution Agreement

On August 12, 2022, the Company entered into an Equity Distribution Agreement, or the Equity Distribution Agreement, with Piper Sandler & Co., or Piper Sandler, pursuant to which the Company can offer and sell, from time to time at its sole discretion, shares of its common stock having an aggregate offering price of up to $ 50.0 million through Piper Sandler as its sales agent in an "at the market offering." Piper Sandler will receive a commission of 3.0 % of the gross proceeds of any common stock sold under the Equity Distribution Agreement.

During the years ended December 31, 2023 and 2022, there have been no sales of the Company's common stock under the Equity Distribution Agreement.

2022 Public Offering

On November 29, 2022, the Company entered into an underwriting agreement, or the Underwriting Agreement, with Cantor Fitzgerald & Co., or the Underwriter, as the sole underwriter, relating to the issuance and sale in an underwritten offering, or the Offering, of 1,615,248 shares, or the Firm Shares, of the Company’s common stock to the Underwriter at a price of $ 9.2865 per share.

The net proceeds to the Company from the Offering were $ 14.7 million (before accounting for the partial exercise of the Underwriter's option as described below) after deducting underwriting discounts and commissions and offering expenses payable by the Company.

Under the terms of the Underwriting Agreement, the Company granted the Underwriter an option, exercisable for 30 days , to purchase up to an additional 242,287 shares of common stock, which we refer to, together with the Firm Shares, as the Shares, at the same price per share as the Firm Shares.

On January 5, 2023, the Underwriter partially exercised its option to purchase 14,420 shares of common stock.

On November 29, 2022, the Company entered into an underwriting agreement, or the Underwriting Agreement, with Cantor as the sole underwriter, relating to the issuance and sale in an underwritten offering, or the Offering, of 161,524 shares, or the Firm Shares, of the Company’s common stock to Cantor at a price of $ 18.573 per share.

The net proceeds to the Company from the Offering were $ 14.7 million (before accounting for the partial exercise of Cantor's option as described below) after deducting underwriting discounts and commissions and offering expenses payable by the Company.

Under the terms of the Underwriting Agreement, the Company granted Cantor an option, exercisable for 30 days , to purchase up to an additional 24,228 shares of common stock, which we refer to, together with the Firm Shares, as the Shares, at the same price per share as the Firm Shares.

On January 5, 2023, Cantor partially exercised its option to purchase an additional 1,442 shares of common stock.

Summary of Significant Accounting Policies

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• Fair value measurements of stock-based compensation;

• Income taxes.

Alaunos Therapeutics, Inc.

NOTES TO FINANCIAL STATEMENTS

• Income taxes.

Cash and Cash Equivalents

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The impairment recognized is the amount by which the carrying amount exceeds the fair market value of the impaired asset, or group of assets, based on the present value of the expected future cash flows associated with the use of the asset.

During the year ended December 31, 2023, the Company recorded impairment charge of $ 4.8 million, which was primarily related to leasehold improvements of $ 3.8 million and lab equipment of $ 1.0 million.

Operating Segments

Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the Company’s chief operating decision maker, in making decisions regarding resource allocation and assessing performance.

Operating segments are identified as components of an enterprise for which separate discrete financial information is available for evaluation by the Company’s chief operating decision maker (“CODM”) and relied upon when making decisions regarding resource allocation and assessing performance.

When evaluating the Company’s financial performance, the CODM reviews total revenues, total expenses, and expenses by functional classification;

using this information to make decisions on a company-wide basis.

The Company views its operations and manages its business in one operating segment.

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As such, the Company has concluded the warrants meet the scope exception for determining whether the instruments require accounting as derivatives and should be classified in stockholders’ equity.

Alaunos Therapeutics, Inc.

NOTES TO FINANCIAL STATEMENTS

Fair Value Measurements

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• Level 1—Quoted prices in active markets for identical assets or liabilities.

Alaunos Therapeutics, Inc.

NOTES TO FINANCIAL STATEMENTS

• Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities;

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The Company had no financial assets or liabilities that were classified as Level 2 or Level 3 during the years ended December 31, 2024 and 2023.

Fair value of non-financial instruments

The Company evaluates assets for impairment whenever events or changes in circumstances indicate that indicators of impairment exist.

In those evaluations, the Company compares estimated future undiscounted cash flows generated by each asset (or asset group) to the carrying value of the asset (or asset group) to determine if an impairment charge is required.

If the undiscounted cash flows test fails, the Company estimates the fair value of the asset (or asset group) to determine the impairment.

Following the Company’s announced strategic reprioritization on August 14, 2023, the Company determined that changes in the intended use of certain property and equipment represented an indicator of impairment, resulting in an impairment charge of $ 4.8 million, which was primarily related to leasehold improvements of $ 3.8 million and lab equipment of $ 1.0 million.

In addition, the Company determined certain prepaid expense balances to be impaired given the Company’s strategic reprioritization, and therefore, has recorded an impairment charge of $ 0.2 million related to prepaid expenses and other current assets, which is recorded in research and development expenses within the statement of operations.

On November 9, 2023, the Company executed an agreement to sell laboratory equipment for gross proceeds of $ 1.5 million and recognized a gain on disposal of equipment of $ 3 thousand, which is recorded in other income in the statement of operations .

Revenue Recognition from Collaboration Agreements

Revenue for the year ended December 31, 2023 consisted of $ 5 thousand and for the year ended December 31, 2022 consisted of $ 2.9 million.

Revenue for the year ended December 31, 2024 consisted of $ 10 thousand and for the year ended December 31, 2023 consisted of $ 5 thousand .

For the years ended December 31, 2024 and 2023, the Company recognized revenue through its Collaboration Agreement with Solasia Pharma K.K.

primarily due to the achievement of milestones, as further described in Note 9, Commitments and Contingencies.

The Company primarily generates revenue through collaboration arrangements with strategic partners for the development and commercialization of product candidates.

The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers, or ASC 606.

The core principle of ASC 606 is that an entity should recognize revenue to depict the transfer of promised goods and/or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and/or services.

To determine the appropriate amount of revenue to be recognized for arrangements that the Company determines are within the

Alaunos Therapeutics, Inc.

NOTES TO FINANCIAL STATEMENTS

scope of ASC 606, the Company performs the following steps:

(i) identify the contract(s) with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract and (v) recognize revenue when (or as) each performance obligation is satisfied.

The Company recognizes collaboration revenue under certain of the Company’s license or collaboration agreements that are within the scope of ASC 606.

The Company’s contracts with customers typically include promises related to licenses to intellectual property, research and development services and options to purchase additional goods and/or services.

If the license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenue from non-refundable, up-front fees allocated to the license when the license is transferred to the licensee and the licensee is able to use and benefit from the license.

For licenses that are bundled with other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue from non-refundable, up-front fees.

Contracts that include an option to acquire additional goods and/or services are evaluated to determine if such option provides a material right to the customer that it would not have received without entering into the contract.

If so, the option is accounted for as a separate performance obligation.

If not, the option is considered a marketing offer which would be accounted for as a separate contract upon the customer’s election.

The terms of the Company’s arrangements with customers typically include the payment of one or more of the following:(i) non-refundable, up-front payment, (ii) development, regulatory and commercial milestone payments, (iii) future options and (iv) royalties on net sales of licensed products.

Accordingly, the transaction price is generally comprised of a fixed fee due at contract inception and variable consideration in the form of milestone payments due upon the achievement of specified events and tiered royalties earned when customers recognize net sales of licensed products.

The Company measures the transaction price based on the amount of consideration to which it expects to be entitled in exchange for transferring the promised goods and/or services to the customer.

The Company utilizes the most likely amount method to estimate the amount of variable consideration, to predict the amount of consideration to which it will be entitled.

Amounts of variable consideration are included in the transaction price to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved.

At the inception of each arrangement that includes development and regulatory milestone payments, the Company evaluates whether the associated event is considered probable of achievement and estimates the amount to be included in the transaction price using the most likely amount method.

Milestone payments that are not within the control of the Company or the licensee, such as those dependent upon receipt of regulatory approval, are not considered to be probable of achievement until the triggering event occurs.

At the end of each reporting period, the Company reevaluates the probability of achievement of each milestone and any related constraint, and if necessary, adjusts its estimate of the overall transaction price.

Any such adjustments are recorded on a cumulative catch-up basis, which would affect revenue and net loss in the period of adjustment.

For arrangements that include sales-based royalties, including milestone payments based upon the achievement of a certain level of product sales, the Company recognizes revenue upon the later of:

(i) when the related sales occur or (ii) when the performance obligation to which some or all of the payment has been allocated has been satisfied (or partially satisfied).

Consideration that would be received for optional goods and/or services is excluded from the transaction price at contract inception.

The Company allocates the transaction price to each performance obligation identified in the contract on a relative standalone selling price basis.

However, certain components of variable consideration are allocated specifically to one or more particular performance obligations in a contract to the extent both of the following criteria are met:

(i) the terms of the payment relate specifically to the efforts to satisfy the performance obligation or transfer the distinct good or service and (ii) allocating the variable amount of consideration entirely to the performance obligation or the distinct good or service is consistent with the allocation objective of the standard whereby the amount allocated depicts the amount of consideration to which the entity expects to be entitled in exchange for transferring the promised goods or services.

The Company develops assumptions that require the use of judgment to determine the standalone selling price for each performance obligation identified in each contract.

The key assumptions utilized in determining the standalone selling price for each performance obligation may include forecasted revenue, development timelines, estimated research and development costs, discount rates, likelihood of exercise and probabilities of technical and regulatory success.

Revenue is recognized based on the amount of the transaction price that is allocated to each respective performance obligation when or as the performance obligation is satisfied by transferring a promised good and/or service to the customer.

For performance obligations that are satisfied over time, the Company recognizes revenue by measuring the progress toward complete satisfaction of the performance obligation using a single method of measuring progress which depicts the performance in transferring control of the associated goods and/or services to the customer.

The Company uses input methods to measure the progress toward the complete satisfaction of performance obligations satisfied over time.

The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition.

Any such adjustments are recorded on a cumulative catch-up basis, which would affect revenue and net loss in the period of adjustment.

Alaunos Therapeutics, Inc.

NOTES TO FINANCIAL STATEMENTS

Research and Development Costs

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• vendors related to product manufacturing, development, and distribution of preclinical and clinical supplies.

Alaunos Therapeutics, Inc.

NOTES TO FINANCIAL STATEMENTS

The Company bases its expenses related to preclinical studies and clinical trials on its estimates of the services received and efforts expended pursuant to quotes and contracts with CROs that conduct and manage clinical trials on its behalf.

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The Company recognized $ 0.0 million of compensation expense related to restricted stock for the year ended December 31, 2024 and $ 0.3 million for the year ended December 31, 2023 (refer to Note 13, Stock Option Plan ).

The total compensation expense relating to vesting of stock options and restricted stock awards for the year ended December 31, 2023 was $ 2.8 million

Alaunos Therapeutics, Inc.

NOTES TO FINANCIAL STATEMENTS

and $ 3.5 million for the year ended December 31, 2022.

The total compensation expense relating to vesting of stock options and restricted stock awards for the year ended December 31, 2024 was $ 0.4 million and $ 2.8 million for the year ended December 31, 2023.

The following table presents share-based compensation expense included in the Company’s statements of operations:

Year Ended December 31,

For the Year Ended December 31,

(in thousands)

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The fair value of each stock option is estimated at the date of grant using the Black-Scholes option pricing model.

The estimated weighted-average fair value of stock options granted to employees in the year ended December 31, 2023 was approximately $ 5.58 per share and was approximately $ 11.54 per share for the year ended December 31, 2022.

Assumptions regarding volatility, expected term, dividend yield and risk-free interest rate are required for the Black-Scholes model.

The volatility assumption is based on the Company’s historical experience.

The risk-free interest rate is based on a U.S.

treasury note with a maturity similar to the option award’s expected life.

The expected life represents the average period of time that options granted are expected to be outstanding.

The volatility assumption is based on the historical experience.

The Company calculated expected term using the simplified method described in SEC Staff Accounting Bulletin, or SAB, No.

110 as it continues to meet the requirements promulgated in SAB No.

The assumptions for volatility, expected life, dividend yield and risk-free interest rate are presented in the table below:

Year Ended December 31,

Risk-free interest rate

3.51 – 4.01 %

1.63 – 4.21 %

Expected life in years

Expected volatility

89.69 – 112.12 %

74.49 – 88.75 %

Expected dividend yield

Reverse Stock Split

Reverse Stock Splits

Alaunos Therapeutics, Inc.

NOTES TO FINANCIAL STATEMENTS

On January 31, 2024, the Company filed a Second Amended and Restated Certificate of Incorporation (the “Charter Amendment”) with the Secretary of State of the State of Delaware in order to effect a reverse stock split of the Company’s common stock at a ratio of 1-for-15 (the “Reverse Split”).

1 unchanged sentence

The Charter Amendment does not affect the par value of the Company’s common stock or change the number of authorized shares or par value of the Company’s preferred stock.

The Charter Amendment became effective on January 31, 2024 at 5:00 p.m.

Eastern Time, at which time every 15 shares of the Company’s issued and outstanding common stock automatically combined and converted into 1 share of common stock.

No fractional shares were issued in connection with the Reverse Split.

Stockholders of record who would otherwise have been entitled to receive fractional shares as a result of the Reverse Split received a cash payment in lieu thereof at a price equal to the fraction to which the stockholder would otherwise be entitled multiplied by the closing sales price per share of the common stock (as adjusted for the Reverse Split) on The Nasdaq Capital Market on January 31, 2024.

All share and per share amounts of common stock, options, warrants, and restricted stock in the accompanying financial statements and notes thereto have been retroactively adjusted for all periods presented to reflect the Reverse Split as if it had occurred at the beginning of the earliest period presented.

The Charter Amendment became effective on January 31, 2024.

On July 17, 2024, the Company filed a Third Amended and Restated Certificate of Incorporation or Third Charter Amendment with the Secretary of State of the State of Delaware in order to effect a reverse stock split of the Company’s common stock at a ratio of 1-for-10 (the "Second reverse Split", the "Reverse Splits") or the Second Reverse Split, collectively the Reverse Splits.

The Third Charter Amendment decreased the number of authorized shares of common stock from 34,666,667 to 5,000,000 .

The Third Charter Amendment does not affect the par value of the Company’s common stock or change the number of authorized shares or par value of the Company’s preferred stock.

The Third Charter Amendment became effective on July 17, 2024.

No fractional shares were issued in connection with the Reverse Splits.

Stockholders of record who would otherwise have been entitled to receive fractional shares as a result of the Reverse Splits received a cash payment in lieu thereof at a price equal to the fraction to which the stockholder would otherwise be entitled multiplied by the closing sales price per share of the common stock (as adjusted for the Reverse Splits) on the Nasdaq Capital Market on January 31, 2024 and July 17, 2024.

All share and per share amounts of common stock, options, warrants, and restricted stock in the accompanying financial statements and notes thereto have been retroactively adjusted for all periods presented to reflect the Reverse Splits as if they had occurred at the beginning of the earliest period presented.

Net Loss per Share

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The effect of computing diluted net loss per common share was antidilutive for any potentially issuable shares of common stock from the conversion of stock options, unvested restricted stock and warrants and, as such, have been excluded from the calculation.

Alaunos Therapeutics, Inc.

NOTES TO FINANCIAL STATEMENTS

The computation of basic and diluted net loss per share consists of the following:

Year Ended December 31,

Weighted-average common shares outstanding, basic and diluted

Net loss per share, basic and diluted

Certain shares related to some of the Company’s outstanding common stock options, unvested restricted stock and warrants have not been included in the computation of diluted net loss per share for the years ended December 31, 2024 and 2023 as the result would be antidilutive.

1 unchanged sentence

Common stock options

Unvested restricted stock

New Accounting Pronouncements

In June 2016, the FASB issued Accounting Standards Update, or ASU, 2016-13, Financial Instruments:

Credit Losses (Topic 326) as clarified in ASU 2019-04, ASU 2019-05 and ASU 2020-02.

The objective of this standard is to provide information about expected credit losses on financial instruments at each reporting date and to change how other-than-temporary impairments on investment securities are recorded.

The Company adopted ASU 2016-13 effective January 1, 2023, with no material impact upon adoption.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, which enhances the disclosures required for operating segments in the Company's annual and interim financial statements.

ASU 2023-07 is effective retrospectively for fiscal years beginning after December 15, 2023 and for interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted.

The Company is currently evaluating the impact of this standard.

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.

2023-07, “Improvements to Reportable Segment Disclosures (Topic 280)” which is intended to improve reportable segment disclosure requirements, primarily through incremental disclosures of segment information on an annual and interim basis for all public entities.

The ASU expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items and interim disclosures of a reportable segment’s profit or loss and assets.

The ASU is effective for our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, and interim periods thereafter with and before it has been applied retrospectively to all prior periods presented.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures, which is intended to enhance the transparency and decision usefulness of income tax disclosures.

The amendments in ASU 2023-09 provide for enhanced income tax information primarily through changes to the rate reconciliation and income taxes paid information.

The amendments in ASU 2023-09 provide for enhanced income tax

Alaunos Therapeutics, Inc.

NOTES TO FINANCIAL STATEMENTS

information primarily through changes to the rate reconciliation and income taxes paid information.

ASU 2023-09 is effective for the Company prospectively to all annual periods beginning after December 15, 2024.

1 unchanged sentence

The Company is currently evaluating the impact of this standard.

There were no debt obligations outstanding at December 31, 2023.

The carrying values of the Company's debt obligation at December 31, 2022 were as follows:

($ in thousands)

Loan and Security Agreement

Unamortized discount on Loan and Security Agreement

long-term debt, current

Long-term debt

On August 6, 2021, the Company entered into the Loan and Security Agreement with SVB.

The Loan and Security Agreement provided for the funding of the Term A Tranche at the closing, with the Term B Tranche available if certain funding and clinical milestones were met by August 31, 2022.

The SVB Facility and related obligations under the Loan and Security Agreement were secured by substantially all of the Company's

Alaunos Therapeutics, Inc.

NOTES TO FINANCIAL STATEMENTS

properties, rights and assets, except for its intellectual property (which was subject to a negative pledge under the Loan and Security Agreement).

The SVB Facility and related obligations under the Loan and Security Agreement were secured by substantially all of the Company's properties, rights and assets, except for its intellectual property (which was subject to a negative pledge under the Loan and Security Agreement).

In addition, the Loan and Security Agreement contained customary representations, warranties, events of default and covenants.

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The issuance costs for the Loan and Security Agreement, including the First Amendment, were approximately $ 1.2 million and primarily related to the SVB Warrants, which were amortized into interest expense over the term of the loan.

Interest expense, including the amortization of issuance costs, was $ 1.9 million for the year ended December 31, 2023 and $ 3.2 million for the year ended December 31, 2022.

Interest expense, including the amortization of issuance costs, was $ 1.9 million for the year ended December 31, 2023.

As a result of the repayments there were no debt obligations outstanding at December 31, 2024 or 2023.

Property and Equipment, net

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Office and computer equipment

Leasehold improvements

Laboratory equipment

accumulated depreciation

Property and equipment, net

Depreciation expense for the year ended December 31, 2023 was $ 2.3 million and was $ 2.8 million for the year ended December 31, 2022.

During the year ended December 31, 2023, the Company impaired property and equipment by $ 4.8 million.

Refer to Note 3, Summary of Significant Accounting Policies , for further details.

Depreciation expense for the year ended December 31, 2024 was $ 2.0 thousand and was $ 2.3 million for the year ended December 31, 2023.

Alaunos Therapeutics, Inc.

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Professional services

Preclinical services

Manufacturing services

Other consulting services

Related Party Transactions

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He also serves as a member of Eden BioCell’s board of directors.

In September 2021, TriArm and Alaunos mutually agreed to dissolve the Eden BioCell joint venture.

The joint venture agreement has been terminated and the Eden BioCell entity has been dissolved as of July 2023.

Refer to Note 15, Joint Venture , for further details.

On January 3, 2019, Eden BioCell was incorporated in Hong Kong as a private company.

Eden BioCell, the Company and TriArm entered into a Share Subscription Agreement on January 23, 2019, where the Company and TriArm agreed to contribute certain intellectual property, services and cash (only with respect to TriArm) to Eden BioCell to subscribe for a certain number of newly issued ordinary shares in the share capital of Eden BioCell.

The closing of the transaction occurred on July 5, 2019.

The Framework Agreement and Share Subscription Agreements were each respectively amended to be effective as of this date.

Upon consummation of the joint venture, Eden BioCell and the Company also entered into a license agreement, pursuant to which the Company licensed the rights to Eden BioCell for third generation Sleeping Beauty -generated CAR-T therapies targeting the CD19 antigen for the territory of China (including Macau and Hong Kong), Taiwan and Korea.

TriArm and the Company each received a 50 % equity interest in the joint venture in exchange for their contributions to Eden BioCell.

The Company determined that Eden BioCell was considered a variable interest entity, or VIE, and concluded that it was not the primary beneficiary of the VIE as it did not have the power to direct the activities of the VIE.

As a result, the Company accounted for the equity interest in Eden BioCell under the equity method of accounting as it had the ability to exercise significant influence.

In September 2021, TriArm and the Company mutually agreed to dissolve the joint venture, which has now been terminated.

The Eden BioCell entity has been dissolved as of July 2023.

Collaboration with Dune Lake Capital

1 unchanged sentence

During the year ended December 31, 2023 , the Company recorded expenses of approximately $ 37 thousand for consulting services performed by Dune Lake Capital with respect to the period from January 2023 to August 2023.

The Company did no t incur expenses to Dune Lake Capital during the year ended December 31, 2024.

On January 20, 2024, the Board of Directors appointed Dale Curtis Hogue, Jr.

as Interim Chief Executive Officer of the Company, effective immediately.

On January 21, 2024, the Company entered into an employment agreement with Mr.

Hogue, under which he will receive an annual base salary of $ 250 thousand.

Hogue was awarded 40,000 shares of common stock of the Company with an exercise price of $ 1.80 .

Alaunos Therapeutics, Inc.

NOTES TO FINANCIAL STATEMENTS

In April 2022, the Company modified its real estate lease agreement executed on December 15, 2020 with MD Anderson for office space in Houston, Texas, which reduced the Company's leased space from 18,111 square feet to 3,228 square feet.

2 unchanged sentences

In June 2022, the Company executed an agreement to sub-sublease 4,772 square feet of subleased office space in Boston.

For the year ended December 31, 2023, the Company recognized $ 43 thousand in lease income, and for the year ended December 31, 2022, the Company recognized $ 0.1 million in lease income.

For the year ended December 31, 2023 , the Company recognized $ 43 thousand in lease income.

Lease income is classified within other income on the statement of operations.

3 unchanged sentences

A gain of $ 0.2 million was recorded on the lease termination during the year ended December 31, 2023.

In August 2023, in accordance with the lease agreement executed on December 15, 2020, the Company notified MD Anderson, as landlord, of its intention to terminate office space of 3,228 square feet in Houston, Texas.

In August 2023, in accordance with the lease agreement, the Company notified, as landlord, of its intention to terminate.

As a result, the associated lease liability and right-of-use asset were remeasured to $ 19 thousand, reflecting the revised lease payments and term end date of November 2023.

Alaunos Therapeutics, Inc.

NOTES TO FINANCIAL STATEMENTS

On November 1, 2023, the Company and MD Anderson, as landlord, agreed to mutually terminate the leases dated October 15, 2019 and April 7, 2020, which represented office space totaling 14,037 square feet, effective November 15, 2023.

3 unchanged sentences

Year Ended December 31,

($ in thousands)

13 unchanged sentences

The Company was responsible for all aspects of the research, development and commercialization and was required to use commercially reasonable efforts to develop certain products.

Alaunos Therapeutics, Inc.

NOTES TO FINANCIAL STATEMENTS

In consideration of the licenses and other rights granted by Precigen, the Company was required to pay Precigen an annual license fee of $ 0.1 million, reimburse Precigen for certain historical costs, pay Precigen milestones up to an additional $ 52.5 million for each exclusively licensed program upon the achievement of certain milestones, and pay Precigen tiered royalties up to a maximum royalty amount of $ 100.0 million in the aggregate.

The Company was also obligated to pay Precigen 20 % of any sublicensing income received relating to the licensed products.

The Company was also obligated to pay Precigen 20 % of any sublicensing income received by us relating to the licensed products.

The Company was responsible for all development costs associated with each of the licensed products.

For the years ended December 31, 2023 and 2022, the Company paid $ 0.1 million in annual license fees under this agreement.

Precigen was obligated to pay the Company royalties up to a maximum royalty amount of $ 100.0 million.

No royalty amounts were incurred during the years ended December 31, 2023 and 2022.

On April 3, 2023, the Company entered into the Amended and Restated Exclusive License Agreement with Precigen, or the A&R License Agreement, which restated and amended the License Agreement in full.

Under the A&R License Agreement, the Company still has exclusive, worldwide rights to research, develop and commercialize TCR products designed for neoantigens or driver mutations for the treatment of cancer and non-exclusive rights to use non-driver mutation TCRs.

The Company further maintains its exclusive, worldwide rights for certain patents relating to the Sleeping Beauty technology to research, develop and commercialize TCR products for both neoantigens and shared antigens for the treatment of cancer, referred to as TCR Products.

On April 3, 2023, the Company entered into the Amended and Restated Exclusive License Agreement with Precigen, or the A&R License Agreement, which restated and amended the parties' previous license agreement in full.

Under the A&R License Agreement, the Company still had exclusive, worldwide rights to research, develop and commercialize TCR products designed for neoantigens or driver mutations for the treatment of cancer and non-exclusive rights to use non-driver mutation TCRs.

On October 4, 2024, pursuant to Section 10.2 of the License Agreement, the Company duly notified Precigen of its full termination of all rights under the License Agreement.

The Company remains solely responsible for all aspects of the research, development and commercialization of the exclusively licensed products for the treatment of cancer.

Alaunos Therapeutics, Inc.

NOTES TO FINANCIAL STATEMENTS

effective March 27, 2015 between the Company, Precigen and ARES TRADING S.A., a subsidiary of Merck KGaA, as assigned by Precigen to PGEN are no longer exclusively licensed to the Company.

The (i) products utilizing Precigen’s RheoSwitch® gene switch, or RTS, for the treatment of cancer, referred to as IL-12 Products and (ii) CAR products directed to (A) CD19 for the treatment of cancer, referred to as CD19 Products, and (B) BCMA for the treatment of cancer, subject to certain obligations to pursue such target under the License and Collaboration Agreement effective March 27, 2015 between the Company, Precigen and ARES TRADING S.A., a subsidiary of Merck KGaA, as assigned by Precigen to PGEN are no longer exclusively licensed to the Company.

The Company is no longer obligated to use commercially reasonable efforts for the exclusively licensed products.

6 unchanged sentences

The rights and obligations of Precigen under the 2015 R&D Agreement were assigned to the Company pursuant to the Fourth Amendment to 2015 R&D Agreement which was entered into on September 19, 2019 (the “Fourth Amendment”) with an effective date of October 5, 2018.

The activities under the 2015 R&D Agreement are directed by a joint steering committee comprised of two members from the Company and one member from MD Anderson.

As provided under the MD Anderson License, the Company provided funding for research and development activities in support of the research programs under the 2015 R&D Agreement for a period of three years and in an amount of no less than $ 15.0 million and no greater than $ 20.0 million per year.

1 unchanged sentence

In connection with the execution of the 2019 R&D Agreement described below, on October 22, 2019, the Company amended the 2015 R&D Agreement to extend the term of the 2015 R&D Agreement until December 31, 2026 and to allow cash resources on hand at MD Anderson under the 2015 R&D Agreement to be used for development costs under the 2019 Research and Development Agreement, or the 2019 R&D Agreement, which the Company entered into on October 22, 2019, with MD Anderson, pursuant to which the Company agreed to collaborate with respect to the TCR program.

For the year ended December 31, 2023 the Company incurred clinical expenses of $ 0.1 million from MD Anderson related to the 2015 R&D Agreement, and did no t incur clinical costs from MD Anderson related to the 2015 R&D Agreement for the year ended December 31, 2022.

The term of the MD Anderson License expires on the last to occur of (a) the expiration of all patents licensed thereunder, or (b) the twentieth anniversary of the date of the MD Anderson License;

provided, however, that following the expiration of the term of the MD Anderson License, the Company, together with Precigen, shall then have a fully-paid up, royalty free, perpetual, irrevocable and sublicensable license to use the licensed intellectual property thereunder.

After ten years from the date of the MD Anderson License and subject to a 90-day cure period, MD Anderson will have the right to convert the MD Anderson License into a non-exclusive license if the Company and Precigen are not using commercially reasonable efforts to commercialize the licensed intellectual property on a case-by-case basis.

After five years from the date of the MD Anderson License and subject to a 180-day cure period, MD Anderson will have the right to terminate the MD Anderson License with respect to specific technology(ies) funded by the government or subject to a third-party contract if the Company and Precigen are not meeting the diligence requirements in such funding agreement or contract, as applicable.

MD Anderson may also terminate the agreement with written notice upon material breach by the Company and Precigen, if such breach has not been cured within 60 days of receiving such notice.

In addition, the MD Anderson License will terminate upon the occurrence of certain insolvency events for both the Company and Precigen and may be terminated by the mutual written agreement of the Company, Precigen, and MD Anderson.

For the year ended December 31, 2023 the Company incurred clinical expenses of $ 0.1 million from MD Anderson related to the 2015 R&D Agreement.

The Company did no t incur clinical costs from MD Anderson related to the 2015 R&D Agreement for the year ended December 31, 2024.

2019 Research and Development Agreement—The University of Texas MD Anderson Cancer Center

2 unchanged sentences

The Company will own all inventions and intellectual property developed under the 2019 R&D Agreement and the Company will retain all rights to all intellectual property, patentable or not, for oncology products manufactured using non-viral gene transfer technologies under the 2019 R&D Agreement, including the Company's Sleeping Beauty technology.

The Company has granted MD Anderson an exclusive license for such intellectual property to develop and commercialize autologous TCR products manufactured using viral gene transfer technologies and

The Company has granted MD Anderson an exclusive license for such

Alaunos Therapeutics, Inc.

NOTES TO FINANCIAL STATEMENTS

any products outside the field of oncology and a non-exclusive license for allogenic TCR products manufactured using viral-based technologies.

intellectual property to develop and commercialize autologous TCR products manufactured using viral gene transfer technologies and any products outside the field of oncology and a non-exclusive license for allogenic TCR products manufactured using viral-based technologies.

Under the 2019 R&D Agreement, the Company agreed, beginning on January 1, 2021, to reimburse MD Anderson up to a total of $ 20.0 million for development costs under the 2019 R&D Agreement, after the funds from the 2015 R&D Agreement are exhausted.

4 unchanged sentences

The Company also agreed to sell its TCR products to MD Anderson at preferential prices and will sell the Company's TCR products in Texas exclusively to MD Anderson for a limited period of time following the first commercial sale of the Company's TCR products .

For the years ended December 31, 2023 and 2022, the Company incurred clinical expenses of $ 0.8 million from MD Anderson related to the 2019 R&D Agreement.

For the year end December 31, 2024 the Company did no t incur clinical expenses from MD Anderson related to the 2019 R&D Agreement, compared to the y ear ended December 31, 2023, the Company incurred clinical expenses of $ 0.8 million from MD Anderson related to the 2019 R&D Agreement.

The 2019 R&D Agreement will terminate on December 31, 2026 and either party may terminate the 2019 R&D Agreement following written notice of a material breach.

8 unchanged sentences

On May 29, 2019, January 8, 2020, September 28, 2020, April 16, 2021, May 4, 2021 and August 13, 2021 the Company amended the Patent License to expand its TCR library to include additional TCRs reactive to mutated KRAS and TP53 neoantigens licensed from the NCI.

The terms of the Patent License required the Company to pay the NCI minimum annual royalties in the amount of $ 0.3 million, which amount would be reduced to $ 0.1 million once the aggregate minimum annual royalties paid by the Company equaled $ 1.5 million.

The Company was also required to make performance-based payments upon successful completion of clinical and regulatory benchmarks relating to the licensed products.

Of such payments, the aggregate potential benchmark payments were $ 4.3 million, of which aggregate payments of $ 3.0 million would be due only after marketing approval in the United States or in Europe, Japan, Australia, China or India.

The first benchmark payment of $ 0.1 million was paid during the year ended December 31, 2022 upon the initiation of the Company's TCR-T Library Phase 1/2 Trial, which was a qualifying Phase 1 clinical trial under the terms of the Patent License.

In addition, the Company was required to pay the NCI one-time benchmark payments following aggregate net sales of licensed products at certain aggregate net sales ranging from $ 250.0 million to $ 1.0 billion.

The aggregate potential amount of these benchmark payments was $ 12.0 million.

The Company was also required to pay the NCI royalties on net sales of products covered by the Patent License at rates in the low to mid-single digits depending upon the technology included in a licensed product.

To the extent the Company entered into a sublicensing agreement relating to a licensed product, the Company would be required to pay the NCI a percentage of all consideration received from a sublicensee, which percentage would decrease based on the stage of development of the licensed product at the time of the sublicense.

The Patent License was to expire upon expiration of the last patent contained in the licensed patent rights, unless terminated earlier.

The NCI could terminate or modify the Patent License in the event of a material breach, including if the Company did not meet certain milestones by certain dates, or upon certain insolvency events that remain uncured following the date that is 90 days following written notice of such breach or insolvency event.

The Company could terminate the Patent License, or any portion thereof, in the Company's sole discretion at any time upon 60 days’ written notice to the NCI.

In addition, the NCI had the right to:

(i) require the Company to sublicense the rights to the product candidates covered by the Patent License upon certain conditions, including if the Company was not reasonably satisfying required health and safety needs and (ii) terminate or modify the Patent License, including if the Company was not satisfying requirements for public use as specified by federal regulations.

On October 27, 2023, the Company provided the NCI the requisite notice of its intent to terminate the Patent

Alaunos Therapeutics, Inc.

NOTES TO FINANCIAL STATEMENTS

License, effective December 26, 2023.

On October 27, 2023, the Company provided the NCI the requisite notice of its intent to terminate the Patent License, effective December 26, 2023 .

The Company discovered multiple proprietary TCRs targeting driver mutations through its hunTR TCR discovery platform, including many of the same KRAS and TP53 mutations licensed from the NCI.

For the year ended December 31, 2023 the Company incurred $ 0.4 million of expenses and incurred $ 0.7 million of expenses for the year ended December 31, 2022.

The Company incurred no expenses under this agreement in 2024, compared to $ 0.4 million in 2023.

Cooperative Research and Development Agreement (CRADA) with the NCI

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For any invention solely owned by the NCI or jointly made by the NCI and the Company for which a patent application was filed, the U.S.

Public Health service granted the Company an exclusive option to elect an exclusive or non-exclusive commercialization license.

Public Health service granted the Company an exclusive option to elect an exclusive or non-exclusive commercialization

Alaunos Therapeutics, Inc.

NOTES TO FINANCIAL STATEMENTS

For inventions owned solely by the NCI or jointly owned by the NCI and the Company, which were licensed according to the terms described above, the Company agreed to grant to the U.S.

3 unchanged sentences

The agreement could be terminated by any of the parties upon 60 days' prior written consent.

In February 2019, the Company extended the CRADA with the NCI until January 9, 2022, committing an additional $ 5.0 million to this program;

however, for the third and fourth quarters of 2021, the Company was not required to make payments toward the program as agreed with the NCI.

In March 2022, the Company entered into an amendment to the CRADA that is retroactive, effective January 9, 2022 to extend the term of the CRADA until January 9, 2023.

In June 2022, the Company entered into the Fourth Amendment to the CRADA, or the CRADA Fourth Amendment, which, among other things, extended the term of the CRADA until January 9, 2025.

In connection with the CRADA Fourth Amendment, the Company agreed to contribute $ 1.0 million per year, payable on a quarterly basis, beginning in the first quarter of 2023.

The Company recorded expenses of $ 0.5 million for the year ended December 31, 2023, compared to $ 0 for the year ended December 31, 2022.

On August 14, 2023, the Company announced that it had provided the requisite notice to terminate the CRADA, pursuant to its terms, effective October 13, 2023 , in light of the Company’s exploration of strategic alternatives.

On October 13, 2023 , the Company terminated the CRADA per its terms.

The Company did no t record expenses under the CRADA for the year ended December 31, 2024, compared to $ 0.5 million for year ended December 31, 2023.

Patent and Technology License Agreement—The University of Texas MD Anderson Cancer Center and the Texas A&M University System

5 unchanged sentences

In addition, the Licensors are entitled to receive royalty payments on sales from a licensed product and will also be entitled to receive a portion of any fees that the Company may receive from a possible sublicense under certain circumstances.

During the year ended December 31, 2024, the Company did no t incur any milestone expenses or royalty expe nses on sales under this agreement.

During the year ended December 31, 2023, the Company did no t incur any milestone expenses under this agreement, and the Company incurred $ 1 thousand in royalty expenses on sales under this agreement during the year ended December 31, 2023.

During the year ended December 31, 2022, $ 2.5 million was incurred as a one-time milestone payment under

Alaunos Therapeutics, Inc.

NOTES TO FINANCIAL STATEMENTS

the terms of the agreement, and the Company incurred $ 2 thousand in royalty expenses on sales under this agreement during the year ended December 31, 2022.

Collaboration Agreement with Solasia Pharma K.K.

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As consideration for the license, the Company is eligible to receive from Solasia development- and sales-based milestones, a royalty on net sales of darinaparsin, once commercialized, and a percentage of any sublicense revenue generated by Solasia.

Solasia will be responsible for all costs related to the development, manufacturing and commercialization of darinaparsin.

The Company’s licensors, as defined in the Solasia License and Collaboration Agreement, will receive a portion of all milestone and royalty payments made by Solasia to the Company in accordance with the terms of the Solasia License and Collaboration Agreement with the licensors, as described above.

In June 2022, Solasia announced that darinaparsin had been approved from relapsed or refractory Peripheral T-Cell Lymphoma by the Ministry of Health, Labor and Welfare in Japan.

During the year ended December 31, 2024, the Company did no t earn collaboration revenue and earned $ 10 thousand in royalty revenues on net sales under the Solasia License and Collaboration Agreement.

During the year ended December 31, 2022, the Company earned $ 2.9 million of collaboration revenue under the Solasia License and Collaboration Agreement primarily related to Solasia's achievement of certain sales-based milestones in Japan, and did not earn royalty revenues on net sales under the agreement.

During the year ended December 31, 2023, the Company did no t earn collaboration revenue and earned $ 5 thousand in royalty revenues on net sales under the Solasia License and Collaboration Agreement.

KBI Biopharma Litigation

3 unchanged sentences

On October 20, 2023, the Company entered into an agreement with KBI to settle all claims asserted by KBI against the Company and the Company's counterclaims against KBI at issue in the litigation for $ 1.0 million.

In connection with the Company’s November 2018 private placement that provided net proceeds of approximately $ 47.1 million, the Company issued warrants to purchase an aggregate of 1,262,626 shares of common stock, which became exercisable six months after the closing of the private placement, or the November 2018 Warrants.

The November 2018 Warrants had an exercise price of $ 45.15 per share and have a five-year term.

The fair value of the November 2018 Warrants was estimated at $ 18.4 million using a Black-Scholes model with the following assumptions:

expected volatility of 71 %, risk free interest rate of 2.99 %, expected life of five years and no dividends.

On July 26, 2019 and September 12, 2019, the Company entered into agreements with existing investors whereby the investors exercised the November 2018 Warrants for an aggregate of 1,186,869 shares of common stock, at an exercise price of $ 45.15 per share.

Proceeds from the warrant exercise after deducting placement agent fees and other related expenses of $ 1.1 million were approximately $ 52.5 million.

The Company issued participating investors new warrants to purchase up to 1,186,869 additional shares of common stock (the "2019 Warrants") as consideration for the warrant holders to exercise their November 2018 Warrants.

The 2019 Warrants will expire on the fifth anniversary of the initial exercise date and have an exercise price of $ 105.00 .

The 2019 Warrants were valued using a Black-Scholes valuation model and resulted in a $ 60.8 million non-cash charge in the Company’s statement of operations in 2019.

On October 22, 2019, the Company entered into the 2019 R&D Agreement with MD Anderson.

In connection with the execution of the 2019 R&D Agreement, the Company issued the MD Anderson Warrant to purchase 222,222 shares of common stock.

The MD Anderson Warrant has an initial exercise price of $ 0.015 per share and grant date fair value of $ 14.5 million.

The MD Anderson Warrant expires on December 31, 2026 and vests upon the occurrence of certain clinical milestones.

The Company will recognize expense on the MD Anderson Warrant in the same manner as if the Company paid cash for services to be rendered.

For the years ended December 31, 2023 and 2022, the Company did not recognize any expense related to the MD Anderson Warrant as the clinical milestones have not been achieved.

The following is a summary of the Company's warrant activity for the years ended December 31, 2024:

Alaunos Therapeutics, Inc.

NOTES TO FINANCIAL STATEMENTS

On August 6, 2021, the Company entered into the Loan and Security Agreement with SVB.

Refer to Note 4, Debt .

In connection with the Loan and Security Agreement, the Company issued SVB warrants to purchase 28,856 shares of common stock with an exercise price of $ 33.30 per share.

The warrants have a ten-year life and were fully vested upon issuance.

The fair value of the warrants was estimated at $ 0.8 million using a Black-Scholes model with the following assumptions:

expected volatility of 79 %, risk free interest rate of 1.31 %, expected life of ten years and no dividends.

On December 28, 2021, the Company entered into the First Amendment, as described in Note 4, Debt, in connection with which, the original warrants issued to SVB were amended and restated.

As amended and restated, the SVB Warrants are for up to 43,308 shares of common stock, in the aggregate, with an exercise price of $ 17.40 per share.

The SVB Warrants expire on August 6, 2031 and were fully vested upon issuance.

As of December 31, 2023, none of the SVB Warrants have been exercised.

(in thousands, except share and per share data)

Number of Shares

Weighted- Average Exercise Price

Weighted- Average Contractual Term (Years)

Outstanding, December 31, 2022

Outstanding, December 31, 2023

Outstanding, December 31, 2024

Restructuring

1 unchanged sentence

In connection with the reprioritization, the Company reduced its workforce during the third and fourth quarters of 2023.

Concurrently, the Company began considering certain strategic alternatives, including, but not limited to, an acquisition, merger, reverse merger, sale of assets, strategic partnerships, capital raises or other transactions.

During the year ended December 31, 2023, the Company recorded termination benefits of $ 1.3 million, recorded in restructuring costs within the statement of operations.

The termination benefits were fully paid as of December 31, 2023.

During the year ended December 31, 2024, the Company did no t incur any restructuring costs.

There is no provision for income taxes because the Company has incurred operating losses since inception.

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At December 31, 2024, the Company has aggregate net operating loss carryforwards for federal tax purposes of approximately $ 737 million, of which approximately $ 342 million expire at various dates through December 31, 2037 and approximately $ 395 million can be carried forward indefinitely.

The Company is reducing its approximately $ 497.9 million of state net operating loss carryforwards to $ 0 as these state net operating loss carryforwards all related to Massachusetts filings and, as of December 31, 2023 the Company no longer had any employees or property in Massachusetts and, as a result, the Company will no longer have income tax nexus in Massachusetts or an income tax filing obligation after the year ended December 31, 2023.

Additionally, the Company has approximately $ 39.8 million of federal and state research and development credits at December 31, 2023, expiring in varying amounts through 2043 , which may be available to reduce future taxes.

The Company has reduced its Massachusetts credits carryforward to $ 0 .

The Company is reducing its approximately $ 498 million

Alaunos Therapeutics, Inc.

NOTES TO FINANCIAL STATEMENTS

of state net operating loss carryforwards to $ 0 as these state net operating loss carryforwards all related to Massachusetts filings and, as of December 31, 2023 the Company no longer had any employees or property in Massachusetts and, as a result, the Company will no longer have income tax nexus in Massachusetts or an income tax filing obligation after the year ended December 31, 2023.

Additionally, the Company has approximately $ 40.5 million of federal and state research and development credits at December 31, 2024, expiring in varying amounts through 2043 , which may be available to reduce future taxes.

The Company has reduced its Massachusetts credits carryforward to $ 0 .

The Company has provided a valuation allowance for the full amount of its net deferred tax assets since it is more likely than not that these future benefits will not be realized.

However, these deferred tax assets may be available to offset future income tax liabilities and expenses.

The valuation allowance decreased by $ 25.8 million in 2023 due primarily to the reduction of Massachusetts net operating loss carryforwards and Massachusetts research and development credits.

The valuation allowance increased by $ 2,250 thousands in 2024 due primarily to the reduction of Massachusetts net operating loss carryforwards and Massachusetts research and development credits.

Income taxes using the federal statutory income tax rate differ from the Company’s effective tax rate primarily due to non-deductible expenses related to the Company’s issuance of warrants along with the change in the valuation allowance on deferred tax assets.

15 unchanged sentences

There were no adjustments to its uncertain tax positions in the years ended December 31, 2024 and 2023.

The Company has not recognized any interest and penalties in the statements of operations because of the Company’s net operating losses and tax credits that are available to be carried forward.

The Company has no t recognized any interest and penalties in the statements of operations because of the Company’s net operating losses and tax credits that are available to be carried forward.

When necessary, the Company will account for interest and penalties related to uncertain tax positions as part of its provision for federal and state income taxes.

The Company does not expect the amounts of unrecognized benefits will change significantly within the next twelve months.

The Company is currently open to audit under the statute of limitations by the Internal Revenue Service and state jurisdictions for the years ended December 31, 1999 through 2023 to the extent net operating losses continue to be carried forward to 2023.

Beginning in 2022, the Tax Cuts and Jobs Act of 2017, or the Tax Act, eliminated the option to deduct research and development expenditures immediately in the year incurred and requires taxpayers to capitalize and amortize them over five years pursuant to IRC Section 174.

The mandatory capitalization requirement had no impact to the overall deferred tax assets due to the Company's loss position and full valuation allowance.

Stock Option Plan

The Company adopted the 2012 Equity Incentive Plan, or the 2012 Plan, in May 2012.

Including subsequent increases, the Company had reserved 933,333 shares for issuance.

On December 31, 2023, there were 65,728 shares reserved for issuance and no shares available for future grant.

The Company adopted the 2020 Equity Incentive Plan, or the 2020 Plan, in June 2020.

As of December 31, 2024, there were 33,236 shares reserved for issuance and 142,745 shares available for future grant.

The Company reserved 140,000 shares for issuance plus a carryover of 7,109 shares from the 2012 Plan for a total of 147,109 shares.

In addition, returning shares from the 2012 Plan are available for issuance under the 2020 Plan.

As of December 31, 2023, there were 400,167 shares reserved for issuance and 1,302,411 shares available for future grant.

Stock options generally vest ratably in either quarterly or annual installments over three or four years, commencing on the first anniversary of the grant date and have contractual terms of ten years.

3 unchanged sentences

NOTES TO FINANCIAL STATEMENTS

There were no proceeds from option exercises during the year ended December 31, 2023 as compared to $ 21 thousand during the year ended December 31, 2022.

The intrinsic value of these options amounted to $ 26 thousand for the year ended December 31, 2022.

Stock option activity under the Company's stock options plans for the years ending December 31, 2024 and 2023 were as follows:

9 unchanged sentences

Options available for future grant, December 31, 2024

The estimated weighted-average fair value of stock options granted to employees in the year ended December 31, 2024 was approximately $ 10.84 per share and was approximately $ 55.80 per share for the year ended December 31, 2023.

On December 31, 2024, total unrecognized compensation costs related to non-vested stock options outstanding amounted to $ 0.4 million, which is expected to be recognized over a weighted-average period of 1.29 years.

The assumptions for volatility, expected life, dividend yield and risk-free interest rate are presented in the table below:

For the Year Ended December 31,

Risk-free interest rate

3.70 – 4.09 %

3.51 – 4.01 %

Expected life in years

Expected volatility

112.17 - 170.50 %

89.69 – 112.12 %

Expected dividend yield

Restricted Stock

For the year ended December 31, 2023 the Company did no t issue shares of restricted stock and issued 18,667 in the year ended December 31, 2022 to directors.

There were no repurchases by the Company for the year ended December 31, 2023.

During the year ended December 31, 2022, the Company repurchased 1,250 shares at a price of $ 36.15 per share to cover payroll taxes for one employee exercise, which is in accordance with the original terms of the award.

A summary of the status of restricted stock as of December 31, 2023 and 2022 is as follows:

Number of Shares

Weighted-Average Grant Date Fair Value

Unvested, December 31, 2021

Unvested, December 31, 2022

Unvested, December 31, 2023

As of December 31, 2023, there was no unrecognized stock-based compensation expense related to non-vested restricted stock arrangements.

During the year ended December 31, 2023, 3,332 restricted shares vested with a weighted average exercise price of $ 179.4 and 2,928 restricted shares were cancelled with a weighted average exercise of $ 246.00 .

No restricted shares remained unvested at December 31, 2023.

For the year ended December 31, 2024 and 2023 the Company did no t issue shares of restricted stock.

Employee Benefit Plan

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The Company contributed approximately $ 0.0 million to the 401(k) Plan during the year ended December 31, 2024 and $ 0.2 million during the year ended December 31, 2023.

Joint Venture

Segment Information

The CODM for the Company is the Chief Executive Officer (the "CEO").

The Company’s CEO reviews operating results on an aggregate basis and manages the Company’s operations as a whole for the purpose of evaluating financial performance and allocating resources.

This decision-making process reflects the way in which financial information is regularly reviewed and used by the CODM to evaluate performance, set

Alaunos Therapeutics, Inc.

NOTES TO FINANCIAL STATEMENTS

On December 18, 2018, the Company entered into a Framework Agreement with TriArm whereby the parties agreed to launch Eden BioCell, to lead clinical development and commercialization of certain Sleeping Beauty -generated CAR-T therapies as set forth in a separate license agreement.

On January 3, 2019, Eden BioCell was incorporated in Hong Kong as a private company.

The closing of the transaction occurred on July 5, 2019.

The Framework Agreement and Share Subscription Agreements were each respectively amended to be effective as of this date.

TriArm and the Company each received a 50 % equity interest in the joint venture in exchange for their contributions to Eden BioCell.

As a result, the Company accounted for the equity interest in Eden BioCell under the equity method of accounting as it had the ability to exercise significant influence.

In September 2021, TriArm and the Company mutually agreed to dissolve the joint venture, which has now been terminated.

The Eden BioCell entity has been dissolved as of July 2023.

operational targets, forecast future financial results, and allocate resources.

Accordingly, the Company has determined that it has a single reportable and operating segment related to biopharmaceutical research and development.

The Company’s CODM assesses financial performance and allocates resources based on consolidated operating results which are also reported on the consolidated statements of operations.

The measure of segment assets is reported on the balance sheet as total consolidated assets.

The CODM utilizes consolidated operating results by comparing actual results against budgeted amounts.

As part of this process, consolidated net loss is a critical performance measure used to evaluate the Company’s operating performance and guide strategic decisions and resource allocations, including additional investments in research and development.

The table below provides information about the Company’s revenue, significant segment expenses and other segment expenses.

For the Years Ended December 31,

($ in thousands)

Less segment expenses:

Research and development

General and administrative

Gain on lease modification

Restructuring costs

Property and equipment and right-of-use asset impairment

Total operating and segment expense

Interest expense

Other income, net

Segment Net loss

Subsequent Events

The Company evaluated all events and transactions that occurred after the balance sheet date through the date of this Annual Report on Form 10-K.

Other than as described in the notes to the financial statements, the Company did not have any material subsequent events that impacted its financial statements or disclosures aside from the following.

On January 20, 2024, the Board of Directors appointed Dale Curtis Hogue, Jr.

as Interim Chief Executive Officer of the Company, effective immediately.

On January 21, 2024, the Company entered into an employment agreement with Mr.

Hogue, under which he will receive an annual base salary of $ 250 thousand.

Hogue was awarded 40,000 shares of common stock of the Company with an exercise price of $ 1.80 .

On February 15, 2024, Michael Wong gave notice of his resignation as Vice President, Finance, effective February 23, 2024.

On February 22, 2024, the Company and Ferdinand Groenewald entered into a consulting agreement, or the Consulting Agreement, effective February 22, 2024, pursuant to which Mr.

Groenewald will lead accounting and financial reporting activities of the Company.

Groenewald will serve as the Company’s Vice President, Finance.

The Consulting Agreement will continue indefinitely until terminated by either party upon 30 days ’ advance notice.

The Consulting Agreement provides for compensation at a fixed rate of $ 15 thousand per month and reimbursement by the Company for any usual and customary business expenses incurred by Mr.

Groenewald in connection with performing services pursuant to the Consulting Agreement.

In addition, the Consulting Agreement provides for the Company to indemnify Mr.

Groenewald on terms customary for officers.

Other than as described in the notes to the financial statements, the Company did not have any material subsequent events that impacted its financial statements or disclosures.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures